Lying. It's what they do.

Michael Geist:

Within days of the Yes Men incident, both Environment Canada and the Canadian Cyber Incident Response Centre, which is part of Public Safety Canada, wrote to the hosting ISP to ask that it shut down the fake websites. While officials understandably pointed to trademark and copyright concerns (the sites were designed to look confusingly similar to actual government websites), those claims alone would not have been enough for most Internet providers to act.

Instead, officials used both the persuasive power of an official government request combined with inaccurate claims that the sites were engaged in phishing to escalate the issue. One email to the hosting company noted the request was sent on behalf of the Minister of the Environment to demand prompt deletion and removal of the hosted sites. The same email claimed the sites were involved in phishing, leading the German-based Internet provider to promptly shut them down.
...
While the sites were obviously an embarrassment, there were several avenues to address the issue. Officials could have filed a complaint with the Canadian Internet Registration Authority, which manages the dot-ca domain (both sites used dot-ca addresses). Alternatively, they could have turned to the courts for an order to either shut down the sites or suspend the domain name registrations. Instead, the phishing claim effectively substituted one hoax for another and, in the process, undermined the trust in a global system designed to guard against identity theft.

What I wonder is what consequences might result if it's possible to prove the Cons had no reasonable basis for alleging that phishing was involved. It could be that a government department doesn't face either possible obstruction-of-justice style criminal charges (and it may be that the report was only made to the ISP in the first place rather than any government body), but at the very least one would think the sites which were wrongfully taken down would have a case for punitive damages for a claim made in bad faith. And it's surely an embarrassment for Canadians in general that our good name has been used in a fraud on the international community.