Special Economic Measures Act

Honourable senators, I rise today as critic of Bill S-214, An Act to amend the Special Economic Measures Act (disposal of foreign state assets), which seeks to allow the Canadian government to seize and dispose of foreign state assets and redirect their value, potentially toward reconstruction or compensation efforts.

The triggers for the Special Economic Measures Act are a grave breach of international peace and security; gross, systematic human rights violations; or a call by an international organization, for example, for a sanctions regime.

Colleagues, let me begin by thanking Senator Dasko for taking up this legislation and for her thoughtful remarks in introducing it. As she noted, this bill was originally brought forward by former Senator Omidvar in the previous Parliament, largely in response to Russia’s illegal and brutal invasion of Ukraine. That context matters, and it continues to shape how we consider this bill today.

At that time, as colleagues will recall, our caucus expressed support for the principle behind this legislation. Senator Housakos, in his remarks at second reading of Bill S-278 — the previous bill — made clear that holding aggressor states accountable, including through financial means, is an objective we share. That remains the case today. We support this goal.

However, support for the objective does not relieve us of our responsibility to scrutinize the mechanism. When we look more closely at this bill, we are left with an uncomfortable truth: This is, in many respects, a largely symbolic exercise. It is a measure that may make us feel as though we are taking meaningful action, but in practical terms, it is unlikely to have any measurable impact on Russia or its war in Ukraine.

Even former Senator Omidvar acknowledged this reality in the previous Parliament that there are, actually, very limited Russian state assets in Canada to seize. Senator Dasko herself confirmed in her remarks that we do not even have a clear picture of what assets remain here today.

We are debating a tool that — while rhetorically powerful — may have little real-world application. That raises a broader concern.

Colleagues, when a country lacks hard power, when it is not at the table where decisive geopolitical outcomes are shaped, there can be a tendency to elevate symbolic or soft-power tools beyond any actual real effect. We invest them with meaning that exceeds their practical reach. We convince ourselves that we are shaping outcomes, when, in reality, we are reacting to them.

We have seen this clearly in recent years. When major powers convened to determine the course of events, whether in Washington or elsewhere, Canada was not among those shaping the outcome. That is a sobering reality and one that should inform how we evaluate legislation like this.

Colleagues, there is another dimension to this debate that deserves attention. In speaking to the predecessor bill, both former Senator Omidvar and Senator Kutcher drew parallels between Russia’s invasion of Ukraine and other acts of violence on the global stage.

I’ll quote Senator Kutcher:

More recently, we have watched in horror as a terrorist organization slaughtered hundreds of innocent civilians and then used its own people as human shields against retaliation. History has often noted that evil, when left unaddressed, ends in tragedy. We have a responsibility to do our part to respond vigorously and to do our best to avert the tragic consequences of inaction.

Former Senator Omidvar, at second reading, described Russia’s invasion in stark terms as an unprovoked attack involving the targeting of civilians and the taking of children.

These were powerful statements, and rightly so. They also raise a difficult and unavoidable question: If this legislative tool is to be used, and if it is as broadly applicable as its proponents suggest, then how will it be applied across different conflicts and different circumstances?

It is a question if Hamas is a state actor. This bill may not apply to them. Hezbollah is not a state actor. Many nations have proxies and actions that may be covered under this legislation, and they may not clearly draw a line to that state.

So, if not non-state actors, then which states would fall within this scope and on what consistent basis? Colleagues will recall that this chamber has previously considered legislation related to sanctions on state sponsors of terrorism, including Iran, and those debates raised differing views on approach and application.

Further, colleagues, what if an aggressor state is an ally of Canada? What if their ties to Canada are geographical, cultural, economic and include partnerships that are military and defensive in nature? Then what? Do we ignore potential significant unintended consequences?

It raises a legitimate concern that tools like this may not always be applied consistently but could, instead, reflect evolving interpretations of international events and priorities, which brings me to what is another serious issue with this bill.

This legislation proposes to grant significant new powers to the executive, specifically, the power to seize sovereign state assets without meaningful parliamentary oversight — not through the courts, not through Parliament, but through executive action.

Colleagues, we should pause here.

The State Immunity Act is clear. A foreign state is immune from the jurisdiction of Canadian courts. This bill does not resolve or address that conflict. It attempts to avoid it by removing the courts from the process altogether.

We are members of an institution that exists, in part, to provide deliberative thought and to act as a check on executive power. Yet, here we are, being asked to consider legislation that expands that power and does so in a way that reduces traditional avenues of independent oversight.

We do not need to look far to see how expansive executive authority can be used and misused. We have seen it elsewhere, but we’ve seen elements of it in our own history. During the October Crisis, hundreds were detained without charge, many of whom were never connected to any crime.

Safeguards exist for a reason. We saw it with the application of the Emergencies Act, which the Federal Court later decreed illegal. We should be cautious before weakening the safeguards.

There is also a practical problem at the heart of this bill. It assumes that costs associated with seizure and disposal can be recovered from a foreign state. In practice, Canadian courts cannot enforce such claims against a foreign state. That leaves a gap between what the bill proposes and what can realistically be implemented.

Finally, colleagues, I want to return to a point that’s often made in this chamber and made forcefully during debates on sanctions legislation.

Sanctions, when pursued unilaterally, do not work well. We have heard this from colleagues across the aisle, including Senators Woo, Harder and others, in the context of sanctions regimes, including those related to Iran. The argument has been consistent. Sanctions are only effective when applied multilaterally, in coordination with allies.

This bill contemplates a framework that Canada could deploy independently. If we already accept that unilateral sanctions are ineffective, then what are we truly achieving here?

Colleagues, this bill is well intentioned. It is grounded in a desire to hold aggressors accountable and to stand with victims of war and oppression. These are values we all share. Good intentions are not enough because, at the core of the bill, two fundamental questions remain unanswered.

First, conceptually, how exactly is this supposed to work? We are told this creates a legal pathway to seize sovereign state assets through executive action. What does that look like in practice? What kinds of assets? How are they identified, valued, seized and transferred? What legal challenges will arise under international or Canadian law? What are the implications for Canada’s reputation as a stable and predictable jurisdiction?

These are not minor implementation details. They go to the heart of whether this proposal is viable at all.

Second, and more importantly, what precedent are we setting? Even the original sponsor acknowledged that this bill is, in part, establishing a precedent. Colleagues, we should be very careful about the precedents we choose to establish.

In fact, colleagues, consider this: If we establish a precedent with, for instance, Russian state assets that sit on Canadian soil, and we seize them, sell them and distribute the funds to reconstruction in Ukraine, what happens when another country does it? The precedent has been set. Are we bound to continue that?

Canada is a country of laws, and precedent is one of the bases of those laws. If Canada asserts the right to seize the sovereign assets of another state through this executive order, are we not operating in a vacuum? Other countries may adopt the same approach, not all of them applying it with the same restraint.

Are we comfortable with Canadian state assets abroad being subject to similar treatment, potentially by regimes that do not share our values, our legal traditions or our respect for the rule of law? Once that door has been opened, colleagues, it does not close easily.

This is not just about Russia, and it is not just about Ukraine. It is about the long-term integrity of international legal norms, the role of Parliament and the limits we place on executive power. For those reasons, while I support the objective, I remain concerned about the mechanism. I look forward to a deeper dive into these issues during further study at committee.

Thank you, colleagues.

Is it your pleasure, honourable senators, to adopt the motion?

Hon. Senators: Agreed.

(Motion agreed to and bill read second time.)