Proceedings of the Standing Senate Committee on
National Security and Defence
Issue 2 - Evidence - Meeting of March 29, 2010
OTTAWA, Monday, March 29, 2010
The Standing Senate Committee on National Security and Defence met this day at 4:01 p.m. to examine and report on the national security and defence policies of Canada (topic: Arctic sovereignty and security).
Senator Pamela Wallin (Chair) in the chair.
[English]
The Chair: Honourable senators, we have a busy day today as usual. Our next meeting will be on April 12. We will continue to hear at least some witnesses on Arctic sovereignty and security. We can discuss that later.
Today, we have three witnesses. Our topic continues to be very timely, with a meeting near the nation's capital today focusing on Arctic sovereignty and security. Foreign ministers from the five Arctic coastal states are gathering for talks — Canada, Russia, the United States, Norway and Denmark. They are looking at economic and environmental challenges facing the planet's polar frontier as it is called and issues of the melting Arctic Ocean. One paper today described it as the new Mediterranean.
We also continue our discussion on these issues as a committee. We are pleased to welcome our first witness today, Professor Rob Huebert, Associate Director of the Centre for Military and Strategic Studies and Associate Professor, Department of Political Science, University of Calgary. He is also the author of a book written in 2009 entitled Canadian Arctic Sovereignty and Security in a Transforming Circumpolar World. Thank you for making the trip from Calgary.
Welcome to all honourable senators. We have two visiting senators today, Senator Plett and Senator Martin. Thank you for being with us.
Rob Huebert, Associate Director of the Centre for Military and Strategic Studies, Associate Professor, Department of Political Science, University of Calgary, as an individual: Thank you, honourable senators. It is my pleasure to have the opportunity to discuss an issue that I think is probably one of the core frontier foreign policies for Canada into the future. The Arctic Ocean, in all likelihood, will become an ocean like all other oceans. This will create both opportunities and challenges for Canada.
The major issue I am here to talk to you about is the darker side of trends I see developing in the Arctic context. I know you have had several other presentations in the last two weeks on this issue. They have been focused on what I would characterize as the cooperative side of the developing regime in the Arctic. To a large degree, it is the type of future I hope Canada will see in its Arctic region. However, the indicators I am starting to see in my research — the issues that seem to be developing — suggest that we should not have rose-coloured glasses when looking at the issues of the circumpolar North.
I wish to introduce elements of some research I have been engaged in around Arctic security. Not to put too fine a point on it, I see troubling indicators that we may be entering the first stages of an Arctic arms race, in which competition and conflict may overwhelm our desires and rhetoric to have a cooperative regime for the developing circumpolar world.
What makes me say there may be such indicators? I have provided a report for you that outlines some of the research on where this is going. Three main indicators have been developing since approximately 2003-04.
First is a shifting tone in the foreign and defence policies of Arctic states. In the 1990s, you would see only statements of cooperation. We can see how both this intent and rhetoric dominated how we view circumpolar relations. From about 2003 onward, you can see that all the Arctic states still call for cooperation, and everyone is hoping for the best, but almost every single Arctic state is saying: ``But, we will defend our interests if necessary.''
Taken by itself, this can probably be characterized as states trying to be on the safe side and putting forward statements they may have not put forward in previous foreign and defence policy statements. However, unfortunately, there are two other indicators backing up this move to a more unilateral concern in Arctic interests as they are developing.
The second indicator is that, since approximately 2003, we see every Arctic state moving towards conducting military exercises in the Arctic region. This had more or less stopped since 1989 when the Cold War ended. Most countries had said there was not much necessity to test the sharp end. They would maintain search and rescue and have an environmental response, but they did not necessarily have to practice with their combat troops. From 2003 onward, all Arctic states have been engaged in combat exercises at one point or other within their Arctic region. Even countries such as Finland and Sweden — the traditional neutral states — have begun to exercise with NATO in northern Sweden. This was not seen even in the height of the Cold War.
Third, and perhaps most troubling, almost all of our Arctic neighbours have been looking to or are actually building combat-capable air and maritime forces for the Arctic. This includes Denmark, Norway, the United States and Russia; and of course, Canada plans to move forward in our particular procedure. Even Finland and Sweden have begun to move away from the constabulary forces needed for environmental and search and rescue procedures to have a more combat-ready force in the Arctic context.
Many people will ask, ``You have these three indicators, but so what? Where are the sources of competition? Where is the problem? Will we have an actual war in the Arctic?'' The answer is that we will not have an immediate war in the Arctic. What we see is countries hardening their position. There are points of tension, I would argue, that can escalate if they are mismanaged.
I have identified five major points. The first is transportation routes. This is what will happen if Canada and the U.S. have a disagreement over the Northwest Passage. That will not be an issue; we can handle that. However, it will be interesting to see what happens with Russian legislation coming out that clearly takes the position that the northern sea route is internal waters. They may not call it internal waters, but they want complete control. What happens if someone tries to oppose that?
Second is the division of offshore limits of the continental shelf. I hope the results of the 2008 Ilulissat meeting are that everyone follows the agreement to a peaceful resolution. However, we are again seeing hardening positions. The most recent Pravda editorial on this issue mocks Canadian claims that we have any hope to maintain any differences with the Russians.
Third are fish issues. We have already had the situation in the Beaufort Sea where the Americans have claimed the right to manage stocks in the disputed zone. We have the ongoing issue with Denmark in developing northern fisheries.
Fourth, we have the potential for military action to be misinterpreted, such as Russian over flights or the ongoing tension that Russia and Norway face over the increased Russian naval activity within the Svalbard Islands.
Last is the issue of the Finnish application for NATO membership. A close observation of Finland will tell you that they are increasingly thinking about closer cooperation with, if not joining, NATO. The Russians this year released a security policy that said their number one concern is the extension of NATO onto their borders. This will have spillover onto the Arctic side. Hopefully, that spillover will only be political. However, once again, given the difficulty we faced with the Russians on Georgia and the Ukraine, I am not quite so sanguine.
However, I would submit the real problem is ``non-Arctic.'' In other words, if the Arctic is indeed becoming an ocean like any other ocean, conflicts elsewhere will spill over. The problem we will face is such where you have hardening positions of the Arctic states and have a crisis develop somewhere else — the Ukraine or Georgia, or wherever you pick a particular crisis — it becomes that much more dangerous for the Arctic, if these are the types of attitudes that seem to be developing.
The geopolitical reality with Russia is that we will, in course, see Arctic focus. They have two ports they can maintain their navies in, one in the Pacific and one in the Murmansk Peninsula. We are already starting to see the Americans re-jigging their submarine capabilities just to respond to an increasing Russian submarine build up.
The final Joker card we do not know is the entry of the Asians into the Arctic region. I was fortunate to be able to visit both Shanghai and Beijing three weeks ago, where we met with Chinese officials. I can assure you they are very well placed and making the necessary expenditures to become one of the leading Arctic research nations in the world. Quite frankly, the facilities they are building in Shanghai will exceed anything Canada has for research on the Arctic. We do not know what that means for the future.
What does this mean for Canada? I would like to conclude with the following issues. First, in the short term, we have a manageable situation. There is no question whatsoever that, with the proper goodwill and proper governance systems, we can ensure that these more problematic trends can be kept in abeyance. However, in the medium term, the issue is how much the Arctic spills over into other issues and how much do other issues in the international region spill over into the Arctic.
In the long term, we can look at the competition for resources — oil, gas, fish, transportation — where we know that internationally the stakes will be much higher. That becomes even more troubling when we look down to 2020 and 2030 in our time frame.
What should Canada's response be? First, we need to develop an international regime that focuses and leads to cooperation in the Arctic. We need to cement it as much as possible. Take, for example, the Arctic Council, which was a bipartisan Canadian creation. We need to eliminate the American refusal to look at security issues. We need to be realistic on that.
Second, we need to match our neighbours on capacities. All of them are taking a just-in-case approach to their capabilities in the Arctic for surveillance and enforcement. I would argue we need to do what we promised to do, which includes both icebreakers and the Arctic offshore patrol vessels, to name but a few.
Third, we need to start preparing Canadians for a new mindset. We are used to thinking of the Arctic as our backyard, and that gave us a sense of national identity. The fact it was so difficult to get to meant we did not have to worry about outside interests. This will change and is changing already.
Fourth, I think we really need to start having a much better appreciation of the long-term intent of our Arctic neighbours. It is naïve to assume that everyone will be cooperating, that there will be no national interests that will be pursued by our neighbours, including the Russians, Americans, Danes, Norwegians and, very shortly, the Chinese. That is not to say that we will necessarily be falling into conflict, but we have to have a more realist understanding of how the future can evolve to ensure it does develop in a more cooperative fashion.
The Chair: Thank you for those opening comments. For everyone's information, they are, of course, being translated, so we will not see them for a while. However, we will have those and they will become part of our research. I am sorry we did not get them out to all the members.
You have raised very interesting issues.
Senator Dallaire: Welcome, professor, and welcome in front of this committee as we saw you in front of the Fisheries Committee, as well. Thank you for the consistency of your argument.
When you say we have to pursue a regime change, capacity building in the North, a new mindset with regards to our backyard and national interests by other nations, this all leads to a new philosophy regarding the Arctic. Would you argue that perhaps the centre of gravity in Canada should be moving more towards the North, and that the Arctic, as we use the Arctic, or that northern region be considered more to be a border area than what I think it is still being perceived as, which is a frontier area? That, in turn, would bring a different philosophy in responding to these things, would it not?
Mr. Huebert: Absolutely. I do not think I could have worded it better. The reality is that we are headed to being a three-ocean nation. We have had the luxury of the ice cover to look at the Arctic, particularly when it pertains to international issues, making the Arctic into a ``boutique'' issue. We could pick and choose when we wanted to be involved and could withdraw when we felt it was not necessary.
The changing factor, as you succinctly put it, is the border line. We will have people coming to the Arctic. That does not necessarily mean it is all doom and gloom. There are opportunities. I think of the way Singapore, for example, suddenly found itself on a new shipping route that no one thought would ever take off, to emerge as one of the richest countries in the Asia-Pacific region. It requires us to look forward to understand that the situation is changing and, as you very well put, get a different mindset as to of how we think of the Canadian North.
Senator Dallaire: Conflicts now are principally imploding nations and not nation states against each other, but with factors. Remember, we are looking not at the Arctic today but trying to get a feel for 10, 15 and 20 years down the road, with food, water levels, and so on. On the geopolitical side, would the Northwest Passage become a critical, strategic, logistic main supply route that could put us in a situation of having to take sides in a possible conflict in a zone on either side?
Mr. Huebert: The simple answer is yes. The pursuit of resources within the Arctic context will, I believe, be the most significant driver by the time we get to 2030. I say that because we are already seeing fish stock moving north. Shrimp and turbot are at the root of this dispute we have with a very good friend, Denmark. What happens in a context where the Chinese, who have already said it several times, want to see the entire Arctic Ocean as a region for the international system? They talk about the expansion in technical terms from the Law of the Sea perspective as being an entire area. In other words, they have already given hints that they do not want to see us cutting it off under article 76.
What happens in a future where we see China in pursuit of such things as fish stock? Recognize that, even under article 76, if the ice goes away, everyone has the right to pursue fish stock outside of 200 nautical miles. Article 76 does not deal with fish.
What happens in that particular context? This is where a lot of problems will develop in the future. What will happen when we actually start looking seriously at oil and gas resources in the High Arctic?
The point of the matter is everyone turns around and says all known oil and gas resources are within the 200- nautical-mile exclusive economic zones of the coastal states. The only reason for that is because that is the only place we have looked so far. Some of the studies I have seen suggest we may see more in the higher Arctic. That starts becoming a troubling possibility.
Senator Dallaire: We do not have nuclear weapons in this country. We got rid of them, although we had them for a while. Nuclear-powered submarines are going through the Arctic with nuclear weapons on board. Should that not be a reason for us to object and to take action to prevent that from happening?
Mr. Huebert: That is a tricky question. At the heart of it, I do not know whether it is necessarily against our interest for both the Americans and the Russians to have their deterrence in the Arctic. To a large degree, nuclear deterrence is what keeps the Americans and the Russians reasonably on good terms, even at the worst of the Cold War. Do you really want to ban that in that particular context?
My gut reaction is to say yes. However, at least for the Americans and the Russians, to say that they cannot maintain a nuclear deterrence — because that is at the heart of what your question is about — I do not know that necessarily. This is where the paradox arises with Canadian security.
Senator Pépin: This is following Senator Dallaire's question. In your view, what should be the role and responsibility of the Canadian Forces in Arctic sovereignty and security?
Mr. Huebert: In terms of sovereignty, they will not have that big of a role because, technically speaking, the sovereignty issue is about the Northwest Passage. You might throw in the boundary issue with the Beaufort Sea and the Lincoln Sea.
In my mind, the issue is security, and this is where the Canadian Forces are absolutely necessary. It is the issue of ensuring that Canadian rules and regulations are protected within the entire region, both the stuff that everyone knows is Canada and also even in the disputed zones and even beyond the disputed zones. The Canadian Forces will have to work with the RCMP and the Coast Guard to ensure that our rules, regulations and national interests are protected from what increasingly will be international interests coming to the Arctic.
Senator Pépin: What do you think about arming the Canadian Coast Guard?
Mr. Huebert: I almost see this as a non-argument. I often get asked whether I would prefer to see red hulls or grey hulls in the Arctic. How do we deal with enforcement? My mock answer is always paint all the hulls pink and get on with it.
In my view, from an international perspective, it does not matter whether it should be Coast Guard or National Defence. What will be required when we have these international interests coming to the Arctic is that we have some capability of responding. Does it mean the Coast Guard should be armed? The Coast Guard is already armed. Let us be honest here. It is by a thousand small steps. Are they armed to the degree that will be necessary? No; I think we have to go further.
The Chair: Can you expand on that, the degree to which you want to see them armed?
Mr. Huebert: Ideally, when it comes to Coast Guard and the Department of National Defence in the North, I would love to see us go to an all-Canada approach. We talk about this ability to go beyond individual departments. Frankly, our Nordic neighbours are creating platforms. Basically, you put whatever capability you see needed for both the short term and the medium term. In other words, if you are building new icebreakers or the Arctic offshore patrol vessels, you do not necessarily put the missiles or the guns on, but you give them a lock and load capability and you train the necessary crews. It may not necessarily be Coast Guard crews that then man a gun or missile system on a Coast Guard vessel; but I do not see why you cannot teach DND to be able to operate on Coast Guard vessels, and we will put the necessary weapons systems and people on board.
Senator Lang: The first question I have is regarding your statement that basically the Northwest Passage will be open year-round.
Mr. Huebert: I did not say year-round for the Northwest Passage. I am saying there are some who are arguing in terms of year-round if you start adding the necessary capability. First-year ice will always come back until such time as we are frying everywhere else in the world.
If we get to a point of seeing ice completely gone in the Arctic, even first-year ice, that means climate change has raised us to such a temperature that we are facing massive dislocation everywhere, probably even hitting Southern Canada.
Senator Lang: You have accepted the fact that it will be open six to eight months a year for transportation; is that correct?
Mr. Huebert: The person whose research I value most on this is David Barber, from the University of Manitoba. He has consistently been the most correct on his estimations. He is saying that by 2020 we will see the elimination of multi- year ice, and by 2030 we probably will see a shipping season in that time bracket.
Senator Lang: Accepting that premise, government really has to review what its commitments are for the purposes of the type of vessels that we would be building for 2030, so that we can cope at that time as opposed to what it is today. Do you have observations about what the plan for our national defence is at the present time and whether there should be any changes?
Mr. Huebert: The plan for national defence is to go ahead with the Arctic offshore patrol vessels, which is a miniaturized version of what the Norwegians have introduced into their coast guard; it is basically a Svalbard class vessel.
I have no problems with the basic configuration of the vessel, except to say we probably should be looking at something larger than what we are talking about. We have so many unknowns coming that we need the capacity to be able to add on to that vessel. Although it is hard to get this information on the outside, there are suggestions that we will not copy the Norwegians in terms of their vessel's ability to have add-on capabilities. The Norwegians have a design to accept weapons systems that we would associate with the navy, even though the vessel is clearly with the Norwegian Coast Guard.
We need to ensure we are in fact copying the Norwegians, and that the vessel does have this add-on capability. For all I know, we may be looking at this; once again, I am not privy to this information. So many uncertain questions remain into 2030 and 2040, when these ships will still be operating, that we need to pad our bets as much as possible.
Senator Lang: You mentioned the Beaufort Sea at least twice — of course, that is our part of the world — and the fact that Canada is now moving ahead to seek a resolution of that particular boundary. Do you have comments on that as well? I see it as very uncertain right now, and we should be searching for certainty.
Mr. Huebert: The big thing with the Beaufort Sea is that we already see what the two issues will be: fishing and oil and gas. The moment we see a big push on that, it becomes that much more difficult to try to resolve the issue.
Historically, we know that if you want to resolve it, set up the rules before people find real value and have real money. The big problem Canada will face is the 1984 Western Arctic Inuvialuit land claim agreement, which basically follows our version of the border. For political reasons, it will be difficult for Canada to have any form of compromise on this issue.
I ultimately see, and have argued, that perhaps some form of a joint management scheme, where we agree to disagree on the formal borders but agree on the management of the resources within, may be the way we want to proceed, rather than getting beat up on the definitive border.
Senator Lang: Do you know of any other area that has such an agreement?
Mr. Huebert: The closest one that comes to mind is an agreement the Australians and the Indonesians had over the Timor Sea. They had much worse political relations than Canada and the U.S., and they were able to come to a joint management agreement around oil resources within that region. That may be one model we would want to look at.
Senator Martin: During your introductory comments, you mentioned the Asian influence. You said you recently visited Beijing and Shanghai, and you referenced some capital projects. Can you elaborate on that?
Mr. Huebert: China will be building what I think will be the world's largest non-nuclear-powered icebreaker for polar research. It will be in conjunction with Royal Royce of Britain and probably will be designed by the world's premier icebreaker designer, which is Akers of Finland.
They are saying this vessel will probably appear within the next three years. She will be between 8,000 and 10,000 tonnes — a very large vessel. The Chinese already have the world's largest research vessel. It is not an icebreaker per se, but she has been in some pretty thick ice.
In Shanghai, they have built a pier specifically for their research vessels. They are building campuses for Arctic research. The Polar Research Institute of China has about seven buildings for research and administration with up to 144 individuals. In their words, they plan to become one of the world's leaders on this issue. They are putting the equivalent of tens of millions or hundreds of millions of dollars into this by any Canadian comparison.
The Chair: What is the nature of the research, because they do not have direct access?
Mr. Huebert: They have direct access. They maintain three bases in Antarctica and they have bases in the Arctic. They were a signatory to the 1920 Norwegian Svalbard Treaty, although they do not know why. That was a comical element to the meeting we had with them; they do not have a clue why they signed it, but they did. As a result, they have a research station in the Svalbard Islands, which they have been maintaining for four or five years.
They told us formally that they have three interests: First, climate change will affect China and it starts in the Arctic, so they want to know the science. Second, their economic prosperity depends on maritime traffic. Any possibility of new trade routes is of immediate importance and significance to China. The third interest is resources. They say that some areas will not be covered for oil and gas in terms of article 76, and they are very interested once the ice retreats to see whether that is developed. As well, they depend heavily on fish stocks for feeding their population.
The fourth interest, which they did not state, is that the newest addition to the Polar Research Institute of China is a branch of strategic studies to look at the impact of security in the Arctic.
The Chair: How big is their base?
Mr. Huebert: They have 144 employees, but they have been at it for only three years.
Senator Manning: Your presentation was very interesting. We have read and heard about submarine activity in the North over the past number of years. As far as I know, Canada does not have any way of tracking how much submarine activity is in the North. Do you have any insight into that from your research? As the ice melts, do you see an increase in submarine traffic? It is a great way of doing research, from the other countries' point of view.
Mr. Huebert: The biggest problem we have with submarines from the outside is that we only know what people want us to know. We have to take any submarine reports with a huge grain of salt, for example regarding the political motivation for the Americans suddenly releasing information on the USS Texas showing up or the Russians suddenly talking about the launch of two of their Delta III class submarines last summer. We have to be skeptical.
We see clearly that there is almost a media competition. We see that the Russians have started to increase some of their exercises in the North. We read their announcement that they sent two of their missile-carrying submarines to the North and did a test launch. The Russians were proud that they did so without being detected by the Americans.
Then, the Americans begin to circulate pictures and low-level media reports of the USS Texas being in Arctic waters. That is significant because until that time, all the American open source said only that the Virginia class submarine — their newest — could not go under the ice. They were clearly signalling that they were either lying or have retrofitted the subs. That becomes important signalling. We are seeing signalling in that context.
In terms of Canadian capabilities of knowing, I would draw the committee's attention to the fact that Canada has been trying to develop an indigenous capability of being able to determine what submarines are coming in and near its waters through what would be underwater sensors, called Northern Watch. This very promising set of technologies is being developed by Defence Research and Development Canada, DRDC. I recommend strongly that we ensure following through with that development, given your point about increased Arctic submarine traffic. We will see an increase in nuclear-powered submarines with the Norwegians and the Russians, but not so much the Americans who are sticking with air-independent propulsion, AIP, which will give their conventional submarines the potential for going under the thinner ice that we will likely see in the Arctic in the future.
Senator Plett: I am not sure that I am a complete convert to the theory of the polar ice cap disappearing. However, considering the doom and gloom that we hear constantly, and given that it takes years and years to build an icebreaker or any type of ship — the Canadian navy lost its icebreaking capabilities in the 1950s — and you suggested that by the year 2030 we might not need icebreakers in the North, should we even consider building them if it takes that long to put one in the water? By all accounts, we will not have any ice left to break by 2030.
Mr. Huebert: Those are very good questions. I will start with the first one about how long it takes to build vessels. It takes Canada that long to build vessels. Not to be too critical, but we have seen from a bipartisan perspective that absolutely we need a shipbuilding strategy. We need to increase this. If you read the report that I provided to the committee, you will see that some of our northern neighbours, once they have decided to build an Arctic-capable vessel, have done it in as little time as three to four years. It can be done quickly, as the Swedes and Danes have demonstrated in that context. Taking a long time to build such vessels is more of a Canadian or North American habit.
As to whether we will need icebreaking in 2030, the biggest issue is whether we will want 12-month access in the North. That will be the critical point. If so, then we will need icebreaking. As I said earlier, we will see ice reform in the winter months. Unless we get into such a runaway period of climate change, the models show us that temperatures would have to be comparable to the burning hot tropics of the southern latitudes before ice would not reform. So there will be first-year ice, and because the Northwest Passage is a relatively narrow combination of waterways and land, there will be ice compression. As the ice on a river melts in the springtime, it piles up in ridges. We will still need the icebreakers because people will push the envelope to navigate the passage. As well, we will need the capability, if for nothing else, for the search and rescues when a ship goes into the season too early or too late.
Even in 2030, I can see a clear argument for needing an icebreaking capability. Will we need icebreakers as big as the Russian nuclear-powered icebreakers of today that can travel to the High Arctic to the North Pole during the wintertime? No, but we will still need some icebreaking capability.
Senator Plett: Following up on that, you alluded to search and rescue. I have spent a good part of my life in the Arctic. I have always been of the opinion that if we were to have eight months of capability each year, it would be sufficient. Yet, you are suggesting that is not sufficient. Is it primarily for search and rescue, or are you suggesting that we start using it as way to haul people? Why do you think it should be open 12 months each year?
Mr. Huebert: I think others will start using it, and we must have the ability to ensure that when those others show up, they follow Canadian rules and interests. In that context, it will be for search and rescue to a large degree but also to provide an enforcement capability, a response to the kind of resource development that seems very plausible in that time period.
Senator Dallaire: In the early 1980s, I participated with the Royal Marines in a study on how much training was required of southern troops not only to survive but also to be effective in winter and summer Arctic conditions. We estimated that they should be up there for at least three months at a time so they could live and operate effectively and not just survive. That meant a significant amount of troop time in the North with possible rotation.
If instead we went to the indigenous peoples of the North and turned to them as a more permanent force than the on-call, temporary arrangement we have now, both on land and on board ship or small craft, would that not be a much more effective force than trying to move southern troops up to the North?
Mr. Huebert: That is an easy question. The answer is yes. There is no question that the indigenous knowledge, the Aboriginal knowledge that the various Inuit and Dene and other members of the Rangers bring is the answer. Given so many of the difficulties for southern troops of dealing with such a foreign landscape, having instead people for whom it is their home, their backyard, is the way to go.
In fact, you heard from retired colonel Pierre Leblanc who was very instrumental when we started re-examining how to start training in the Arctic. One of his core requirements was that we have to get much more serious with the Rangers, even though he may be too modest to take credit for it. He ensured that was brought in when we resumed training in the Arctic in 2002.
The Chair: To follow up on that, when you started your remarks today, and Senator Dallaire talked about moving the centre of gravity, you still have probably more than 90 per cent of the Canadian population that live within spitting distance of the 49th parallel. Even if you employ and use the resident native populations, will you be anywhere close to what you think is needed?
Mr. Huebert: It depends on how you utilize the resources. They are underutilized at this point. We know some core domestic issues facing us in the Arctic region are an employment issue and social problems that come with a young population that is really asking how we bridge the gap between a traditional society and a modern society. Considering some of the challenges facing youth right across the board within our northern region, both Aboriginal and non- Aboriginal, the opportunities that could be provided by the type of situation Senator Dallaire is talking about would be precisely the way to address many of the issues, and we are nowhere near being able to utilize that to the degree that I think we could. Honestly, I think we can do a lot more, and we have no idea how far we could push the capacity, even with the small numbers we are speaking of.
Senator Lang: I agree with your last comments. We can do much more especially with the smaller isolated communities, and they do have significant social problems. This could in part be a reason to be and could give these young people another opportunity to be out there.
The one thing you did not comment on was the resources that appear to be out there that we are presently mapping, especially offshore, and what that could do for Canada as far as sovereignty is concerned with the development of those resources. That means more people and more investment and, in turn, especially for the smaller, isolated communities, a greater participation in an ever-evolving economy. Do you have a short comment on that?
Mr. Huebert: We know that the unknown quantity is the North. We do not know what the fish stock will be like once the ice is gone; we do not know about the oil and gas. We have a fairly good idea from what the U.S. Geological Survey tells us about the immediate area offshore, and those estimates were anywhere from 13 per cent of all undiscovered oil and probably about 30 per cent of all undiscovered gas, and that is not looking at the issue of gas hydrates, which, incidentally, is where the Japanese are putting their money now.
Most of our gas hydrate research is not funded by Canadians or Canadian research interests but by the Japanese, so it is quite interesting watching the Asians. They basically know where their future is headed in this regard — something we might want to look at a little more closely.
The Chair: Thank you. We really appreciate this. You have given us lots of material. We will get your document out, and I am sure you will be happy to take our phone call if we have any questions that come from that.
Mr. Huebert: Absolutely.
The Chair: Thank you for being with us today.
Our next witness is Stephen Carmel, Senior Vice-President of Maritime Services at Maersk Line. He is proud to say that his career in sailing began as a deck officer and master, primarily on tankers. He knows whereof he speaks. He is currently working on a PhD in international studies with an emphasis on international political economy and conflict.
I had the pleasure of hearing Mr. Carmel speak in Halifax at a recent conference on some issues that are very salient to the whole question of Arctic sovereignty and security.
I know you have some opening remarks, which we will have distributed shortly.
Stephen M. Carmel, Senior Vice-President of Maritime Services, Maersk Line Ltd: Good afternoon, honourable senators. Thank you for offering me the opportunity to speak with you today.
I will be offering my observations based on my many years at sea as a captain on tankers in international trade, my experience as an executive with a major international shipping company, and my deep academic interest in the Arctic. I note that these observations are mine and do not represent any position or policy of Maersk. In fact, Maersk, the largest shipping company in the world, does not have an official policy or position on the Arctic that I am aware of, which should on its own tell you something.
I will structure my opening remarks around three main themes: security, trade and global consequences.
First, in relation to security, in my view the potential for armed conflict in the Arctic, as opposed to armed conflict because of the Arctic — my final topic — is remote at best. Unlike the 19th century Great Game in ungoverned Central Asia, to which it is frequently compared, the Arctic is fully enmeshed in a regime of international institutions and treaties. All participants are abiding by the rules and procedures set forth in that regime because it is in their individual best interests to do so.
The amount of border in dispute is relatively small. Where disputes exist they are mostly between otherwise close allies, and the majority — something exceeding 80 per cent — of natural resources are located in areas where sovereignty is not at all in dispute. Where disputes exist the procedures for resolving them are clear and there is always room for compromise, such as the somewhat surprising recent development in the border dispute between the U.S. and Canada in the Beaufort Sea.
In the end, the battle for the Arctic will be fought by scientists and lawyers. The weapons will be information and scientific data, and the battleground will be conference rooms and courtrooms.
Were I responsible for allocating precious national funds for assets for Arctic operations, I would concentrate first and foremost on ships equipped to conduct serious scientific research under the most severe Arctic conditions. The bathymetry, hydrography, cartography and environmental analysis essential for navigation in the Arctic are all sorely lacking. Multi-mission research icebreakers capable of supporting a law enforcement detachment, for example, might be a reasonable solution.
The most urgent security issue in the Arctic is along the environmental security dimension.
Next is trade. It is highly unlikely the Canadian Arctic will become a great highway for international trade, as most seem to predict. This is not to say you will not see an increase in some types of traffic, such as ecotourism and destination shipping — shipping specifically to supply industrial activity in the Arctic — but the Canadian Northwest Passage will not be the next Panama Canal.
There are many things to consider in judging the relative attractiveness of the Arctic as a marine transit route. First, the presence of multi-year ice — which, the consensus seems to be, we will continue to see for another 30 years — is an extreme impediment to navigation. The Arctic remains stormy and dark for a good bit of the year and is subject to extended periods of restricted visibility. The Arctic will also remain frozen for part of the year, regardless of climate change, rendering it impractical for normal international trade during that period.
In trade modeling, distance is used as a convenient proxy for time and cost, but in the Arctic that normal relationship does not hold. Just because it is shorter does not mean it is faster or cheaper than traditional routes. Depending on the model, ships must be able to maintain an average speed through the Arctic of seven to ten knots for the shorter distance to translate into faster time. Given the environmental conditions noted above, this is not a foregone conclusion. The Canadian Northwest Passage is shallow in places, meaning large container ships normally used in international trade will never be able to work there, destroying the economic advantage derived from network design and economies of scale in ship size.
For ships operating south of 60 south latitude, there is an International Maritime Organization rule restricting the presence on board — not just the burning — of the types of heavy fuel oil ships normally use. A lighter fuel such as arctic diesel is required, which is at least double the cost of more traditional fuel.
It is my understanding the Norwegian government is preparing to propose a similar rule for the Arctic. Such a rule would greatly increase the cost of operating in the Arctic as opposed to traditional routes, as would other special requirements, such as construction and equipment standards, training and certification standards and any transit fees that might be imposed to defray the cost of maintaining an aids-to-navigation system, emergency response capability, regulatory enforcement capacity and maintaining up-to-date and accurate navigational charts, none of which exists now. Again, shorter may not be cheaper.
It is worth pointing out that the Canadian Arctic represents a distance saving for only one major trade route, the Asia to North America East Coast. The Northern Sea Route, the route west across the Arctic coast of Russia, is shorter for the Asia-Europe trade. The benefit of the Canadian Arctic also accrues only in northern Asia, Shanghai, and north, as south of that, from Singapore, for example, the more traditional routes are shorter. When I say ``traditional routes,'' the assumption is, of course, that I am referring to the Panama Canal, to which the Northwest Passage is also compared. This is a little odd, since a huge portion of Asia trade does not go through either the Arctic or the Panama Canal to get to the mid and eastern parts of North America. It is off-loaded in ports such as Prince Rupert or Los Angeles and then loaded onto trains. Therefore, the Northwest Passage is not competing just with the Panama Canal; it is competing with trains.
An odd fact in discussions on the potential for the Arctic to reshape international trade is that the assumption always seems to be that climate change in the Arctic is happening independent of everything else in the world, ceteris paribus. That, of course, is not the case. Again assuming a 30-year time frame, the world trading system will continue to evolve and will likely look nothing like it looks today, meaning the economic cost-benefit analysis will be different 30 years from now than it is today.
The Chair: Mr. Carmel, I am sorry. The translators are having a little trouble keeping up with you. We will try to give them a little help.
Mr. Carmel: It should not be forgotten that the pattern of global trade 30 years ago did not remotely look like it does today. In that 30-year time frame, the innovation of containerization took hold; complex and hyper-efficient intermodal transportation networks co-evolved with changes in business management practices; production chains were disaggregated — outsourcing, as it is more commonly referred to; and China exploded from an isolated backwater to the world's second-largest economy and world's largest exporter. An innovation in transportation completely transformed the world in the space of 30 years.
Demographic trends will continue to reshape trade patterns, and manufacturing in Asia will shift south, as it is already beginning to do, diminishing the value of Arctic routes. Discontinuous events, such as the development of shale gas in the U.S., turning it from an importer to a self-sufficient and potentially net exporter virtually overnight, have the potential to upend the economics of Arctic natural resource extraction, as it has for the gas industry, putting the giant Russian Shtokman project on hold, for example.
On the other hand, and favouring an expanded Arctic role in world trade, economic development will continue apace; and infrastructure investment, in the U.S. at least, is woefully inadequate, meaning that a rail system that is near capacity now may not be able to support the projected volumes of trade, which would increase the attractiveness of the Arctic, especially when you consider that climate change is happening not just in the Arctic but everywhere.
Temperature and rainfall changes in Central America are causing diminished river flows into Gatun Lake, the source of water needed to operate the Panama Canal. While climate models vary in their predictions, under certain climate change paths in the time frame relevant to the Arctic discussion, it is possible that climate change will render the Panama Canal unusable for international trade. The calculation is then not the Arctic versus the Panama Canal but the Arctic versus the Straits of Magellan, which adds 9,000 miles to the trip. Coupled with rail congestion, the perfect storm could develop, which would indeed force a very large volume of international trade through the Arctic.
George Friedman, in his book The Next 100 Years, makes the statement that reasonable people are incapable of anticipating the future. Speculation about the future path of development in the Arctic is subject to that admonition in spades. The world is in a period of rapid and highly non-linear change. Why anyone would frame the discussion in 19th century thinking — the Great Game analogy — is beyond me.
Last, what would an ice-free Arctic mean for the world from the perspective of world trade? Should the Arctic end up fulfilling the role of a major transit route resulting in substantially reduced time and cost, this will have effects far beyond the Arctic, and I would argue the principal impact will be nowhere near the ice. Major innovations in transport that impact trade patterns tend to end in conflict at some level. The current tension with China is one example that clearly can be traced to an innovation in transport, as discussed a moment ago. The twin innovations in transport of the steamship and railroad resulted in North American agricultural products becoming tradable in Europe, setting in motion the chain of events that culminated in World War I. Any discontinuous change that impacts relative positions in trade is not an unambiguous good. It will produce winners and losers, and losers rarely accept that position gracefully. China, a non-Arctic country, could conceivably be a large, if not the largest, winner from an ice-free Arctic, due to the potential impacts on its terms of trade.
Collateral effects may also be pronounced. Any large-scale diversion of trade from the Suez Canal across the Northern Sea Route will have a catastrophic effect on the stability of the Egyptian government, which derives a significant amount of foreign exchange and overall government revenue from canal tolls. A stable Egypt is an absolute requirement for peace and stability in the broader Middle East. Much like rainfall in Central America potentially having a large bearing on traffic in the Arctic, traffic in the Arctic will have huge consequences far from the North, such as stability in the Middle East. Developing patterns likewise will be affected in ways difficult to anticipate.
Therefore, there is indeed a state security dimension related to the Arctic, but it is a security dimension derived from changes in the Arctic, not manifested in the Arctic itself.
Thank you. I look forward to your questions.
The Chair: Thank you very much. That was a terrific presentation. We will start our round of questioning.
Senator Dallaire: You are not a futurist, though quite pragmatic, and I do not say that in a derogatory sense. However, what are the anticipated major shifts in maritime transport over the next 30 years? Will there be a revolution in shipping systems, in the ships themselves, in propulsion, or in other means, which leads you to argue principally that the future will have ships, containers and railways more or less as we have them now, except maybe a bit expanded?
Mr. Carmel: A number of events could influence the way this goes. Demographic changes will certainly impact the regions where trade happens. For instance, as Southeast Asia becomes more important and Russia kind of drops off the map, trade patterns and the types of ships needed to support them will shift. We have already seen China, for instance, become a major exporter of automobiles.
In terms of technology, we think that container ships where they are now, in the 18,000 TEU or 18,000-container range, are probably as large as they will get because of engineering challenges. I do not think you will see ships getting bigger. Fuel is probably the biggest consideration here. If a low-cost, low-carbon footprint source of fuel becomes common, that will impact shipping in a positive way. If fuel continues to be extremely expensive or becomes more expensive, we could see international supply chains collapse, a return to more regional manufacturing, and fewer of the integrated international supply chains that we see now.
Do not forget, for instance, that half of containerized cargo is actually intermediate goods. It is not goods going to a retail shelf but to factory production across the world. That sort of thing will collapse, and regional production chains will take over.
Those are the sorts of developments that we expect to see in the near term, in 20 to 30 years. Developments that would be truly revolutionary — fuel cells becoming viable, for example — could be quite disruptive, but I do not see them, at least in the near term, as being an issue.
Senator Dallaire: Therefore, speed would not leap ahead?
Mr. Carmel: No. Our normal ship service speeds and our networks were originally designed around 24 knots because of the combination of fuel, carbon footprint rules, and the fact that the world economy is a little slack anyway. We have actually cut the service speeds. We have slowed down our networks quite significantly. Some are down from 24 knots into the 12- to 16-knot range.
The world intermodal system at the moment is slowing down. Fuel costs drove that, and we find it is the easiest way to satisfy carbon footprint mandates. It may well be that even as the economy picks back up again, speeds may not. That remains to be seen.
Senator Pépin: What are the different risks associated with different types of shipping in the Arctic?
Mr. Carmel: You look at risk from two perspectives: risk to the ship and risk to the environment. They are not necessarily the same thing. In my view, unfortunately, regulations tend to be oriented around risk to the ship. I think it would be more appropriate to orient regulations around risk to the environment. Damage to the ship from ice is the biggest. In addition, in terms of economic modeling, it is important for us to be predictable. Variability in ice conditions makes it difficult for us to tell whether the trip through a particular patch will be two days or twelve days. Everyone talks a lot about shaving six or seven days off by going on a particular northern route as opposed to one of the canals. That may be true. However, if we have to wait two weeks for the route to open up to be able to go through, it will not do much good.
With respect to variability and damage, there are not good models of what response will look, like so insurance is hard to price. We can get insurance. It is not that it is not available, but risk models are not well developed, so insurance will be expensive and probably variable for a while. There is no decent aid-to-navigation system. Charts are inaccurate or not well charted at all. We do not understand what the bottom looks like. There is no response capability in the North anywhere. If we get into trouble, there is no way to call for help. There are many things about working in the Arctic that must be done before it is a reasonable thing for us to do.
Senator Pépin: Thank you.
Senator Banks: In July of next year, ships that are certain sizes and that contain certain stuff will have to report to the Canadian authorities before passing through the Arctic. Does that pose a problem for you and your competitors?
Mr. Carmel: Not at all. Actually, I am quite happy to see it happen. Frankly, I am surprised that regular vessel traffic schemes have not been instituted yet. Down the road, I am sure that will be necessary if Arctic shipping actually picks up at all. You are speaking of the Arctic Canada Traffic System NORDREG?
Senator Banks: Yes.
Mr. Carmel: That does not bother us at all.
Senator Banks: The Arctic Waters Pollution Prevention Act of Canada and, more particularly, the Migratory Birds Convention Act contain provisions that mean, on a fairly summary basis, that in the event of traceable pollution — that is, dumping bad bilge water, or whatever, at night, under cover of darkness, in a fog, for example — the master of a ship or its first officer or its engineer can be put in jail. We have heard from others, not on this committee but elsewhere, about the views of world shipping organizations. However, with all those organizations, we did not hear from you, and you are the biggest. What is your view of that?
Mr. Carmel: First, I note it is only bad for us if we do it. It is our policy not to do stuff like that.
You are not alone in doing that. It happens in the United States, and it happens frequently enough. To me, it is not an unusual thing. I would expect that if one commits a criminal act, one will suffer a criminal consequence. Therefore, I do not necessarily disagree with that. Some people claim that criminalizing mariners is not a good thing, but that is for inadvertent discharge. I presume we are talking about a deliberate discharge here — that is, a wilful violation of the law — in which case prosecution and a fine is a reasonable thing to do.
Senator Banks: Under the Migratory Birds Convention Act, wilfulness is not required. If the event can be traced to the ship, regardless of how and where it happened, those senior officers can be held responsible for it, without the Crown having to show that they did it wilfully.
Following along that line, ships have separators on them that take the bad stuff out. If you will say to shippers that you cannot release that stuff into those waters because it would do harm and would be an affront against the sovereignty of the nation in whose waters you are doing that, you need to provide to those shippers the proper facilities to discharge the stuff that they are not supposed to put into the water. We are among those nations that are notoriously ill-equipped to do that. Would we have to provide those kinds of facilities in the North if shipping picks up despite what you said?
Mr. Carmel: If ships are docking in the North, that would be an issue. Let us assume for a moment that transit shipping starts to happen and ships are taking a short cut across the top of the world there. My first reaction would be no, unless they are docking there, because we do not stop just to do that. That is in place in some places in the United States now, where we are not allowed to discharge anything. In fact, we are required to contain rain if it falls on a deck. NPDES is the acronym for it. We have been installing grey water tanks on all our ships to collect that.
You are exactly right; it will require that governments provide some place for us to put this stuff when we come into port. For the Canadian Arctic, there are two implications: one is transit shipping, and I do not see that having any bearing; the other is destination shipping, where you have ships stopping in the Arctic. It is not just rain water, and so on; we have sewage to consider. We have ballast water exchange rules, which are not well developed for the Arctic, and trash. Presumably, you will not want people throwing their garbage overboard. You have to collect that stuff and do something with it once it is collected.
Senator Lang: For the record and so people understand how large your organization is, how many ships are you in charge of?
Mr. Carmel: The A.P. Moller Group globally operates a little over a thousand ships. A good analogy is that it is bigger than all the navies combined. My part of it is headquartered here in North America. We are divided into four shipping companies. I am personally responsible for running about 60 ships.
Senator Lang: I wanted to get that for the record because I thought it was a good analogy.
In your opening remarks, you said your company does not have an official policy or position on the Arctic, and then you added, ``that I am aware of, which should on its own tell you something.'' At this stage, because of the situation in the Arctic — that is, the uncertainty up there — your company is not taking the Arctic seriously as an alternate route to what you already do?
Mr. Carmel: No. We have no research programs ongoing to design ships capable of working up there. We have no network design studies ongoing on what our network would look like should something like that happen. The oil and gas division of the business has given a passing look at it but is occupied elsewhere in the world.
At the shipping company, we do not expect to have anything to do with the Arctic for several generations.
Senator Lang: Further on in your presentation, you stated that if you were in charge and had the ability to allocate national funds, you would put them more into a research area. You named a number of areas, including hydrography, cartography and environmental analysis. Do you want to expand further on that?
Mr. Carmel: Sure. These were comments in the U.S. itself, which has zero Arctic resources. We say we have three icebreakers; only one of them really works.
Right now, claims for seabed will be driven by scientific data more than anything. That is what everyone seems to be looking at. Down the road, in order to successfully exploit the Arctic for shipping, we need better, more reliable charts; we need to understand what the bottom looks like; we need to understand the influence of environment. Those areas are not well researched at all, particularly along the routes that would be useful for shipping. In order to exploit the Arctic for shipping, we need the same level of detail in charts and currents and things like that that I would have if I were going to Vancouver. Those detailed charts simply do not exist.
Senator Lang: Just to follow up further, I assume some work has been done. I do not know to what degree. If that decision were taken today, are we talking about a 10-year window to do that type of thing? Do you have any idea what we are talking about for time?
Mr. Carmel: I have no idea. For the United States, the decision will take 10 years, and it will take another 20 years to build a ship. I do not know. It is a significant amount of work, and it depends what you are doing it for. I can clearly see this being an effort of several decades.
The Chair: I want to come back to that point, because we have had previous testimony on this. It seems to be a North American phenomenon that shipbuilding takes 15 to 20 years. What should shipbuilding really take?
Mr. Carmel: I can speak from our experience in building ships in Korea and China. We used to build our own ships in Europe but do not any longer. It generally takes us 18 months to build a standard container ship. It costs us about half of what a similar ship built in the United States would cost. I am not quite aware of what it would cost in Canada, but in comparison with the United States, the ships are about half as expensive and it takes about half the time to build them in Asia.
Remember that if you are talking about Canada-to-Canada trade or U.S.- to-U.S. trade across the Northwest Passage, cabotage rules apply and you will have to build those ships in either Canada or the United States, which blows the economics away.
The Chair: That is why you come to the conclusion that this is not a likely route?
Mr. Carmel: Yes.
Senator Manning: This is very interesting. Maybe we should be doing a study into how long it takes to build ships and the cost. Just those comments alone pique interest around this table, from earlier discussions we have had.
I am interested in your comments that the issue does not necessarily concern you because you see it will not be an issue for generations. When talking about generations, you are talking about a fair amount of time. However, anyone who has been following what has been happening in the Arctic over the past couple of years knows that there seems to be a race on to have these concerns addressed. Today an international conference has been taking place close to here. The five coastal countries hoping to deal with activity in the Arctic are certainly front and foremost on these issues.
I will throw the question out; feel free to answer it whatever way you want or not. What are your thoughts on the emphasis put forward now to prepare especially Canada for what will happen in the Arctic over the next few years and to have surveillance, to have ships, to have armed personnel on those ships, because this is where the action will be?
In your discussion today, it does not seem to be uppermost on your or your company's agenda. How do you even up that discussion for those of us who are looking at these things from the outside and listening to people like you? We seem to be getting a mixed message, and I wonder how you equal the two spots.
Mr. Carmel: Again, I point out the difference between destination shipping and transit shipping. As you develop in the Arctic, destination shipping will increase. That is not Strait of Malacca style traffic, but there will be more. When it happens, the press seems to make a big deal of it. Last year, Beluga Shipping ran one ship. To me, that is not a massive increase in shipping, although from no ships to one ship is a 100 per cent increase, and that is how it gets reported. The Russians are saying they will run a tanker from the oil field in the Western Arctic in the Barents to Japan this summer. Whether or not that happens remains to be seen. It depends on the weather.
Destination shipping will pick up. It will not be much, and it will be controllable by how much you allow development to happen in the Arctic and where you allow it to happen. Clearly, you will be able to control that.
For transit shipping, I have seen many of the same things and I have heard many of the same statements. Every time someone says it will cut 4,000 miles off, they assume that that 4,000 miles will be running through the Arctic at standard speeds of 24 knots, which will not happen. At best, ships might go through at 3 or 4 knots. Remember, even ice-strengthened ships are not designed to ram into ice at 10 knots. That will put a hole in the stoutest ship. They are designed to ease up to it and ride over it and withstand pressure on the hull, not slam into it at any speed.
Transit shipping will always have to occur at reduced speeds. Given all the other things I have said, we run much bigger ships than you will ever be able to run through the Arctic because of draft. You have a controlling draft through the major channels in the Northwest Passage of maybe 10 metres, that I know of. Our ships long ago exceeded that. There are economies of scale and ship size that will not be able to be used.
When people say transit shipping will increase dramatically, all they look at is distance. They do not understand anything of shipping economics that go behind it. They just do a simple division. I have never spoken to a regular shipping company in international trade that expects the Arctic, no matter what side — the Northern Sea Route, the Northwest Passage or even a transpolar route — to be usable to 2050. By that time, the world will be a very different place, and it is hard to say what will happen then.
Senator Manning: I know much of the world is charted now. Can you give us an idea of how much charting is concluded in the Arctic and how much needs to be done? I will use the draft of your ships as an example. There must be some knowledge of what is up there compared to other parts of the world.
Mr. Carmel: As far as I know, parts along the western side of the Canadian Arctic and the northern part of Alaska are reasonably well charted because there is a fair amount of destination shipping going on there, and on the eastern side as well, but for the parts in between there is very little. I have looked for charts and have not been able to find anything I would be comfortable navigating a very large ship with myself. It is that in-between part that does not seem to be charted at all. Unexpected sea mounts or shallows that are not anticipated are relatively easy to get around in a very small, eco-tourism type of boat. In a 70,000-tonne or 80,000-tonne ship, it is difficult to turn and probably will not have many places to turn. It is important to know where that stuff is before we head in there.
Senator Manning: You believe we should be putting a fair amount of emphasis on that type of work for the future, is that correct?
Mr. Carmel: Yes, the U.S. and Canada; we share that. Most of it is yours, but your part of it does not do any good if the United States does not hold up its end. You have to go past the U.S. end of it to get out on it, so both sides need to do that.
The Chair: I assume you believe the Chinese are busy doing this.
Mr. Carmel: The Chinese operate the second-largest icebreaker in the world. They have many Arctic research stations, so I know the Chinese are doing it.
Senator Day: I wanted to ask you about the Chinese. When you were giving your presentation, I thought you were tying in innovation in the shipping industry to current problems with China. Could you expand on that? Were you talking about intermodal containerization or about something else?
Mr. Carmel: I was talking exactly about intermodal transport containerization. The manifestation of globalization as we see it today resulted from containerization. The development of containerization and the parallel development of information technology is what allowed supply chains to become disaggregated, as they have become.
Many people call it outsourcing, which basically means you chop up supply. We do not just make widgets in one place anymore; we make parts of them wherever the comparative advantage is best, then pick someplace to bring all of that stuff together and assemble it.
China has benefited from that more than anyone in the world. In fact, the rise of China is directly related to this form of globalization because they have sucked all that stuff over there.
I do not say that is good or bad, it is just an observation. The Chinese have benefited tremendously from this, but the rest of the world has too. Do not forget things are much cheaper as a result of that for the rest us than otherwise would have been the case. The world has benefited as well through lower inflation rates and things like that.
The status of China as an economic powerhouse now would not have happened the way it did without information technology and containerization allowing us to completely blow the supply chain apart.
Senator Day: That would be an interesting matter to discuss further at some time. There are other factors there as well, like cheap labour and that kind of thing, but we will not go further.
I want to get into the shipping aspect of that and how you were tying it in. Your comment with respect to northwest Russia, and going to Japan, got me thinking that I never hear anyone talking about a northeast passage. Is there ever, in the next 50 years or so, likely to be a northeast passage north of Russia?
Mr. Carmel: Yes. When I refer to the Northern Sea Route, that is what I am talking about. That is the route the Russians will take to go from the Varandey oil terminal to Japan; they will go across the Northern Sea Route or the Northeast Passage.
The Northeast Passage actually will open first. The Russians have exploited it for nearly 100 years; they have had traffic along there. Stalin worked aggressively at developing the northern coast of Russia and used it extensively. After the collapse of the Soviet Union, things sort of fell off, but the Russians have invested a great deal of time, effort, energy and national resources into developing a northern sea route. They have the largest icebreaker fleet in the world by far and operate the biggest icebreakers in the world for that reason, so that will be useable before anything else will.
Senator Day: Is the reason we do not hear much discussion of that because it is mainly just Russia that is interested?
Mr. Carmel: No; I am not sure why, because that route will be faster for Asia to Europe than across. That route will open up. They suffer from the same problems that the Northwest Passage does in that there are shallow spots and variability in transit. Ice still drifts around and tends to choke things up, but that passage will actually be more useful for Asia-Europe, the biggest trade route in the world, than going across the North.
I do not know why that does not attract as much attention as the Northwest Passage does, other than that the things that involve North America tend to attract more attention in general than anything else. There is a little bit of a sovereignty issue that remains unresolved in the Canadian Arctic that is not replicated in Russia to the same extent.
Senator Day: I think you have already discussed my final point, but there may be more comment you might like to make on that. You talked primarily about transit routes, and we have been talking also about the extraction of oil and gas and whatever else might be up there.
Let us assume that activity — the extraction of oil, gas, diamonds, whatever — starts even before the transit shipping that you talked about. You distinguished between destination shipping and transit shipping. If there is increased activity in the extraction business and more destination shipping as a result, is that exclusive from the likelihood of increased transit shipping, or does one help develop the other?
Mr. Carmel: To the extent that there is an overlap, it is the need to develop the charts and infrastructure and emergency response capability. That sort of thing, which would be able to serve destination shipping, would also apply to transit shipping.
In some respects, yes, and clearly destination shipping is increasing up there now. A couple of years ago, Canada was an inconsequential player in the diamond market, and now it is one the largest producers in the world because of resource extraction in the North. That is where it will help. It will limit how much extra work you need to do to make transit shipping viable.
Senator Day: Many of the factors that you have given here, which lead us to say initially that it is not likely that there will be transit shipping here for quite some time, could be brought a little closer as a result of some other activity up there.
Mr. Carmel: It could limit some of the drawbacks; some of the others remain — draft restrictions and things like that. However, it would certainly make it easier if other things happen that promote shipping in the Arctic.
Whether or not traffic moves to the Arctic is not dependent on melting ice; it is dependent on the interaction of melting ice and other events going on in the world and how they all come to play together. If forces align such that shipping through the Arctic becomes a reasonable thing to do, then to the extent that destination shipping has taken away some of those barriers, it will help it come across that much faster.
Senator Plett: Senator Banks asked my first question and the chair asked my second one, but I do want to touch a little further on what Senator Banks raised in regard to the registration of certain ships going through the Northern Canada Vessel Traffic Services Zone, primarily on ships carrying dangerous goods or potential pollutants. Is this something that they are not doing now in other shipping routes? I find it a little disconcerting that we have ships running around carrying dangerous goods and they do not need to register and let anyone know they are doing it.
Mr. Carmel: In other parts of the world, when we are going in and out of port, we are required to declare those sorts of things. If we had to do it in the Canadian North, that would bring you more in line with things we have to do elsewhere in the world.
One thing that has surprised me, which I have not heard anyone discuss, is the requirement for pilots operating in the Canadian North. Given what I have seen as a ship's captain myself — the extreme need for local knowledge and how variable conditions can be up there — and given the fact that you require a pilot to go into Vancouver, I have never understood why you would not require a pilot in some of those very environmentally sensitive areas. As far as I know, that has never been advanced anywhere.
It is not advanced in the United States, either, except for certain areas. For instance, the approach to Prince William Sound requires a pilot. In certain environmentally sensitive areas, pilots are required.
To my knowledge, if the Northwest Passage were to open tomorrow and I wanted to bring a 70,000-tonne tanker through it on my licence, I could do it. I would not be required to take a pilot knowledgeable in local conditions or responsible to the Crown for the safe passage of my ship.
The way it works now, as you mentioned earlier, if I violate a law, the only way you will know it is if there is a consequence in the Arctic. There is no proactive enforcement mechanism. This goes back to the idea that regulations apply to ships, not to the environment. We almost rely on the environment to tell us that we have done something wrong, but by then the damage is done. A proactive enforcement mechanism might include pilots and things like that.
Senator Dallaire: I notice that you are a member of the executive panel of the Chief of Naval Operations, United States Navy. In that capacity, have you seen the U.S. Navy look at developing any increased capabilities in the Arctic based either in Alaska or in the South?
Mr. Carmel: Yes. As you know, the U.S. government published National Security Presidential Directive 66 at the end of the Bush administration. It lays out broad guidance for the United States for increased ability to operate in the Arctic, and, last year, the U.S. Navy published the Navy Arctic Roadmap and put in place a study on the kinds of assets they need to make that happen. At the same time, the U.S. Coast Guard has a study that is due to be reported in another month or two on a melting Arctic and what the United States Coast Guard will have to do about it. There are several high-level studies by the U.S. Navy and the U.S. Coast Guard on what they need to do to operate in the North.
Senator Dallaire: It would be well worth our knowing more about what our allies are doing, in particular given the need for the hydrography studies and necessary analyses of the routes in the Northwest Passage. A committee that sat in 2008 recommended that the U.S. and Canada do that work together. Would that not be a smart move with our capabilities? I would suggest that with the Russians being so competent in the Arctic, perhaps we should work with them as well.
Mr. Carmel: I agree totally. It would be extremely important. Contrary to the Great Game analogy, cooperation is rampant in the Arctic. The Canadians, Danes and Russians share information. The United States would be happy to share if it had any information. I hope that at some time in the future we will develop that capability. Yes, I agree. This kind of work should be done jointly in a coordinated way so that we do not have to explore the same ground twice.
By the way, currently a bill is pending in the U.S. entitled, Arctic Marine Shipping Assessment Implementation Act of 2009, in both the Senate and the House of Representatives. These companion bills deal specifically with increasing Americans' ability, from a commercial perspective, to understand and implement Arctic shipping assessment. Among other things, it would fund Arctic research and a real icebreaker. The U.S. Congress is thinking about it, and perhaps when they finish with all the current distractions they will get back to it.
Senator Lang: I want to expand a little further on the question put to you about the Northeast Passage on Russia's coastline. Do you know whether the scientific evaluation and mapping of that route have been done? If you wanted to take a 70,000-tonne tanker through that passage, would the charts be available?
Mr. Carmel: Yes.
Senator Lang: That was done by the Russians, I presume, during the last 100 years.
Mr. Carmel: Yes.
Senator Lang: I find the situation interesting with the Chinese. You said the Chinese operate the second-largest icebreaker in the world. Could you expand on that comment? What do they do with their icebreaker?
Mr. Carmel: She is called Snow Dragon, as translated from Chinese. They use her primarily for research. She spends an inordinate amount of time in the Arctic. The largest icebreaker in the world is Russian, and I believe her name translates as 50 Years of Victory. The Russians launched her last year, and Snow Dragon was launched shortly after. She can hold several hundred people and is quite a capable research icebreaker.
Senator Lang: Interesting.
Senator Banks: If you are taking a ship with certain kinds of cargo into or out of ports, you often have to report your cargo to someone. However, once in transit, the reporting is a different matter. For example, if you are shipping through the Strait of Malacca, do you have to report your cargo to someone? If you are shipping the Northern Sea Route and not stopping at a Russian port, would you have to tell the Russians what you have on your ship?
Mr. Carmel: My understanding of the Northern Sea Route is that you have to report.
Senator Banks: We should do that, too.
Mr. Carmel: Yes. Regarding international transit, such as the Strait of Malacca, in broad general terms we are required to broadcast what we are carrying. However, it is not necessary to provide the details that you referred to when we operate in normal international waters.
Senator Banks: Are we close to having all that information standardized so that it is set up on a transponder and read by anyone?
Mr. Carmel: The requirements of automatic identification systems are such that you report your cargo in general terms.
Senator Banks: As well, you report its origin.
Mr. Carmel: That is right. You report where you are coming from and where you are going. An automatic identification system is far from foolproof because the system contains enormous holes. About three or four years ago, the Government of Singapore put out a broadcast notice stating that it is wildly inaccurate and should not be relied upon.
We are a long way from broad, standard descriptions of what we are carrying. Some will argue that we should not report, because if I am a bad guy trying to target a ship, I probably should not be able to do it by listening to the radio.
The Chair: I just want to put one final comment from you on the record. You referenced the Suez Canal, and I have heard you speak on that before. This is drawing people's attention to the geopolitical side. If you open up a northern trade route in competition with the Suez Canal, there will be implications. Egypt will not be happy. Is that one of the reasons you think the North is not viable?
Mr. Carmel: No. In the end, countries and companies will do what is in their own best interests and let Egypt fend for itself.
The Chair: That was most interesting. Thank you for being here today and for your documentation.
Our next guest and witness today is Dr. Charles F. Doran, the Andrew W. Mellon Professor of International Relations, Chair of the International Relations Committee, Director of the Global Theory and History Program and, most importantly, Director of the Centre of Canadian Studies at Johns Hopkins University.
Dr. Doran has been speaking and making presentations of late on issues related to national security. He will submit a written transcript on Arctic security and defence to us later, and that will be delivered to all senators.
He has been writing on Canada and the Canadian Arctic since the early 1970s, and one of the first discussions appeared in his book Forgotten Partnership: U.S.-Canada Relations Today, which came out 25 years ago and will now be updated and re-released.
Welcome to our committee. We are very pleased to have you with us today. Would you make any opening comments this evening?
Charles Doran, Canadian Studies Program, Johns Hopkins University, as an individual: Yes, senator, I would, if I may. Thank you very much for the opportunity and the honour of appearing before the distinguished members of this Senate committee. I will make three points.
First, the ice in the Arctic is melting at an astonishing rate, opening up oil fields and shipping lanes and thus creating new problems of security and defence.
Second, the interests of Canada and the United States in attempting to cope with these problems of security and defence are quite different. While Canada would like to declare the Northwest Passage inland waters, the United States would like to declare the Northwest Passage an international strait. These conflicting goals appear irreconcilable.
Third, yet there is a solution. Why not monitor and protect the security of these waters jointly through NORAD, an institution that for decades has served both countries superbly through unparalleled integrity and cooperation?
The Arctic is melting. Every independent source indicates that whatever the cause of global warming, the Arctic is melting at such a rate that traffic through the Northwest Passage will become feasible, at least in the warmer months, thus opening up a host of problems in terms of defence and security.
By taking product and gear in and out of the Arctic, firms and governments will employ transshipping. Transshipping from Europe to Asia and vice versa via the Arctic will cut days and dollars off the old routes through the Panama Canal or around Cape Horn.
Even the non-Arctic states are taking a great interest. China is now an observer on the Arctic Council. Germany is reportedly building a modern icebreaker. If transit through the Northwest Passage is becoming reality, this reality is becoming a strategic problem for Canada and the United States. They must undertake the complex, costly and difficult task of monitoring these waters effectively and of providing defence and security.
Whatever Canada's legitimate claims to the Arctic waters in terms of environmental protection and economic development, Canadian and American defence and security responsibilities in these waters are not well coordinated. The Northwest Passage cannot be both an international strait and Canadian domestic territory at one and the same time.
Moreover, the American problem is further complicated. Not only does it want to transit the surface fleet unimpeded, but it must safeguard the passage of NATO submarines while detecting those of hostile intruders. Security is seamless; there is no room for the practice of prior consent.
In addition, if the Northwest Passage is declared internal waters, then every other international strait has the potential of being declared the same. Indonesia or Malaysia may extend sovereignty in the Strait of Malacca. China or other countries may attempt to extend sovereignty in the Paracel and Spratly Islands chains, where half of the world's tankers must pass. Furthermore, oil fields in the Persian Gulf area produce 70 per cent of the exportable oil and natural gas worldwide. Much of this oil and natural gas passes through the Strait of Hormuz. Iran borders on that strait. A precedent in the Northwest Passage establishes a precedent in each of the other straits as well.
The cost and difficulty of providing security and defence in these hard-to-operate waters should not be underestimated. It will involve air, space, sea and underwater surveillance and enforcement. Navies unavoidably will assume some of these tasks. Canada and the United States need to cooperate in their own self-interest. Why not exploit the benefits of joint monitoring experience in the single bilateral institution at the highest military and political levels where Canada and the United States have a record of trust and effectiveness — NORAD? As of May 12, 2006, NORAD has a provision to extend its services in a maritime direction.
On October 29, 2009, General Victor Renuart, Commander of North American Aerospace Defence Command and United States Northern Command, observed that NORAD's maritime mission is a warning mission. NORAD's role is to warn each government of a threat, including that of unmanned vehicles or cruise missiles, launched from sea-based platforms in the Arctic. NORAD has neither an enforcement role nor operational control over ships, planes or defensive missiles. However, by relying on NORAD cooperation, Canada would have no need to demand prior consent for the transit of American naval vessels, nor would the movement of NATO submarines create any problem of communication. Likewise, the task of monitoring potential hostile vessels, whether surface or subsea, would be handled in a much more cost-effective and thorough manner than if the two governments were to undertake this effort separately and in isolation.
At both the individual and government levels, Canada and the United States have shown that in dealing with an air- breathing threat they can cooperate with extraordinary trust and efficiency. Why not make use of this virtually wasting institutional asset, NORAD, to cope with the next great defence and security problem for Canada and the United States, surveillance and coordination or coordinated enforcement in the Arctic?
Americans and Canadians know how to cooperate militarily. NORAD can provide the key to a solution regarding an otherwise irreconcilable strategic problem. While the United States and Canada can continue to agree to disagree over the nature of the Northwest Passage, they can, in actuality, provide both surveillance and a link to enforcement in a tradition of cooperation and respect inside a great bilateral institution, NORAD.
I am prepared to try to answer any questions.
The Chair: Thank you very much, Dr. Doran. Just before we begin our questions here, can you clarify that there is intent for NORAD to move beyond aerospace and into maritime activity? It is kind of a chicken and egg question. Could Canada and the U.S. come to an agreement and ask NORAD to do that, or will NORAD go down that road and Canada and U.S. can benefit from that in the Arctic?
Mr. Doran: I think I understand the very good focus of that question, or at least I hope I do. They are in the process of talking about how this is to be done. Their intention is clear, but the details are still left to be worked out. The pace at which this is done is still to be evaluated.
Senator Dallaire: Dr. Doran, what is the Canadian participation in the U.S. Northern Command?
Mr. Doran: The U.S. Northern Command is a U.S. command.
Senator Dallaire: However, it is the same commander as NORAD, right?
Mr. Doran: It can be, yes.
Senator Dallaire: Right. I mean, we are seeing it as such.
Mr. Doran: Right.
Senator Dallaire: In so doing, your perspective is that a defence posture should be established for the Northwest Passage and the Arctic area under NORAD and not necessarily under NATO. Are you separating the two or are you saying one complements the other?
Mr. Doran: What we do in North America is complementary to what we do in NATO, but it is also separate. What Canada and the United States do in defence and security matters, particularly in the Arctic, which is of such great peculiar importance to both countries, requires special attention. NATO will certainly be impacted and will be a positive co-participant, but the real decision making here is between Canada and the United States regarding surveillance in the Arctic between Canada and the United States inside NORAD.
Senator Banks: Thank you, Dr. Doran, for taking the time to do this. Did I understand you to say that NORAD's function is purely a warning one and it does not control any airplanes?
Mr. Doran: I did say that. I quoted the commander of the United States Northern Command who clarified this quite recently — within a year of this point — indicating that this is a warning function. This function, like previous ones, was borne equally by Canada and the United States, with Canadian and American personnel involved, with a great deal of trust, and with information given to the respective governments to decide what they want to do if and when a threat should emerge.
Senator Banks: For example, if the Russians start testing the northern limits to which we want to contain them, is it NORAD that sends up planes to intercept them?
Mr. Doran: No, it is not. NORAD provides the information, which the two governments have to act on, and the individual planes of the respective countries will be brought into implementation if and when the governments decide that that is what they want to do.
The Chair: Senator Banks, this was, I believe — Dr. Doran would know — clarified strongly after 9/11, that it was a warning system and that it was up to the political leadership to respond.
Senator Banks: I will pursue a different level, because I did not understand that. It is interesting to learn.
Dr. Doran, one of the contentious areas between Canada and the United States is the northern slope of Alaska. I am guessing you might have paid some attention to that with respect to searching for oil that exists there, as there was a national wildlife refuge there. I do not think the moratorium has been taken off yet, but people keep talking about it.
It is Canada's view that it ought not to happen because of the refuge and the caribou herds there. Is that bubbling up anywhere these days?
Mr. Doran: It remains an issue. At this point the Alaskan government is deeply interested in this, as is Washington. The decision has not been made to drill in the area of the Arctic National Wildlife Refuge, ANWR. I think you are talking about that area.
If some way can be worked out not to impinge negatively on this very important caribou herd, drilling might take place. So far there is great fear that the drilling would be problematic.
Senator Banks: My final question is with respect to whether those waters in the North turn out to be internal waters on the one hand or a strait on the other. One hopes these questions will be settled in court rather than by any other means. The effect of that decision is not only who gets to go there with their ships and who reports to whom in controlling that. Would it not also affect whatever lies under the seabed in that strait or in those internal waters?
Mr. Doran: My view of this is as follows: I think there are various functional areas. There are economic concerns, environmental concerns and security concerns. It seems to me that by keeping these concerns somewhat separate, the two governments have a much better chance of maximizing their interest in all of these sectors.
I would think that Canada will probably, if it wishes, go forward with extending its sovereignty in terms of economic considerations — the oil and natural gas interests and so on — and certainly environmental protection. When it comes to the security matters, I would hope that these would be done through NORAD.
Senator Lang: I am from the Yukon, up close to the Arctic. In your opening remarks you mentioned at least twice that the ice is melting at an astonishing rate. You are obviously very familiar with it. Give us your assessment from what you have read and studied. What time frame are we looking at from the point of view of having the Northwest Passage open on a seasonal basis?
Mr. Doran: First, I am a political scientist, so I am a very weak link here to try to make a technical judgment of that sort. However, as you suggested, I did follow this very carefully from a number of sources. I did not rely on only one. The one I saw most recently was startling. They took a series of shots. The amount of melting that took place was sufficient so that the whole area along the Russian coast was very open.
Because of the way the ice swishes around in currents, there was less melting on the Canadian side, but it was clear that the water was open in the summer months along much of that coastline as well.
More than this, I looked at the graph that was attempting to predict the change in melting over that 20-year period. There was a fair amount of vacillation around the graph, so each year things changed quite a bit, but the trend of that graph was decidedly towards a much more open ice area. I would say within 10 or 15 years certainly there will be movement of some sort, or the potential for movement of some sort, through the Northwest Passage.
Senator Lang: To pursue a bit further the idea of transhipping through the Northwest Passage, we just had a witness here who told us in no uncertain terms that, at least from his knowledge, the draft for ships is such that the Northwest Passage would not be able to take those large freighters and barges, the 70,000-tonne ships. I believe he said the draft is 10 metres in some places. Do you have any comments on that?
Mr. Doran: I do not have comments on the issue of the draft. I do have comments, though, on the size of the ships. I think that the supertankers with double hulls will not have much trouble getting through many areas of this passage. In other words, the remaining ice that is there will not be a big problem for them.
I do not know exactly. There are many different ways one can go through these passages. It is not a single passage. Some of that area may be too shallow, but I am sure there are other areas that are adequately deep. From what I know of supertankers, they are constructed in a strong enough and heavy enough way so that light ice will not be a problem for them.
Senator Lang: To return to the issue of NORAD, you talked about the fact that Canada views these as inland waters and the U.S. views them as an international strait. There is obviously a stark difference of opinion.
You also said that you would see the United States and Canada coming together. Are you suggesting co-managing this area and accepting the fact that neither one is right? How will these waters be defined?
Mr. Doran: First, I did not use the term ``co-manage,'' and I would not.
What is necessary is, first, to concentrate on security and defence separate from the other aspects of sovereignty, such as the economic and the environmental issues.
Second, it is important to treat the surveillance and the warning aspects separate from the other aspects of security. Surveillance and warning are not easy to do and will require very sophisticated technology in very difficult circumstances. Concentrating on that is certainly in the capacity of the two governments to work together on. NORAD would definitely be the framework in which to do that.
The question then is what happens if they discover that there is a threat out there. They will inform their respective governments. The respective governments will then say, ``All right, what will we do about this?'' That is quite a different matter. It is an important matter, but it is different.
The Chair: Because the interests might be different?
Mr. Doran: The capabilities and the interests are different. In my view, if such a crisis took place, Canada and the United States, in their own experienced way, would find some solution to deal with the problem. I think it might be quite pragmatic at this point, because nothing is in place to provide guidelines on how they would actually respond.
Senator Lang: I would like to go back to this concept that Canada says it is our waters. As I understand it, you are recommending to us that we should not continue to pursue that. Is that right?
Mr. Doran: I am saying that one should recognize that there are different areas of sovereignty involved. There is the question of the economic issues involving oil and gas. There are the questions of environmental protection and native peoples, which are other very important aspects of sovereignty.
Security and national defence also exist and stand separate from the areas that I have just mentioned. They should be treated in a special way, in a unique way, because of their importance. Inside the issue of national security and defence, there are further divisions, one of which is whether you are talking about surveillance and warning or whether you are talking also about some kind of military response in the case of a crisis. At this point, all people are talking about in the area of defence is focusing on the warning and the surveillance, something that can be done in the context of a single institution, NORAD, where cooperation is already very good.
Senator Day: A protocol exists in association with NORAD, if there is a need for interception, as to which aircraft will participate in the interception. Even though most of those interceptions in the past would have been in Canadian air space, there were times in the northwest of Canada where U.S. aircraft were closer, and they would have been scrambled to intercept. That goes beyond warning. If it is not part of NORAD, it is part of the protocol in relation to NORAD. We have a number of jet aircraft that are designated on a standby basis for the same purpose.
That is the point we started to get to a short while ago. The NORAD model is capable of going beyond merely surveillance and warning. You seem to want to stop there. I am just wondering why you want to stop there, if we get along so well.
Mr. Doran: I do not want to be misunderstood. I do not necessarily want to stop there, but I do respect what exists at this point. What exists is a set of discussions and negotiations about surveillance and warning, with a lot of capacity. It is important to have the capacity in place. They have the capacity in place to deal with this. Obviously it must be linked to a way of dealing with a problem should a problem arise. There should be good coordination there. The example you gave is a good, real-world example. There ought to be other explorations as to how we proceed with a response. I think that is the obvious next step.
Senator Day: I do not want to be misunderstood. I am a great supporter of NORAD and what we have been able to achieve in a cooperative manner in NORAD. I think that model could well be expanded into more than security and defence, because there are many other things that we could do cooperatively.
Mr. Doran: Depending upon what the two governments want to do, all of these things are possible. It is clear to me that they no longer have the freedom to simply step back and say that is in the future and not something we will have to think about. They have to think about it now because the rate of melting is at such a pace that, within a few years, there may be usage in the area that Canadians and Americans would like to monitor and would like to somehow deal with. In fact, if we have no planning in place, we will not be able to do that.
Senator Day: Going to your second point, that there is disagreement between Canada and the U.S. with respect to whether this is an international strait or an inland waterway, what is the situation north of Russia in the northern route of the Northeast Passage?
Mr. Doran: It is interesting how open the waterway is along much of that area. On the other hand, it is a very long route that passes largely along the Russian coastline. The Russians are pretty clear that since they are not sharing this with anyone else, they will be monitoring this and probably enforcing the rules and so on, at least until an international agreement is signed with someone else. At this point, I do not see any of that really taking place. I would say that the Russian coastline is quite different from this area.
Also, I think it is not as attractive a place to transit because it involves longer distances than would be the case through the Northwest Passage. What will really drive movement through the Northwest Passage is economics. You can cut a lot of time off of that route from Europe to Asia or Asia to Europe. It is interesting to me that the big Asian and European countries are quietly already making their preparations for using that route.
Senator Day: If it is an international strait, is the difficulty that, unless the ship calls on some port along the way, if it is just transiting through there is no ability to require reporting?
Mr. Doran: It may be the case that if a port were entered, it would be easier to monitor contents and so on. I am not an expert on that issue, so I am not the right person to talk to regarding that.
However, I would say it is very likely that we will face both kinds of things. We will face movement in and out of oil and natural gas fields, without any question. I was surprised to see how many mines have been identified as being of great interest. There will be movement of ships bringing gear in and bringing product out. In addition to that, there will be transiting directly from Europe to Asia and back through the area. That is a separate sort of movement.
The Chair: Dr. Doran, we heard earlier testimony that the Northwest Passage, from some people's point of view, including the Maersk shipping line, will not actually cut days and dollars. It is expensive and unpredictable because we do not know how long the ice will be there or whether it will be there. There are many issues at stake, not to mention some of the political repercussions of challenging the Egyptians with the Suez and other similar issues. What convinces you that this is the most economic route?
Mr. Doran: What convinces me of that is geography, looking at how far these ships have to travel at this point to get down through the Panama Canal or all the way down to the Horn. Going around the Horn is no picnic either. Looking at the distances themselves indicates where the benefits will be.
In addition to that — and this is the part that really shocked me — is how rapidly the ice is melting and where that trend line is moving. The comments you heard are probably correct today, but will they be correct 10 to 15 years from now? I doubt that very much.
The Chair: When you talk about the problems, it seems in some respects that with regard to this issue, the least of the problems involve Canada and the U.S. We have heard from you and from others about China and Russia moving into this field pretty dramatically. Even if we sort out some of this under the auspices of NORAD, many questions remain open about how the other players react.
Mr. Doran: You are exactly correct. It is interesting that China is so much involved in this that it is now an active observer on the Arctic Council. I was amazed to see Germany, with all its interests and concerns, a long way from the Arctic, considering building an icebreaker. Why is that? Because it wants to develop and have access to oil fields and natural gas fields other than what it gets from Russia. The Germans think this is an area where there are good prospects. Why do they want an icebreaker? They want to extend the number of months they can operate in that area.
Senator Pépin: Mr. Doran, what are your views on the Beaufort Sea and the Lomonosov Ridge?
Mr. Doran: Senator, I am not an authority on either of those areas. These are interesting international questions that have great international legal content, particularly depending upon how you look at access to the continental shelf as opposed to calculating sovereignty on the basis of straight lines that are extended in other ways. These issues are a bit further afield, as far as I am concerned, although very important.
I would say that in particular what is interesting here is what the technology will reveal about access to the continental shelf and how likely international law will pick up and build on its concepts of sovereignty in terms of such a calculation.
Senator Dallaire: When you consider the NORAD concept, the surveillance requirements would now be different inasmuch as we are looking at surface and subsurface capability, which is not necessarily the forte of NORAD. There is a whole new equipment sweep, new rules of engagement and new capabilities.
Do you foresee that we would have a better solution to providing security if we did this together than if Canada tried to do it alone? Second, where does your Coast Guard fit into this exercise?
Mr. Doran: With regard to your first point, you said it very eloquently and better than I did. In fact, this does involve a new frontier of security and defence, in terms of surveillance and warning, for NORAD and therefore for the two governments. It will require new technologies that are expensive and difficult to manage. It will require technologies that are underwater and on the surface. It has to be coordinated with space to be effective. Most important, it is something that the two governments ought to do together, if for no other reason than to save money, and to do it more effectively and in a fashion where there are no slip-ups or problems.
The good news is that NORAD has shown that these two governments can work together on even more time- sensitive issues, in a close and responsible way. If we can do that, we ought to be able to do this with regard to the Arctic waters.
Could you repeat your second question?
Senator Dallaire: Where does your Coast Guard fit into this exercise?
Mr. Doran: I will put it this way: I am looking at this from the perspective of politics and economics and so on. I would hope very much that bureaucratic problems in each country between services — between the Coast Guard and the Navy, for example — would not get in the way of operating in the most effective and efficient manner in monitoring and surveillance. I believe they will be able to work this out; however, you are correct that Coast Guards in each case do have a significant role, and that has to be worked out.
When it comes to questions, though, of security and defence of the sort that I was talking about, it seems to me this is a military responsibility. The Navy and the Air Force and so on will have to take a lead. However, there are many areas for participation by the Coast Guard, and if they have the ships, the capacity, the manpower and the budgets to do this, I am sure they will have a significant role.
Senator Dallaire: The example of the DEW Line — where we had American installations on Canadian soil and part of the overall defence mechanisms, all those radars — sets a precedent, does it not, for us to work together, to work even within Canadian territory and on the ground, if we believed even that the passage was only Canadian?
Mr. Doran: That is an interesting and clever question.
We have shown that the two countries can indeed work together when their territories are involved and when you have to have some technical participation — and indeed not just technical participation — of nationals involved on the other territory as well. Therefore, that bodes very well with regard to NORAD and this Arctic water situation.
The problem, however, is much more complicated than that. The problem, in the case of the Arctic waters, is that we have the transiting of ships on a regular basis, probably fleets, on the surface, and we have the submarine capability. It is imperative that this continue without any kind of interruption or prior notification. If Canada and the United States are both part of NORAD, the capacity to do this is far greater than if it is done separately, because the information in fact will be shared. What worries me about the extension of sovereignty over military matters is that it will be difficult, it seems to me, to avoid some of the problematic issues that militaries know exist out there.
The Chair: Dr. Doran, thank you very much for being with us today, for putting up with some of our technological glitches, and for working us in around your teaching schedule. Dr. Doran is with Johns Hopkins University. He is there in Washington, and there is a lovely shot of the Capitol behind him. Thank you for being with us.
Mr. Doran: Thank you very much, Madam Chair.
The Chair: That concludes our witnesses for today. We will have the next few minutes of our meeting in camera so we can talk about future business.
(The committee continued in camera.)