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Canada’s potential future PM has endorsed crypto in the past, but industry executives warn it may harm his upcoming campaign.
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Canadian Conservative front-runner Pierre Poilievre has become a darling among crypto proponents, who say he will usher in a new era of financial freedom — but others fear he has more to lose than gain by embracing crypto in this upcoming election cycle.
After former Canadian Prime Minister Justin Trudeau resigned on Dec. 6, crypto bigwigs were quick to rally behind Poilievre. Tesla CEO Elon Musk posted a video of Poilievre addressing inflation concerns, to which Brian Armstrong, CEO of crypto exchange Coinbase, replied, “Well said.”
The same day, Bitcoin Magazine CEO David Bailey boldly projected that “Pierre Poilievre will deliver Canada a Strategic Bitcoin Reserve.”
Indeed, Poilievre has made a number of endearing statements to the crypto industry over the years — in stark contrast with Trudeau, who in late 2022 called Poilievre irresponsible for encouraging Canadians to invest in digital assets.
“Anyone who followed that advice would have seen their life savings destroyed,” Trudeau warned.
However, some believe Poilievre won’t live up to the industry’s high hopes. Morva Rohani, executive director of the Canadian Web3 Council nonprofit trade association, told Cointelegraph that Conservatives will likely avoid crypto on the campaign trail this year.
“While the Conservatives have shown support in the past, they’ve been quiet lately, likely to avoid controversy,” Rohani said.
“I don’t expect crypto to be a major issue in this election because it’s seen as more of a risk than a vote-winner.”
‘Orange-pilled’ Poilievre buys shawarma, smokes hookah
The crypto industry’s assumption that Poilievre will embrace digital assets is not ill-founded.
Perhaps the most public incident involving crypto during Trudeau’s time in office was during the trucker protests of 2022.
Trudeau’s government invoked the Emergencies Act to suspend truckers’ bank accounts and funding rails, on the grounds that demonstrations were causing “serious harm to our economy, to our democratic institutions, and to Canada’s international standing.”
Trudeau’s supporters would note this suspension was temporary during a countrywide political crisis — but for many, it cemented his reputation as “anti-crypto.”
Just months after the conclusion of the truckers’ strike, Poilievre made a number of supportive statements about crypto and the blockchain industry. He appealed to Canadians during the Conservative Party’s leadership election by asking them to “take control of your money” with cryptocurrencies.
On March 29, 2022, he posted on X that he wanted to make Canada a blockchain hub and “expand choice, lower costs of financial products, [and] create thousands of jobs.”
The Conservative leader even bought a quick bite to eat on the Bitcoin Lightning Network at Canadian shawarma chain Tahini’s, and he talked Bitcoin (BTC) over a hookah session with the restaurant’s vice president Ali Haman.
Related: Canada PM frontrunner once vowed to make the country a ‘crypto capital’
Public statements like these endeared him to the Web3 industry. However, Poilievre’s bullish Bitcoin comments soon cooled amid a series of scandals that rocked the crypto world.
Canadians can’t afford another crypto burn
Crypto had a terrible year in 2022, with the collapse of the Terra/Luna stablecoin ecosystem and major scandals like the implosions of FTX, Celsius and Three Arrows Capital.
The confluence of these events sent crypto prices spiraling downward and led to significant knock-on effects for Canadian pension funds, which lost millions of dollars in 2022. Caisse de Depot et Placement du Québec, an institutional investor managing pensions in Quebec, wrote off its $150 million investment in Celsius.
In April 2023, the Ontario Teachers’ Pension Plan decided to steer away from crypto entirely after it lost its entire $95 million investment in FTX.
Since crypto’s dark days in 2022, Poilievre and the Conservative party have mostly stayed quiet on the subject. Indeed, many of Poilievre’s statements circulating on social media since Trudeau’s resignation are over two years old.
As for Canadians and their representatives in government, crypto is simply not a priority. Rohani told Cointelegraph:
“The reality is that most Canadians are either indifferent or skeptical about crypto, and larger issues like the affordability crisis, housing, inflation and immigration dominate the political conversation.”
Rohani continued, “To win a majority, the Conservatives need to appeal to voters in traditionally Liberal ridings [electoral districts], as we’ve seen in recent by-elections. Taking a strong position on crypto could risk alienating this base.”
If the 2024 by-elections are any indication, Conservatives will adjust their policies to appeal to middle-class and urban voters in swing districts.
And, unlike the US, Canada has strict limits on campaign financing and lobby groups. There are no political action committees that can put their thumb on the scale to the tune of hundreds of millions of dollars.
“Corporate and union donations are banned, individuals face low contribution limits, and PACs don’t exist. In the US, campaign contributions are a major driver of political influence, including in the crypto sector,” said Rohani.
Future crypto embrace still on the cards
While Bitcoin may be notably absent from the current political rhetoric, many industry observers agree that the Conservatives will likely engage with crypto after the elections.
Dean Skurka, CEO of crypto investment firm WonderFi, said, “PM Trudeau’s departure could signal a reset in leadership that brings fresh perspectives on emerging industries like crypto. It’s an opportunity to engage policymakers on the economic potential of digital assets and advocate to make Canada a global leader in this industry.”
Rohani agreed that crypto had a place in Canada in the future.
“Conservative government would bring more openness to engaging with the crypto industry and a willingness to explore how blockchain technology can address critical challenges in Canada.”
According to Sophia Cote, head of policy at Canadian crypto exchange service Shakepay, there’s plenty of work to be done. Fiat-backed stablecoins in Canada are currently in a lurch, as they are regulated under securities laws, which are “creating significant regulatory challenges for regulated crypto trading platforms.”
Per Cote, this has driven some investors to offshore platforms, where regulatory oversight and consumer protections are less certain.
She also noted that “Bitcoin isn’t included in the definition of qualified investments under the Income Tax Act. So, Canadians can’t hold cryptocurrency in a tax-advantaged account for their long-term savings.”
Despite these issues, Cote feels cautiously optimistic that crypto can be embraced in Canada.
“As we approach a federal election this year, there’s a unique opportunity to position crypto as a multipartisan issue, […] especially because the sector can help solve major policy challenges like affordability and make our banking sector more competitive.”
Trudeau will serve as prime minister until March 9, when Liberals are slated to choose a new party leader. Federal elections are set for Oct. 20.
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This article first appeared at Cointelegraph.com News
