Special Economic Measures Act
Bill to Amend--Third Reading
May 26, 2026
Moved third reading of Bill S-214, An Act to amend the Special Economic Measures Act (disposal of foreign state assets).
She said: Honourable senators, I rise today to speak at third reading as the sponsor of Bill S-214, An Act to amend the Special Economic Measures Act (disposal of foreign state assets). I am here to advocate for its passage and to address issues raised at committee.
Bill S-214 was studied at committee with 13 witnesses testifying over four panels. Witnesses included former Senator Omidvar and me, government officials from the Department of Finance, Global Affairs Canada and the RCMP, as well as subject matter experts.
I wish to thank Senator Peter Boehm in his role as Chair of the Foreign Affairs and International Trade Committee, who offered balanced and impartial insights throughout the study, as well as other senators on the committee, who thoughtfully engaged in this process. They have clearly invested in this topic and what it could mean for Canada going forward.
This bill would amend the Special Economic Measures Act, or SEMA, to create a legal pathway to seize and repurpose the state assets, including central bank reserves, of perpetrators who breach international peace and security. More specifically, it would create a pathway to seize these assets through executive order. These assets could then be redirected to victims who have suffered at the hands of these perpetrators.
The context is very important. After Russia invaded Ukraine in February 2022, Western countries, including the EU, the U.S., the U.K., Canada and others, froze hundreds of billions of dollars in Russian state assets, primarily Russian central bank foreign reserves — around €210 billion to €300 billion in total — as well as the private assets of oligarchs, such as planes, yachts and real estate. The bulk of the frozen state assets sit in Europe, with Belgium’s Euroclear holding the largest share — around €180 billion.
Soon after these events, Canada took a bold leap. In the Budget Implementation Act, or BIA, of June 2022, the government amended SEMA to permit not only the freezing of the assets of sanctioned individuals and entities but also the seizure and forfeiture of such assets. With this move, Canada became the first G7 nation with the power to both freeze and permanently seize and redistribute the assets of sanctioned individuals and entities.
Parliament thus gave the government the power to seize assets, including both private and state assets. However, the mechanism to seize state assets in SEMA is flawed. Bill S-214 deals with this flaw by giving the executive, the Governor-in-Council, the power to seize state assets, thereby carving out a distinct legal pathway for state assets.
At committee, witnesses Robert Currie, Viscount Bennett Professor of Law at Dalhousie University, and Fen Osler Hampson, Chancellor’s Professor at Carleton University, articulated the legal and historical basis of the bill, locating it in the concept and practice of countermeasures.
Professor Currie stated:
What I want to emphasize is that doing this would be lawful for Canada under international law. . . . All that Bill S-214 does is provide maximum clarity under Canadian law about how to do it.
This bill is enabling legislation. It provides the government with another tool in the tool box. It does not require the government to seize assets.
Further, SEMA requires a high threshold, extreme circumstances, for a state to be listed and, thus, potentially subject to sanctions. Extreme conditions must be met. There must be a grave breach of international peace and security, gross and systematic human rights violations, acts of significant corruption or requests for action from an international group such as the United Nations, to which we belong.
I want to speak now to the risks of the bill.
At committee, concerns were raised by committee members and witnesses — including Preston Jordan Lim, Assistant Professor, Charles Widger School of Law at Villanova University; Robert Brookfield, Director General, Sanctions Bureau at Global Affairs Canada; and Professor Hampson — about potential risks and unintended consequences of this bill.
These include the risk of retaliation by Russia against Canadian assets and the reputational risks to Canada as potentially being seen as untrustworthy or unstable by investors, as well as foreign investment potential losses, which is called the risk of capital flight from Canada, if some nations think their assets can now be more easily confiscated.
This latter effect may be more likely for authoritarian regimes that are concerned about the health of their assets. And in fact, according to Professor Hampson, they may have already moved their assets to more friendly jurisdictions because of the current existing sanctions in this country.
On the other hand, Senator Omidvar noted that capital flight has not materialized in Europe during this period of frozen Russian state assets.
In considering all of these potential risk outcomes, Professor Hampson concludes:
I think they are manageable risks under the current legislation. The current legislation —
— talking about SEMA specifically —
— does not give an unrestricted hunting licence to the executive authority. There are many guardrails in that legislation. . . .
These guardrails include the high threshold and the extreme actions that offending nations would be judged by, as I noted earlier, when actions against them are contemplated.
In assessing risk, we must consider that there is always risk in any actions that the government may take when it comes to these proposed sanctions or existing sanctions. In this bill, we must understand that the risks to passing this bill by giving the government this tool will be different from the risks related to decisions that might be made down the road by governments that may wish to seize assets in particular circumstances.
In the opinion of Professor Currie:
. . . what this bill does is add what is, in essence, a really small tool to an existing tool box. Now, the implications of using this tool might, in a given situation, be very large. But otherwise, this is just a cog in the normal machinery of how Canada administers sanctions.
The risks mentioned above are mitigated by the fact that the threshold for invoking sanctions is very high, as I have noted, and by Canada working together with our allies. Working together is not just a way to minimize risk, but it is also a way to be more effective in our actions and in the outcomes.
Government spokespeople have frequently expressed to me a preference for working with allies on issues related to asset seizure and asset demobilization, and government witnesses at committee concurred with this point. For example, I will quote Mr. Brookfield:
Certainly, in terms of working with others, that’s what we prefer to do, both because sanctions are more effective when we work with others and, as you note, they mitigate the risk.
With respect to the importance of working with allies, witnesses at committee noted that our allies are putting in place similar or related arrangements to those that are contemplated in Bill S-214.
Professor Hampson noted the loan agreement recently reached in Europe, where the €90-billion loan to Ukraine is ultimately backed by the frozen Russian state assets held in Euroclear. He stated:
The Europeans are clearly moving in the direction of seizure in the event that reparations are not paid by Russia. . . . The legislation that is being proposed here would . . . essentially be applying that under similar conditions.
Another example of allied action is the 2024 Rebuilding Economic Prosperity and Opportunity for Ukrainians Act, or the REPO legislation, in the United States which authorizes Russian sovereign assets held under U.S. jurisdiction to be seized and redirected to the Ukraine Support Fund, and U.S. lawmakers have gone further by proposing follow-up measures that would provide for the regular transfer of those resources to Ukraine. The REPO legislation functions as enabling legislation, much like Bill S-214 would here.
In light of all of these developments, Professor Hampson argued that Canada “. . . risks becoming an outlier if it fails to modernize its own legislative tool kit.”
Colleagues, I would now like to turn to other benefits gained from this bill, in addition to the benefit of working with allies on these issues using related legislative options.
At committee, we learned about other benefits of Bill S-214 from the testimony of Inspector Guy Paul Larocque of the RCMP, who described that foreign state assets can be part of an ecosystem of financial crime connected to broader threats such as corruption, kleptocracy, money laundering and more.
Inspector Larocque stated:
. . . Bill S-214 speaks to a legislative gap . . . where traditional judicial forfeiture pathways may not apply or where assets are clearly linked to foreign state actors subject to restrictive measures.
Bill S-214 will assist the RCMP in investigating this sanctions-related crime.
I have to say that having worked on this subject matter for two years, this is the very first time I have heard this argument used with regard to the benefits of this bill in terms of dealing with financial crime at the state level. I take that as a great benefit.
As to the benefits of this bill, first and foremost, this bill is a mechanism to hold nations who violate international human rights through violence, oppression or war to account for their illegal actions and to assist the victims of these actions.
This bill would allow Canada to be a leader. Professor Currie also said that we “. . . must give way to the moral case at some point.”
I will quote committee witness Danylo Korbabicz, CEO of the Ukrainian Canadian Congress:
. . . this creates a significant opportunity for the government to provide Canadian leadership on a global stage on this critical issue. In so doing, the government would have the strong support of the Canadian people. . . .
I have spoken of this initiative many times. Yet in an ever‑evolving geopolitical landscape, its importance has only grown. Our allies are already moving forward with similar legislation and similar initiatives. Without this bill, we risk being unable to act in concert with them. This is our opportunity to contribute meaningfully and to ensure that Canada is ready to work alongside its partners. It aligns directly with the vision of Canada as a capable and engaged middle power. At committee, it was noted as a critique by Senator Harder that the government has not formally weighed in on this bill or indicated its support for it.
I would also note that it is not unusual in our experience for the government to not weigh in on private bills.
However, in an article on Bill S-214 in The Globe and Mail published on May 11, after our committee deliberations, journalist Steven Chase quotes the press secretary for Minister Anand as follows:
“Minister Anand supports the intent of Bill S-214. . . . The minister looks forward to constructive discussions in Parliament once the Senate has completed its initial review” . . . .
Well, I certainly took that as a positive comment.
I am hopeful that, should we pass Bill S-214 in this chamber, both the government around and the other place will see fit to support it.
Colleagues, they’re waiting for this bill. I think we heard the minister’s spokesperson say that. Let us send it to the other place so it may continue its journey, and, ultimately, the decision will be in their hands.
Colleagues, thank you.
Honourable senators, I do not expect to speak for long. I wish to put on the record a couple of comments and concerns that I raised in committee.
I do not want to hold up the consideration of this bill that Senator Dasko has been sponsoring so ably for the last number of months. I thank her for her speech. I thank her for her conduct of this bill in committee.
I raise two concerns.
One is the unintended consequences issue, which the senator was kind enough to reference as well. Part of my unintended consequences concern speaks to the broader issue of sanctions policy, as it is being administered by our like-minded countries. By the way, like you — because it was unanimous — I supported the SEMA bill and the amendments that were brought forward in the process that Senator Dasko referenced.
But I do believe it is worthy of this chamber and other bodies that examine the policy issues attendant to sanctions policy to ask ourselves whether the existing sanctions policy is working the way we intended.
Essentially, we’re dealing with sanctions against China, Russia and Iran. I won’t speak in detail on any of them, except to suggest that what has happened has not been the path forward that we would have wished in developing the sanctions policies.
In fact, I would commend to you a book by Edward Fishman, who was the designer of the policy of the White House for the sanctions regime, the so-called economic sanctions, and who has, on reflection, spoken to the unintended consequences and suggested that we probably overstated what we could do and that, as a result of what we have done, there are alternative mechanisms of the sanctioned regimes to expand their ability to act in ways that are not as subject to oversight as, in fact, the existing regime would have allowed.
Unintended consequences are something we need to be very attentive to, particularly when we are dealing with a sanctions policy against which there has not been a lot of experience.
Leave that aside. My other concern — and, frankly, my stronger concern — is the one that the senator was kind enough to reference at the end.
I could say I would associate myself with the comments made by the press secretary of the minister; I am anxious that the bill be reviewed. But, colleagues, frankly, I am uncomfortable with foreign policy matters as important as sanctions policy not coming from the government itself but from private members’ business.
The SEMA regime, we certainly debated it. There had been private members’ bills dealing with the sanctions regime. Ultimately, it was a government bill.
While this is a so-called tweak of the SEMA bill, we would be the first jurisdiction to, in a sense, exercise this degree of bypassing judicial processes that I would be more comfortable if they were actually ones that the government embraced.
The senator has spoken about this just being another tool in the tool box. What happens, though, of course, is once the tool is in the tool box, you get all kinds of third parties suggesting to the government to use the tool in its tool box, even if it didn’t ask for the tool.
I understand the reluctance of governments to commit to supporting a particular bill, even one whose objective they can share. I think we should reflect at least on whether or not we should be moving forward with bills that impose on the Royal Prerogative of the Crown for foreign policy and foreign relations the way this bill does.
I raise these concerns. I expect that this bill will move forward as it should, but I wanted to be on the record for these two issues.
Thank you for your comments, Senator Harder and Senator Dasko. Thank you for conceiving this bill and introducing it. And hearing some of the comments from Senator Harder and your comments as well, this should have been a government bill. The government should have taken the initiative to put this into place.
They have the opportunity, if they would like to assert their Royal Prerogative, to change it, delay it or never let it see the light of day. They have those powers in the other place. I commend you for putting this together in your swan song in the Senate. Congratulations; well done.
I also want to thank the committee for having a rigorous look at this. It is important that, while we support the intent of the bill — and we might even support the wording of the bill — Senator Harder is correct in saying that unintended consequences always come up that were not a part of the objective and that are sometimes a part of the result.
The Conservative Party is supportive of this bill. It should have been done long ago. And, again, thank you for putting it forward and congratulations. With that, Your Honour, I would like to call the question.
Are senators ready for the question?
Is it your pleasure, honourable senators, to adopt the motion?
Hon. Senators: Agreed.
(Motion agreed to and bill read third time and passed.)
