Proceedings of the Standing Senate Committee on
National Security and Defence

Issue 10 - Evidence - Afternoon sitting

The Standing Senate Committee on National Security and Defence met this day at 1:12 p.m. to conduct an introductory survey of the major security and defence issues facing Canada with a view to preparing a detailed work plan for future comprehensive studies.

Senator Colin Kenny (Chairman) in the Chair.

[English]

The Chairman: The Standing Senate Committee on National Security and Defence is the first permanent Senate committee with a mandate to examine the subjects of security and defence.

We began our work last July with formal hearings in Ottawa. We received detailed briefings on defence policy and on the current capabilities and future challenges of the navy, army and airforce. In the fall, we focused on security and intelligence matters as well as on defence operations. Last November, our committee visited military bases in Esquimalt and Winnipeg to learn firsthand about the Canadian Forces. Last week, we visited military bases in Halifax and Gagetown. In addition, we have visited airports and seaports in Montreal, Vancouver and Halifax. Next week, we travel to Washington, D.C., for meetings with members of the United States Congress, administration officials and representatives from various institutes.

We have several objectives for our visit to Washington. We wish to discuss Canada's contribution to the efforts since September 11. We wish to understand the views of the U.S. Congress and administration in regard to current and future military and security issues and how Canada relates to them. We also wish to promote a better understanding of bilateral cooperation for homeland security, as well as future U.S.-Canada defence arrangements, and to examine specific issues of NATO enlargement, the missile defence system, NORAD, joint command questions, border issues and measures to combat terrorism.

Today, we have before us from the Department of Foreign Affairs Mr. Jon Allen, Mr. Kevin O'Shea and Mr. Bruce Levy.

Please proceed, Mr. Allen.

[Translation]

Mr. Jon Allen, Director General, North American Bureau, Department of Foreign Affairs: Thank you, Mr. Chairman, for this opportunity to discuss with you our views on Canada-U.S. relations.

[English]

It is a pleasure for us to be here. I will talk about the border, and Ms Sinclair, Director General for the International Security Bureau, will be here later to talk about the political military side.

Honourable senators, no two countries anywhere have such a complex and mutually beneficial relationship that touches so many areas of policy, both foreign and domestic, as do Canada and the United States. For Canada, in particular, this relationship is pervasive and of paramount importance. A senior U.S. official, Mark Grossman, now the Undersecretary for Political Affairs at the U.S. Department of State, once called it an "interdomestic" relationship, both international and domestic, because so much of what happens in Canada or in the United States has an impact in the other country.

Through the NAFTA, we share the largest bilateral trading relationship in the world. We share a common stewardship of the environment through numerous treaties in the International Joint Commission. We are partners in the defence of North America through NORAD and NATO and in the defence of human rights and democracy. For Canada, this relationship exists with the world's undisputed economic and military superpower - or as the French like to say, the "hyperpower." For Canadians, figuring out how to manage this relationship has been and will always be a fundamental challenge.

Since September 11, our vital interests with the U.S. remain exactly the same as before; however, September 11 has put into even higher relief the issues of economic and security interdependence in North America. The issue of security and more security is at the top of the U.S. agenda, post-September 11. President Bush, his administration and Congress are totally focused on this challenge.

The President's popularity is at stratospheric levels because, in the aftermath of September 11, he came forward with strong plans for defeating terrorism and defending America. His recent budget requests, $48 billion in new spending on defence and $38 billion, a doubling of their previous budget, for homeland security issues, are an indication of the administration's priorities.

There are two dynamics that I should like to underline in regard to U.S. security issues at this time. First, the United States built its fight against al-Qaeda on the basis of a coalition of the willing, not on the traditional alliances that underpinned U.S. foreign policy in the Cold War. Allies self-select; they contribute what they can or wish to contribute. Even countries once on American blacklists can earn credit for meaningful contributions to the effort. In this dynamic, influence in Washington is more dependent upon the willingness to share burdens and risks.

Second, for the first time, perhaps since Pearl Harbour, Americans are experiencing vulnerability. The Cold War is over, but they now feel vulnerable to a raft of new threats including the proliferation of weapons of mass destruction, global terrorism, drugs and international crime. Americans are aware that they have implacable enemies who are still able to strike at them, and thus the focus on homeland defence.

Canada has responded to the immediate challenges of the international campaign against terrorism. We will also have to think through how we react to the increased U.S. preoccupation with the defence of its homeland. Canadian action to date on the campaign against terrorism has been significant, as honourable senators are aware. The administration has been highly appreciative of this contribution to the coalition and recognizes that Canada, perhaps along with the U.K., is providing unique materiel support. For example, Canada's military contribution is amongst the highest of all the allies. Our contribution list includes our Hercules transport aircraft, Aurora patrol planes, our five warships, our special forces unit, JTF-2, and the Princess Patricia battle group that will soon deploy.

At home, the government's Ad Hoc Cabinet Committee on Public Security and Anti-Terrorism examined all aspects of our legislative framework to see if we were missing essential elements in our legislation, procedures, programs or international treaties. As honourable senators are aware, two significant omnibus bills were brought forward out of that committee.

In addition, the government strengthened its security, intelligence and border capabilities in the last budget to the tune of $7.7 billion. Canadian cooperation with U.S. agencies in intelligence and law enforcement has been intense and productive. On this front, as you will have heard last Friday and over the weekend, Attorney General Ashcroft praised Canada for providing the information that identified two new terrorist suspects.

While all of these actions supported the campaign against terrorism, they were also in the spirit of the Canadian tradition of defending our own liberties and security. In the government's view, they represented a strong assertion of our fundamental interests and of our sovereignty.

We will be facing other policy challenges on security. The Bush administration appears determined to proceed with ballistic missile defence. The President's recent decision to withdraw from the ABM treaty, effective in June, will raise issues in Canada over the strategic arms control architecture, especially if a framework agreement is not negotiated with Russia.

As well, the Pentagon is considering its options regarding its military command structure - the unified command plan, or UCP as it has been known - that could have implications for the bilateral defence relationship. You may hear more on this subject this afternoon, but decisions in the U.S. are still pending.

Apart from these security issues, we will continue to engage the U.S. on our economic and trading partnership. Access to the U.S. market and U.S. capital is a fundamental requirement for the prosperity of Canada. You know the statistics. Over $1.9 billion in goods and services flows across our border each day, every day, 365 days a year. Our exports to the U.S. constitute approximately 87 per cent of our merchandise exports and 43 per cent of our GDP. We receive 67 per cent of our foreign direct investment from the United States. For its part, the United States sends 25 per cent of all their exports to Canada.Thirty-eight states, and not just the border states as one might imagine, have Canada as their largest trading partner. Unfortunately, our trade with the United States represents only about 2 per cent of their GDP, not the 43 per cent that we have in respect of their trade.

On any given day, 97 per cent of that trade is dispute-free, but irritants remain, and those tend to be the chronic irritants, such as those related to softwood lumber, steel, wheat, and other agricultural products such as dairy. Those can have a significant impact on the Canadian economy. Moreover, with a flattening world and North American economic situation, the forces of protectionism in the U.S. are strengthened as all politics become increasingly local. Minister Pettigrew has been extremely active in his efforts to arrive at a solution on the softwood lumber issue, but it has not been easy. His consultations with the provinces and industry have been productive. The President appointed a former governor, Mark Racicot, from Montana, to assist in finding a mutually acceptable solution.

Unfortunately, we Canadians have neither the votes nor the money to play the congressional game in Congress. Instead, we work with the administration and, equally important, we make common cause with American allies who share our interests and who do have the votes and the money.

One question is whether and when the Bush administration might weigh in against the lumber coalition out of recognition that it is essentially engaged in protectionism, contrary to the free trade philosophy of the Bush administration.

Energy security also is high on the congressional agenda. On the one hand, it could tip the balance in favour of drilling in the ANWR - the Arctic National Wildlife Refuge - which we oppose. On the other hand, it could provide some important opportunities for Canadian suppliers. Canada is, of course, the largest and the most reliable supplier of energy to the United States.

On a related issue, the U.S. decision not to sign the Kyoto agreement on climate change could place economic pressure on Canada as we contemplate our own decision of whether or not to ratify.

September 11 also highlighted more than ever a key dimension of our economic relations with the U.S. - the border. Almost immediately after September 11, based on erroneous media reports, many Americans suspected that at least some of the terrorists had penetrated the U.S. through Canada. Enormous attention was suddenly focused on border security. The border essentially shut down. We quickly realized that heavy-handed and ill-thought-out security initiatives could cripple key Canadian industries, with downstream consequences for investment and, of course, for jobs.

We were fortunate when President Bush asked Pennsylvania Governor Tom Ridge to be his new Director of Homeland Security. Governor Ridge is well known to Canadians. From Pennsylvania, he understood the economic relationship with Canada and the realities of the border. He had led trade missions to Ontario and to Quebec as a governor. He and Deputy Prime Minister Manley signed the Smart Border Declaration and a 30-point action plan in December and are committed to seeing it implemented before June.

Today, the administration and, increasingly, Congress acknowledge that the terrorist threat did not originate from the porous northern border. Officials in Washington and, increasingly, the media recognize that Canada's actions to strengthen the border allow for creative approaches to ensure smoother cross-border trade.

In conclusion, I think we can agree that, as always, we have a full and challenging agenda with our American brethren, but our stock in Washington right now is high. The President and the Prime Minister have a strong personal relationship, allowing for quick access on tough issues. Foreign Minister Graham will be meeting Colin Powell and forging their relationship in the not-too-distant future. Given the stakes involved, the management of the relationship will remain a high priority for all Canadians.

Senator Day: Are we still in the reaction stage to the September 11 terrorist attacks on the United States, or are we beginning to see a new order in the manner in which international matters will be policed and influence brought to bear on different countries? Are we seeing the end of the cooperation of the United Nations and more groupings based on people wanting commercial access to another country, particularly the United States, with the Americans saying "You are either with us on this issue or you will not trade with us"? Would you react to that?

Mr. Allen: I would make several points. We are still in the process, in some ways, of reacting to September 11. The activities that our various agencies - CIC, CCRA, Solicitor General - are engaged in with respect to their cooperation and work with U.S. agencies is ongoing and will continue for some time. Generally speaking, in international fora, the terrorism agenda is very high and very active. Whether it is the OAS, the G8 in Kananaskis, or in NATO, there will be a continuing focus on terrorism and on the means to combat it.

In terms of whether this represents a watershed and a turning away from the United Nations, I think it does not. Currently in Afghanistan, both the United Nations and allied forces are operating. Koffi Annan and Deputy Prime Minister Manley were in Kabul over the weekend. They were, in a sense, acting in concert to try to address the problems in Afghanistan. The United Nations is taking the lead on humanitarian food relief. The force lead by the British, and in some cases the Americans, will be providing security.

We are in a balance, and that is probably healthy right now. I do not think one should in any way tie what we did on the border, or what we did in December in the budget, to gaining access to American on the economic front, for example. The government avoids linkages. We are not saying to the Americans, "We have done this for you, so what will you do for us on softwood lumber?" We did what we did because it protected Canada and North America. Much of what was negotiated in the action plan was to beef up facilitation at the border to ensure that we do not get caught in a similar situation in the future. We will have to fight the softwood lumber, dairy and other issues separately.

Having said that, we are in good standing in the United States because we have stepped up to the plate, and I do not think that hurts when we are in discussions with the Americans or when the Prime Minister is talking to the President.

Senator Day: Do you get the sense that issues such as softwood lumber and the dumping of salmon in the United States by Chile, which is affecting the East Coast fish farming industry, are more difficult to resolve because of the September 11 terrorist act and the reaction and the mood within the United States?

Mr. Allen: I wish I could say that the focus on terrorism has made what we could call the protectionists in the United States forget about that and turn their minds elsewhere. However, I do not think it has. I think that the economic downturn has caused Americans to continue to pay great attention to their markets, to their goods and to protecting what they consider to be their economic interests.

That is not to say that in good economic times, during the nine years of economic growth we saw in the United States, we did not have trade disputes, but the issues get even more difficult when there is a recession in the United States.

Senator Day: Are there two moods running at the same time in the United States? Are you detecting a mood of isolation from the point of view of their own industry and, at the same time, a desire to reach out from the point of view of international terrorism in order to protect their homeland by stopping this activity wherever it might be happening?

Mr. Allen: There is certainly a vulnerability and a desire to take care of the homeland. As I said, there is a continuing desire to protect their markets on the one hand. On the other hand, the United States was criticized for being isolationist and unilateralist when the new administration came into power. There were perhaps some signs of that, but there were also signs that they had begun to engage on other files.

Many would argue that September 11 has demonstrated to the United States that they cannot operate alone in the world. They have looked to their allies to assist them and a number, including Canada, have stepped up to the plate. There is a bit of the yin and the yang on that one issue.

Senator Day: I am detecting two moods. When will the mood develop in the United States administration to patch up irritants with good friends rather than allowing them to fester in order that we can get on with life?

Mr. Allen: I do not think that will happen. From their point of view, those irritants are as much the fault of their allies as they are of the local industry. There are many in America who allege that we are dumping softwood lumber, and they will continue to do that until we finally settle the case. I do not think we will ever get to a point where the Americans will say, "Thank you so much for all your efforts; we will put aside these two or three disputes."

It is such a complex system. There are so many players in the U.S. - Congress, each individual congressman, their constituencies, their interests. They are playing on one set of files while the administration is playing on a whole other sets of files. We have to deal one on one with the facts of our trade disputes and our other disputes, marshalling our resources and finding our allies. We will probably not be able to call in these other chits.

Mr. Kevin O'Shea, Director, U.S. General Relations Division, Department of Foreign Affairs: The United States administration definitely came out with a very strong trade liberalization agenda, and they have used it post-September 11 to argue that trade liberalization is part of the contribution to economic security. As Mr. Allen has said, power is so diffuse in the United States that even if the administration wanted to solve each one of these disputes, it may not have in its power the ability to do so. The recent vote on the trade promotion authority was 215 to 214, I believe. Who knows what deal was cut to get some of those votes. There is always this type of trading going on in the United States system between very powerful congressmen and senators. Even if the administration had the will to resolve all these issues, there is no certainty that it could, and I think that is what we are seeing on softwood lumber. The Prime Minister has made the issue very clear to President Bush. He is very aware of it, but they are dealing with a very powerful lumber coalition which, in many ways, is calling the shots on this matter.

Senator Day: Do you see the mood of vulnerability in the United States and, therefore, an isolationist attitude exacerbating the problem and reducing the opportunity for a settlement of the softwood lumber issue, for example?

Mr. O'Shea: Before September 11, the U.S. administration was in many ways very much focused on the hemisphere and Mexico. September 11 has shown how important a partner Canada is to the United States. That will be a factor in the desire of the administration to solve some of these issues. How it can solve them is another question.

Senator Day: I hope you are right.

Senator Meighen: I was encouraged by your statement, Mr. Allen, that Canada is appreciated for what it has done. I do not quarrel with that. However, I wonder how deep it runs, given your remarks about the diffuse power base in the United States. I imagine we will get a taste of it when we meet with people in Congress. Could you expand a bit on that and, in particular, give me some indication of how aware the American people are of what we have done, or what we have not done.

You stated the fairly widespread feeling that was prevalent in the immediate period after the attacks of a porous border to their north with all these dreadful people pouring through. There was the impression that we let anyone who wants to come in come in, and that they just skip across the border. Many people were concerned about that.

I am not asking for empirical evidence that people are not so concerned; however, upon what do you base your encouraging remarks? Are they based on a detailed assessment or a feeling? I have the feeling that it is better than it was.

I would offer an editorial comment that there is still a body of opinion out there that if they could seal the border, both north and south, they would be were off.

Mr. Allen: First, the United States is a big place. There are many views in Congress; some of them are informed, some of them are less so.

How aware are the Americans of what we have done? We have given you a small package of material. Much of that package represents our efforts post-September 11 to ensure that Americans know what has been done. Not only has this material been handed to every member of Congress and every major media outlet, whether print or otherwise, but we are continually bombarding both Congress and the media with evidence of the contribution of Canada.

We had a number of ministers in the States right after September 11, lead by the Prime Minister and followed by then Foreign Minister Manley and virtually every other cabinet minister. Commissioner Zaccardelli and Mr. Alcock have been there. They were all part of the effort to explain the level of cooperation to those Americans who were not already aware, or to reinforce it with others.

A September 12 report in The Boston Globe suggested that two Canadians somehow came by ferry. CNN broadcasted that story to millions of Americans; it did a lot of damage. It has taken not only our efforts but also meetings by Minister Manley with Hillary Clinton and a number of senators to explain the reality.

When I suggest that our activities are appreciated, I am really talking about the administration. I am talking about Colin Powell, Secretary Rumsfeld, Secretary of Transportation Norman Mineta and Attorney General Ashcroft. Mr. Ashcroft recently sent Minister MacAulay a gift, on the basis of the friendship they have developed. A whole set of new, intense relationships have developed post-September 11.

Do most Americans or most members of Congress know what we have done? I would say not.

I have served in Mexico. Do most Americans understand the importance of Mexico to trade, to the economy or to the tourism industry? Absolutely not. Americans know only the threat of Mexico in drugs, illegal migration and pollution. They do not know the good side about Mexico; nor do they know the good side about Canada.

Generally speaking, from my experience after three years in the United States, they pay attention to threats. They pay attention to China. Russia is off the radar screen; China is the new threat. Korea is a threat, as is the Middle East. Americans do not pay attention to the grade-A student. They pay more attention to Colombia than to Canada because Colombia is a problem for them.

We are their best friend and ally. It is disheartening for us, but the Prime Minister's characterization that we are a family, as opposed to something else, is true. Your brother and sister do not always give you the credit you deserve.

Senator Meighen: You stated that we have set aside $7.7 billion for border security. I think I can say without fear of contradiction that this committee, in its travels - and I realize that it is early days - has received the impression from people in CCRA and in ports across the country that although $7.7 billion may have been set aside they have not seen any money, nor do they know where the money is going. Some of the material to which you alluded may contain that information.

I am as guilty as some of the people this committee talks to - I do not know where the $7.7 billion is going either. I am terrified that I will be asked about this in Washington. Would you please elaborate for me?

Mr. Allen: You will have an opportunity this evening to speak to representatives from CCRA, CIC and some assistant deputy ministers. They have a pretty good handle on how much money they are getting and where they are hoping it will go.

For example, $600 million will go for infrastructure on the border. Significant amounts of money will be spent on airport security. Certainly, there will be a significant amount of money for control officers abroad so that we can try to deal with the threat where it is most effective, outside of North America, certainly not on the 49th parallel.

Only about $1.2 billion of the $7.7 billion is border-related. Much of the other money is for CSIS, the RCMP, areas not necessarily related to the border but areas that will contribute to our security and, perhaps, to cross-border security.

Perhaps the money has not filtered down yet. It may take some time. My understanding is that it is real money. We are beginning, for example, with this 30-point action plan to implement some of the new pilot projects on NEXUS, examining ideas like clearance away from the border and getting our immigration people out to Delhi and to Hong Kong to work with their American counterparts.

Senator Meighen: Is there not an expansion of Americans stationed in Canada?

How would that work? There would have to be an agreement between both countries; correct?

Mr. Allen: If you are referring to new enforcement personnel at the embassy, that already exists. Of course, the Canadian embassy in Washington has RCMP personnel.

Senator Meighen: My understanding is that it was for airports and ports of entry.

Mr. Allen: Pardon me. As you know, there are U.S. Customs and Immigration officials at certain air preclearance locations. Ottawa is a good example. There is talk about land preclearance and how that might work. There is a variety of possibilities, including reverse inspections - putting Canadians on the American side and Americans on the Canadian side. That might happen in Detroit-Windsor. We are also looking at joint facilities.

Senator Meighen: Do we have a view of that?

Mr. Allen: We are in the midst of exploring that. We are doing modelling to see where something like that might work. We are doing a fair bit of legal analysis to understand the Charter implications, among other legal implications, of having Americans on Canadian soil. The Americans are doing the same thing.

Our understanding is that the issue is not guns but the carrying out of powers. These issues are in the process of being examined. They are complex; they touch sensitive nerves. We are trying to do all of our homework before we decide which way to go.

Mr. O'Shea: It is part of the 30-point action plan in terms of the Smart Border Declaration.

Incidentally, in the document we are handing out, there is a paragraph on the $7.7 billion over five years. It shows some of the areas where that money will be spent. Part of the problem related to the $7.7 billion, is that the government is gearing up to get that money, and each department has to put it in after the budget.

Senator Meighen: I understand. It does not come immediately.

Mr. Bruce Levy, Director, U.S. Transboundary Division, Department of Foreign Affairs: It is not just a question of gearing up but of doing it right. The money has been identified, in principle, for departments, but on a fairly general basis at this point. We have unprecedented attention to the border and to security issues right now. That unprecedented attention, however, brings significant and warranted pressure to do it right. As Mr. Allen mentioned, there are many options, from measures that could be taken immediately on the border, to moving the border away from the border, to using biometrics, which is using facial recognition and fingerprints, for example, to identify people as they come in and out of Canada or the U.S. However, none of these things yet comes with a 100 per cent endorsement.

Having just returned from a meeting in the United States last week with U.S. Customs and Immigration personnel and their Canadian counterparts, it has become evident to me that there are no simple, obvious answers to these questions.

With respect to these funds for which people before you and others have been pressing for some years - September 11 was a tragedy but also represents a opportunity - officials want to be sure, as do ministers, that they do it right.

Mr. Allen: With respect to the $600 million for infrastructure, for example, we want to ensure that a bridge we build on the Canadian side will be joined with a highway on the American side. The Department of Transport in the U.S. was meeting in Windsor last week while its counterparts were meeting in Fort Lauderdale. As Mr. Levy said, we are in an effort to ensure that we maximize the benefits of the expenditure of this money.

Senator Meighen: In the Maritimes last week we heard a great deal about unmanned borders and the fact that we rely on the American technology to tell us when someone has crossed the border during unstaffed hours. Obviously, they feel that they are carrying the ball on that. I imagine we will hear more about it.

Mr. Allen: I am from Manitoba. Senator Dorgan used a red traffic cone to make a point about the border. We must be realistic. The Americans have spent a huge amount of money to seal their southern border, but somewhere between 6 million and 11 million illegal immigrants are currently in the United States.

Sealing our borders, or even putting 20 people at Emerson, will not solve our problem. We will solve it by working cooperatively on intelligence, on law enforcement and on preventing terrorists from coming into North America. It is a matter of determining low risk and high risk. You let low-risk people come through and you focus attention on those who cause you concern.

Senator Banks: Mr. Levy, what constitutes the transboundary matters with which you deal? Everything we talk about is a transboundary matter. Can you put a circle around it?

Mr. Levy: Sometimes we think it is everything we talk about.

Senator Banks: They all bump into each other, do they not?

Mr. Levy: They do. One of the challenges we face is trying to keep some of the issues my division is responsible for on the radar - issues which are important regionally, if not always nationally - at a time when certainly the U.S. focus, and the Canadian focus to an extent, is overwhelmingly on the border-security issue. One half of our division deals with energy, natural resources and environmental issues. Under that are the IJC, bulk water, the ANWR question, energy policy generally, natural gas and fisheries on the border side. The other half of our division deals with the border itself, that is, crossing the border.

Senator Banks: Do you mean the operation of the border?

Mr. Levy: Yes. That has been institutionalized over the years, prior to September 11, through a number of fora, including the Shared Border Accord, which is an institution of the two customs agencies. The immigration agencies work together under what is called the "Border Vision" exercise. There is also the Cross Border Crime Forum, which involves the Solicitor General and the Attorneys General. That is how we are divided.

Senator Banks: Do you also deal with the Boundary Waters Treaty Act?

Mr. Levy: Largely through the IJC, yes.

Senator Banks: When we ask an American, "Who is your biggest trading partner," often the response is "Japan." However, we say that we are their largest trading partner. You told us that Canada constitutes for 2 per cent of their exports.

Mr. Allen: We constitute two per cent of their GDP and 25 per cent of their exports.

Senator Banks: Are we their biggest trading partner? Is that in one direction, or is 25 per cent of their exports and 2 per cent of their GDP a two-way street?

Mr. Allen: Yes it is a two-way street.

Senator Banks: We are their biggest trading partner on both sides of the street?

Mr. Allen: Yes.

Senator Banks: I would hate to yell that out loudly in Washington and have someone say, "Let me tell you the truth."

Mr. Allen: They have 300 million people, and it reflects the fact that their economy, unlike ours, does not depend on exports. Their economy is virtually self-generating. That is part of the reason that when their trade deficit goes up, they make some noises, but they are not that concerned because that is not what generates most of the jobs in the U.S.

An interesting statistic is that more trade goes on across the Ambassador Bridge and the tunnel at Detroit, those two transfer points, than all the trade between the United States and Japan. Not only are we the largest, we are by far the largest. You are absolutely right. They would probably say that Mexico is their second largest trading partner. This goes back to what goes across that bridge.

Senator Banks: Every Canadian knows that.

Mr. O'Shea: Along those lines, while I was posted in New York I attended seminar on U.S. trade. The only country that was not mentioned mention during that seminar in terms of the importance of trading partners, was Canada. Incidentally, Henry Kissinger was in attendance.

Most Americans do not realize that Canadians buy more American goods than Mexico and Japan combined. Moreover, Canada is a larger market for U.S. goods than all 50 members of the EU combined. In addition to what Mr. Allen mentioned, they are totally unaware of that fact.

Mr. Levy: To complete this, we will chime in and ask your U.S. counterparts where most of their energy exports come from.

Senator Banks: I know we sell them more oil than Saudi Arabia. However, that has not been the case for very long.

You mentioned the question of overseas intelligence. You talked about it in terms of immigration, sending people abroad so that we have a better idea of what is happening. Canada has been absent since the last war, at least in terms of any foreign intelligence-gathering capability, whether it is covert or information gathered by commercial attaches who report back to their embassies. We do not have any spies, to put it more simply. Practically every other country in the world does, including those who spy on us. We have heard from a number of security people that it would not be a bad idea if Canada had some covert foreign intelligence-gathering capability, including, it has been suggested, in the United States. What is your view of that, Mr. Allen?

Mr. Allen: I can honestly say that I am not the expert in that field.

Senator Banks: I know, but would it be useful to you?

Mr. Allen: Even if we went there, I doubt we would have any agents in the United States. I think I am right in saying that.

Senator Banks: Do you think that the United States has agents in Canada?

Mr. Allen: I do not know.

Senator Banks: If we did it right, nor would they.

Mr. Allen: I think we would have a problem doing it right. I think the Israelis tried that, and they have somebody in jail in the United States that they have been trying to get out, even though they are pretty good at it.

We foreign service officers like to think that we are intelligence gatherers, and we certainly do a lot of intelligence gathering, but it is overt not covert. My colleagues may want to jump in on this one, but I will pass on it.

Let me say just one thing. Having spent four years in Washington, the problem was not getting information; the problem was that there was too much information. In some ways, it is a problem with the United States. September 11 was a fairly colossal intelligence failure, and not one from a lack of information.

Senator Banks: It appears as though it was a lack of processing available information.

Mr. Allen: Yes. I do not know whether it would be of great benefit to us or whether we need it to advance our interests.

Mr. O'Shea: The only thing I have heard that might be of benefit to Canada would be the ability to contribute to a larger pool of intelligence information. If we had a foreign intelligence agency that was gathering information, it could add to the greater pool of knowledge that is largely dependent now on American, British or French sources. We cannot contribute to that pool because we do not have a foreign intelligence service. It would be seen as a contribution to an overall Western security system.

Senator Banks: Are you comfortable now with the Canadian capacity to process information that we either obtain for ourselves or receive from others? We used to be good at that, during the beginnings of the Cold War.

Mr. Allen: I could not say.

Senator Banks: I will ask that question of specific people tonight, then.

What is your view, Mr. Allen, concerning the treatment of prisoners by the United States? What is your advice to us regarding an approach to that? We will be raising the question. Canadian soldiers may be taking prisoners if the Princess Patricias find themselves in that situation. It is impossible to send troops into an armed conflict and tell them not to take any prisoners; that is not the right message.

Everyone knows that there is a question of whether we will adhere to the Geneva Convention. Secretary of the State Powell raised that question today. What is your view, and how should we deal with that?

Mr. Allen: It is not completely clear what is happening in the United States, but certainly Vice-President Cheney and Secretary of defence Rumsfeld were clear that they want these prisoners not to be designated as prisoners of war under the Geneva Convention but as unlawful combatants. Whether Secretary of the State Powell has taken a different position is not clear. It is my understanding that Secretary of the State Powell may be taking the same position the Canadian government would take, that whether these people are prisoners of war under the Geneva Convention is to be determined on a case-by-case basis, that they are entitled to have a tribunal make that determination.

Senator Banks: That is what I understand his position to be.

Mr. Allen: Again, I am not acting as a lawyer in the department right now, so it is not easy for me to say what the Canadian government's position is on this. However, I think that is where we would stand; namely, that they are entitled to a determination under the convention.

The questions to ask are the following: On what basis are the Americans making a determination that they do not have to put these people before a tribunal? What is the basis under international law? That is not entirely clear. Some of these people may well be al-Qaeda and terrorists, but some of them may have been Taliban combatants.

Senator Banks: They may have been defending, as they saw fit, their country from attack.

Mr. Allen: I do not know all of the facts nor all of the prisoners in Guantanamo Bay or in Afghanistan. However, if some of them are not al-Qaeda, then it is not clear on what basis that determination can be made. However, there may be facts that I am not aware of. The International Committee of the Red Cross has been there. They have done a report, and we will have to wait and see how it plays out. It puts our forces in a difficult situation.

Senator Banks: It would today.

You mentioned the recent identification of two terrorists by our intelligence people. defence Secretary Rumsfeld suggested that that has been of great assistance to the American security effort. To the extent that you can, would you tell us that story chronologically? Was the fact that they existed and the fact that they were Canadians identified by the American intelligence services, or did we say, "We found two terrorists for you"? Which of those scenarios occurred?

Mr. Allen: To be honest, I do not know. However, I understand they were under surveillance in Canada. Certainly, our intelligence forces were aware of them. I cannot say whether we were initially made aware of them by the Americans, or whether we were aware of them and advised the Americans, who then put the video and the individuals together.

Senator Cordy: My first question concerns the relationship between Canada and the United States. Mr. Allen, you portrayed it very well when you said that it is almost a domestic-international relationship that we have. Certainly, since September 11, the U.S. is preoccupied with homeland defence, and Canada has shown great support in the campaign against terrorism.

I have noticed concerns in the media by a few who are afraid that we will lose our independence, in terms of what we will do in this campaign against terrorism, and that we will just follow the lead of the U.S., almost getting caught up in a snowball effect.

Mr. Allen: I understand why people are concerned. Simply put, it is because the U.S. has made it a huge priority, because we have joined in the campaign against terrorism and because, in defending Canada and in protecting our own security, we are inevitably also protecting North America. Having seen how the Smart Border Declaration and the 30-point action plan were developed, for example, I personally feel that we have in no sense or in any way given up our sovereignty. That was an action plan put together in Canada, by Canadians, and taken to the Americans. As I said before, it reflects a sincere effort to ensure that there is facilitation and that our economic security is protected, while assuring the Americans and ourselves that the security equation has been taken care of.

There was a sense of vulnerability in the U.S. There is no question that the work of the Ad Hoc Cabinet Committee on Public Security and Anti-Terrorism was essential to get the security equation down pat. It provided assurances to the Americans. However, at the same time, it did things that we had been trying to do in Canada for a long time.

In the past, we ratified international terrorist conventions that had been on the books while there were more important things happening. We now have more money for the RCMP. The RCMP had been looking for more money for quite a while. As well, we will be beefing up immigration. There was a tightening of immigration laws in ways that many Canadians and the government thought probably should have happened a while ago. However, there was, perhaps, a focus elsewhere.

In my opinion, and I think in the government's view, nothing in what happened post-September 11 detracts from our sovereignty. We took decisions in our own interests that in fact enhanced our sovereignty.

I think what we are seeing is a confluence of events. For example, we are serving in Afghanistan under U.S. command. We have engaged in discussion on the border. The dollar is at a low point. If you want, you can put all of this together and say that we are losing our sovereignty. However, if you examine each event independently, the connection is not there. While I understand it, it does not concern me and I do not think it concerns the government broadly.

Senator Cordy: After September 11, Canadians also felt vulnerable. It is good to have you clarify that in fact we are taking made-in-Canada initiatives.

My second question concerns the anti-ballistic missiles to which you made reference in your opening comments. We get the sense that Mr. Bush is very intent on a missile defence system. I have not heard details of it, but one knows that this is his intent. I would say that the American public after September 11 is now more supportive of his intent than they may have been previously. This would also involve the abandonment of the ABM treaty. What is Canada's position on the missile defence system?

Mr. Allen: There are those who argued that September 11 proved that we did not necessarily need a ballistic missile defence shield because the threat did not come from anti-ballistic missiles; rather, it came from individuals flying planes. There are others in the United States who argued that the threat is a suitcase bomb or a cruise missile. There are many ways that one could get to the United States. Many predicted bioterrorism long before the anthrax scare post-September 11.

On the other hand, the Bush administration takes the following position: We could and should defend against all of those possibilities, but that does not mean we should not defend against ballistic missiles. They are concerned again with rogue states, whether Iraq or North Korea. They also have a concern that these states could threaten the U.S. in its discussions with others.

I do not think it is for Canada to make a decision about whether the United States is right or wrong or whether the missile defence system is expensive or will work. Clearly, that is their decision. Our concern as a country is that there is a basic strategic architecture, that there is a rule of law and that this strategic architecture falls within some semblance of order.

The reason that ballistic missile defence causes a problem is that it was prohibited under the ABM treaty. The Americans have withdrawn. Our position would be that the Americans should continue to negotiate with the Russians, as they have, on reductions in total arsenals and on creating a new strategic framework that would give some stability in the area of arms control and disarmament. We have not taken a position on whether we will participate. Frankly, the Americans are in the testing phase. At one point they were testing only a land-based option. They are now testing a sea-based option and a space-based option, something that would hit missiles just as they took off, or a laser on a plane that would attack missiles in the air.

In many ways we are in a wait-and-see mode. We are waiting to see what they will decide to do and whether they want our participation.

Senator Atkins: I should like to ask a question about NAFTA and the provision in that agreement with regard to dispute mechanisms. Are they working?

Mr. Allen: The mechanisms that are there are working. Unfortunately, there were no dispute settlement mechanisms with respect to anti-dumping and subsidies. Thus, many of the problems we have fall into areas to which specific dispute resolution mechanisms do not apply.

Canada has been pushing both the United States and Mexico to consider some rejigging of the NAFTA. Amending it is difficult because it would require opening up the whole treaty. However, some rejigging of it could allow for a dispute settlement mechanism. Thus far, we have not been successful. Americans seem to love their anti-dumping measures.

In other aspects of the NAFTA, and previously the FTA, there have been a number of disputes. We have been engaged with the Americans primarily. We have won a number of disputes in that process. Where it works, it works; and where there are no mechanisms, we tend to have to use other means.

Senator Atkins: It is too bad the NAFTA did not include anti-dumping.

Mr. O'Shea: The good news is that at least in the new round of world trade negotiations there is an agreement to look at strengthened disciplines on anti-dumping and subsidies. Many in the U.S. Senate would say, "Over my dead body will you get agreement on that," but it is on the table at least for the new round of multilateral trade negotiations.

Senator Atkins: We passed Bill C-44 in December, which extracted out of Bill C-42 - which is still in the House of Commons - a demand by the Americans to provide manifests. Why could we not have included a request for Americans to provide manifests to Canadians?

Mr. Allen: Mr. Levy is better qualified than I am to answer that question, but we are in the process of negotiating agreements for advanced passenger information and passenger name recognition. These agreements will be reciprocal.

Mr. Levy: I think they are reciprocal. The challenge is not on that side of the equation. If we wanted that information and if we believed that we could take advantage of it for intelligence purposes, the U.S. would probably be willing to provide it with full reciprocity. The challenge for Canada in facing this request or demand is to respect our own well-founded privacy concerns and to ensure that the information is for specific intelligence purposes.

Senator Atkins: From a practical point of view, how would it work?

Mr. Levy: It depends on what you are talking about specifically. At the meeting that I attended, they were looking at the issue of having as much advance information as possible on people who are arriving in North America, recognizing that we want to reduce the enforcement role at the border and to ensure that the people getting into North America in the first place do not represent a threat. Frankly, that border is long. We would never be able to seal it, even if we wanted to do so and even if we paid no attention to trade considerations.

As a passenger checks in at an airport in Europe, or anywhere else, the authorities want a certain amount of information relating to when that person bought their seat, whether they paid cash, whether they have baggage accompanying them, whether they are accompanied, and whether there are 10 people on the same flight who have the same curious pattern in terms of how they made their arrangements. This is all information that can be crunched from intelligence sources. The authorities then discern threatening patterns from that information so that when those people meet up with either a customs or an immigration official, that official is warned in advance to ask certain questions.

Senator Atkins: Some manifests might not be complete until the plane is in the air, for example, if it was flying from Toronto to Washington.

Mr. Levy: That is a question we are asking, too.

Mr. Allen: Their argument concerns someone coming into the country from Europe, for example, with the plane having stopped in five Eastern European countries before landing in Montreal. A pattern of activity is established.

Mr. Levy: In the specific example that you raised about going from Montreal to Washington, that person would - even without prior information being provided - go through U.S. Customs and Immigration prior to getting on the flight.

Senator Atkins: In Canada, yes. There would be preclearance.

The Smart Border Agreement is being signed in December. What degree of it has been implemented up to this time?

Mr. Allen: Governor Ridge, who is the Director of Homeland Security, and Deputy Prime Minister Manley are intent on getting deliverables out of this declaration. They have talked on the phone three times since, each time in an effort to push their officials farther and faster. They are meeting on the margins of the World Economic Forum on February 1 and they will meet again in Canada. The intent is to deliver as much on each of the 30 points to the Prime Minister and to the President in Kananaskis by June. Mr. Levy was just at a meeting in Fort Lauderdale in which the head of customs demanded some deliverable for each item 30 days from now when they meet in Vancouver.

I have never seen a process in which there has been more attempt to push an agreement along. It is causing a phenomenal amount of work for customs and immigration officials on both sides as they try to work through issues that have been on the table for a long time but that now have a sense of urgency.

We talked about clearance away from the border and customs self-assessment, which basically means allowing the DaimlerChryslers, the Fords and the GMs cross the border without having to stop because they have been pre-evaluated and because they can be post-audited. We are talking about safe third-country agreements on the immigration front because half of our refugees now come from the United States. There is a series of ongoing actions, and I am confident that we will have real solid deliverables on a number of the 30 points.

Mr. Levy: NEXUS, which in technical jargon is an alternative inspection system, means that the low-risk traveller who travels between Canada and the U.S. as a commuter a number of times a month will get a preclearance card.

A pilot project at Port Huron that was suspended on September 11 was resumed about 10 days after the action plan was signed.

Consultations on visas are ongoing, and the number of countries on which we differ has been steadily reduced.

An air preclearance agreement will formally govern what already exists. That was identified in the action plan, and we are on the verge of implementing that as well.

Senator Atkins: Is it your impression that Tom Ridge has a handle on his responsibilities in the homeland agency?

Mr. Allen: I do not envy Governor Ridge. He must try to get his arms around a massive U.S. bureaucracy. There was a fascinating chart in The New York Times about a month ago showing the maze of officialdom for which he could or could not be ultimately responsible. However, his office is gearing up. He has more people and more effective people working for him now than he did two months ago. Also, the Canada-U.S. border and the Mexico-U.S. border are two areas that he can actually deliver on. It is not easy to make the United States safe from anthrax or make it safe from some other bioterrorist threat. It is easier to point to a 30-point action plan and say, "We have done this, this and this." It has been negotiated, people are working on it and, to be honest, that is in part why he is committed and why he picked up the phone after the new year and wished the Deputy Prime Minister well and wanted to know the outstanding issues that Mr. Manley wanted to see addressed. They both see this as a win/win situation. I am not sure whether he will be able to tackle all of the other problems in the United States, but I wish him well.

Senator Atkins: Will this include the continuation of the National Guard on the U.S. border with Canada?

Mr. Allen: The National Guard was the reason that the bridge and the tunnels stayed open post-September 12. Essentially, the Americans had moved to inspections 100 per cent of the time. If the National Guard had not arrived, we would have seen huge lineups and impacts on Windsor, Whistler and places right across the border. They brought in the National Guard so that while the National Guard was lifting up the trunks and looking in, the customs officers could ask the questions so that the lineups could move. They provided an inspection function.

To the extent that they have helped us, we have been grateful. However, President Bush and Governor Ridge have gone out of their way to say that no militarization of the border is going on. I think they recognize that closing the Canada-U.S. border would certainly impact on them, if not hurt them as much as us, especially at a time of economic recession.

Senator Atkins: How would you describe the equivalent in Canada of the homeland defence agency? Who is in charge? Is it the Deputy Prime Minister?

Mr. Allen: The Deputy Prime Minister is Chairman of the Ad Hoc Cabinet Committee on Public Security and Anti-Terrorism. A large group of ministers formed the ministerial committee, which included the Solicitor General and the ministers responsible for the CCRA, the CIC, the Department of Finance and the Department of Foreign Affairs. Under them were essentially two groups of bureaucrats, deputy secretaries to the cabinet. Richard Fadden ran with the security agenda, and Robert Fonberg ran with the border agenda. Given that they are at the centre of things and because they had the political will and the power behind them, they could corral all of us to get our various acts together. They have been extremely successful and have done a good amount of work to make this happen as fast as they have.

Senator Atkins: Do you think that we require a separate agency?

Mr. Allen: No, I personally do not. The Deputy Prime Minister has been given continuing responsibility for the border file. He and his colleagues at PCO can continue to drive officials, and I am hoping that that will do the trick. It will be a long battle. It will not be over in six months, but we have a good start.

The Chairman: Mr. Allen, preclearance, as I understand it, is really more a question of whether the Americans will ask their questions before the plane takes off or after it lands. Is that a fair description?

Mr. Allen: Yes.

Mr. Levy: Air preclearance is operating in about seven Canadian cities now. It means one goes through those procedures in Canada.

The Chairman: Demanding the questions of airlines going into the country simply means that when the plane lands, the time to process the passengers getting off will be diminished. If they do not have that information in advance, the authorities in the United States will take as long as they need to get that information. Either the airlines provide it ahead of time or the authorities will get it on landing. Is that correct?

Mr. Levy: I suppose so, except that under the provisions of air preclearance now, there is in effect no processing at the U.S. end because it is being done beforehand.

The Chairman: That is correct. I am really talking about a situation where someone is flying into an international airport, has not been through one of the seven preclearance places, and the Americans are asking all airlines going in to provide them with lists of passengers in advance. Those who comply will get one form of treatment when they land, and those who do not comply will get a different form of treatment that will arguably be slower and more complicated.

Mr. Levy: A worst-case scenario, at least from the airlines perspective, is that the airline itself is banned from landing.

The Chairman: Exactly.

Mr. Allen, could you provide us with a timeline of what we can anticipate to be the major events in terms of Canada-U.S. relations over the next six months?

Mr. Allen: Dealing with the border first, we have a whole series of meetings. As I suggested, there will be a meeting on January 30. There will first be a meeting of Governor Ridge and Mr. Manley. Then there will be a meeting of customs and immigration officials, and state and foreign affairs in Vancouver on January 30. There will be another bilateral between the two of them, and that will end up in Kananaskis. There will be a bilateral meeting between Foreign Minister Graham and Secretary Powell probably February 13 or 14, but it has yet to be announced. The dates may vary, but that is one possibility.

There will, of course, be the summit at Kananaskis, of which there will be bilateral meetings. It is possible that the Prime Minister and President will also meet in Monterrey, on the margins of the a UN conference on finance and development, where there could be another bilateral meeting.

In terms of other ministers travelling to Washington or meeting with their counterparts, I do not have any particular information right now.

Mr. O'Shea: In terms of NAFTA issues, the NAFTA ministers will be meeting May 28 in Mexico. The three trade ministers will decide how to deepen NAFTA or whether to deepen NAFTA. The other one, which I do not have a date on but which will be a very important meeting in terms of Canada-U.S. issues, will involve Minister Anderson going to the U.S. for discussions with the Americans on global climate change. We are anxious to see where the Americans will come out with their national plan in terms of global climate change, to see if it is complementary to our international commitments under Kyoto. That will be important, but we have no set time for it. It will happen in the next six months.

Mr. Allen: All of the new ministers who have recently taken over - Minister Coderre in immigration, for example - will be going down to Washington or their counterparts will be coming here to get to know the bilateral issues. The Deputy Minister of Justice is heading down to Washington next week on a number of files. The Deputy Minister of Energy was in Washington last week.

Mr. O'Shea: The Deputy Minister of International Trade is there today for three days of discussions with the Americans on softwood lumber and other issues.

Mr. Allen: As you know from Hugh Winsor's column, the Assistant Deputy Minister of Political and Security Affairs and for Foreign Affairs and Defence, and the Deputy Chief of Defence Staff were in Washington last week for discussions. The embassy, as Senator Kenny knows from his experience, is a busy place and is constantly welcoming Canadians who are interested in meeting with their U.S. counterparts, just as the Canadian embassy in Washington will welcome members of this committee from February 3 to 5 of this year.

The Chairman: You talked earlier about misconceptions as they have come up. Is there a strategy here? Take, as an example, the situation of perhaps two weeks ago when Senator McCain commented once again about terrorists coming across the border from Canada. What is the response from the Department of Foreign Affairs when they read that in the newspapers? Does someone write a letter or make contact? Does someone say, "You did not get it right," or do we just let it pass?

Mr. Allen: One of the main functions of the U.S. General Relations Division is advocacy. I will let Mr. O'Shea explain what he spends half of his day doing.

Mr. O'Shea: There is no doubt that our highest priority at the moment is border advocacy or correcting American misperceptions of Canadian contributions to security. In a case such as you have mentioned with Senator McCain, a letter would immediately go out, either from the ambassador or from a consul general. We have 10 consul generals in the United States, all of whom have been told that their top priority is advocacy. If there is a misstatement by a congressman or a senator, someone will contact him or her. The same is happening now with respect to media reports. When we see a media report that contains a misstatement about terrorists coming in from Canada, our consuls general write a letter, we do an op-ed or we phone these people and tell them that the statement is factually wrong.

We have had some success in recent months in getting the record corrected and we have received a number of apologies. One editorial from Denver was particularly egregious. It said that Canada should take a lesson from the management of the U.S.-Mexico border. It began by stating that three terrorists came in from Canada.

One of our greatest challenges is the mental image of a large border with no one guarding it and which must be easy to breach. My wife is American and she often says that the border is unprotected. I continue to make the point that, with the amount of cooperation at that border, it is probably the most well protected border the Americans have.

We spend a lot of time on border advocacy. Currently we are suggesting a number of ministerial visits. During the congressional recess we told each consul general that we want them to see every congressman, to the extent that they can, to give them information on the Smart Border Declaration and to explain how it is a better way to deal with security on the border. It is an uphill battle.

Mr. Allen: We have had a lot of difficulty in that campaign from former senior officials of CSIS and the Departments of Immigration and Foreign Affairs who enjoy pointing out past failures. They may not have been in those departments for quite a while, so they speak of past failures and the American press picks that up and uses it.

In December, we brought in some journalists from the United States and other foreign newspapers and we spent two days providing them with all the facts. Our embassy in Washington has the e-mail and fax numbers of every major think-tank, congressional office and media outlet. The minute information on the smart border, the budget or our military contribution comes out, it is faxed to them. However, Washington being Washington, there are probably 2,000 people faxing them something every day. It is a constant battle. I think we are beginning to turn the tide but we will probably never be completely successful.

I try to tell Americans that before Ahmed Ressam, who was actually caught, there was no evidence of any terrorist crossing from Canada into the United States and threatening to cause damage. That was not an issue. We have had 50 years in modern time of this apparently porous border that has not been a threat to the United States. Mr. O'Shea is right in saying that the nature of our intelligence and law enforcement cooperation is the best defence.

The Chairman: Earlier in the proceedings you talked about 25 per cent of U.S. exports coming into Canada. You also talked about all politics being local in the United States. Do we have a communications program to educate exporters to Canada about these issues? It should be easy to identify who exports to Canada. Do we communicate to those folks? Presumably they, in turn, have a better grasp on the ear of their congressman or senator.

Mr. O'Shea: Yes, we do. To go back to border advocacy, most of the major U.S. trade associations of importers and exporters are targeted in terms of providing them with information. We encourage them to contact congressmen because congressmen will listen more attentively to U.S. business people than to Canadian diplomats.

On trade issues it is a bit more difficult. This is one of the frustrations of the embassy. During the Clinton administration, business had its head down a bit on the NAFTA because of a certain defensiveness related to the NAFTA. Many of the natural allies of trade liberalization were not being very vocal. When you get into specific trade issues, such as softwood lumber, for example, there is a very targeted coalition. Other exporters would not be willing to carry the issue of softwood lumber because it is not specifically on their agenda.

Senator Banks: Mr. O'Shea, public relations propaganda can convince anyone of anything. Joseph Goebbels knew that and practised it, as do many other people. We see an example of it when the secretary says, "Do you see those soldiers at the border with M16s?" We have not militarized the border but people believe that.

We would have an easier time in Washington if we did not have to start from less than zero when we try to convince people that we are important to them. That has to do with issues that the chairman and Mr. O'Shea have talked about.

If we hired the right people for $15 million or $20 million, we could soon make everyone in the United States understand that we are their biggest trading partner and that we are not operating a porous border through which anyone can walk at any time. Would that not be a good expenditure of money? Education would make everything else easier, including dealing with the softwood lumber issue. By "education" in this case I mean propaganda, changing their minds, marketing, or whatever you want to call it. Would that not be a good idea?

Mr. O'Shea: I think it would. The problem is how much money it would cost to get that difficult message across.My last posting was at the consulate in New York. There are stores in New York that are not meant for retail purposes, they concentrate on PR for brand marketing.

Senator Banks: Whatever they spend it is worth it. That is precisely my point. It would have such implications that the cost would be worth the outcome.

It is a rhetorical question. I am sorry to raise it, but I have been thinking that for years. We should just fix this problem. It would cost a lot of money, but it would be worth it.

Mr. Allen: It is a good point. To make a dent in that market on a continual basis in terms of a porous northern border and getting the message across that none of the 19 came from Canada could be done, but it would cost $25 million or $30 million, if not more. That is one issue.

There are many people spending that kind of money on the other side of the softwood lumber dispute. If we were to get into that game, for example, there would be a massive competition for funds.

This comes up quite often. It should never be dismissed because there are targeted times when it could be used. Hiring PR firms on permanent retainer would be a hard decision to make based on whether we would be as effective in advancing our issues or whether we should be continuing to do what we do. It is a very useful question.

Mr. O'Shea: One of Mr. Levy's colleagues suggested that one of the most effective uses of advocacy funds would be to hire the Goodyear blimp during the Super Bowl with a sign that read: "We did not do it," or "They did not come through." I have a feeling that the message would probably get through.

The Chairman: Thank you, gentlemen. We appreciate you being here today to kick off our first hearing and for giving us an overview of Canada-U.S. relations. This hearing is in preparation for our visit to Washington next week. We will be hearing from Mr. Allen again and from other of your colleagues this evening.

The committee continued in camera.

The committee resumed in public.

The Chairman: Senators, our next witnesses are from the Department of Foreign Affairs and the Department of National Defence. We will focus our attention on issues such as NORAD, national missile defence, NATO enlargement and the joint command structure.

Please proceed.

Ms Jill Sinclair, Director General, International Security Bureau, Department of Foreign Affairs: Senators, I will be talking to you briefly about NATO and missile defence. Generals Macdonald and Ross will pick up on the issues of NORAD and UCP, the Unified Command Plan, but we are here as a team to answer your questions.

Canada has been one of the strongest proponents of enlargement. Indeed, our Prime Minister has stated many times that he believes that further enlargement of the alliance is the best way to extend the zone of stability and security in Europe. Our foreign policy continues to be based on strong reliance on effective multilateral diplomacy, and membership in NATO is fundamental in this regard. Article 10 of the North Atlantic Treaty Organization left the door open to NATO enlargement. When we were creating the alliance, we envisioned the possibility of enlargement, so there is nothing new about the idea. The principle of keeping the door open has been reaffirmed in successive NATO summits. At the most recent one in Washington in 1999, the Membership Action Plan, MAP, was unveiled. This action plan was designed to facilitate membership by new states in NATO. I believe we have circulated some background on this to the committee, so I will not go into the details, but I would be pleased to answer any questions.

The nine NATO aspirants - those who have indicated their interest in joining the alliance - are: Albania, Bulgaria, Estonia, the Former Yugoslav Republic of Macedonia, Latvia, Lithuania, Romania, Slovakia and Slovenia. In order to join the alliance it is not simply a question of military capacity, but the Membership Action Plan also speaks to the important issues of political and economic issues, human rights questions and government rights issues. This is all about building a more secure, safe and stable Europe. It is not simply a military question. As always, the alliance has been more than a military alliance.

This MAP process, the process whereby countries are brought into the alliance, has been serious and substantive. There have been individual progress reports on the implementation of MAP, and they will be prepared for each aspirant. A consolidated progress report will be presented to foreign ministers at their meeting in Reykjavik in May of this year. At that time we will have a better sense of how each aspirant is situated. Until the foreign ministers have had an opportunity to look at this material, Canada and other allies have said they will refrain from speaking about the specifics of each aspirant's case. There is a bit of discretion here such that we want to give the individual candidates a chance to make their own case and for the process to be completed.

The goals for this round of enlargement are positive in orientation. They are designed to be inclusive; to show that we are in a new space in Europe; to widen the zone of security and stability in the Euro-Atlantic region; to continue support of the political economic reforms that are underway in Central and Eastern Europe; and to provide something of substance to all of the aspirants, whether or not they are successful at the Prague summit in November 2002, where the decisions will be taken.

Clearly, NATO continues to evolve. It has always been a dynamic alliance. Canada supports its evolution, and we will be working very hard to ensure that our alliance remains dynamic and inclusive.

Before I conclude on the issue of NATO enlargement, I would just note that Russia has had concerns in the past over NATO enlargement. However, those concerns may have decreased over the past year or two. Russia has recognized that enlargement is going ahead, and President Putin has acknowledged this publicly. However, there is no denying that there is active debate in Russia. Canada is aware of the concerns that Russia has expressed over time. We think that part of the issue is ensuring that we have a meaningful and substantive relationship and engagement with Russia through NATO. Therefore, Canada has been amongst the leading proponents of a revitalized relationship for Russia and NATO. Many of you may have heard of the suggestion that we become an alliance of 20 rather than an alliance of 19 plus Russia. Let's look at things that we can do together, in partnership, for example, on the terrorism issue. These are ways in which the alliance is evolving.

With your permission, I will speak to the issue of missile defence.

This question of missile defence is of considerable importance to Canada. It cuts to the heart of a broad range of foreign policy and defence issues. It is also one of the more provocative issues on the security agenda at the moment, and it tends to inspire strong, even passionate, views on both sides of the issue.

Missile defence has many dimensions: military, foreign policy, bilateral arms control, scientific and technical, just to name a few. I will try to narrow this debate to a few key issues for Canada, and I will be open for questions.

First, I think it is worth stressing that the issue of missile defence fits into a much broader framework of U.S.-Canada bilateral relations. We enjoy with the United States a uniquely close, cooperative, security and defence partnership. This finds expression in NORAD, in the permanent joint board on defence, about 250 bilateral agreements, and a host of other mechanisms such as joint training. We are careful not to lose sight of the fact that Ballistic Missile defence, BMD, is just one piece of a much larger relationship.

Second, both Canada and the United States are continuing to grapple with the security challenges of a period that, until recently, we were calling the post-Cold War period. Now, it is characterized as the post-September 11 period. North America is clearly faced with a number of new, enhanced and unpredictable threats such as the proliferation of weapons of mass destruction. We, therefore, understand the wish of the United States government to protect its territory and population, just as the Canadian government is taking active measures to ensure the security of Canada and Canadians.

The third point I would make is that Ballistic Missile defence remains a work in progress. The United States has not yet settled on an architecture for missile defence. This means that they do not know yet which systems will work most effectively. Only when the technology is adequately advanced will the U.S. make decisions on architecture and timing of deployment options. Meanwhile, the U.S. is moving to create a test bed - a launcher site - in Alaska that, when completed in 2005, could be described as providing a rudimentary operational missile defence capability.

Fourth, it is not yet clear what impact missile defence will have on strategic stability, particularly between the United States and Russia. On one hand, Russia's reaction to the U.S. withdrawal from the ABM treaty was rather muted. President Putin argued that withdrawal was a mistake, but he also said that, in his view, it did not threaten Russia's security. On the other hand, Moscow fully expects that the ABM treaty will be replaced by an alternative, overall strategic framework. We will be watching closely the outcome of discussions between Washington and Moscow. We will also be paying attention to the response from China, which has a relatively small and, in their view, vulnerable nuclear force. China's reaction could, of course, affect the reaction of Asia as a whole.

A fifth key issue for Canada is the impact of missile defence on global non-proliferation arms control and disarmament. This is a regime of considerable importance to Canada.

In Canada's view, the security of Canadians and Canada begins offshore. We remain deeply committed to a rules-based multilateral system as the key guarantor of international peace and stability. Here I will stop my brief presentation because I am sure you will have questions.

Lieutenant-General George Macdonald, Vice Chief of the Defence Staff, Department of National Defence: We are happy to appear before your committee today. I will specifically address the American Joint Command Structure and the North American Aerospace Defence Command, NORAD. We will be able to answer any questions on defence-related issues in respect of Ballistic Missile defence and NATO enlargement. I understand that background papers on these issues have been distributed to you.

Like Canada, the United States has a well-established organizational structure that positions its military to serve the national interests of its country. The Unified Command Plan, initially established in 1946, represents the key document for the U.S. military structure. It formally distributes the geographical, functional and authoritative responsibilities of the United States military to its different commands.

I would like to note that some of these commands have multiple responsibilities. For example, the U.S. Joint Forces Command serves regional, or Atlantic, responsibilities. It has a functional responsibility for force generation for army, navy and air forces in the continental United States. They have the responsibility to organize, train and equip forces. The command also has responsibilities for the evolution of the United States joint force doctrine. At the same time, the Supreme Allied Commander Atlantic, which is also the responsibility of the CINC for the U.S. Joint Forces Command, has an allied function as well. Note that NORAD is not a formally designated commander-in-chief under the Unified Command Plan since it is a binational command. It is also interesting to note that the continental United States, Canada, Mexico and Russia do not currently fall into the area of responsibility of any unified commander-in-chief. As noted in the background notes that we gave to committee members, the Chairman of the Joint Chiefs of Staff is responsible for these areas specifically.

One of the more important aspects of the Canada-U.S. defence structure is NORAD.

[Translation]

The North American Aerospace Defence Command, NORAD, was established in 1958 to provide surveillance and control of North American airspace.

NORAD is one of the most important aspects of Canada-US relations. The NORAD Agreement is renewed approximately every five years, with the last renewal occurring in May 2001.

[English]

Canadian assets assigned to NORAD include CF-18s, our fighters, and early warning radar stations and centres. The Canadian Forces have a current establishment of 287 positions within NORAD, outside Canada.

As outlined in the background note, NORAD serves a variety of functions in Canadian-U.S. defence relationships. NORAD incorporates a process, a command and a control framework, a pattern for coordinated action and an integrated military headquarters. Most important, however, it provides a pattern for coordinated actions, including military plans, rules of engagement and delineated sovereignty between our two countries.

Since September 11, the NORAD rate of activity has been significantly higher than in previous years, with over 10,000 sorties being flown. Since the occurrence of these tragic events, NORAD had to expand its focus to include the air space within Canada and the United States and is now working closely with civilian air traffic control organizations in both countries to accomplish that. NORAD continues to provide a key element in the defence of North America and a major contribution to constructive relations between our two countries. I believe that NORAD serves as a useful basis for future continental security considerations.

Senator Banks: I will ask a question regarding a subject about which I suspect every one of my colleagues will ask more specific questions. It concerns joint command in a different context, except NORAD. There is an article in today's newspaper and we have heard previously about things that concern expanding joint command in international terms, specifically in relation to the United States and Canada, which would place more aspects of Canada's Armed Forces under joint command than are presently the case. We know about NORAD and about the supreme allied commander in Norfolk as regards NATO undertakings. However, with respect to continental defence in the sense that it is being talked about now, what do we know about, what can you tell us about and what can you forearm us about the attitude of both the United States and your community, Ms Sinclair, with respect to the idea of joint commands of larger proportions of Canadian Armed Forces that would, given the proportion of them, ordinarily place them under initial American command, as in the case of NATO and NORAD?

LGen. Macdonald: You refer to the initiative in the United States to update what they call a unified command plan, which establishes the functional arrangement between the various commands they have.

Senator Banks: With the exception of NORAD, when they refer to unified command, do they mean interservice?

LGen. Macdonald: That is correct.

Senator Banks: I am talking about interservice, including Canadian services.

LGen. Macdonald: The unified command plan proposal that they are currently considering for announcement sometime in the near future includes the possibility of creating homeland defence - that is, a commander-in-chief for homeland defence. That would respond to the events of September 11, but this was under study for some time before September 11.

The question then becomes, what about NORAD in the context of homeland defence command? Will NORAD be part of it? We have been consulting with the Americans for some time to ensure that Canadian interests vis-à-vis NORAD are properly protected in the context of whatever changes they make to their structure. We have declared ourselves ready to explore other areas of possible cooperation that might extend to land and sea forces in addition to aerospace forces.

The arrangement that we have with NORAD presumably would be the same sort of arrangement we would have with other forces in the future. When we talk about NORAD forces being under the command of an American commander in chief, we must recognize that it is truly a partnership arrangement. NORAD is commanded by an American four-star general officer, but there is a Canadian deputy for NORAD that works equally well.

Senator Banks: Yes, but the Canadian is always the deputy.

LGen. Macdonald: That is correct, but they have a mutual responsibility to report not only to the national command authorities, as they call them in the United States, but also to those in Canada. It is never a commander-in-chief of NORAD reporting uniquely to his U.S. colleagues. It is a binational reporting relationship. The Canadians are involved in everything that is done. Ultimately, the Chief of Defence Staff has command and control of Canadians. They are working in NORAD for NORAD purposes and they are integrated into the structure, but it is very much a partnership with the Americas. People have suggested that we are somehow compromised or under the command of Americans because we are part of NORAD, but it is very much an equal arrangement.

Senator Banks: I was not being critical. I was merely asking a question. I think that NORAD is fine. It has always operated very well. I wonder if we will expand that concept. Is it your view that we should expand it?

LGen. Macdonald: I think there is an opportunity here for us to recognize our mutual concerns about continental security - not only aerospace related but also land and sea related. In the context of the United States establishing a command for homeland security, there is an opportunity to explore the possibilities with them. If we can retain the NORAD-like arrangement that we have in those other areas, there may be some significant advantages to do that.

Ms Sinclair: LGen. Macdonald explained well the issue from a military point of view, but this issue is not simply military. This is an enormous political question and one must look at it in all its dimensions. Issues of sovereignty come to the forefront when we start stalking about different sorts of command structures. However, as LGen. Macdonald has said, in the post-September 11 environment, it is prudent for us to look at the existing mechanisms that we have, whether it is NORAD or the PJBD, the Permanent Joint Board on Defence. It is a prudent for us to look at how we can cooperate in other sectors with the United States. One would have to do this carefully and prudently, bearing in mind the interests of everyone here. It is not appropriate to speculate on what those models would look like, but I would encourage you to ask the United States while you are in Washington.

Senator Banks: It is appropriate to speculate on what those models would look like.

Ms Sinclair: For you it is appropriate to speculate on anything.

Senator Banks: We would like you to do that.

Senator Day: Could you tell us how we might speculate?

Senator Banks: If you were in our position, how would you speculate?

Ms Sinclair: I would not suggest anyone speculate in imprudent ways, but I would suggest that you ask your American counterparts when you are down there where their thinking is going. This is a work in progress and they are working on their unified commands. This is something that has been under way for a long time. September 11 has generated thinking in new areas like homeland security, as LGen. Macdonald has said. You should ask them.

Senator Banks: We will. They will also be asking us what we think about it.

Am I right in my recollection that with rare exceptions and in all cases having to do with war as opposed to peacemaking, and with the exception of parts of World War II, Canadian forces have, in their foreign operations, always served under foreign supreme command? Is that not more or less true?

Major-General H. Cameron Ross, Director General, International Security Policy, Department of National Defence: Senator, I am not sure that I would be able to say "always," but the majority of the time that we have worked in a coalition under operational control - which is the military term that we use - we always retain Canadian command, but under operational control. We have done that with the British and with the Germans during the Cold War period. I am not sure that I can say "always."

Senator Banks: On those occasions, which are much of the time if not most of the time that we have done so, they have not harmed our concept of sovereignty, our Canadian on-the-ground control of our resources; correct?

LGen. Macdonald: That is correct. In fact, I think we can make a strong case that we are protecting our sovereignty by acting with them in concert to accomplish our mutual aims.

Senator Banks: Ms Sinclair, you said that all security begins offshore. That is agreed. Particularly with respect to interdicting persons who might have nefarious ends in mind with respect to immigration, it would be a great help if we had an offshore covert intelligence capability, which we have been told in the past by intelligence people would be a great help in certain areas. Canada has not had that capacity for a long time. The situation is not really just post-September 11. North America has been involved in terrorist undertakings long before September 11. The Air India crash is an example that involved many Canadians. Are we not now in a situation in which Canada must, in its own interests, have some kind of covert foreign intelligence-gathering capability?

Ms Sinclair: Senator, forgive me if I say that responding to that question would go beyond my brief.

Senator Banks: Whom would we ask?

Ms Sinclair: I would think that you should ask the Solicitor General or people in that line of business.

Senator Banks: You are the Director General of International Security.

Ms Sinclair: The Department of Foreign Affairs does not deal directly in the areas about which you speak.

Senator Banks: Nobody does at the moment.

Ms Sinclair: The question you pose is one probably for the Privy Council Office and others. I do not mean to pass the buck, but given that I have already contributed one to the pot I would not want to pass that one on.

You are right that this issue predates September 11, but the UN Security Council resolutions, the things that have invoked people to cooperate, to have intelligence-sharing in a way that did not happen before, are happening. Putting aside the question of whether Canada needs to establish its own offshore independent capability, the cooperation amongst the intelligence services around the world needs to be enhanced. People recognize that. There have been lessons learned from September 11. There is an enhanced effort in that area. It is something that Canada is working on through its G8 presidency. That work is being taken very seriously.

Senator Day: Ms Sinclair, would you comment on the perception I have of reading the Membership Action Plan under NATO in 1999 in Washington as a marked evolution from NATO being primarily defence-oriented into something more political and international. I have a sense that you are looking for plans to implement political, economic and even legal reforms of these nations before they are entitled to join this military and security organization. Is that the direction you see NATO going?

Ms Sinclair: Thank you very much, Senator Day. It is not so much a marked change from the whole purpose of NATO; NATO has always been much more than a military alliance. It was Canada that put in Article 2 of NATO, which dealt with economic cooperation. We recognize that collective defence was extremely important because we had a common enemy to face back then when we established NATO. Really, the best defence against any enemy was strong, robust democracies working in a common transatlantic security space.

With the transition in Europe, the Membership Action Plan is designed to ensure that we build that community of governments that will be able to defend themselves and defend the common values of democracy and free market economies. The Membership Action Plan is designed to help point people in the right direction. It has been used by a number of NATO members on a bilateral basis, as a basis for bilateral assistance to help them reform their military, police or governments and deal with human rights issues. It is not a marked change. The alliance has always been much more than a military alliance. That is why it has been so successful.

Senator Day: Is it becoming less of a military alliance? Is the military aspect of the alliance becoming less important than the other issues that we have just spoken about, the other changes, such as economic and legal reforms?

Ms Sinclair: I am not sure. I will look to my colleagues from the Department of National Defence to help answer this. I am not sure that it has. It has always been a composite. Perhaps the balance has shifted somewhat. In the days of the Cold War, when one had the fears of Soviet troops massing in the East, obviously there were some visceral security concerns in the traditional sense of military security. There is still now a need for the alliance to be robust militarily.

Look at who was first out of the post in terms of response to September 11 - NATO, with an invocation of Article 5. The impact that that had in catalyzing political support for a robust response to what happened in the United States I think it is inestimable.

Perhaps there is a shift in balance, but I do not think it diminishes the military dimension of the alliance at all. Perhaps it just rounds it out because we have a much bigger community of democracies in Europe to deal with now.

MGen. Ross: Senator, I would fully agree with those comments. What we are seeing is a parallel action on the political, legal and economic issues as well as military. There was the response by NATO with Article 5, as Ms Sinclair has mentioned, not just in words but in deeds. There was the deployment to North America of the AWAC planes to provide security to North America. Even if you look back into actions by NATO in the Balkans and elsewhere, it has been very positive.

I have been involved with NATO in and out for a number of years. If anything, we have seen an increase in, if you wish, the standard and the quality on the military side. What the action plan provides those who have been in NATO for a number of years, let alone the three new countries and the aspirants, is a bar, a standard, a report card, if you wish, by which we assess ourselves and the aspirants.

From a military point of view, we see this as extremely positive and do not see any degradation in the quality of the alliance.

Senator Day: Do you see the military role in the future as evolving significantly from where it has in the past when we had the necessity for military and arms build up because of the Cold War situation and one alliance against another? Now with the expansion theory of NATO you are tending to bring more and more of the major trading democracies into one group and trying to control rogue states and that kind of non-state activity in a terrorist sense that we did not have in the past.

MGen. Ross: Your term of "evolving" is bang on. I just returned from Germany on Friday from discussions with an alliance partner. Very much, other countries in Europe and elsewhere are looking at how the military dimension is evolving. We have tended to have these legacy systems, as we call them, focused on the Cold War era, where all the countries are having to change to the new dimension, asymmetric threats and terrorist attacks and the like. These changes will not be made overnight, but they will have to be done in cooperation with our alliance partners, and members outside the alliance must not forget the European Union headline goal with respect to some objectives that the European Union has over and above NATO objectives.

Senator Day: Is it fair for me to assume that there is planning going on within the Department of National Defence at the present time to help develop a new plan for our national defence that will meet our homeland security, obviously, but also our evolving role in international groups like NATO with regard to the different types of military equipment that we might need and the different demands that will be put on our personnel?

MGen. Ross: It is clear, senator, that we must make some changes, as the minister has publicly stated. We will be looking at opportunities over the next months to review our current policies. We do that in conjunction with the Department of Foreign Affairs and, of course, the Privy Council Office. The simple answer is, yes, there is planning under way. It is in the very early stages. We have not been sitting on our collective behinds all this time. Some plans have been developed that must be refined within the context of what the government wants us to do.

Senator Day: I would like to ask you about NORAD. Who are the participants in the Permanent Joint Board of Defence?

LGen. Macdonald: The PJBD originated in the early 1940s after the Ogdensburg Declaration by then Prime Minister Mackenzie King and President Roosevelt. It was established to enhance discussions between the United States and Canada on defence issues. It has met regularly ever since and has had more than 200 meetings. It is a high-level body with military and foreign affairs representation from both countries. In the case of the United States, there is Secretary of State representation. They meet about every six months to discuss topical defence-related issues of common concern. MGen. Ross is our senior military representative on the PJBD.

Senator Day: My question related to matters other than military. You have answered that in part by telling me that the Department of Foreign Affairs is involved. Is there any plan to include other security intelligence gathering agencies in addition to the military and the Department of Foreign Affairs?

MGen. Ross: Our next meeting will be just outside of Seattle in March. Ms Sinclair is my opposite number on this board. One of the issues that we will be discussing is how the PJBD and other bodies, such as the Military Cooperation Committee, operate in this new dimension. Some consideration may be given to this, but we are not there yet.

Ms Sinclair: Senator Day, at the last meeting, Margaret Purdy of OCIPEP, the Office of Critical Infrastructure Protection and Emergency Preparedness, briefed the board on defence. OCIPEP was overseeing the response to September 11. There was an effort made to bring other civilian agencies into the discussion with the Permanent Joint Board on Defence in the context of the immediate post-September 11 period.

Senator Day: As a guest as opposed to a permanent member?

Ms Sinclair: That is correct. The existing structure was set up to have the Departments of Foreign Affairs and National Defence sit at the table with their counterparts from the United States. However, we must consider whether all of these mechanisms meet the new challenges. It is a very open-minded discussion that we are having. As MGen. Ross said, when we get together with the Americans the next time around, we will explore whether we have the right people at the table.

Senator Day: Assuming that at the highest levels of government more cooperation between Canada and the United States is deemed desirable, do you see this particular mechanism as a likely group to expand to include more bilateral cooperation and exchange of information?

Ms Sinclair: It is certainly a body that has a long and rich history. It is a place for dialogue. We have resolved very practical problems within the Permanent Joint Board on Defence. In this new era, we must look at all possibilities. If we have existing mechanisms that work well, we should see if we can build on them and complement them in new ways.

Senator Day: When we were in Winnipeg, the air force commander there, when wearing his NORAD hat, told us that when they are cooperating with U.S. immigration or customs and excise in the United States, it would be possible for the Canadian air force to be asked to intercept an aircraft that was possibly carrying contraband or doing something else illegal, and that that request would come through the Department of Immigration or through NORAD, which was cooperating with one of the U.S. agencies. Can you confirm that that is the case?

LGen. Macdonald: Yes, that is absolutely the case. I formerly held that same position in Winnipeg. Trafficking in narcotics in particular becomes a very complex situation with immigration, law enforcement and drug agencies. We do have an intricate relationship with agencies in the United States through our NORAD connections. Intelligence about the potential target is passed between the law enforcement agencies and within NORAD. Indeed, Canadian fighters would be cued to respond if the aircraft came into our air space.

Senator Day: The order would come from the United States.

LGen. Macdonald: It would be coordinated with the United States, but it is in our interest to intercept aircraft carrying drugs that come into our territory. There have been instances where it has been successfully executed.

Senator Day: We had a fairly good briefing on cooperation between Canada and the United States with respect to NORAD and a good briefing in relation to the cooperation and joint activities between the U.S. and Canadian navies. Could you expand on that and tell us about parallel operations and cooperation in relation to the armies of Canada and the United States?

MGen. Ross: The Canadian Armed Forces have had over the years a number of exercises with U.S. forces, the U.S. army in particular, both in the United States and in Canada. That was the level of interoperability until about 10 years ago when we started to embark upon higher level activities to the extent that, for example, a Canadian is currently the deputy commander of 3rd U.S. Corps in Fort Hood, Texas. We have had a Canadian there for a number of years. That is just one person in one headquarters, but it does indicate an evolving nature.

It is a little more difficult for armies in general to be able to effect a high level of interoperability due to the size and nature of the armies, but we are getting there.

We do not envision masses of troops crossing the border on exercise. That is not required. However, command-post exercises or computer-based exercises are very effective, and that is happening as we speak.

I must add that interoperability with the United States is matched with our desire to have interoperability with a number of other allies, particularly of the U.K. and other NATO allies. It is the nature of the business. Should we as a middle power be called upon in a coalition, we will want to know how that coalition works with respect to standard operating procedures and the like.

Senator Day: From the point of view of the army planning and preparing for potential terrorist activities and attacks, is there a standing set of procedures and protocols for cooperative activity between Canada and the United States?

MGen. Ross: There are standing procedures from the Canadian Forces and the U.S. Department of Defence which will probably change and evolve as a result of these interactions between the two governments and the various departments.

Senator Day: Is some of that change likely to include more activity whereby the Armed Forces will assist other government agencies in Canada and the United States? They are already cooperating and I am wondering about cooperation between different agencies in each of the Armed Forces in the North American sense.

MGen. Ross: It is premature to determine the extent or level of the cooperation. Clearly, these are the subjects that we wish to discuss with the United States. Your visit to Washington is also part of that evolution of discussions. We are heavily engaged in discussions at the staff level and have been for some time. We do not know whether the what-if scenarios on the land, at sea, and in aerospace will result in new linkages.

Again, I must stress that this is not just the Department of National Defence. We must do this with other Canadian departments, as well as other agencies of the U.S., particularly on the legal side.

Senator Day: Am I correct in assuming that our current thinking is that the Office of Homeland Security in the United States would involve more than military responsibilities and would involve many of the other protective agencies?

MGen. Ross: We do not know at this time, senator, exactly what the architecture will be. We anticipate that there will be some announcement in the near future of the formation of such an organization, but its composition, responsibilities and accountabilities are not known at this point. We do have a rough idea of the responsibilities of Governor Ridge and of the Office of Homeland Security. It is still a work in progress on the military side.

LGen. Macdonald: I might add, senator, that the current U.S. Joint Forces Command based in Norfolk, Virginia, does have a joint task force that deals with "consequence management," as they call it - that is, military assistance to civilian agencies in the case of a significant event. We assume that this sort of thing will continue in whatever construct they have in the future. They already do that, at least to some degree.

Senator Meighen: When we talk about joint command, are we talking about two entities by definition, or could joint command also apply to the NATO model?

LGen. Macdonald: In military terms, when we talk about joint command, we are really talking about interservice command. In Canada it is army, navy, air force, and in the United States it is army, navy, air force and the marines. When you talk about international cooperation, you would use the word "combined." NORAD, for example, is a combined United States-Canadian command, but it is also joint because it has more than one service involved in it. We are talking here about joint activities with the United States.

Senator Meighen: NORAD has more than one service, being American and Canadian, or more than the air force?

LGen. Macdonald: In NORAD, the Americans have the air force, navy, army and marines, and Canada has the air force, army and navy.

Senator Meighen: I had not appreciated that.

LGen. Macdonald: I should clarify that. Those individuals are all at NORAD headquarters or in Colorado Springs at the operations centre. We do not have land and maritime assets.

Senator Meighen: I was confused by the name itself. Is it not North American Air Defence?

LGen. Macdonald: Exactly. However, we are truly a joint force from a Canadian and American perspective.

Senator Meighen: It is the air, but it incorporates non-air elements; is that correct?

LGen. Macdonald: No, senator. I did not mean to confuse you. Aerospace defence deals with things related to aircraft but also related to space and anti-ballistic missile warning. Although that has been predominantly an air force role, it is not always the case. In fact, command and control functions and expertise in all branches of the service can be brought to this role.

The American forces have recognized the need to have navy, army, air force and marine components involved in space and air issues. NORAD does have all of those in it.

A few years ago, we recognized that it would be helpful for officers and non-commissioned officers in the Canadian Forces to have the opportunity to be exposed to not just the air but the aerospace and ballistic missile warning system, which is not uniquely an air endeavour. We have been sending personnel to Colorado Springs to participate in traditional NORAD missions.

During the attacks on September 11, there was a Canadian navy captain who was the commander on duty in the Cheyenne Mountain operation centre for NORAD. The first call came to a Canadian, and not even a member of the Canadian Air Force, but a member of the Canadian navy.

Senator Meighen: In terms of perimeter defence and widening the effectiveness and the extent of any shield around North America, could you give me any guidance as to the extent to which Canada views that as a Canada-U.S. question as opposed to a NATO question? Does NATO have a role to play in that, in our view?

LGen. Macdonald: Clearly from a NORAD perspective, we are concerned about the continental landmass of Canada and the United States. When we talk about defence from an aerospace perspective, we are talking about the penetration of the perimeter around that continental mass.

Article 5 of NATO, which Ms Sinclair mentioned earlier, was invoked. It includes Canada and the United States as NATO partners. It was noted that airborne warning and control system aircraft had been deployed from NATO to the United States.

It is difficult to select one or the other organization, but it is an overlapping concern. It concerns predominantly NORAD from a point of view of exercising aerospace control, but with NATO participation or assistance in this case.

Senator Meighen: My question was prompted somewhat by the comment MGen. Ross made about interoperability. We do not wish to limit it strictly to the Americans; rather, we want to continue to be interoperable with NATO allies. If the idea is to push out the perimeter of North American defence, should that consideration be kept in mind?

MGen. Ross: For years, NATO was arguably focused more to the east with the Cold War. With Article 5 and this NATO squadron deploying for the first time ever to this continent, there is a realization that there is also a focus west. The western perimeter of NATO is the Pacific. It is sometimes hard to remind our European colleagues of that. The NORAD alliance is responsible for a huge geographical area.

Ms Sinclair: Senator, you used the term "perimeter."We do not use that term easily at the Department of Foreign Affairs because one must define where a perimeter begins and ends. That is quite difficult.

It relates somewhat to the point that I made in my presentation. From a foreign affairs point of view and for Canada's security, we need to think about forward defence in the most expansive way possible. If we are to deal with terrorist threats to our security, traditional or non-traditional security threats, we need to think way out there. We must think about our multilateral instruments. If there is a potential threat from biological weapons, how do we deal with that? There are legal instruments and compliance instruments on which we need to work.

Partnerships must be diverse and the relationship and interrelationship with the United States is extremely important. The interoperability and the political relationships that we have achieved through NATO are extremely important. However, in and of themselves, they are not sufficient. We can see from the diversity of the coalition built around September 11, where we engaged the countries of the Middle East and the countries of Asia, we have to have everyone on board. That is one of Canada's value-added partnerships to the world. We have those partnerships and we know how to work them in the best sense of the word. If we are to look at our defence and security in its broadest sense , we must look beyond the traditional and into the non-traditional, building relationships there as well.

Senator Meighen: How would any of you characterize or evaluate the success of the initial wave of NATO enlargement? Was it everything that we all dreamed about when we brought in the Czech Republic, Hungary and Poland? Where has it not lived up to expectations? Is there not quite a different set of dynamics as between those three countries and the nine others that are being considered now?

MGen. Ross: Senator, I will address the military aspects and Ms Sinclair will address some of the other aspects. The enlargement that we have enjoyed so far I think can be termed very successful. The three new countries have been alliance partners in every stretch of the expectations. I must give you a personal view of the impact that enlargement has on these countries. I was fortunate to command a battalion of Polish troops on the Golan Heights in the Middle East when it was announced that Poland had been accepted to NATO. Had Poland won the World Cup of soccer, it would not have surpassed the incredible, deeply held feeling that this country had come out of the past and whatever. It was a monumental experience for all ranks, military and civilian.

There are other aspects of this NATO enlargement. There is the report card of military expectations and everything else, but there are other aspects. The three new members are as strong and as keen alliance members as any of the others.

Senator Meighen: Is there any comment you would like to make about the next group that is proposed?

MGen. Ross: It is probably safe to wait and see. I do not say that facetiously, because the Government of Canada has not made any decision with respect to the numbers or who would be successful.

Senator Meighen: Is there any comment from the Department of Foreign Affairs?

Ms Sinclair: No, I think MGen. Ross has expressed it well.

Senator Meighen: On the economic front, someone mentioned that Canada was responsible for Article 2, which relates to economic cooperation. I think it fair to say that harking back to the days in the mid-1990s when Senator Kenny and I were on a joint defence committee there was a general feeling that economic cooperation was great but Canada perhaps had not received its fair share. That may be a well-placed perception or not, I do not know.

I notice in the material that we were provided with that this new Freedom Consolidation Act of 2001 authorizes military financing for seven of nine aspirant nations. That is what I am interested in under the rubric of economic cooperation, and how it is going and what can be done to enhance it within NATO if it needs enhancing. Who provides the funds for the military financing? A cynic might ask whether this is a way to fuel the American defence industry, but I am sure there is another explanation. What is that explanation?

Ms Sinclair: The program is a U.S.-funded program.

Senator Meighen: It is not a NATO one?

Ms Sinclair: It is not a NATO one, no. That is a U.S. bilateral program that is referred to there.

Senator Meighen: It is what I thought. What about economic cooperation under NATO? Can the Department of Foreign Affairs give any evaluation as to whether it has been what we hoped or whether it is a side bar?

MGen. Ross: The requirements of all the aspirant countries are detailed as to what are the aspirations. Clearly there is a requirement for them to fund some of these developments themselves once the country is a member of NATO. NATO infrastructure funds, to which Canada contributes as a partner in the alliance, assist and develop, whether that is infrastructure, courses or whatever, so from a military economic point of view that is the process. I am not qualified to speak about the other economic impacts with respect to NATO.

Senator Atkins: I will return again to the NATO enlargement question. There have been three additional countries added to the alliance. They all had military capability of some sort or other. Did all the other nine that are applying have military capability?

MGen. Ross: Yes, senator, they all have military capabilities, of varying degrees, qualities and resources, that are part of this report card, for lack of a better term. The expectation of the alliance is for that military capability to be put to the use of the alliance, remembering that the alliance is for its self-protection, not just the protection of individuals.

As Ms Sinclair mentioned in her opening remarks, there is also the expectation of the alliance that the members, let alone the aspirants, will understand what other alliance members perhaps take for granted, that is, the civilian control over the military, and the rule of law and those types of activities that for some countries is quite foreign in their past. This is part of the checklist for those aspirant countries. They must show their desire, if not having met those standards, at least their desire to meet them by a certain time.

Senator Atkins: In regard to the ABM treaty, was Canada surprised by the decision of the Americans to withdraw from that treaty?

Ms Sinclair: Senator Atkins, we were not surprised. The Bush administration had been talking for some time about the fact that they would be bumping up against this treaty if they were going to pursue their testing program for missile defence; therefore, we were not surprised. They had been talking with allies. Many of us had been talking back and asking provocative questions as to what would replace it, and whether they were consulting with the Russians or Chinese. We were not surprised.

Senator Atkins: Are you satisfied with some of the answers?

Ms Sinclair: We are satisfied with some of the answers, yes, but not with all of them. Clearly, President Bush and President Putin's discussion about nuclear reductions is something that is very welcome. However, Canada has said to the United States that we would like to see such reductions legally binding, verifiable and irreversible. To date, the Americans and the Russians are still in discussion about those reductions, about the new strategic framework, but we do not know what it would look like yet. We have not heard if those reductions would be irreversible, verifiable and legally binding.

There are still some questions out there that people are asking as the Americans and Russians work their way through this new scenario that they have set for themselves.

Senator Atkins: Can we feel optimistic that there will be a continuation of reductions?

Ms Sinclair: The American administration seems to be committed, but you should ask them about an ongoing dialogue with Russia. However they perceive of this new relationship, they would like a new relationship. How that is defined in the end we do not know at the moment.

There is a real intent in the United States to review and update their nuclear doctrine. Again, this would be something that would be worth asking them about in detail. It is a very current issue under discussion.

Will they make the reductions in the way that Canada might like to see with this particular irreversibility? They may, they may not. There is a slightly different approach in the United States to these kinds of things at the moment. There is a slightly less instinctive reliance on multilateral rules-based approaches to things than there was in the past. Can they establish a new framework that would provide for security and stability for themselves and the Russians, and give that to the rest of us because we are all members of this community? These are still open questions, and they are questions that we ask the United States regularly.

Senator Atkins: As a result of 9/11, were there any major operational changes that took place through the command as a result?

LGen. Macdonald: Senator, when you refer to the command, are you talking about NORAD?

Senator Atkins: That is correct.

LGen. Macdonald: The NORAD response to 9/11 was immediate. The most obvious change since then has been the increase in the number of fighters. With that has been the airborne warning to control system aircraft and refill tanker aircraft to support them. They have been flying continuously ever since the date itself. The United States has deployed fighters to a number of locations around the United States. They have been flying combat air patrols over cities or holding alert. We in Canada have also increased the number of aircraft we would normally have assigned to NORAD on a full-time basis. They have been flying from bases around Canada as well.

I am not sure that this will be a permanent arrangement. We would like to find a steady state. Certainly, the level of alert and the need to ensure that NORAD can respond to threats that are sourced from inside the United States or Canada has been the main change since September 11.

Heretofore, the NORAD concentration on air threats had been to those coming from outside Canada and the United States because it was assumed that any aircraft that originated domestically was not a threat aircraft.

Senator Atkins: Using the example of 9/11 and the aircraft that went down in Pennsylvania, if NORAD had been aware that there was a problem on an aircraft, who would have made the decision that the aircraft might have had to be destroyed in the air?

LGen. Macdonald: The decision to shoot down an aircraft like that in the United States would be made by the President himself. The NORAD system, in that they have the information necessary to make that judgment, would be used to relay that information through the chain of command in the United States. Ultimately, the President would be asked to make a decision one way or the other. One must recognize that that would be an action of last resort action. The President would have to be virtually certain that that was the only alternative to whatever else might happen.

Senator Atkins: The timing would be unbelievable.

LGen. Macdonald: There are a number of things that mitigate against it. First, there would have to be enough information to know that this was a threat aircraft that had to be intercepted by armed aircraft. The information would have to be accurate enough so that a firm recommendation could be made to the President, and the President would have to have confidence in the information to actually act on it in time. In other words, a number of factors would weigh against such a decision being taken. However, should that scenario play out, it would ultimately be the President's decision.

Senator Atkins: It is a scary thought.

LGen. Macdonald: Very much so.

Senator Atkins: How many RCAF fighters are involved in the NATO activities?

LGen. Macdonald: Do you mean in NORAD activities?

Senator Atkins: Yes.

LGen. Macdonald: Normally, we have four aircraft on alert, two at our Western base in Cold Lake and two at Bagotville in Quebec.

Senator Atkins: Are they CF-18s?

LGen. Macdonald: That is correct. Since then, we have increased the numbers and they have been deployed at more than just those two bases.

The Chairman: You described the system in the United States. Perhaps you could describe how it works in Canada. Is it the same aircraft with the same problem? Tell us about the command and control system here.

LGen. Macdonald: It would be similar. The NORAD system would feed the information to National Defence Headquarters. If we were in a situation where we even contemplated the potential engagement of an aircraft, the Chief of Defence Staff would ultimately make a recommendation through the Minister of National Defence to the Prime Minister for a decision. Again, all the same factors would apply with regard to the uncertainty of the information that may mitigate against such a thing happening, having fighters in the right place at the right time and being absolutely sure that this was the best course of action.

Senator Banks: Could you imagine a scenario in which the President of the United States, through NORAD, could order the shooting down of a plane when all those things you spoke of were certain and when Canadian planes were subject to common command? Could an order be issued in which an RCAF plane would shoot down, for example, a Polish airliner?

LGen. Macdonald: First, this would be in the context of NORAD, with the same rules of engagement that I indicated. Thus, the quality of the information is critical. If the aircraft is in American airspace, it is a decision of the President of the United States. If the aircraft is in Canadian airspace, it is a prime ministerial decision.

There are some circumstances that may result in a NORAD aircraft flying across the border and then having some cooperative arrangement made where the decision is made together. However, if an aircraft is shot down in Canada, it is the Prime Minister's decision. It is the same for the United States.

Senator Cordy: The first issue I should like to talk about is NATO enlargement. Do Canada and the United States get together to determine that they will likely support similar aspirants to NATO enlargement, or does each country do that independently?

Ms Sinclair: It is an independent decision. The actual decision on enlargement will be taken by consensus among all NATO members, but each country takes its own decision. A decision as to which aspirants we support would be taken by the Canadian cabinet.

Senator Cordy: The aspirants have been working very hard to become members of NATO. When I was in Lithuania in the spring of last year, there were hundreds of people wherever we went waving NATO flags along the highways in the middle of nowhere. There would be carloads of people and bicycles with people waving flags because they wanted desperately to be in NATO.

Six countries will not get into NATO in this particular round in 2002. How do we create incentives for countries that are not successful? I do not like to use the term "unsuccessful" because, in fact, they have achieved so much in a short period of time. How do we create the incentive to keep them interested in becoming members of NATO?

Ms Sinclair: That is an excellent question. First, there is no predetermined number as to how many countries will be allowed membership in NATO. In terms of this round of enlargement, there is no number. It could be all the aspirants or one. The inclination within NATO is to have a more robust enlargement this time rather than a smaller one.

The question of keeping the others engaged is extremely important. First, it will be important for NATO not to close the door on this round of enlargement. That does not mean there will not be another round of enlargement.

Second, through the Membership Action Plan, countries are offering bilateral assistance. Thus, there are incentives to remain engaged. You will get assistance for the further modernization of your military or assistance in dealing with some of the issues MGen. Ross was talking about, such as civilian control of the military. There are incentives to remaining engaged with NATO through the partnership for peace. There are other places in which you can play with NATO. You can be engaged in the NATO family of countries.

A point we have made to the aspirants all along is that membership is nice, but it is not necessary in order to be part of the NATO family, to engage with NATO in some operations and to be able to work side by side in peace operations, for example. Membership is not the only way in which to enjoy the partnership with NATO countries, although obviously it is the preferred option for a number of countries, as you have pointed out.

Senator Cordy: We were all pleased when Lord Robertson came out so quickly to invoke Article 5. However, I suggest that six months ago, NATO would never have dreamed that they would be invoking Article 5 in relation to a North American country, in particular the United States. What ramifications does this have? How will NATO change, or will it change in the future because of what happened on September 11 on North American soil?

Ms Sinclair: One of the positive dimensions - though it is hard always to talk about anything positive out of September 11 - namely, the invocation of Article 5, reminded everyone that NATO is truly a transatlantic alliance. Perhaps it reminded those in the United States that this alliance, which Americans and Canadians thought was there to protect Europe, ended up protecting North America. There are NATO AWAC aircraft with Canadian personnel onboard who are helping to overfly U.S. territory. It simply reaffirmed and strengthened that transatlantic link, that we are truly interdependent. That is extremely important for the alliance.

The Chairman: I should like to return to questions relating to the joint command structure. First, in terms of timeline, this is an issue that the Americans have been discussing internally for some time. They are thinking about it in their own context, a new CINC North America, or commander-in-chief North America. We are expecting them to arrive at a decision soon.

For the Hansard reporters, I can put that down as a yes, LGen. Macdonald?

LGen. Macdonald: They do not have an announced deadline to make a decision or to indicate what that decision is. Every indication is that it is not very far away, that they are coming to closure on the options that they have identified. We will make that decision in the near future.

The Chairman: This is first and foremost a reorganization of how the Americans structure themselves militarily; is that correct?

LGen. Macdonald: Yes.

The Chairman: In terms of the Canadian component, or how Canada fits in, we are looking to them to arrive at a position first and then we would then engage in discussions with them to see if it was along the NORAD model or along the SACLANT model. What is the process?

LGen. Macdonald: First and foremost, the Unified Command Plan process is a joint process, as you have identified. Our concerns and consultations with them have been focused on ensuring that they are cognizant that NORAD is currently a homeland defence type of activity and that they should take the consequences for NORAD into consideration in any decision that they make.

The primary points that we have been making to them is that we feel that NORAD is a useful arrangement that should be continued, that it is mutually beneficial to have this command that addresses aerospace defence for North America and that we would want to ensure that NORAD was never subordinated to the American commander - that is, whatever adjustments they may make to their Unified Command Plan process, the CINC for NORAD, the commander-in-chief for NORAD, must always be responsible to the national command authorities of both Canada and the United States. It would not be acceptable to us to have NORAD as a component or a subordinate command to a United States commander and, therefore, be essentially subsumed within an American command.

We have also indicated that, in the context of their homeland command, there is a possibility of enhancing our relationship to beyond aerospace to consider the land and sea implications of mutual defence and to deal with those in that context.

As MGen. Ross said, we have not had any detailed discussion because they have not taken a decision.

The Chairman: Has there been a response of agreement in principle regarding expanding or enhancing the naval and land components? Is that something the Americans have agreed to in principle?

LGen. Macdonald: We have received a positive response from them in the context of discussing those possibilities. We are not suggesting necessarily that we are trying to create a land or a sea version for NORAD, but rather to use our NORAD experience, which has been successful for some 44 years, to extrapolate that into other areas.

The key difference between land and sea and aerospace is that aerospace is here now. It must be done in real time to be effective. You cannot wait until you have an aircraft flying into your radar to assemble the resources to respond. However, in a land or a maritime environment, you may well be able to do that. It is not necessarily Canada creating standing forces of some kind to contribute to a mutual arrangement with the United States on a day-to-day basis, but rather having some contingency plans that would address these land and sea contingencies that we would want to address. We have no specific arrangement with them in these areas; it is a matter of expanding the discussions to see if there is an opportunity for more than just an aerospace arrangement for the future.

Ms Sinclair: You asked how Canada fits in. It is important to recall that this is actually an iterative process. It is a U.S.-driven initiative for them to look at their overall command structures. When it starts to impinge on things like NORAD, as LGen. Macdonald has said, we have put down some clear markers about our interest in NORAD and its importance and the importance of retaining that privileged relationship because it works to the benefit of both of us. However, it is an iterative process. The United States has been sensitized to the fact that where their changes impinge on Canada they will consult with Canada. We will come to an understanding. LGen. Macdonald has outlined some areas in which one might want to discuss expanded enhanced cooperation. I do not think there are definites around this at the moment because the Americans have not brought their Unified Command Plan to some sort of definitive form yet. It is very much a process of consultation, and we are in constant consultation with them to ensure that whatever comes out works for both sides.

The Chairman: Would it be fair to say that there has been no selection of a headquarters such as Colorado Springs or Norfolk? We do not know whether it will be a new CINC or whether they will take one of the existing CINCs and use it instead?

LGen. Macdonald: The media reported that this would be a new CINC; however, in effect, no decision has been taken. One of the easy options from our perspective would be to take an existing or a new commander-in-chief and double-hat him as, say, NORAD so that we would retain the pre-eminence of NORAD as a binational command reporting to both national command authorities.

The Chairman: If we try to cast our mind forward to where the Americans are going here, we could visualize some sort of organization that would run in parallel with Governor Ridge's operation where at some point the totality of the security arrangements would be in place. You would have the CINC North America, or whatever you call it, operating in conjunction with Governor Ridge's responsibilities; correct?

LGen. Macdonald: You have hit on an excellent area that will give you some opportunity to discuss those details with your American colleagues. It is not clear to us what the relationship of Governor Ridge and his organization would be with this new military command. The details have not been shared with us; nor are we sure that they have totally been developed in the United States.

The Chairman: Is their Coast Guard an asset that falls under Governor Ridge or under the Joint Chiefs of Staff?

LGen. Macdonald: I am not sure what relationship the Coast Guard has with Governor Ridge. I do not think I can answer that.

The Chairman: It just reports to treasury and that is it?

LGen. Macdonald: It works with the navy, but I am not sure Governor Ridge's relationship is with the Coast Guard.

MGen. Ross: It is clear that the relationship of the U.S. Coast Guard and other government agencies is quite different from our Coast Guard. These are some of the issues in the consultation that we would have concerning what maritime responsibility means, whether it is Governor Ridge or the military, and, on our side of the border, what our responsibilities would be.

The Chairman: We have meetings with the Senate Select Committee on Intelligence, the House Committee on Intelligence, House Armed Services, Senate Armed Services. How seized are these committees likely to be with the issue of joint command?

LGen. Macdonald: The Unified Command Plan is not focused on international or binational issues but rather on the domestic organization of their commands. Congress has the ultimate authority for creating an additional command, if that option is chosen, and confirming the individual who would occupy that position. The concerns related to NORAD are not a large issue in the United States. They are more concerned about what a homeland security command would do and what would be the relationship with Governor Ridge's responsibilities.

The Chairman: If we are talking about a time line where the Americans will make a decision soon, the joint command is a question that is principally a domestic military one. The issue of the relationship between Governor Ridge's operation and joint command is unclear. The Americans have not made it clear. It seems to me that it is unlikely that the committees that we are looking at will have focused on the question of Canadian involvement at all. Will we be breaking new ground with them?

Ms Sinclair: Senator, I think you will. Your visit is timely in that you can sensitize them. We constantly remind the Americans that we are there. When they talk about things like a new command structure, there are implications for Canada. Certainly, we have had to do some work on both the diplomatic and the military tracts to alert them to the fact that there are implications for Canada. It would be very helpful if you were able to do that sort of sensitization when you meet with those two committees because it will not be instinctive to them.

The Chairman: If I understand you correctly, LGen. Macdonald, the key question, as it relates to NORAD, is the direct link back to the national command structure here and that any subordination of that would be a problem for us.

LGen. Macdonald: Exactly, Mr. Chairman. First, we feel that the continuation of NORAD is useful and beneficial for both countries.

The Chairman: After the question of the link back to the national command structure, what other issues are on your wish list?

LGen. Macdonald: The obvious tertiary issue would be this: If we had a mutual agreement that NORAD has been successful and we would like to explore the enhancement of our mutual security arrangement to land and sea, how would that be incorporated into a homeland defence relationship in this new command, and what, ultimately, would be the art of the possible? What kind of agreement can our two nations develop in that regard?

Senator Banks: Among the things that have not yet been determined by the United States is under whose command the Strategic Defence Initiative, SDI, will be when it becomes operational. Canada makes a significant contribution to NORAD in terms of space, people, expertise and fighter airplanes. I think it is fair to say that Canada will make less of a significant contribution in terms of expertise, material and people to SDI. We can reasonably demand joint command in NORAD. It will be tough for us to do that in SDI. If SDI is placed under NORAD command, which is one of the possibilities, do we not have a sticky wicket?

The Chairman: You are up to $5 on "SDI."

Senator Banks: It is like shooting bullets with bullets. Is there a way around that? Are we likely to find out that they will take into account our sensibilities, Ms Sinclair? Will we have to bang on their door and say, "You guys forgot. You put the Strategic Defence Initiative under NORAD, and we are your new partners"?

Ms Sinclair: As with many of the things we have discussed today, Ballistic Missile Defence, which is the latest incarnation of the Strategic Defence Initiative, is a work in progress. The Americans are in a testing phase. They are trying out many things to see what will work. If one thing works in a testing phase, they might decide to develop it. Where they situate the command and control of this overall system, the architecture for which has not yet been developed, is still a big question.

The important thing is to sensitize the Americans as we were doing on the unified command structure. When you start talking about things that impinge on NORAD, such as saying, "We are your partner. We have a treaty relationship. It matters to us. We have some questions that flow from that. Is NORAD, in itself, sufficient to deal with the challenges of post-September 11?" Some are suggesting that one might wish to enhance the security arrangements. However, that is still an open question in the minds of the Americans as well as here. Where should such a command structure be situated? The Americans have not said yet. Certainly, NORAD looks like one possibility, but there are other possibilities that the United States has been musing about, or at least have appeared in the press. It could be in the joint command. They could move space command out of NORAD. There are many possibilities.

Senator Banks: In the case of the SDI, or Ballistic Missile defence, they are the 900-pound gorilla.

LGen. Macdonald: The Ballistic Missile defence initiative is a United States undertaking to defend the United States. They have not decided to deploy the system yet. They are still in a testing phase. They have not specifically asked us whether we would be partners in Ballistic Missile defence, whatever that may mean. One thing is certain, however. They would not assign responsibility for BMD to NORAD without our concurrence. They would assign to an American command if we opted not to participate, or if there seemed to be no advantage to having a binational participation. Everything that happens to NORAD is a mutually agreed undertaking.

Senator Banks: I hope we mutually agree to something because one day the debris will fall on us.

LGen. Macdonald: An intercept would occur exo-atmospherically, which means in outer space. Because it is not a nuclear detonation or an explosion of any kind - it is actually a bullet hitting a bullet as you suggested - everything would be smashed to smithereens. Anything of any significance would be mostly burnt up in the atmosphere. There is a risk of some debris falling to earth. It would not be radioactive debris or a significant damage-causing event.

Senator Day: I am looking at the unified command material that you provided. Can you tell me whether the Deputy Secretary of Defence is in uniform?

LGen. Macdonald: The Deputy Secretary of Defence is a political appointee. It is Mr. Wolfowitz at present, and he is a civilian.

Senator Day: How do the joint chiefs fit into this diagram? I do not see them here. Where do they fit in?

LGen. Macdonald: This is difficult for us to explain. The Secretary of Defence ultimately has the authority for the forces there. The Chairman of the Joint Chiefs of Staff is just that; he chairs the staff and runs the Pentagon staff and the chiefs of staff of the services, and they work together to provide military advice and so on. It is the Secretary of Defence who actually has the authority over the CINCs in the United States. Of course, they do not do anything without the chairman being involved. In fact, the joint staff prepared this Unified Command Plan for the chairman to recommend to the Secretary of Defence and, ultimately, to the President.

Senator Day: The commander-in-chief, to pick one of them, of central command, would report directly to the deputy secretary through to the Secretary of Defence, but would also report through to the chairman of the joint chiefs; is that correct?

LGen. Macdonald: Yes, that is correct.

Senator Day: Should we not try to work the joint chiefs into this diagram?

LGen. Macdonald: This is information we have drawn from American sources. Again, it reflects the Secretary of Defence having the ultimate command authority.

Senator Day: If I flip the page, I see that the chairman's office has responsibility for certain areas, but you do not show the chairman's office in your block diagram.

LGen. Macdonald: No, again, that comes from the American sources.

Senator Day: That may confuse the uninformed. I see where the chairman's office is responsible for Canada, Mexico and Russia.

LGen. Macdonald: That is his responsibility because those countries are not assigned to any other CINC in their area of responsibility.

Senator Day: We might be interested in talking to them.

LGen. Macdonald: You could certainly ask about the role of the chairman in the United States and the constitutional amendments and so on. It is clearly identified and shown on the chart.

Senator Day: The chairman is not even shown on the block diagram.

LGen. Macdonald: Not in the chain of command to the CINCs. The CINCs are what they call the "war fighting commanders." In the United States, the army, navy and air force provide forces for ultimately conducting those operations. The chairman has a more direct role with the services.

Senator Day: LGen. Macdonald, I was wondering if that would be your answer. When we were talking to some of the operational units in Halifax, they told us that once they go into an operational mode, they report to you, as opposed to the regional commander. Is that correct, and is this a similar type of situation?

LGen. Macdonald: We distinguish between force employment and force generation, force generation being the actual training and equipping of individuals or units to conduct operations. However, when they do deploy, as they are in Afghanistan now, on an operation, the command goes, in the case of the army, from the chief of the land staff to the CDS, who is ultimately the Canadian commander of those forces abroad.

Senator Day: Is this a similar structure to that in the United States? Is operation the key part of it?

LGen. Macdonald: I am not sure if they call it "force generation," but they call it "organized training and equip." The air force, army and navy would be organized training and equipping forces to be deployed by those CINCs that are shown in your chart.

The Chairman: Thank you, Ms Sinclair, LGen. Macdonald, MGen. Ross. It has been an informative afternoon. We appreciate your taking the time to help us in our preparations. We also appreciate the briefing materials you sent to us. We look forward to hearing from you again the next time we have the opportunity.

Senators, this meeting is adjourned.

The committee adjourned.