Proceedings of the Standing Senate Committee on
National Security and Defence

Issue 11 - Evidence - Afternoon sitting

The Standing Senate Committee on National Security and Defence met this day at 1:30 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: Honourable senators, we have before us today Mr. Richard Fadden, Deputy Clerk, Counsel and Security Intelligence Coordinator to the Privy Council Office, and Mr. Daniel Giasson, Director of Operations, Security andIntelligence, also with the Privy Council Office. This is the final panel of witnesses in our hearings in preparation for our visit to Washington next week.

We are very pleased that you could appear before us,Mr. Fadden. We are looking forward to whatever assistance you can provide us, in particular for our meetings with the House and Senate Armed Services Committees and with the House and Senate Select Committees on Intelligence, which are on our schedule for next week.

We value your advice and counsel. We are particularly interested in your views on what issues have not had a good congressional airing. It would be very helpful to get some insight into the tone and scope of involvement at the congressional level. That may be difficult to do, but we are aware, as are most people, that one communicates with Washington at a variety of different levels and we would like to take best advantage of the occasion that presents itself next week.

Please proceed.

Mr. Richard Fadden, Deputy Clerk, Counsel and Security Intelligence Coordinator, Privy Council Office: It is a pleasure to appear before you again, senators. I would like to give you a snapshot of what the government and the community has tried to do since my last appearance before you. At the end of my presentation I will try to address more directly the specific questions you have put to me. You are right in assuming that I will not be able to give you chapter and verse, but I do have some ideas to pass on, for what they may be worth.

I would like to divide my brief presentation to you into three parts. I will bring you up to date on the threat assessment in respect of Canada, I will talk about our contribution to the coalition campaign against terrorism. I will also try to give a comprehensive overview of what the government has done to enhance public security.

First, in respect of the threat assessment, it is important to remember that despite all the things we have done and the difficult environment in Canada since September 11, Canada has not been the subject of a terrorist act. The U.S. still faces the possibility of attack in the immediate future. We still hear through the intelligence system that a number of people are thinking about attacks against United States allies.

For all these reasons, we can hardly afford to be complacent. We remain a close ally of the United States and an active participant in the U.S.-led coalition against terrorism.

To put not too fine a point, while we believe that as the United States' principal ally and neighbour on this continent, we must collaborate with them to the extent that we can. However, we have our security concerns, and they are real. In everything we have done since September 11, we have tried to take into account these two overriding considerations.

We are also subject to a variety of media attacks about the perceived effectiveness of our response. These attacks come and they go. The ongoing issues of our immigration and refugee policies and the effectiveness of our border security will continue to be of interest to the press. However, the new resources made available in the budget and the new legislation that the Senate and the other House have passed make it easier for us to deal with these issues. We are confident that since September 11 substantive improvements have been made on those two fronts.

I will not go into detail about our military contribution to the coalition. I suspect that you know more about it than I know. However, I would note that by the end of February we will have 3,000 members of the Canadian Forces involved in Afghanistan and elsewhere. It is not an inconsiderable contribution.

The Prime Minister created a cabinet committee to deal with these issues after September 11. He has asked the Deputy Prime Minister to remain in the chair, and the committee will continue to meet as is necessary. Between September 11 and today, it has met some 15 times. It was instrumental in coordinating the passage of Bill C-36 and has worked on Bill C-42. Its views were of use to the Minister of Finance in the development of the budget. It assisted Mr. Manley in the Smart Border Declaration of the United States. All of this is to say that the committee has been active and has made a very good contribution to Canada's response to the crisis. It has also presented the United States with an impression of some coordinated activity on the part of Canada.

When I was before this committee in 2001, I noted that Canada had five overarching security objectives. I want to stress that they remain the same: to keep terrorists out of Canada; if terrorists are found here, to prosecute them and remove them; to facilitate Canada-U.S. relations at the border; to undertake a variety of international counterterrorism initiatives; and to protect our critical infrastructure and enhance emergency preparedness.

Since I appeared before you the last time, three things have happened: First, Bill C-36 has passed; second, a budget announcing some $8 billion over five years in this broad area was tabled in the House; and, third, the Smart Border Declaration was signed with the United States.

You will know more than I do about the legislation and the budget, so I would like to talk about the Smart Border Declaration. The four key objectives to which our twogovernments have agreed are to work on the secure flow of people and of goods, to develop a secure border infrastructure, and to coordinate efforts and enhance information sharing.

Late last year I appeared before the House Select Committee on Intelligence in Washington. Aside from the usual exchange of who was doing what to whom, I was left with the impression that they do not know a great deal about the Canada-United States border, period. The majority of members on that committee were from the southern part of the United States, and they immediately transposed their experience with Mexico. I spent part of my time explaining that there were two borders, but that was the only commonality. Everything else was different. Their bottom line was that this is interesting but what will Canada do to help them make sure that the border is secure, by which they mean Canada keeping out people who are troublesome to them.

My understanding from colleagues in the embassy in Washington is that this overarching approach remains. In other words, they tend to equate our border with Mexico. They are really interested in keeping out bad guys.

I do not think that point of view is necessarily reflected in the administration, where they have ongoing relations with Canadian officials and ministers. However, in the House of Representatives, it was down to what Canada will do to help keep the bad guys out. The other things are interesting, but they want the bad guys kept out. I was really quite struck by that.

I want to flag for you the proposed public safety act, which is now in the House of Commons. We hope that it will come before you before the summer break. This is the second omnibus bill that the government will introduce in this broad area. It seeks to do a variety of things. In particular, it deals with enhancing ministerial authority in respect of air security measures to allow for the exchange of information with security and intelligence agencies regarding the users of the air transportation systems. It creates a new offence relating to unruly behaviour.

We believe that it would be reasonable for Parliament to provide additional authority to ministers in the handling of hazardous and explosive substances. There is an uneven treatment in Canada in that area. The proposed public safety act would also enhance the authority of FinTRAC and other departments to share information.

In direct response to your question, Mr. Chairman, about the preoccupation of the United States authorities, we have come to an understanding that in the final analysis, terrorism is reduced to an individual. Someone will explode the bomb, obtain the money or provide a safe haven. It boils down to the Government of United States being able to find out who those individuals are. All of this activity will be for naught if we cannot find the individual who is committing the crimes.

We have been able to develop an intelligence-based approach to enforcement. The United States is increasingly speaking broadly on the same wavelength, although their approach tends to be transactional. If they could - and I should not speak for the U.S. authorities - I think that they would check every piece of equipment and every good that goes into the United States. They would stop every single person going in and make sure that individual is acceptable to them.

They are willing to discuss and they are increasingly discussing with us the idea of a risk-management approach to intelligence, which is based on good intelligence. To achieve that, we must share intelligence effectively.

I would like to leave with you the very positive effect of Mr. Martin's budget. Some $8 billion is being made available over the next five fiscal years, of which $1.6 billion is to go to intelligence and policing. Another $1 billion will go to enhance the screening of entrants into Canada. Over $2 billion is dedicated to enhanced air transportation security. Slightly over $1 billion will go toward chemical, biological, radiological and nuclear threats preparedness, $0.5 billion to military deployment, and about $2 billion toward making the border more efficient and effective.

Mr. Ridge appeared in Ottawa the day after the budget. The U.S. authorities were impressed that we truly can put our money where our mouths are. It had some considerable effect. This is a lot of money to spend on security. If one translates it into the equivalent in the United States, it would be one heck of a lot of money - $70 billion. The challenge now, both within Canada and the United States, will be to make sure it is spent well and that we leverage every dollar. We want to ensure that we get as big a bang for every buck that is available.

The United States is asking for some $2 billion to be spent on the Canada-U.S. border. I suspect that the budget that Mr. Bush sends to Congress will have a huge security component that will probably dwarf what we have spent.

The thought I should like to leave with committee members is that we have no reason not to hold our heads high in terms of what we have done in the resourcing front on security and intelligence, both for our own needs and in terms of collaborating with the United States. The United States administrationacknowledges that.

I do not have a sense how much members of the Congress have absorbed this fact. Their preoccupation appears to be different.

The Smart Border Declaration, which I am sure you have all seen, reflected an extraordinary level of collaboration between Canada and the United States. It involved working on 31 items that will enhance our joint security. The items deal with the secure flow of people and goods, the border infrastructure, and coordination and information sharing. Mr. Ridge and Mr. Manley will be meeting over the next week or two to be given an update on what we are doing. Officials have met both here and in the United States since the Smart Border Declaration was signed. We are making progress on all fronts.

Our understanding is that, both from the perspective of the various authorities in Canada and those of the United States, the Smart Border Declaration has been a success all round. It really is succeeding in bringing together and, in some ways, prioritizing what we are trying to do on the security and border fronts. We are hopeful that by mid-year this year the two countries, to a considerable degree, will be able to declare a victory and move on to the next phase of what we will have to do.

In direct response to your question, there are several areas that I think both Canada and the United States will have to spend more time on. Those areas include maritime security and seaport security. In Canada we acknowledge that we did not know enough about those areas and we put them aside until we had a chance to work our way through what this meant to us. That is also true in the case of the United States.

Another area where we need to do more work is relates to the extent to which we project abroad - push the border out away from Canada. Both ministerial intent and the budget will allow us to assign a reasonable number of immigration control and other officers abroad, but we need to think our way through how we will do that: how we will work with airline and shipping companies; how we will collaborate with the United States and other countries in doing this, the objective being that every terrorist that is kept out of Canada is a terrorist kept out of North America. Every terrorist kept out of the United States is one kept out of North America. That enhances the mutual raising of comfort we are trying to achieve across the board.

Mr. Chairman, I would be pleased to answer any questions committee members might have.

Senator Meighen: I would like to ask you about your last point with regard to pushing our borders out, given your comment that quality of intelligence is critical in the world in which we now live, post-September 11 and, indeed, perhaps even before.

Obviously, no decision has been taken to do anything to enhance or create intelligence-gathering capability outside the country. We will continue to be dependent upon the goodwill of our allies to furnish us with intelligence that the officers you alluded to would then use in their assessment of individuals seeking to come to this country. Is that correct?

Mr. Fadden: At one level, it is, but at another level it underplays the intelligence-gathering capacity of officers current ly assigned abroad. You are right when you say that Canada is unlikely to create a foreign intelligence service tomorrow. However, it helps to look at intelligence-gathering on a spectrum. It can range from what you read in The Economist to what the blackest department in the CIA can gather for you. There is much intelligence to be gathered before you get to this end of the spectrum.

Enhancing diplomatic reporting and focusing it, and having more immigration control officers and additional CSIS or RCMP liaison officers, will go some distance toward this end of the spectrum. While you are right, Senator Meighen, in saying that we do not have a CIA-like agency collecting intelligence abroad, I do not think it is 100 per cent correct to say that we are entirely dependent on our allies. We do collect a fair bit of intelligence through the means I have set out.

Senator Meighen: Do you or your office get involved in deciding what information that we have gathered can and should be shared with our allies? Who makes that decision?

Mr. Fadden: It depends on the agency. If the matter relates to a police inquiry, we leave the police to do it. If they see a link with criminal activity in the United States or elsewhere, there are established procedures. In other areas, such as defenceintelligence, political intelligence and security intelligence, unless the intelligence is Canada-specific - in other words, that it would affect immediate Canadian interest - the default position is that we share. We would need a good reason not to share.

My sense is that in respect of most of our allies, in particular since September 11, they bring to bear much the same attitude. Unless their own national interests are directly affected, the idea is that the more people who have the same intelligence, the more eyes and minds that are looking at it, the more benefit we will get from it.

I or my office would get involved at the policy level in the sense of determining which countries we would share with, and whether there are broad categories that we should or should not share. However, on an ongoing basis, most of it just flows.

Senator Meighen: That is interesting. We hear the phrase "turf wars" bandied about in every context. I suppose it goes back to primeval instincts, with everyone defending his or her own turf. To take it at its most benign, if I gather information that helps me to do my job better, what is pushing me to share it with you?All across the spectrum there has been a problem ininter-organizational operability. What, if any, incentives have been put in place, or what causes us or our allies to be more forthcoming and more voluntarily inclined to proffer information we or they have accumulated?

Mr. Fadden: I take your point. I am certainly not going to deny that there are turf wars in the bureaucracy, either here or elsewhere. One thing that has changed since September 11 is that, for the first time, people have been able to see a direct cause and effect between not sharing information and sharing it. There have been incidents since September where the sharing of information within Canada has resulted in people being barred from the country. We have been vigilant in trying to avoid a repetition of what I call the "R" incident: the Ressam incident. Departments and agencies have come to realize that the public and Parliament are not tolerant of incidents where errors occur because people have not collaborated or shared.

A large number of the systems that are now in place, but also the systems that have been promised in the budget, will not be allowed to be implanted - if that is the right word - unless my office is assured that they are interoperable. Unless there is a really compelling reason, information available to one agency is available to another.

Having said that, and going back to your analogy with human nature, people do not intuitively share unless they see some advantage to themselves. The RCMP cannot prosecute if they do not get information from CSIS. They need to convince CSIS to do something for them. There are a whole raft of things they can do on that front, ranging from the sharing of criminal intelligence to holding off on prosecutions to allow CSIS to pursue intelligence operations. It is a world where things go very much together.

That is a long-winded answer, but even bureaucrats and institutions that tend to be very silo-oriented and where the need to know has a strong basis in experience have shifted their modus operandi. It is largely because we do not want to have a World Trade Center event in this country. It does make a difference. It does focus the mind. My colleague and I, and others who work in PCO, if we have been pushing anything since September 11, it is that we do not have enough people; we do not have enough resources, any more than the U.S. does. We must take advantage of what we have. We constantly enjoin people, as do ministers, for people to get together and to share.

Senator Meighen: That is very encouraging, presuming that is the stated or implied role of the Manley committee. What is the Manley committee called again?

Mr. Fadden: It is called the Ad Hoc Cabinet Committee on Public Safety and Anti-Terrorism, PSAT, for short.

Senator Meighen: I prefer the long term. I remember "ad hoc," which is a term I used as a lawyer.

If it is an ad hoc committee, it is an ad hoc committee and not a standing committee. As such, it will stay in place as long as the Prime Minister or whoever decides it should; is that not right?

The Chairman: It will be in place as long as we have a threat of terrorism.

Senator Meighen: I was hoping that, perhaps, that is whatMr. Fadden would say, which means that it will become a standing committee because we will always have the threat of terrorism. Is that not right, Mr. Fadden?

Mr. Fadden: The Prime Minister does not like adding committees and institutions any more than the rest of us. He created it as an ad hoc committee because at the time he had no real sense if that was the right thing to do. His view appears to be that as long as it is necessary, it will stay in place. In practical terms, whether the committee is standing or ad hoc makes no difference. It has a secretariat to support it. It has a full-time chair and it chugs along. If, over time, the emphasis on the war against terrorism shifts, I suspect it will become less busy. If we have a terrorist incident in Canada, I expect its activity will be ratcheted up. We have heard nothing to lead us to believe that the Prime Minister intends to close it down. It is doing its job. I suspect it will be with us as long as it is needed.

Senator Meighen: Could you briefly describe what role it has in coordinating the numerous intelligence gathering agencies we have in Canada, everything from Agriculture Canada to CSIS, and whether those various agencies have a clearer idea of what their roles and responsibilities are now?

Mr. Fadden: I would be less than honest if I said that PSAT was concerned with agriculture to whatever is the closest departmental name with a "z" in it. It has restricted its activities to the broadly defined security and intelligence area, which is more than CSIS and the RCMP. It would include immigration, customs and a variety of other areas.

We have tried to recommend to the committee clear objectives in terms of where they need to go and what their focus has to be. There is no doubt now that departments and agencies have been told that anti-terrorist intelligence gathering and collaboration is the top priority.

Over the course of the next couple of months, either this committee or the Committee on Security and Intelligence will have to look again at the extent to which important issues are rebalanced. There is still a variety of other problems in the world that cannot be ignored.

There is the issue of weapons of mass destruction, for example. We hear regularly about the possibility that some of these terrorist groups may get their hands on weapons of mass destruction. I do not mean to suggest that we drop these other important issues from our list at all, but the fight against terrorism has meant a bit of a shift.

Over the course of the next two to three months, ministers will be presented with some suggested priorities, which will then be reduced for each department and agency into operational priorities and then specific tasks. What we try to do in my office over the course of the year is to ensure that something actually happens when ministers decide they want to do "x". I do not mean this in a negative way. In large institutions it sometimes takes awhile. We then report back in the subsequent year to ministers as to whether this reallocation has taken place.

Senator Cordy: I wish to return to the cabinet committee on public security. What is the role of this committee? I know there are a number of cabinet ministers on this committee. Does it coordinate the various departments that deal with security in some way?

Mr. Fadden: It certainly did that, senator. It was also the committee that reviewed the draft legislation which becameBill C-36. It was the committee to which Bill C-42 was referred. It has dealt with legislation. Its views were sought on where new resource allocations could be made. The committee contributed to the budget process. It does play the general coordinating role to which you just referred.

The Chairman: That is what the ad hoc committee does.

Mr. Fadden: That is correct.

The Chairman: The question was: What does the committee on security intelligence do?

Mr. Fadden: I beg your pardon?

The Chairman: Does that committee not meet once a year?

Mr. Fadden: The committee on security and intelligence has been around for a few years now. It tends to focus on the more traditional security and intelligence departments.

If there were a significant public event involving a draw on security and intelligence relations because the President of France was coming, for example, that committee would look at that issue. It looks at priorities every year in a systematic way. It reviews from a policy perspective whether we need changes in the mandates of the departments and agencies that exist.

Some of the stuff that I just said that PSAT did incorrectly, had PSAT not been there, the other committee stepped in. Thus, there is a bit of sorting out now between the two committees.

Traditionally, its principal interest is to ensure that the government's priorities are made known to the securityintelligence agencies and that ministers are assured that these agencies respond to those priorities.

Senator Day: You said there is a bit of a sorting out going on between the ad hoc committee and the other committee. Is the fact that Mr. Manley now has a new position likely to result in a more coordinated and a more unified approach to the activities of the ad hoc committee over the longer term in relation to the other committee?

Mr. Fadden: To be honest, I do not know. That is a prime ministerial decision. I do not know what his views would be on this matter. I am not trying to avoid the question. I just do not know.

Senator Day: Since you are in PCO and you have a view of what is going on, is it likely that PCO will make such a recommendation to the Prime Minister?

Mr. Fadden: I would say that we see a use for both. Traditionally, there is a view that there is an advantage in having the Prime Minister in the chair once or twice a year to deal with security and intelligence matters, given his particularresponsibilities for the security of the state. Speaking from my own perspective, there would be an advantage in keeping the Prime Minister in the chair and allowing PSAT to be somewhat more operational.

I go back to my initial response, which is probably what I should have stuck to - it is a prime ministerial decision, and he has not indicated any view one way or the other.

Senator Day: Perhaps it is too soon.

I found your presentation very helpful. The point that you made in relation to your visit to the House Standing Committee on Intelligence, I think it was, and the fact that a majority of the members were from the southern part of the United States, representing states in the South, is something that is important to us. I am assuming the makeup of that committee is likely to stay the same.

You had some prepared notes. I was taking notes as best I could. Could you share your notes with us? Perhaps you might want to fix them up. It would be helpful if you could do that.

Mr. Fadden: Mr. Chairman, I do not mind doing that. However, they were really only memory jogs. They are not organized. I do not mind giving them to you, as long as we understand that they are not a speech. They were meant as memory jogs. I leave it to you to decide whether you would like them or not.

Senator Day: Please share them with the chairman. If he thinks that memory jogs would be helpful to the rest of us, then that is fine.

You went through the $8 billion in Mr. Martin's last budget. You indicated that Mr. Ridge was up here shortly after that and saw that we were putting our money where our mouth is. Let us assume that all Mr. Martin could find was $8 billion. If he had put $1 billion or $2 billion of that money into national defence, would Mr. Ridge have been as impressed as he was with the distribution the way it actually took place?

Mr. Fadden: All I can do is guess. The war against terrorism is not a traditional war. If you give money to a defence establishment, the tendency is to spend it in a relatively traditional fashion, that is, for more armoured personnel carriers, more tanks, et cetera. The war against terrorism is similar to the war against drugs. It is a different kind of war and I am not sure that we will win the war against terrorism by having bigger and better tanks. If you look at the kind of new funding the United States is making available in this area, they clearly spend a great deal on the military, on the U.S. Customs Service, on the INS and on the Coast Guard. Taking all this into account, their immediate interest is probably better served by the $7 billion the government allocated the way it did than for us not to have spent more on customs, on immigration and on air transportation safety but rather on bigger and better tanks or strategic airlift capacity. I am trying to give a sense of what the thinking might be. It would be interesting to ask Mr. Ridge that when you are in Washington.

Senator Day: This committee has had several submissions from various sources that the Armed Forces are seriously underfunded. The work that we are calling upon them to do in Afghanistan is seriously taxing the establishment as it currently exists and as it is currently funded.

Mr. Fadden: It is for the government to decide whether or not it wishes to give us a bigger and conceivably better military. As someone who has a role on the terrorism side, I wish to emphasize again that more submarines will not help in the war against terrorism. Neither will more fighters. It is a different kind of war. I make no comment on whether it is desirable to increase the military but we need different kinds of tools.

Senator Day: I understand.

Mr. Fadden: I am not disagreeing with what you are saying.

Senator Atkins: We are not only talking about equipment; we are talking about personnel. Canada has a lot of international commitments now with the military. This panel has found out that, down the road, the replacement of personnel is taxing the military to the point where, if we do not know what the exit strategies are - and we do not - we will run into a real major problem.

Mr. Fadden: I take your point, senator. The major expenditures in respect of the military are usually on capital. That is why I focused on those.

Senator Atkins: I think they are related to personnel.

Senator Day: We are now getting into the issue of allocation.

You said that the default position is that we share intelligence. Are you sharing that intelligence on an agency-by-agency basis, CCRC with the U.S. Customs Service, Citizenship andImmigration Canada with INS, and the Canadian military with U.S. military? Is that the way it flows back and forth and is shared?

Mr. Fadden: That is the way it has happened beforeSeptember 11 and I would like to think that that is happening even more now. As we share intelligence more in Canada, we are also sharing it across the board. In other words, if the customs officer at the Canada-U.S. border now has information on his computer screen that originates with the RCMP, with CSIS, withimmigration, as well as his own department, that kind of coherent sharing is also taking place. We also share with the United States our assessments of various intelligence issues.

Senator Day: Who is drawing this together and doing the analysis and then sharing that sanitized type of data in addition to the raw data that we are sharing?

Mr. Fadden: There, again, it is done and on a department-by- department basis. Departments share operational intelligence and all of them, to one degree or another, assess the intelligence. In a coordinated sense, the Intelligence Assessment Secretariat in the Privy Council Office does that coordinating work and we share that with the United States.

Senator Day: Is your shop part of the Mr. Manley's secretariat?

Mr. Fadden: Because it does assessments, it is given some measure of independence. Mr. Manley's committee is supported by the Privy Council Office. It is not his secretariat, it is the Prime Minister's secretariat. The assessment side is separate because we try to give them freedom from policy intervention to ensure that they can deliver objective assessments on the intelligence that they have.

Senator Day: Is Mr. Manley's new role to continue to be supported through the Privy Council Office and that secretariat within the Privy Council Office as opposed to establishing his own secretariat?

Mr. Fadden: Yes, that is my understanding.

The Chairman: When you were before us last time, you said that you had 55 souls working for you and only 23 of them were involved in coordination of intelligence.

Mr. Fadden: Yes.

The Chairman: I visualize it as almost operating as a switchboard in terms of connecting one organization to another. You are describing an evaluation function as well withthese 23 people.

Mr. Fadden: They do have an evaluation and an assessment function. They do produce some material on their own. They have access to most of the intelligence that is available in the Government of Canada and they put out a variety of assessments. One way they do this is by bringing into the Privy Council Office representatives from all the various departments and saying: "We believe we need an assessment on "X." You are the lead. You write the paper and then we will come together and look at it as a group." They produce the assessments in two different ways.

The Chairman: I continue to be struck that 23 people is not many to do that.

Mr. Fadden: It is not a great many people. During the height of the crisis, for reasons that we all know, they concentrated most of their efforts on the counterterrorism side. There is a lightening up on other parts of the world. You are right, we do not have excess capacity.

Senator Atkins: How many ministers are on that ad hoc committee?

Mr. Fadden: It just changed. There are, I believe, 11.

Senator Atkins: That many?

Mr. Fadden: Yes.

Senator Atkins: I assume that Minister Graham is one of them.

Mr. Fadden: Yes.

Senator Atkins: Has there been a clear definition of where Minister Manley's responsibilities are and how Minister Graham fits into that?

Mr. Fadden: The traditional role of the Minister of Foreign Affairs will be respected; there is no fundamental change envisaged. However, I also understand there are discussions to try to add precision to that. I am not trying to avoid answering the question; I just do not think we are there yet.

Senator Atkins: It is a new situation, though.

Mr. Fadden: That is right. People are working on it, senator.

Senator Atkins: I would think the Minister of Foreign Affairs would have a significant interest.

Mr. Fadden: Absolutely. That is why Mr. Manley was on it in the first place, both as foreign minister and as the chairman.

Senator Atkins: We passed Bill C-44, which was almost a demand by the Americans to meet a certain date in January, which we did. We have signed the Smart Border Declaration. Do you detect any other demands that are coming from the Americans that it is felt we must meet?

Mr. Fadden: In the accord signed by Mr. Ridge andMr. Manley, we at least have a current sense about where their thinking is. I do not think it represents the end of their requirements, nor the end of ours, but if you read the agreement signed between Mr. John Manley, former Minister of Industry, and Mr. Tom Ridge, the then Governor of Pennsylvania, you will have a good indication of where they are coming from at this point in time.

Senator Atkins: Do you and the Privy Council Office have any concerns about where the balance is between Canadiansovereignty and how we satisfy the Americans?

Mr. Fadden: I do not think so. One of the points that we find comfort in is that we have security concerns as they do, and we often find that we can lower our level of concern about the security of both countries in a manner that is acceptable to both.

It is for ministers to decide where the ultimate balance lies. With respect to the development of joint border facilities, some people in Canada have suggested that this is an abandonment of our sovereignty. We had a few joint border facilities on the Alaska border and we found that they work well and they save us money. It depends on the perspective that you bring to bear.

You mentioned Bill C-44. The United States simply told this country, and any number of countries around the world, that if we wish to fly into the United States they require certain information. If we did not want to fly into the United States we did not have to give them the information, which I know is tantamount to demanding the information. The fact is that some countries are probably not going to provide it. The information they want from us is information that we are also interested in having for flights coming into Canada. There again, I think a lot of it is in the presentation. It is at least worth thinking about.

Senator Atkins: Did we demand the same privilege of receiving manifests?

Mr. Fadden: That is available to us. They are prepared to make available all the information they are seeking from us. My understanding, though I am not certain, is that we will use large portions of it. For example, with the program to provide armed officers on aircraft in Canada, the more information that they have on who will be on each flight, the better equipped they will be to decide how many air marshals they need and which flights they will be on. The information will be used, senator.

Senator Atkins: My last question is a general one about continental security. Have there been any discussions to address that in the broadest context?

Mr. Fadden: That would fall outside of my ambit, so I cannot answer that.

Senator Banks: Mr. Fadden, I recall the last time you were here, it was still close to the September 11 event and things had not yet settled down. You were saying that those 26 people you have who were involved in the intelligence analysis were pretty well on their last legs, and that you could not keep up that level of intensity and involvement for very much longer. Have things now settled down to the extent that that is no longer a pressure point? Are you in a situation where, in the new regime that we now find ourselves, you simply need more people?

Mr. Fadden: I would have to say that the pressure has been released. I think I mentioned last time I was before you, part of the pressure was in not knowing, and it called for a very high level of vigilance. Since then, both we and our allies have a better handle on what might or might not happen, so the level of activity is higher than before September 11. However, it has dropped somewhat.

A variety of measures in the budget will make it easier for departments and agencies to deliver on the heightened level of activity. It is nowhere near as bad as it was in November and December, for a raft of reasons, but it is heavier than it was before September 11.

Senator Banks: As part of these new budget expenditures, will you get more people working for you?

Mr. Fadden: As you know, senator, working from the actual budget documents to implementation is an art in itself. I am quite hopeful.

Senator Banks: I will admit, it is at least a craft. Subsequent to that time, in what some people regarded as haste, we have passed some laws that made it easier, and in some cases possible, for information that previously could not be shared to be shared between various operations of government. I am assuming that that has been given some effect. Have you found that those changes are useful to you?

Mr. Fadden: I think so, although in most cases we are just getting there. If you recall, Bill C-36 provided for additional authority to allow FinTRAC, the money laundering agency, to share information. That is just starting. It was the general message that was conveyed, that sharing for specific purposes relating to terrorism was a good thing. We still remain quite preoccupied with the privacy components of this, as is the PrivacyCommissioner, but we have seen a bit more of it and we are hoping to see even more.

I am answering in a general way because I do not remember the detailed provisions, for which I apologize. I do think that the general message that Parliament sent was a good one.

Senator Banks: When they were appearing beforecongressional committees, INS said that there was information which was then, at the time in question, extant in some of those myriad of American intelligence services. Had they been able to access the information, it would have resulted in their not issuing visas to several, if not all, of those people who flew those airplanes. We now know some of those things, and we were in that same position as well.

You have assisted us by giving us valuable information, and you have reconfirmed the Canadian folk tale about how little our good friends and neighbours know about us.

Senator Atkins: We could sit here and discuss this, and the Americans could say they spent $10, and I could say the Canadians spent $1. The bottom line is that there is a difference in size between our populations and our economies, so it only natural that we will spend less in dollar terms. If you were ignorant of these circumstances, you might be excused for saying: "This is the border. I spent $10 on this side and you are telling me you, with your chest puffed out, that you spent $1 on your side." I am not sure if we are at 10 per cent yet, but in respect of both, the comparison is always made that we are about 10 per cent of the U.S. We do not spend 10 per cent of their budget on armed services or on security overall. I suspect that they are less interested in the niceties of our capacity and our GNP. Do have you any advice for us in respect of what, in that circumstance, becomes a more or less defensive position?

Mr. Fadden: In the final analysis, percentages are very interesting, but the proof is really in the pudding.

I do not have the detailed statistics, but broadly speaking we have three times more customs officers on our side of the border than do the United States on their side. They can go on at as great a length as they want about our not taking care of our side, but we have three times the manpower as it is. We developed with them a model of patrolling the space between customs ports, which they think is such a good idea that they want to do it across the entire border. We included in the budget for that an additional 10 or so.

Again, it is not really the number of Black Hawk helicopters that you have flying across Manitoba but whether you have the right kind of intelligence at the right place and at the right time. To some degree, that is having a fingerprinting capacity at the border or an iris scan capacity to allow you to check back into the data banks. I would argue that you do not need $75 billion to do that. What you need is a little money and the will to ensure that information is linked and that you are willing to share that information.

Some people would argue that in some instances less is better than more. Pouring resources at issues gives you exactly the kind of problem you talked about a few moments ago - so many agencies that are so large it becomes difficult to organize operations.

I would fall back on the fact that, over the years, Canadian air transportation safety has always been regarded as better than it is in the United States. Our border and the customs side of it had more people per capita than the Americans had. We have adopted many measures since then with them, and if we base all of our activities on good intelligence, we do not need $1 billionor $1 trillion.

Again, in direct response to the chair's question, my sense is that they are beginning to accept the view, that more focussed use of less money is better than spending a great deal of money on everything. That is an incomplete answer, for which I apologize, but it is the best I can do.

Senator Banks: It was a broad question, and you have given some specific answers. I know there are some things we do as well or better than they do in respect of intelligence and operations at the border and that poundage is not always what counts. However, a moment ago you alluded to issues in respect of the application of facilities and concepts. Is it the case, without being specific, that we are ahead of the game in any of those respects? That is to say, are we making proposals, moving in directions and waiting for the other side to catch up in any of those respects, or is it the other way around?

Mr. Fadden: I believe that we are, senator, and please forgive for not being more specific. There are some areas where we are substantially ahead and there are other areas where we are clearly not ahead. The reverse is true on the other side. We are hopeful that one of the results of the Manley-Ridge agreement will be that, by working together on detailed plans to move across the whole range, we will have reached the point by midsummer where our level of comfort will be quite a bit better than it has been. I would submit that having to go through this exercise improves our knowledge of one another. In many cases, because we do things somewhat differently, they assume we do not do it as well, and I suspect the same is true the other way around. That is not necessarily the case - we just do things differently.

Senator Banks: I knew when I asked the question that you could not be specific. If, in the interim between now and the time we leave, you can speak to the extent to which you can apprise us in that respect, even in the most general terms of specific areas, it would be most helpful to us.

Mr. Fadden: I will try.

Senator Banks: My last question has to do with your specific area, Mr. Fadden. In the time immediately after World War II, the one area of international skulduggery and spy activity in which Canada distinguished herself and became, one could say in some respects, "pre-eminent" was not in the gathering of intelligence information but in the processing and analysis of it. We allowed that to lapse a bit. Since we are not likely to be in a position to mount anything comparable to the CIA or that kind of international extra-border intelligence-gathering capability, might we concentrate on, to better effect and better use in respect of cooperation, the analysis of intelligence information? Might it not be a good idea to move in that direction?

Mr. Fadden: That is a tough question because, as I understand the security and intelligence world, you have to pay your dues in each module or sub-module. Even if we were very good on assessment, it would be appreciated, and our friends would share far more assessed intelligence with us than they perhaps do now. However, turn the corner and they would want to know what we are doing on collection.

It is difficult to develop an absolute specialization and to not do a bit of everything across the board. Speaking absolutely personally, I believe we should do more on assessment and analysis because there is an imbalance between expenditures for collection and expenditures for analysis. However, it is one of those issues that ministers will have to examine over the course of the next while.

Senator Banks: As you said, even if we no longer gathered information and we became pre-eminent again in the processing of it, we might find there would much more sharing, and we might find ourselves more welcomed at the table.

Mr. Fadden: We would generally be more welcomed, but we would be particularly more welcomed at the assessment table. The point I was trying to make is that, in the intelligence world, people tend to compartmentalize. The professionals in the area want you to assess and to work on a certain kind of collection, to the extent that, if you do a bit of this or a bit of that, the doors are open more than they would be. However, if you only do top-notch assessment, the other doors will not swing open quite as much as you might think, because of the way the communities are compartmentalized.

The Chairman: Mr. Fadden and Mr. Giasson, I thank you for appearing before the committee today.

The committee adjourned.