Proceedings of the Standing Senate Committee on
Foreign Affairs and International Trade
Issue 6 - Evidence - Meeting of February 8, 2012
OTTAWA, Wednesday, February 8, 2012
The Standing Senate Committee on Foreign Affairs and International Trade met this day at 4:30 p.m. to examine and report on Canadian foreign policy regarding Iran, its implications, and other related matters.
Senator A. Raynell Andreychuk (Chair) in the chair.
[English]
The Chair: Today, the Standing Senate Committee on Foreign Affairs and International Trade is starting its examination on Canadian foreign policy regarding Iran, its implications, and other matters.
In the first panel before us this afternoon we have representatives from the Foundation for Defense of Democracies. The Foundation for Defense of Democracies is a non-partisan institution focusing on national security and foreign policy. It was founded by a group of former U.S. officials and visionary philanthropists shortly after the attacks of September 11, 2001, to help free nations defend themselves.
Via video conference from Washington we have Mark Dubowitz, Executive Director, and Sheryl Saperia, Director of Policy (Canada).
The Chair: I understand that there has been a negotiation and Ms. Saperia succeeded in becoming the first to speak. I turn the microphone over to you. Please proceed.
Sheryl Saperia, Director of Policy (Canada), Foundation for Defense of Democracies: Honourable senators, thank you for inviting me here today. CSIS has deemed the Iranian nuclear weapons programs one of the most significant, urgent threats of the proliferation of weapons of mass destruction, WMD, today. The United States and Israel are now of the shared view that Iran is within about one year of reaching the point where it will be able to assemble a nuclear bomb. Will Iran decide to build a bomb, and if so would Iran actually use it? Many security experts would probably be most confident in saying only that Iran is seeking to develop the option — that is, the capability — to build a nuclear bomb.
In my opinion, even a nuclear-capable Iran, which I distinguish from a nuclear-armed Iran, is extremely dangerous. Nuclear weapons capability could form a protective shield around the Iranian regime and further embolden it to continue and intensify its nefarious activities, such as assassination attempts of foreign government officials, support of terrorist groups around the world, meddling in other countries to foment violence and civil unrest, propping up repressive regimes like Assad's Syria, translating into action its vitriolic hatred of and threats against Israel, and state- sanctioned arrests, beatings, detentions, kidnappings, torture, and ever-increasing executions of its own citizens, including Iranians who also hold Canadian citizenship.
Moreover, a nuclear-capable Iran would likely set in motion rapid nuclear proliferation in the region. Saudi Arabia will surely not tolerate a scenario in which it is lacking weapons or capabilities that Iran possesses. Turkey and Egypt may take similar positions, and the greater the rate of proliferation, the greater the chance that weapons-grade material could fall into the wrong hands, such as non-state terrorist groups. A tense and nuclear Middle East is indeed a frightening prospect.
Let us briefly focus on the threat that Iran poses specifically to Canada and Canadians. Just last week, U.S. Director of National Intelligence James Clapper told a Senate committee that Iranian officials, including Supreme Leader Ali Khamenei, may be more willing to conduct an attack inside the United States. Similarly, Israeli Deputy Prime Minister Moshe Ya'alon believes that one of the reasons Iran is establishing bases in Latin America and creating links with drug dealers on the U.S.-Mexico border is to facilitate Iran's ability to bring weapons into and carry out terror attacks inside the U.S. Given our physical proximity, an attack on the United States is certainly a threat to Canada.
Reza Kahlili, a former member of Iran's Revolutionary Guard who is now living in the United States, maintains that Canada is a major target of Iranian espionage. Kahlili has said that Iranian intelligence agents spy on Iranians in Canada and report on those who oppose the Islamic Republic. These individuals may be arrested when they return to Iran or their families still in Iran may be punished.
This is consistent with the concern about the presence of Revolutionary Guard members in Iranian embassies throughout the world. When Iran recently wanted to open up more consulates across this country, many Iranian diaspora members recognized the attendant risks, namely increased intelligence activities in Canada and increased spying on diaspora members.
Most recently, Israeli and Jewish facilities in North America are on high alert against Iranian attacks. An Israeli security report states that they are operating "according to the information that Iran and Hezbollah are working hard and with great intensity to release a quality attack against Israeli and Jewish sites around the world," including in Canada.
Zafar Bangash, Director of the Islamic Society of York Region, seems to concur. He ominously announced recently that
. . . if there were an attack on Iran, and obviously the fact that Israel would be involved in it, [the] US would be involved in it, it is quite possible that, you know, members of the Jewish community might be targetted. . . . We will not want that to happen at all but, you know, you cannot control the emotions of the people.
I therefore proceed with my remarks on the assumption that Canada has great incentive to combat the Iranian threat, not just as a matter of principle or as a dutiful member of the international community, but also as a country that could be impacted directly by Iran's activities.
So what can Canada do to reduce the Iranian threat? Honourable senators, if we are serious about dealing with the Iranian threat, we must focus on the IRGC, the Islamic Revolutionary Guard Corps. This entity is not only in charge of Iran's nuclear program, it is also responsible for severe human rights violations and for the 2009 violent suppression of Iranian protesters. It trains and finances terrorist groups like Hezbollah and Hamas and, counterintuitively, even al Qaeda. It was behind the recent attack on the British embassy in Iran, and it has been implicated in the attempted assassination plot of the Saudi ambassador in Washington.
Canada's current sanctions under SEMA, which target many individuals and entities, including some associated with the IRGC, have been imposed in response to Iran's nuclear activity. However, the IRGC is a terrorist organization, and should be designated as such under the Public Safety list of terrorist entities. Even if Iran were to cease its illegal nuclear program tomorrow, this does not alter the fact that the government has a nine-digit budget line for international terrorism that is channeled through the IRGC. Canada needs to use every non-military tool in its toolkit at this critical time, and that includes listing the IRGC as a whole, as well as individual senior commanders and members, as terrorist entities in Canada.
I would be happy to address all the benefits of listing the IRGC during the question and answer session. For now, let me say that the decision not to designate the IRGC promotes a culture of impunity. The IRGC is the spine of the Iranian regime, and we must not countenance any interaction with the organization. Listing the entity diminishes its legitimacy, as well as that of the Iranian regime. It also provides important moral support to Iranian dissidents who may feel isolated and alone in their efforts to affect change within the country.
What else can Canada be doing? We need to do more to stop the bloodshed in Syria, not only because thousands of civilians have been killed in the last year but also as part of our response to confronting the Iranian threat. Syria is Iran's greatest regional ally and strategic asset, and the collapse of the Assad dynasty would be a blow to Iran's reach. That may be why Qassem Suleimani, the commander of the Revolutionary Guard's Quds Force, is reportedly in Damascus right now to help Assad suppress the growing uprising.
Tehran also continues to help Syria evade oil sanctions, enabling revenues from illegal oil sales to fill the government's coffers — funds that allow Assad to continue his murderous repression of protesters. Canada and the West need to strength the Syrian opposition. This could mean providing the rebels with more sophisticated equipment, like secure means of communication with one another, or considering international tools like the Responsibility to Protect doctrine.
Canadian energy security is another piece of the puzzle. Iran has threatened to close off the Strait of Hormuz, a critical passageway for much of the world's seaborne oil.
The Canadian government has rightly tried to convey the message that stable Canadian resources are an essential component of any solution to American and Asian energy needs. At the same time, Canada needs to consider its own energy security in a more serious way. While its oil exports are substantial, Canada depends in part on Middle Eastern oil, such as that from Saudi Arabia, for domestic consumption. It may now be appropriate for the government to come up with ways of improving our own energy security and thereby diminishing the salience of any Iranian threat to cut off the Strait of Hormuz.
Lastly, economic sanctions have become the most adopted measure against Iran by Western countries. Canadian sanctions are very good but could likely be tightened further. I will leave discussion of sanctions against Iran to my colleague Mark Dubowitz, who is a world expert on this subject.
I commend the members of this committee for examining Canada's foreign policy regarding Iran and hope you will consider greater measures in confronting the Iranian threat. Now is the time to take bold and responsible action in protecting Canada and the world from a nuclear-armed, or even a nuclear-capable Iran.
The Chair: Thank you. We will turn to Mr. Dubowitz now.
Mark Dubowitz, Executive Director, Foundation for Defense of Democracies: Thank you very much, honourable senators, for having me here. It has been five years toiling in obscurity working on Iran sanctions issues, and clearly sanctions have now become the dominant tool that the United States and its international allies are using to confront the Iranian nuclear threat.
I am pleased to be here with you. I want to confine my remarks to a few minutes and leave room for questions to give you a lay of the sanctions landscape with respect to what is happening in Washington, what is happening internationally, whether or not sanctions could actually work in confronting this challenge, and what Canada could be doing in addition with respect to sanctions.
There are three clocks that are now ticking. There is the Iranian nuclear clock as the Iranians move forward aggressively on their nuclear program. There is the military option clock, which is the extent to which Israel and the United States decide at some point that there are no other peaceful alternatives but to use military force to confront the Iranian nuclear program. There is a difference in those two clocks, the U.S. clock and the Israeli clock, and I will address that in some detail in my remarks but also in the question and answer period. Then there is the sanctions clock, which has been ticking away for years and years but has rapidly accelerated in recent months.
Let me address the first clock, the Iranian nuclear clock. My colleague, Ms. Saperia, has talked about nuclear capability versus a nuclear-armed Iran. I think it is important to understand that the actual red lines that we are dealing with are also very different from a U.S. perspective and an Israeli perspective.
You have heard the Israeli defence minister, Ehud Barak, talk about a zone of immunity, which refers to the point at which the Iranians have buried their nuclear facilities underground in a facility called Fordo near Qom, which would make it impenetrable to Israeli military ordinance. It is at that point that the Israeli military option would be off the table. It would be perhaps another six to eight months where the Americans, with much heavier ordnance, would be able to penetrate that Fordo facility, but there will be a zone of immunity that the Iranians will eventually reach that will take the military option off the table. It is important to understand again the red lines with respect to that option, and the differences between the United States and Israel.
With respect to the sanctions clock, it has only been in recent months, for those of us who have been working on sanctions for years, that we have finally seen potentially crippling economic sanctions being discussed, passed and imposed. There I want to focus very specifically on the most important sanction, which is the sanction relating to Iran's oil sales.
Iran is, for all intents and purposes, a one-crop country. All Iran really does is sell its oil. It represents about 60 per cent to 70 per cent of the government budget, about 80 per cent of hard currency export earnings and about 25 per cent of Iran's GDP. It is a critical short-term source of the hard currency the Iranians need to run their regime, sustain their currency and deal with some of their enormous economic challenges.
Sanctions in the past have been designed to go after Iran's production capacity, its ability to produce oil. The more Iran can produce oil, the more oil it can sell in international markets. Over the years, sanctions have been quite effective in draining capital investment and technology from the Iranian energy sector and decreasing Iran's ability to produce this oil. However, those are medium to long-term sanctions. Those are sanctions that, over the next five years, the International Energy Agency and the U.S. government project Iran will lose about $14 billion a year in annual oil revenues as a result of restrictions on its production capacity. We do not have five years with respect to this challenge. We may not even have five months. The real question is, what sanctions are on the table that can target Iran's oil revenue and drain that Iranian treasury of the critical hard currency it needs to sustain its program?
We are really talking about the Central Bank sanctions that were recently signed into law by President Obama. You have now seen Europeans freezing Central Bank assets. The Canadian government has essentially cut all financial ties between the Canadian financial sector and the Iranian financial sector. These sanctions have had an enormous consequence already. They have led to a cascade of oil sanctions and oil market reaction. The Europeans imposed a voluntary oil embargo. There are now discussions between the U.S. Treasury Department, the Japanese, the South Koreans, the Indians, the Chinese, and others about reducing their purchases of Iranian oil. There are a number of other mutually reinforcing measures that have been introduced recently — in Congress and in Europe — under discussion internationally that would ratchet up the hassle factor associated with buying Iranian oil.
At the end of the day, come the end of June, President Obama has to make a determination. Under the existing Central Bank law, he has to decide whether countries have significantly reduced their purchases of Iranian oil in order to be granted exceptions from the sanctions passed by the U.S. Congress, or whether to sanction countries that have not met that threshold. Those discussions are now under way. There is intensive diplomatic activity taking place both in Washington and in international capitals. You should keep your eye on that activity, because the Israelis are keeping their eye on that activity. If by June or the beginning of July those sanctions have not created that kind of cascade in the oil markets that has led to a significant reduction in Iranian oil revenue, the determination will be that sanctions have failed. If oil sanctions do not work, no sanctions will work. That is a very key point to keep in mind. I can get into more detail in question and answer, but that is number one with respect to sanctions.
There are also financial sanctions. Relating to the central bank sanctions, there is a consideration on the table now in the U.S. Congress to go after an international financial settlement mechanism called SWIFT. SWIFT is a Belgium- based company that provides secure financial messaging to 10,000 financial institutions. To put it in simple terms, senators, if you are moving money from one bank to another you cannot do so without going through the SWIFT system. There are 44 Iranian banks currently using the system to circumvent international sanctions and to move money. They use it for trade with the international community. They transacted over $35 billion worth in bilateral trade with the Europeans. If you cut the Iranians from the SWIFT system, in theory the Iranians will not be able to do or facilitate any international financial transaction, for oil sales or anything else.
Removing the Iranians from that system is currently a subject of intense debate in Washington and with our European allies.
The board of directors of SWIFT is comprised of major financial institutions. There is a Canadian who sits on that board representing a major Canadian financial institution. That board of directors has the power to make the decision — under its own bylaws — to remove these Iranian banks. There is an important Canadian angle to the story that is worthy of consideration.
There have been years of sanctions and months of very intense sanctions. Clearly the Iranian economy is under intense pressure with hyperinflation and high unemployment, and the currency has dropped by 50 per cent in the past two months. You are finally starting to see the impact of tough, crippling economic sanctions. However, I would suggest to you that time is running out. The sanctions clock has been ticking too slowly, the nuclear clock has been ticking too quickly, and the military option clock is coming potentially closer to midnight as we move into the spring and summer season. I will conclude with that.
I welcome your questions and thank you for the opportunity.
The Chair: Thank you for being efficient in your time and leaving plenty of time for the questions.
[Translation]
Senator Fortin-Duplessis: Mr. Dubowitz, thank you for your presentation. Do you understand French? Can you hear the interpreter?
[English]
Mr. Dubowitz: I understand some French. I prefer an interpreter, please.
[Translation]
Senator Fortin-Duplessis: I would like to have your opinion on the topic I am going to describe to you.
The European Union has recently launched a war against Iran. Of course, there was no official declaration, not even covert use of force. However, the European Union's decision to impose an embargo on Iranian oil imports, to block any new contracts and to freeze the assets of the Central Bank of Iran is actually a way of declaring war. This could very well lead to military hostilities, which is precisely what those sanctions are designed to prevent.
Oil imports represent 50 per cent of the government's revenue in Tehran and almost 80 per cent of their cash. As a group, the European Union is Iran's second largest client with a quarter of its exports being sent there.
On January 27, 2012, The New York Times said that Iran was more than likely going to try to sabotage or attack refineries, pipelines and other facilities like Ras Tanura in Saudi Arabia or to close the Strait of Hormuz. This threat has been issued before. It could officially be described as actions carried out by local Shiite insurgents in the eastern province.
What do you think about that? Could this escalate into a real war? What can we expect? What impact would this have on Canada?
[English]
Mr. Dubowitz: Thank you. You asked exactly the right question. These sanctions are designed ultimately to persuade the Iranians to come back to a negotiating table, to impact their risk-reward calculus with respect to their pursuit of a nuclear weapon, and hopefully to persuade them to negotiate a deal with the international community.
It is clear that over the years the Iranians have been unwilling to do so, despite very intense efforts by the Europeans for at least seven or eight years to try to reach an accommodation with Tehran on the question of their nuclear program. The determination has clearly been made by the Europeans, after years of negotiations, that the Iranians are not interested in a deal right now. The decision has clearly been made that the only way Ali Khamenei, the Supreme Leader who is ultimately the major power broker in that country, will be persuaded to come to the negotiating table and negotiate a peaceful deal on this question is if intense economic pressure is put on this regime.
I would not call the voluntary embargo of Iranian oil an act of war. It is clearly not an act of war under international law to make a voluntary decision not to import a commodity from a country. However, I think what you are getting at is not whether it is an act of war legally under international law, but whether the intense pressure being placed on the Iranian regime will lead the regime to retaliate in ways that could escalate into war. I think that is the nature of your question and concern.
I think it is clear that for the first time since the Iran-Iraq war, the regime fears for its oil wealth. This is a direct sanction against the Iranian regime's oil wealth, its life blood. The threat to close the Strait of Hormuz is an example of the Iranian reaction to that sanctions measure.
I think you can expect the Iranians over the next few months to retaliate in a variety of ways. You have suggested some of them — attacks against Saudi oil facilities. They will certainly try and talk up the price of oil because their only response to this is to increase the price of oil so that even if there are reductions in the volume of oil purchased, the fact that there is now a higher price means they are still getting sufficient oil revenue to fill their coffers and support their economy.
I think you can expect this to happen over the next six months. I would not be surprised if the Iranians ultimately do something so provocative that it presents the international community with little choice but to move to the next stage of escalation.
What impact will this have on Canada? There are a few concerns for Canada. On the one hand, the Canadian economy would benefit from a high price of oil. As a major oil producer, high prices of oil can be useful to the Canadian economy.
However, clearly Canada has a much more overriding concern, which is that it is part of the international community; it is a major exporting nation; it depends on a healthy America and Europe, and anything that boosts the price of oil significantly and plunges America and the OECD further into recession will have a major impact on the Canadian economy. There will be an economic angle to this.
The second is that Canadian troops are still in Afghanistan. We have seen examples of the Iranians providing support to the Taliban and to Iraqi Shias in the past to actually help kill NATO troops, including Canadian troops. Therefore, there may be repercussions for Canada's armed services and for Canadian diplomats who still are in Tehran at the embassy and Canadian missions around the world.
Canada is clearly a country that has done significant work in trying to find a resolution to this problem. It has joined Britain and the United States and other countries in doing so. I would just suggest to you and your intelligence officials that Canada remains one of the prime targets, not only abroad but in the Canadian homeland, and to be very circumspect in dealing with that problem.
Senator D. Smith: Thank you for your presentation, which I thought was very well done and interesting. My first question is that reading between the lines, I thought your presentation basically was to justify a strike against Iran — presumably at Fordo before it gets too deep — by either Israel or the United States or maybe in cooperation. Is it unfair for me to conclude that you are sort of rationalizing the case for either of them to make the strike before the Iranians get too deep?
Mr. Dubowitz: Are you directing that question at me or at my colleague?
Senator D. Smith: To you.
Mr. Dubowitz: Actually, I have been on record for many years now as supporting sanctions as a peaceful measure to try to change the risk-reward calculus of this regime. I am not an advocate of military strikes. I am someone who believes that sanctions can work, if imposed and enforced.
I am merely trying to explain to you and to your esteemed colleagues that the current international atmosphere is one where if sanctions do not work and do not work quickly, the possibility of military strikes is very real. I am not advocating; I am analyzing.
Senator D. Smith: You said we may not have even five months. Do you think effective sanctions will be in play that quickly?
Mr. Dubowitz: I think there is a possibility that if sanctions — specifically oil market sanctions, Central Bank sanctions and SWIFT sanctions that I described earlier — are imposed and enforced aggressively over the next couple of months, those sanctions will have such a significant impact on Iranian oil revenue and on the Iranian economy that there is a chance that it will change Ali Khamenei's risk-reward calculus; and it will convince Iranians to finally, after all these years, sit down and negotiate a deal with the international community on the concerns that the community has with respect to Iran's nuclear program.
I think that possibility still exists. It is something that I pray still exists; but I want to be clear as an analyst, rather than advocate, for you and your esteemed colleagues to understand that these next six months will be a very decisive time. It is clear that unless those sanctions are found to work, there may be no other option than a military strike by Israel or the United States. That again is not something I am advocating; it is merely something I am analyzing.
Senator D. Smith: Do you think that if and when Iran has the ability to make a strong strike against Israel, it is inevitable that they will do it?
Mr. Dubowitz: I think the question, as my colleague Ms. Saperia pointed out quite correctly, is not whether Iran will use a nuclear weapon, because I think that is one of those unknowables right now. There are a lot of theories and good analysis on that question, but as Ms. Saperia pointed out, the issue is a nuclear-capable Iran, an Iran that could break out very quickly. For example, Japan could assemble a nuclear weapon in three to six months; it has that capability today.
The question is, can the Iranians break out and do so? Or could the Iranians sneak out? Could they do so under the nose of the international community without us knowing? That is a serious risk.
However, the real question is not whether the Iranians will use a nuclear weapon; it is what is the likely impact of a nuclear-armed Iran? I will end with the scenario that a nuclear-armed Iran is likely to lead to a cascade of proliferation in the Middle East. There is no doubt in my mind that if Iran goes nuclear, the Saudis, the Turks and perhaps the Egyptians will very quickly develop nuclear weapons capability. The real nightmare scenario for those in the region and for the international community is a nuclear-armed Middle East, where every country is on a hair trigger.
There the scenario is more likely based on miscalculation than intention. When you have that kind of instability with countries on a hair trigger, the chances of a miscalculation increase dramatically. That again is a real scenario, and one that President Obama speaks about regularly as his overriding concern with respect to a nuclear-armed Iran.
Senator D. Smith: If there were a pre-emptive strike by Israel or the United States against Iran and this facility, what would the domino effect of that be?
Mr. Dubowitz: There is no doubt that military strikes against Iran could have serious and severe repercussions. I think all of us who study this issue, and you senators who have been looking at this issue, are well aware of that.
Not only am I not here to advocate military strikes, but I am also not here to analyze the impact of those military strikes. I am here to suggest to you that there is still time remaining for very tough sanctions to be imposed. I am suggesting that while the Canadian government has gone a long way in supporting international efforts with respect to sanctions, there is much more that can be done. If senators are interested in what more can be done to peacefully bring this to a conclusion, I would be happy to further elaborate.
The Chair: If it is not covered in the questions, we will come back to that, Mr. Dubowitz.
Senator Johnson: Could you then elaborate? That was one of my questions. Based on what you just said to Senator Smith, elaborate on the sanctions and what the next step would be.
Mr. Dubowitz: Senator, is that being directed to me?
Senator Johnson: Yes, please.
Mr. Dubowitz: The sound is not great. I apologize for that.
I think my colleague Ms. Saperia underscored the most important step that the Canadian government could take. That is to add the Islamic Revolutionary Guard Corps, the IRGC, as a designated terrorist organization under Canadian law. To provide a bit of further colour on why that is so important, the IRGC is a dominant economic actor in Iran, as Ms. Saperia said. It is also responsible for Iran's nuclear program and its terrorist activities; it has been responsible for killing NATO troops and is responsible for assassinations. It is clearly an international outlaw. The Obama administration, and the Bush administration before that, understood sanctions should be designed through the prism of the IRGC for a simple reason: because the IRGC was involved in proliferation and terrorism.
By designating IRGC companies, entities and individuals involved in Iran's economy, the expectation was that international companies would not be willing to take the risk of doing business with Iran. If you are doing business with Iran, you are doing business with the IRGC. The banking sanctions, shipping sanctions and energy sanctions have all been designed through the prism of the IRGC. This is not only politically good for the international community but also economically good for the international community. If you are a Canadian financial institution, Canadian energy company, or Canadian individual at all engaged in trade, doing business with Iran means you are going to do business with the IRGC. That will present you with significant problems under international sanctions. It will present you with significant problems if the Financial Times or Wall Street Journal run a piece naming your company as an aider or abettor of IRGC business.
This entire sanctions regime has been designed with the IRGC in mind. Canada needs to take the step of designating or criminalizing the IRGC under Canadian law. That is a critical step that the United States has taken and that has been endorsed by the international community. However no other country, with the exception of the United States, has criminalized the IRGC in its entirety. I am sure Ms. Saperia can also talk about some of the reasons, concerns and objections, but I would suggest that is an important step.
The second important step — and I will conclude with this — is that Canadian sanctions are not what we call secondary sanctions. Canadian sanctions only apply to Canadian persons. If you are a company operating in Canada or a Canadian person operating abroad, you fall under the jurisdiction of these sanctions. In Canada, the sanctions do not put non-Canadians to a fundamental choice between doing business in Canada and doing business in Iran. That is what U.S. sanctions do. They put international persons to a fundamental choice between a U.S. market and a Canadian market.
Ms. Saperia and I have argued in print and elsewhere that Canada is an energy superpower. There are international energy companies who covet Canadian energy resources. In that respect, those companies could be put to a fundamental choice between Iran's energy sector and Canada's energy sector. Canada could play a much more consequential role in putting Chinese, Turkish or South Korean energy companies — go down the list — to a fundamental choice. You either do business in Iran or you do business in Canada, but you cannot do business in both.
I would suggest that five years ago, three years ago, or maybe even two years ago, Canadian reluctance to impose what are called extraterritorial sanctions perhaps was understandable. Given the context of what we face today, the possibility that the only other solution to stopping a nuclear-armed Iran might be military strikes, with all of the consequences that the senator talked about earlier, this is the time. There will be no other time for the Canadian government to stand up and use Canada's economic power and energy sector to fundamentally and finally put these companies to a choice between Iran and Canada. This is something that the Canadian government needs to do.
Senator Johnson: Thank you. Ms. Saperia, would you comment as well, please?
Ms. Saperia: On the sanctions front specifically, Mr. Dubowitz spoke about how Canadian sanctions under SEMA could be tightened. I would like to follow on his remarks, which were quite comprehensive. Simply, I believe right now there is a loophole that would allow, for instance, a Chinese energy company to operate in Iran and a subsidiary of that company to be operating right now in Alberta. That is the type of loophole that could be tightened quite easily under our sanctions regime.
I will advocate first and foremost for listing the IRGC as a terrorist entity in Canada. I have put together a number of materials on the subject. I tried to anticipate the types of concerns or reasons why government would not want to do it. In my opinion, I have come up with better reasons why they should do it. I would be happy to discuss that with you if there is interest.
Senator Johnson: I would like to turn to the comment you made, Mr. Dubowitz. You said it is probably very unlikely that economic pressure is going to change Iran's Supreme Leader Khamenei's commitment to building a nuclear bomb. Do you know the stated intentions of their program and its development at this time in terms of nuclear and other weapons of mass destruction?
Mr. Dubowitz: Certainly my knowledge of Iran's nuclear program is based on the most recent International Atomic Energy Agency, the IAEA, report, which came out in November. We are expecting another report very soon. For those who have been following Iran's nuclear program and its development for years, the most recent IAEA report went further than anyone ever thought that international agency would go. It provided significant detail on the nature of the program and the aspects of weaponization that the Iranians have undertaken. It was of no surprise to people who follow the program closely, but I think it was quite shocking for many people in the international community to have the IAEA come out in such stark terms and underscore the military nature of Iran's nuclear program.
We will see another report out soon, which perhaps will go even further. It is clear from the most recent visit of IAEA inspectors to Iran that the Iranian regime has no interest in cooperating with this international agency. Unfortunately for those of us who were hoping that that would be a successful trip and would lay the predicate for a more meaningful negotiation with the Iranian regime, it is clear from the reporting on that trip and sources I have spoken to that the IAEA was very disappointed with what transpired there. We have a clear indication from the International Atomic Energy Agency that the Iranians are moving forward on a nuclear program with military dimensions and have not been willing to cooperate in any meaningful way with that agency.
Senator Downe: I want to follow up on the question asked by Senator Johnson and that Senator Smith referred to as well. I am interested in your condensed time frame. You are talking months instead of years, but we do not actually know for sure how close the Iranians are to having a nuclear bomb, do we?
Mr. Dubowitz: The question of how close they are to having a nuclear bomb, senator, is actually not the question. The question is what I referred to earlier in my testimony. There have been a number of red lines that have been imposed by the international community over the years. The first red line referred to the Iranian right to enrich uranium. The Iranians blew through that. The second was that there was an indication that the Iranians would be enriching uranium at a level not required for peaceful energy. The Iranians have blown through that red line.
The third red line would be what we would call the red line just before breakout. That is where the Iranians have assembled all the technical capability to rapidly build a nuclear bomb, and all that is remaining is a political decision by the supreme leader to do so. That is the Japan scenario I referred to earlier.
The question of that red line is now being assessed by, in particular, Israel, but also to a great extent, the United States, over two other red lines. The first red line is not the breakout but the sneak out. The breakout assumes you know when the Iranians have reached the level of technical competence and you know whether the supreme leader has made a decision to actually move forward or not. That requires a level of intelligence that many analysts are concerned the international community does not possess. It may be that the Iranians actually sneak out, that they do all of this covertly, and the international community wakes up one day and the Iranians have a nuclear weapon.
What has really become of urgent concern is what I call the "zone of immunity." That is when the Iranians reach a point where there is no military option. If there is no military option, there really are only two choices, which are these: Can economic pressure put enough stress on a regime to come back to the negotiating table, or can the Iranian opposition rise up once again, like they did in June 2009, and overthrow the regime? If those two scenarios do not work, then you have a nuclear-armed Iran.
That is the assessment that the analysts are looking at. It is no longer the question of how far the Iranians are from a nuclear bomb, it is how far are we from a point where options to stop an Iranian nuclear weapon are taken off the table — economic options, military options and peaceful regime change options.
Senator Downe: Options are dependent on how far they have proceeded, as you have said, and how close that gets them to having a bomb. I have heard this story before. My concern is that in Iraq, for example, we heard "weapons of mass destruction." We heard the intelligence reports that the weapons were there, and it was on that basis that a number of countries joined the United States in that invasion.
Are you not concerned that the lesson of the Iraq war for all the countries was they did not have a nuclear bomb and look what happened? No one attacked North Korea and we had better get one as quickly as we can; Iranians could be stringing out the international community and could be years away from having the technology.
Mr. Dubowitz: There is no doubt that the Iraq experience has understandably raised a level of skepticism in the international community about these questions, and justifiably so. It was an intelligence debacle.
The question of looking at Iran's nuclear program and trying to understand the nature and extent of it is clearly a very difficult challenge. I would suggest to you there are a few things that are different from the Iraq scenario.
The first is if you remember with respect to Iraq, the IAEA clearly made the case all the way through that according to their weapons inspectors, according to their intelligence, they believed that Saddam Hussein had not progressed sufficiently on his nuclear program to justify military action. They had concerns about his ability to reconstitute the program; they had concerns about the sanctions regime that was at that time dismantling. There were a number of concerns. However, the IAEA, in reports it was issuing at that time, was against the American consensus on Iraq.
We have a very different situation this time — in fact, a polar opposite situation, where the IAEA is coming out with reports. I would suggest to the senators that you study the reports and you have experts come in who can take you through those reports in a lot of detail, because there is a lot of detail in those reports that is worthy of a separate hearing.
The IAEA has made very clear in its reports its concerns about the nature of the Iranian nuclear program, the military aspects of the program, the kind of testing that is taking place that is completely incompatible with the nuclear energy program. I suggest we should be cautious and skeptical, but the evidence seems to be leading us in a direction where it is becoming increasingly difficult to conclude that the Iranians are building a nuclear energy program and are willing to face punishing economic sanctions in order to build a peaceful nuclear energy program.
The evidence is suggesting quite the opposite, which does not mean we should not be cautious. What it does mean is that we should be looking for all peaceful alternatives to try to get the Iranians back to the negotiating table; and if they are unwilling to satisfy the international community's concerns, we need to continue to press forward on these economic sanctions.
Again, I said in writing and repeatedly in congressional testimony that as it becomes more and more clear that these sanctions will not change Khamenei's risk-reward calculus, we should start designing sanctions to help empower the Iranian opposition to overthrow its own government peacefully.
The military strike option is not something I would like to see. It is the absolute last resort, and all peaceful alternatives need to be exhausted.
Senator Downe: You are right about the caution because obviously the U.S. president at the time, George Bush, did not invade based upon hearsay; he invaded based on intelligence that he thought was correct. After the fact, we found out it was completely wrong.
The Iranian government is brutal to their own citizens; they have a horrendous human rights record in their own country. I am wondering how these sanctions are affecting the population. As the resources for their state become smaller, I assume they are being distributed to the elite. How much suffering is there among the general population?
Mr. Dubowitz: That is a very good question, and it is always the challenge with sanctions. Sanctions always hurt the disadvantaged. Sanctions against South Africa during the apartheid era hurt Black South Africans. The White Afrikaner elites benefited from sanctions. They diversified their companies; they created conglomerates that moved into other fields as international companies abandoned those markets. For many years, White Afrikaner South Africans benefited and Black South Africans were clearly the victims of those sanctions. Despite that, I would add that most South African anti-apartheid activists supported sanctions. With the exception of Helen Suzman, all of the leading advocates supported these sanctions.
I think that points to a very important aspect of sanctions, which is that the Iranian people, who will ultimately be the victims of sanctions, are now telling the international community in ways that I think are very interesting that either sanctions have to be ratcheted up in order to get rid of this regime, or what is very interesting in the reporting on this issue is that when they interview the average Iranian in the street, despite the fact that there is a government handler probably six feet away, these Iranians are telling reporters as they are describing their economic distress that the sanctions are hurting them and making life more difficult, but what is interesting in the reporting so far — and it is anecdotal but it is interesting — is that they are not blaming the international community for these sanctions. They are not blaming the Americans for these sanctions. They are either not blaming anyone because there is a handler six feet away or they actually have the courage to be blaming the regime for these sanctions — even repeatedly and often saying, "The nuclear program is not worth it, I am not interested in the nuclear program, it is not a priority for me and my family. What is important for me is to have a job and to put bread on the table."
The argument that the nuclear program is a source of national pride may be true at some abstract level, but at a very practical level what Iranians are saying to reporters — again, anecdotally but importantly — is that the nuclear program is not a priority; sanctions are hurting, yet either the regime is to blame or they leave it very quiet about who is to blame. However, they are not blaming the international community or America despite the fact it would be probably a politically wise thing to do with a handler six feet away.
Senator Nolin: Following on the last question, I am interested to understand the public support for President Ahmadinejad. He is up for re-election in 2013, if I am not mistaken. I would like to understand what the popular support is for him. What is your reading of the popular support for President Ahmadinejad?
Mr. Dubowitz: I would say that it is very difficult to get a really accurate read about what is going on in Iran. First, you see polls being conducted about Iranian public opinion. I would say, senator, treat those polls with a lot of skepticism. If you were Iranian and you got an anonymous call asking your opinion about anything political, I would suggest that if you were concerned about your safety and the safety of your family, chances are you would echo the party line on issues of concern. You would not likely answer truthfully to an anonymous voice on the other end of a phone call.
As a result, it is very difficult to poll people and get an accurate sense of where Iranian public opinion is. That is why, to the previous question, I responded that the best we can do is get anecdotal evidence based on press reporting of the man on the street. With that caveat in mind, it is clear there are three major power blocks competing right now. There is the Khamenei power, which is the supreme leader. There is the elite of the Islamic Revolutionary Guard Corps, represented by two men — Soleimani and Qasemi — who are two of the central pillars of the IRGC. There is the Ahmadinejad power centre of Ahmadinejad, his loyalists, and some revolutionary guard commanders of a less high level than Khamenei's. He is clearly a populist appealing to poor and rural Iranians particularly by handing out large sums of money to that constituency to try to buy and keep their loyalty. The third power block is the power block of moderates, of green movement candidates who are sympathetic to the green movement but have to be very careful about openly declaring their sympathies. If they do, they will be automatically disqualified from running in the March parliamentary election. They certainly would be automatically disqualified from running in any presidential election. Three major power blocks: one built around Khamenei, the second built around Ahmadinejad and the third is moderates sympathetic to the green movement.
It is clear that Ahmadinejad still retains fairly significant support. I would put his support at about 25 per cent of the Iranian public. He is challenged in the next year or the next month with the parliamentary elections coming up. With the presidential elections in 2013 his challenge will be if he can fend off what will be a brutal challenge from Khamenei and Khamenei loyalists in the parliamentary election. If he cannot, Parliament will try to impeach him. If he is successful doing so, how successful will be he be in the next presidential election? Will he be allowed to run, and if he is, can he use the largesse of the state to continue paying off his constituency, which like the rest of Iran is facing hyperinflation and soaring unemployment? Unlike the rest of Iran, Ahmadinejad can now pay them off in rials. He actually has more rials to pay them off because the currency has dropped so significantly that oil revenue, which is U.S. or euro-denominated, is now converted to more rials because of the drop in the real exchange rate. He has more rials to pay off his constituency. He is clearly doing that already and will do that.
The question will not be, in principle, how popular he is, but how much of the Iranian electorate beyond his core base can he essentially pay for support? I think that is an open question, but I would say keep your eyes on the March parliamentary election, a very important litmus test.
Senator Nolin: That leads me to my second question. Ms. Saperia, we cannot expect traditional fairness driven by our international principles of good elections. Let us assume that they will play tricks to keep the power. We are just playing into the hands of the authority in Iran with the attention that we and other foras are giving Iran in the next 14 months. Let me explain why, and I will ask for your comment.
The more we focus on them, and the more we take sides against them — moving the sanctions, rattling everything to make sure they do not become the big monster — we are just playing into his hands. He will do everything to keep the power.
This election is the ultimate raison d'être of the attitude that they have, but also that we have; not only he has elections. Let us look at the electoral dynamics in the next 14 months — France, the U.S., and Russia, just to name three. The electoral dynamic is probably providing the impetus for our being asked to get excited by Iran. I am not saying that we should not be, but I think to a certain degree we are getting a little bit too excited. We have to relax a little bit and look at the full spectrum, the full dynamic and the full environment.
Ms. Saperia, can we be driven by Mr. Ahmadinejad's intent to be re-elected, and are we playing in the hands of this gentleman?
Ms. Saperia: I will make a couple of comments. I am interested in Mr. Dubowitz's remarks, too, but I will say two things. First, with regard to the re-election or not of Ahmadinejad, that is not my primary concern.
Senator Nolin: It is probably his primary concern.
Ms. Saperia: It certainly may be his primary concern. My concern is Ali Khamenei, who is the true leader of the country. I will disagree with your premise that the more we focus on Iran in terms of sanctions, the more we might be playing into their hands. The intent of sanctions is to try to change that cost-benefit analysis for Khamenei and other leaders to say, "Maybe this nuclear program is not worth it." That is probably not realistic. What is more realistic is that sanctions will render the regime extremely vulnerable, which is has started to do with high inflation and high unemployment. What I see as the real intent behind sanctions is, in the context of this vulnerable regime, to embolden and strengthen the internal opposition. What I want to see is another Iranian uprising. This time I want to see a successful one in which the West is willing to provide that support on the ground that is needed, where you have regime change, and where you have a complete loss of interest in a nuclear program as the best case. The worst case, but still not that bad, is a completely different regime under which a nuclear weapons program is far less scary. What we have right now is a regime that is calling for the annihilation of certain countries, that has been interested for a long time in regional hegemony and that has its eye on causing trouble in other countries. That is the type of regime which I do not want to see in possession of nuclear weapons.
Senator Nolin: I think you missed my point. I am saying they want to be able to unite their populace against the West and we are doing that. Napoleon said when they give me an enemy, I unite France. That is exactly what Iran wants.
Let us forget about who is the authority. The authority wants to stay there. They want to keep it. We are just playing that game. They want to be able to say to everyone in Iran, let us get united against an enemy.
Ms. Saperia: I am going to point again to Mr. Dubowitz's anecdotal evidence, where he spoke of these Iranians who are being interviewed who are actually not nearly as unified as many had predicted about the idea that Western sanctions or Western-imposed hardships would bring the country together against the West. In fact, it has not.
There is an incredible amount of opposition, both within the regime and certainly within the populace. I believe that we are on a good track. There is concern about what a military attack would do and whether that would unify the populace against the West, but I have been starting to read things that would suggest otherwise.
I believe that we cannot waste any more time wondering about whether we are playing into their hands. I think we are not. I think the sanctions we have imposed thus far are starting to bite, and the regime is feeling it.
The Chair: Mr. Dubowitz, I will hold you in abeyance for one moment. Senator Robichaud, please put your question quickly, and I have one question. Then I will ask Mr. Dubowitz to try to answer all of them very efficiently because we are intruding on the next panel already, unfortunately.
[Translation]
Senator Robichaud: My question is for either of the witnesses.
How can the Iranian people get information and what kind of information is circulated? Does the regime spread propaganda to the people? What freedom do the opposition members have to keep people informed and what tools do they have?
[English]
The Chair: You said the next six months are critical and that the sanctions need to bite. If that is the case, why are the European sanctions, as I understand, delayed in imposition? Is it because they do not get the message of the urgency, or is the urgency a cumulative effect and not quite as urgent in the minds of some people as you in a time frame?
The ultimate goal may be the same. You want them back at the negotiating table. Europe wants them back at the negotiating table, but they seem to have a different time frame than you have. If you can answer any or all of those quickly, I would appreciate it.
Mr. Dubowitz: Sure, I will. First, to your question, Madam Chair, it is very important to draw a distinction between the legal time frame when sanctions legally begin to be implemented, and the signalling impact that sanctions have on the market. The fact is that the voluntary European oil embargo already is signalling to oil market participants and changing their behaviour. This happens well ahead of when the actual legal implementation schedule begins.
Sanctions are that way. Sanctions are a way of signalling and changing market behaviour, which happens well in advance of when legal contracts end or begin. The Europeans are clearly very serious. I think a senator earlier called it an act of war against Iran. I would say it is not an act of war, it is an act of economic warfare, and the Europeans are serious about that.
On the previous question, it is absolutely clear to me that the Iranian regime has never been more divided, that the fissures in the regime have been intensified between Khamenei and Ahmadinejad, between senior Revolutionary Guard commanders and junior Revolutionary Guard commanders.
The Napoleon theory of give me an enemy and I will unite the people is clearly not working in Iran. The regime is trying but it is failing miserably. There is no analyst in Washington who believes that the external enemy, the Great Satan or the Little Satan, has been used effectively by this regime to unite its people. Its people have never been more divided, and the regime has never been more divided on itself.
The third question is the most critical question that has been asked all day. With respect to the Iranian opposition, it is clear — and we do a significant amount of work inside Iran — that Iran is a military dictatorship. Regarding the ability of the opposition to merely communicate by email, by cell phone or by SMS message, it is remarkable the extent to which the regime has cracked down on simple communication, and their ability to intercept a message, to target it, to identify the source of it, to find that individual, roll him up and put him in prison or worse. It is remarkable when you compare Iran to any other country.
I would suggest that what the opposition is facing right now is a brutal crackdown not only on their bodies and souls but also on their ability to communicate, mobilize and express their opinion. What Canada can do most importantly is match rhetoric with material support. If Canada wants a peaceful solution to this, and I hear this echoed throughout this session, then Canada needs to provide real and material support for the opposition.
You have the most sophisticated technology companies in the world. You have the most sophisticated human rights organizations in the world. These organizations, with government support, should be asking Iranian opposition, what do you need? Give us your top 10 list and let us see if we can help provide that.
That is a peaceful alternative; and to the previous senator who believes that maybe Iran is not building a nuclear weapon, if it is not and they are still cracking down brutally on their people, we have a moral responsibility to help people against an authoritarian regime, even if they are not building a nuclear weapon. I think that was the lesson of Iraq, that we should have helped the Iraqi people against Saddam Hussein, and not even gone the military route.
Unfortunately, we are in a position now where we are trying sanctions, we have a few months left to exhaust them, and then we have the possibility of either a nuclear-armed Iran or military strikes to forestall that. If we never had tried peaceful support of the opposition, using the full resources of your government and my government, I think history would not look kindly upon us for that.
The Chair: Ms. Saperia and Mr. Dubowitz, we have run way over our time. Thank you for the wealth of knowledge that you have brought to the table here today. You have also challenged us to look at all of the options and ideas that may be confronting the Iranian people and therefore those of us who wish to help them in any peaceful way.
We are just starting our study. You have certainly given us a lot on our table, and we look forward to other witnesses and our continuing study. I trust you will follow our deliberations.
For our second panel today, we have two eminent scholars: Professor Andrea Charron, Research Associate from the Centre for Security and Defence Studies at the Norman Paterson School of International Affairs of Carleton University; and Professor Peter Jones, Associate Professor from the Graduate School of Public and International Affairs at the University of Ottawa. We have a balanced Ottawa presentation.
Professor Jones, you will start. I have indicated we are running a bit short of time, so efficiently as you can, make your presentations because the senators have many questions, as you have noted from our first panel. Welcome to the committee.
Peter Jones, Associate Professor, Graduate School of Public and International Affairs, University of Ottawa, as an individual: Thank you for the invitation to appear before you. You have all the key factions here of the Ottawa academic community before you.
In the very brief time that I have, and I will try to condense this, I would like to touch on three main issues I think are of great importance to Canada and more broadly: first, the internal situation in Iran and the situation of the government; second, the Iranian situation in the Middle East in the context of the Arab Spring and what is happening there; and finally, a few thoughts on the nuclear issue. Any one of these three things could consume several hours, so I will condense and rely upon your questions to broaden things out.
First, with respect to the Iranian government and the internal situation, Iran's government is a complex and diffuse beast. There are many power centres and many factions, some of which are declared in the Constitution and some of which are informal. For most of the history of the Islamic Republic, a range of reviews and ideas was permitted within a rather narrowly and well-defined set of basic agreements about the nature of the overall system. Beyond these constitutional arrangements, in practice the government is held together by corruption, patronage and enforcement of certain disciplines.
The most powerful individual is the supreme leader. He has a divine mission to defend the revolution and he also, in practical terms, balances the different power centres and factions to make the system work.
Since the elections of 2009, and probably somewhat before that, the supreme leader has been systematically reducing the range of acceptable political parties and movements and consolidating power around himself, and in this he is backed by the Revolutionary Guard, which was discussed in the previous panel.
When I first went to Iran in 1995, it was a very different place. I last was there in 2010. I have gone several times. You see the narrowing of the political space that has taken place in that time.
One would think that an individual with the title of president would be the most important person within the system, but in Iran that is not so. Ahmadinejad's rhetoric is blood-curdling, but he is a long way from the actual centre of power, even more so in the last few years as his faction and his power centre have come into a very significant dispute with the supreme leader. He is probably one of the least actually powerful people in Iran right now in the political spectrum. By the way, he cannot run again. There are term limits. He has served two terms; he cannot run again. He could serve again, but he must take a break. It is quite clear that his dispute with the supreme leader is so intense he will not be allowed to run again. He is trying to set the ground for a successor who will be sympathetic to his point of view.
It is important to note that the Islamic Republic has never been a beacon of democracy or human rights in the terms we would understand them, but for most of its history, until just before the 2009 election, it was more democratic and respectful of human rights than most countries in the Middle East. In relative terms, there was an open press, and the situation of women was much better than in many other countries in the region; but, as I said, this has been systematically eroded.
The internal situation is very troubled. It is getting much worse. Corruption, poor governance, the growing impact of sanctions — all these are pressuring the people. Standards of living are declining. You can see this when you go there. There is a growing unease at the way the supreme leader and those around him are eroding the democratic foundations of the revolution.
Most of us who study Iran do not necessarily see a violent uprising against the regime, which showed in 2009 that it will fire on the crowd if it has to, but it cannot be discounted. Most likely is an ongoing disengagement of the people from the political life of the country and a corresponding reduction in the legitimacy of the government. Voter participation is declining, and it is becoming clear that the supreme leader is desperate to ensure a good turnout in the March parliamentary elections, and he will probably not get it.
The trend line is against the regime, but we do not and cannot know how or when it will be swept away. Everyone knew the Soviet Union was rotten, but few predicted exactly when and how it would be swept away, and that is the situation with Iran.
I have a few quick words about the Arab Spring. Iran will be a net loser from the Arab Spring. They have proclaimed it hopefully as the Islamic awakening and they have tried to say that the movements we have seen in Tunisia, Egypt and so on are based upon what happened in their revolution in 1979, but the truth is that if anything happened in Iran to inspire the Arab Spring it is what happened at the 2009 election, not the 1979 revolution.
The loss of Syria, if it happens, as an Iranian ally will be a significant blow, the loss of their only ally in the Arab world and the loss of their direct line to Hezbollah in Lebanon. Beyond that, it is very difficult to imagine that any Arab government that comes out of the Arab Spring will want to have a strategic relationship with Iran. More fundamentally, Iran's attractiveness to the so-called "Arab street" has for many years been based on a sense, however misplaced, that Iran's revolution was young, dynamic, representative, and willing to stand up to the U.S. and Israel, all the things that these old Arab countries were not; but if regimes emerge across the Arab world that claim these attributes, while Iran continues to slide toward corruption, authoritarianism and repression, Iran will no longer be a source of emulation among the Arab young. Its ability to influence the discourse of the region, its soft power, will suffer greatly. It will no longer be helpful for groups from across the Arab world to receive support from Iran.
I have a few quick words about the nuclear issue. Prime Minister Harper's recent comment that he believes that Iran is trying to acquire nuclear weapons and would use them is a very serious comment, but there are two aspects of this statement that do not hold up to analysis. First is the assertion that Iran definitely wants nuclear weapons. Most who study this issue believe that Iran is trying to acquire the capability to build such weapons but that it has not decided to actually build them. In his statement last month, U.S. Defense Secretary Leon Panetta said: "Are they trying to develop a nuclear weapon? No. But we know that they're trying to develop a nuclear capability, and that's what concerns us. And our red line to Iran is, do not develop a nuclear weapon."
There is a difference between a weapon and a capability.
The much-respected Institute for Science and International Security, which has been hard on Iran over the years, stated in its most recent assessment: "Iran is unlikely to decide to dash toward making nuclear weapons as long as its uranium enrichment capability remains as limited as it is today . . . Iran is unlikely to break out in 2012, in great part because it is deterred from doing so." They go on to list in some detail the problems that Iran is having with its enrichment program.
The second aspect of the Prime Minister's statement is the question of whether a nuclear-capable Iran would use these weapons in the service of some messianic impulse, knowing full well that the response would be devastating. The key issue here is whether or not Iran's leadership is rational. Rationality exists on different levels. There is the issue of whether a regime's objectives are rational, but there is also the question of whether their methods are rational. It is possible for a regime to have goals that appear irrational, and in Iran's case also odious, but to subscribe to very rational cost-benefit calculations that are perfectly sane. That is the key question.
Mr. Harper is right to say that the statements of Iran's leadership about such things as Israel's right to exist are disgusting and even irrational, but this does not mean that the Iranian regime would necessarily act upon these statements if it knew that doing so would result in its own destruction. Here again, the evidence we have about Iran's leadership, how they act when their own survival is on the line, is that they are far from crazy. As U.S. General John Abizaid, who formerly commanded CENTCOM, the military command that would have to go to war with Iran if it ever came to that, said, "Iran is not a suicide nation. I mean, they may have some people in charge that don't appear to be rational, but I doubt that the Iranians intend to attack us with a nuclear weapon."
This reflects the view of most analysts. Whatever Iran's rhetoric may be, its actions have been cautious and risk- averse. Iranian leaders will poke and probe their enemies for weaknesses and use blood-curdling rhetoric laced with references to martyrdom, but they back down when faced with a threat to their own survival. That has been a consistent trend over the history of evolution.
The primary motive of Iran's leadership in trying to acquire a nuclear weapons capability may be to assure their own survival in the face of what they perceive to be threats to them. Israeli Defence Minister Ehud Barak recently stated in an unguarded moment of candor that he would likely seek a bomb if he were an Iranian: "I don't delude myself that they are doing it just because of Israel. They look around, they see the Indians are nuclear, the Chinese are nuclear, Pakistan is nuclear . . . not to mention the Russians." In other words, Iran's motives are rooted in an objective assessment of the risks they face and not a religious impulse to destroy Israel.
Mr. Barak was quickly yanked back on message by the Israeli government, but his statement is essentially supported by former Mossad chief Meir Dagan and current Mossad chief Tamir Pardo, who both argue that a nuclear-capable Iran, though obviously a serious problem and something not to be wished, would not be a threat to Israel's existence. It could be deterred. Based on these comments and my own trip a few weeks ago to talk to leading Israeli officials dealing with the Iran issue, there is a growing sense in Israel that inflated talk of Iran's ability to threaten Israel's very existence is becoming a problem in Israel. It inflates Iran's ability to deter Israel from acting to shape the region in its interest.
Today we saw Prime Minister Netanyahu telling people to calm down and stop talking about this. What should Canada do? We have to begin with a recognition that Canada's influence is modest. We are right to join the international sanctions and to take steps to seek to deny Iran access to dual-use technology. These steps should be maintained and strengthened where possible. However, it is irresponsible to talk of the inevitability of Iran's getting a nuclear weapon, or worse, the inevitability of Iran's using it. It is not helpful and it raises the temperature where it does not need raising. It creates a sense that conflict is inevitable, which it is not.
Andrea Charron, Research Associate, Norman Paterson School of International Affairs, Centre for Security and Defence Studies, Carleton University, as an individual: Thank you for the invitation to speak here today. I had some prepared notes, but based on the preceding evidence I would like to make comments because I feel a corrective is required.
One of comments made was that the sanctions clock has been ticking for decades. That might apply to the U.S. unilateral sanctions, but in a multilateral context mandated by the UN Security Council, that clock started in 2006. By the time regulations were put in place by member states, we are talking about 2007. To give you some context, I remind you that sanctions against South Africa, which also had as a goal to stop South Africa's proliferation of nuclear weapons, were first put in place in 1977 and were not removed until 1994. Sanctions are never a quick fix.
I would also say that sanctions are effective when they are limited to clear goals, and you do not get sanctions creep where in addition to saying we are concerned about proliferation, you then add on goals such as regime change and human rights, et cetera. Sanctions work for limited goals.
The other way that sanctions are most effective is when you keep the cost of defiance as greater than the cost of compliance. The concern is that by applying too many sanctions and too comprehensive sanctions that you affect this calculus. I remind you that the UN Security Council has tried comprehensive sanctions with quite disastrous results in the case of Iraq, Haiti and the former Yugoslavia. That experience was so bad that the permanent five, which includes the U.S., penned a letter to the president of the Security Council pledging that from now on sanctions will always take into consideration the humanitarian impact before they are imposed.
Sanctions are not a peaceful tool. In fact, they are extremely coercive. They are in chapter 7 of the Charter for a reason. They are on par with the use of force. When we wield them, we have to consider them as that coercive.
Next, the comment about Canada's regulations is wrong. In fact, I have a copy of the Special Economic Measures Act here in front of me, and it clearly states that our regulations apply to any entity, any person in Canada as well as Canadian entities and persons outside of Canada. Canada does not have a tradition of extraterritorial reach, but when we apply our regulations, if you are a Chinese company operating in Canada in violation of our regulations, you will have to pay the price.
Finally, to reiterate what Mr. Jones has said, the cost of sanctions is starting to feel the bite in Iran. In today's Globe and Mail, I will point you to a tiny little piece that says 79 lawmakers in Iran have now compelled Ahmadinejad to provide testimony to them on what they call the irregularities related to the handling of the country's economy.
Canada has applied the necessary regulations to be in compliance with international law as far as the UN sanctions are concerned. We have decided that in support of the U.S. and the EU we will also apply additional sanctions, and we do that through our Special Economic Measures Act. Canada also has other measures in place, including its controlled engagement policy vis-à-vis Iran. We have a number of levels of measures in place. Something I wrote about in 2008 — and I will call again for this attention — is that our sanctions are effective only if they are translated into regulations that are understood and are enforceable. As the number of cases of sanctions that Canada is applying is on the rise, now is a propitious time to look at our regulations. I have some thoughts on how we might improve them.
The Chair: Thank you for being efficient with your time to allow for questions.
Senator Downe: I am curious about the sanctions, and you talk about Canadian sanctions. I have done a very brief analysis and I would like you to assist me if you could. Are any of the Canadian sanctions original? Are they simply duplicates of what the Americans have done a week or days before we announce them?
Ms. Charron: Yes and no. In terms of the UN sanctions that are put in place, we translate them so that they match, but Canada does not just follow in lockstep with the U.S. The U.S. has tended to try to tighten control of the Iranian Central Bank in doing any business with them and likewise doing any business generally in Iran. Canada has not done that to the same extent. One of the things we have done is looked at some of the materials that are not on the UN's list that are used to proliferate nuclear weapons. We have tried to make sure we have not got any loopholes.
We also have our own list of individuals that we put on our list.
Senator Downe: We have degrees of sanctions then, and I cannot understand why you would have the variations of the degrees. If you are imposing sanctions, why would you not have them uniform and stronger in all the countries? Would it not be more effective?
Ms. Charron: Yes and no. There are sanctions that the U.S. puts in place that we simply cannot because we do not have that extraterritorial reach. We try to do what we can within our regulations and our laws.
Senator Downe: Are you aware of any sanctions that are original — specific to Canada — other than extraterritorial reach?
Ms. Charron: Generally, the spirit of the sanctions, there are variations on a theme. The best person to ask would be at DFAIT.
Senator Downe: I very much enjoyed both of your presentations. They were very informative and your clarifications of some comments earlier were helpful as well.
The Chair: You said our regulations need to be looked at — not because they are similar to other countries — but you are saying we could strengthen within our capabilities now, our intent to this point, whether we go further. What do you mean within the regulations per se?
Ms. Charron: There are a few things we need to look at. They are actually administrative, and generally they are not huge things. For instance, the definition of property is different in the United Nations Act, the Special Economic Measures Act and now the Freezing Assets of Corrupt Foreign Officials Act. That means the poor bank now has to contact DFAIT to try to get clarification of what you mean by "property." I believe it is in the new Freezing Assets of Corrupt Foreign Officials Act; it talks about movable and immovable property, whereas the SEMA does not.
We are asking third parties, in most cases, to actually give the sanctions effect and try to interpret them. There are things we can do. For instance, we do not have consolidated lists. If you are a bank, you have to know to go to the DFAIT website to get the UN list.
From the Office of the Superintendent of Financial Institutions, you get a list about terrorists, about weapons of mass destruction and the Criminal Code. Then you also have to know there are these things called the SEMA and the Area Control List, ACL. Most banks that I know of, other than the Bank of Montreal, do not have a dedicated sanctions person.
We also have not defined things like what "ownership" means. Does it mean 50 per cent or 1 per cent? Do we also freeze the interest that applies on frozen assets? We do not have clear rules about this.
In many ways, Canada's acts and regulations are models, but there are a lot of places for interpretation, which makes it so much more difficult for us to put them into effect. Why would we load more sanctions if we cannot even put into effect the ones we have and make sure that they are put in place properly?
[Translation]
Senator Fortin-Duplessis: Thank you for your presentations, Professor Jones and Ms. Charron. It is all very interesting. My question is for Professor Jones.
Your general view on the Iranian situation is really interesting. You might be somewhat taken aback by my question. Last Sunday, U.S. President Obama said that Israel had not decided whether to attack Iran's nuclear facilities or not. The Thursday before that, the Washington Post wrote that Leon Panetta, the U.S. Secretary of Defense thought that there was a strong chance that Israel would take military action against the Iranian nuclear facilities in the spring. In your view, why did the U.S. Secretary of Defense express an opinion on an Israeli military intervention with such an exact date? What can we conclude? That worries me personally. Would that be the start of a war?
[English]
Mr. Jones: I think there is a significant campaign on now to calm things down. There has been an awful lot of talk. The Israelis have come forward with this idea, which originally came from the defence minister, Mr. Barak, about this zone of immunity that the Iranian program is progressing toward. In other words, it does not matter how close they are to a bomb; when they get to the point that we cannot attack them, we have lost the military option.
That was immediately jumped on by a great many Israeli defence analysts, saying it is not true. There is a lot of controversy around that and around the idea that there is some date. There has been a history of setting dates — by this point the Iranians will be beyond our ability to stop them. These dates have come and gone several times in this drama over the course of several years.
As I understand President Obama's comment on Sunday, which I thought was very interesting, it was a bit of a message: Do not decide to attack; everyone needs to calm down here. I agree with him that the Israelis probably have not made a decision. I wondered, frankly, having just been there and having talked to a number of Israelis, whether a lot of the pressure that was being created had to do with the American electoral cycle and the desire to put some pressure on Mr. Obama in advance of the election.
I think Mr. Obama and the administration have said we will not play that game and take that pressure; everything needs to calm down. That is the sense I have of it. Time will tell.
Regarding the consequences of an attack, just as we perhaps overestimate the consequences of Iran achieving a nuclear capability and saying it would result in the destruction of Israel immediately and without question, I think we sometimes overplay the consequences of an attack. The Iranians would be hard-pressed to start a regional war, especially in the context of the Arab Spring, when most regional countries are not on their side.
It is interesting that with the Syrian regime in such trouble, I would expect Hezbollah, if it received an "order" from Iran to fire its missiles at Israel, might not; or it might only fire a few to show it is an ally, but it would not commit suicide knowing that there is no Iran or Syria to help it.
This inflated rhetoric about how the region will descend into fire I find difficult. I am more concerned about the impact of a strike within Iran, which is not to say there will not be regional consequences. There will be Iranian strikes against American military positions in Afghanistan and elsewhere; there will be perhaps trouble in the Persian Gulf with the Strait of Hormuz, although not much — I think that is overplayed; and there will be some attacks against Israel.
However, within Iran, I think that what room there is left for peaceful resistance to the Iranian government and for the creation of political resistance will be closed off. I do not necessarily think the people of Iran will rally behind their government — most of them do not like it. However, they will rally behind the idea that Iran should not be attacked, that Iran should be inviolable; and that will complicate diplomacy.
I mentioned I was in Israel about 10 days ago at a conference specifically on Iran with a number of government officials and academics. They said Israel should be reluctant to attack Iran for a variety of reasons, not the least of which is that if you look historically at Israel-Iranian relations, there was a time when they got on fairly well. There is no reason why Israel and Iran should not have good relations, except for the ideology of the Iranian regime. If that were to be removed, there is no reason why there should not be good relations.
One Israeli cabinet minister at this meeting said we are a little reluctant to attack Iran because we have what he called an historical account with the Arab people. It will be generations before there is real peace between Israel and the Arab people because of the occupation and the wars we fought. There is no historical account yet between Israel and the Iranian people; but if we attack Iran, even if they hate their government, it will still open an historic account with the Iranian people. That will make it much more difficult for us to have any kind of relationship with Iran after this government goes.
There are a variety of considerations swirling around this question. All this to say I think the possibility of an Israeli attack has gone up somewhat in the last few months, but I still think it is less than 25 per cent, if one has to put a percentage on it. A lot of the rhetoric floating around has been meant to influence public opinion in Europe and the United States to try to get sanctions toughened up.
The Chair: Ms. Charron, did you want to add anything? No? We will go to Senator Nolin.
Senator Nolin: I want to thank Mr. Jones for correcting my ignorance about the non-possibility of having Mr. Ahmadinejad be re-elected. It definitely changed my perception of the dynamic.
You heard the comments of Mr. Dubowitz about the latest IAEA report. Do you share his analysis of the change in the intensity of the opinion of the IAEA?
Mr. Jones: It is an interesting report. It did go further than any other one.
Senator Nolin: Because there is a change in the leadership of the IAEA.
Mr. Jones: I believe that is a large part of it. I think a variety of things are going on. First, the Iranians are progressing down their path, and the IAEA has picked up on that.
However, the IAEA report did not say Iran has decided to build a weapon and it did not give a time frame. It said we do not know those things; we think they are certainly trying to acquire the capacity to do so and putting the pieces in place, but there is no evidence they have made a decision to go ahead and build one, nor could the IAEA find any timeline by which it would be done.
A lot of what was in the IAEA report were things that I think people who have watched this for a long time already knew. What was interesting was that it was in an IAEA document and therefore has a certain international legitimacy and credibility.
The Iranian response was that a lot of what was in there was based upon intelligence provided to the IAEA by the Americans, the Israelis, the British and others, and therefore an international body has no business merely turning around and recycling intelligence it has been given.
That is a debate. Some feel that that is a correct position. Some feel the IAEA has a responsibility to take information that it gets from any source, and as long it feels it is true, to put it forward.
Senator Nolin: Go back to the discussion we had on Iraq.
Mr. Jones: Absolutely. It is also true that there has been a change in leadership in the IAEA. The current director general is a much stronger person in terms of his views on these matters, so the tone of the most recent report was different, not just the content; but at the end of the day they still did not say there is evidence they are building a bomb or that they have a timeline.
Senator Nolin: That is why I am asking you the question. From the previous testimony, I thought that probably we are not reading the report properly.
Mr. Jones: That is my interpretation.
Senator Nolin: Let us go back to the question of why: Why all this fuss about Iran now? Who would gain by increased sanctions? As a Canadian, I wonder why the supreme leader would behave that way. There is definitely no interest for him, his authority and his group of leaders to behave like that. Where is the point of doing that? Where is their interest? Why are we getting excited about Iran? Of course, in the last decades since 1979 we have been concerned about Iran, but why now? Why the increased intensity of concern? What is your reading of the latest information?
Mr. Jones: You are right to point out that there have been moments of concern before, and they have been ramped up and down. I used to work for the PCO as an intelligence analyst and the Israelis would come every year and say, "We think Iran is two to three years away from a bomb." They would come back the next year, "two to three years." We had a bit of a joke amongst ourselves that the Israelis know that the Iranians are two to three years away; they just do not know which two to three years.
The Iranians have made progress. They have managed to enrich uranium to 20 per cent, which is far beyond the requirement for nuclear power. They are still having significant problems with their centrifuges. A few weeks ago Dennis Ross, who just left the Obama administration as a key person on the Iran file and who certainly is no friend of the Iranians, made a public statement to the effect that their centrifuges are not working as well as some estimates proclaim them to be. I do not think they are as close as some of the more apocalyptic references make them out to be, but they are making slow, steady progress. That is part of it.
There are electoral cycles in Iran, Israel and America, which some might say make it advantageous to some to begin to hype the pressure now. Once those cycles move past, the pressure might come down again. That is part of it.
In terms of the internal perspective within Iran, the supreme leader and the people around him, it is very difficult to probe the minds of these people and to discern what is going on. So much of what happens in Iran has to do with internal politics and the manoeuvring of the different factions. About a year ago a deal was struck between the Ahmadinejad government and the Americans and others with regard to something called the Tehran Research Reactor, which is a small reactor in central Iran that they use to make medical isotopes. I have been there; I have visited it. It was built by the Americans for the shah many years ago. The idea was that they would take away the enriched from this facility, send it abroad; it would be re-fabricated into a form that could not be used to make weapons and sent back so they could make isotopes.
This was a good deal all around. The Obama administration was very keen on this deal. They felt it had bought some time for diplomacy to work, but when Ahmadinejad took it home, it was the internal process in Iran, specifically Ali Larijani, the Speaker of Parliament, who has designs on that job, who said, "You sold out to the Americans. This is a bad deal for Iran." The supreme leader backed that point of view and the deal fell apart. It was about internal political manoeuvring within Iran for who gets to look like they are the toughest. There is a great need in Iran, if you are going to be in political life, to look tougher than the next guy. It is part of the negotiating culture. I have done some writing on Iranian negotiating culture, and that is significant.
To some extent, when there have been moments where some sort of diplomacy might have been possible, internal Iranian politics has made it very difficult to progress.
In terms of who benefits from the sanctions, certainly the Iranian people do not. As I say, in my own experience going there, I have seen the standard of living dropping, largely due to their own corruption and inefficiency, but sanctions accentuate those. The last few trips I found it interesting that I could not use my Visa card. I always used to be able to use my Visa card, but international sanctions have meant that that is no longer possible. I spent a day going around to all kinds of banks and merchants that I used to go to, asking if I can use this. No. The trade that has gone on via Dubai and their ability to take a Visa card, send it via fax to Dubai and get their friends in Dubai to process the transactions is gone; they cannot do that any longer.
It was felt for many years that one of the main beneficiaries of the sanctions was the Revolutionary Guard, through their business enterprises, which had been set up to run sanctions. That may still be happening, but I have to believe that the overall economic situation of the country has now declined to the point that even they are beginning to suffer. The sanctions now being put in place against Iran's ability to sell its oil abroad, even though they are imperfect, have always been the game-changer. That is the only means of support the government has for the economy. Even if they are not eliminated, if they are restricted in their ability to sell oil abroad, that will have a significant impact, I think fairly quickly. A certain amount of the bluff and bluster we saw about attacking the Strait of Hormuz was about that. It was about saying, "If you will deny us the right to sell our oil, we can do things, too." It was a certain bluff and bluster in that sense.
Senator Nolin: Are there any comments you want to add?
Ms. Charron: I would also like, because we are talking about the context of Canada, to keep in mind that there are unintended consequences of sanctions not only abroad but also in Canada. Sanctions are very ensnarling things. I have come up against them in the context of Sudan. I have nothing to do with Sudan whatsoever, but I was studying Sudan sanctions. Because I received a cheque that said that this cheque is for research done on Sudan's sanctions, it was frozen. I had to spend a lot of time explaining to the bank that I in fact am not supporting the Sudan sanctions. I am not sanctions-busting; I am trying to get a bit of money owed me by the Swiss government. It took a long time.
My concern is for students here who have connections to Iran. We are going to start ensnaring them in these sanctions. They are the exact audience that we do not want to ensnare. We will make it different. For the elite, it is okay to turn off one source of assets, but in many cases for the average person you start meddling with their bank account and that is it.
The Chair: I have about three minutes and I have three senators who wish to ask questions. I will ask all the senators to put their questions and then I will invite Professor Charron and Professor Jones to respond as best they can quickly to all three.
Senator Johnson: The last witness was saying that if oil sanctions do not work, nothing will, and time is running out. Of course, he went on to say the nuclear clock is running too quickly. What do you think of that statement in terms of time running out? He then went on to talk about more sanctions that could be imposed. How is this all affecting the average Iranian? As well, what is it doing for them and even the people wanting to promote the democratic movement in Iran? I do not think any of this would lend itself to that kind of effort.
[Translation]
Senator Robichaud: If we had to come to some conclusions after hearing from a number of witnesses, should we be thinking more about sanctions or seek to calm things down vis-à-vis Iran, as well as perhaps try to play a role more of mediation rather than of confrontation?
[English]
Senator Patterson: Very briefly, it was recommended by previous witnesses to this committee that Canada should list the IRGC as a terrorist organization, as the U.S. has done, to ramp up the sanctions against Iran. Do you have opinions on that recommendation?
The Chair: Just the final question — Professor Jones, perhaps more than Professor Charron — you said two to three years and then it is two to three years, but in that process the capabilities have also marched closer to capability, not weaponry. It is not that time is standing still in Iran; it is moving forward in a frightening way. Capability is frightening as much as the weaponry. If it is not sanctions, what else?
Mr. Jones: Thank you for the questions. On this idea that time is running out, is it running out? In some theoretical sense, I suppose it is. However, most of the analysts I talked to both in the United States and in Israel, people in government and out, draw some distinctions around different things.
They say, look, if we received information that Iran was actually trying to build a bomb, that would make things different. We do not like the fact that they are acquiring different capabilities and perfecting different techniques — and as you say, time is marching on and I said in my comments that their capabilities are advancing — but until we see some evidence, and we feel we would be able to recognize that when we see it, partly because the IAEA is still monitoring to at least some extent Iran's activities, until we see some sign they are actually trying to build a weapon, which we estimate would take a year to 18 months from when they made the decision to start trying to do it, then we would have time to switch gears and become more aggressive and perhaps even take military action if necessary.
The comment that Secretary Panetta made that I quoted — they are not trying to build a bomb, et cetera — is in a way sending a signal to the Iranians. We perhaps might be able to find a way to live with a certain amount of capability, but do not cross a certain line. That may be the basis of a negotiation.
On the question of whether time is running out, I am not sure it is. Time is running, but it is not running a certain way, which is the breaking out and trying to build a bomb.
Should Canada play a role perhaps in trying to calm people's minds, or should we be piling on additional sanctions? I am not sure they are necessarily mutually exclusive. I think some of the rhetoric we have heard is not helpful, such as they definitely want to build a bomb and they will definitely use it. That does not help.
In terms of Canada's ability to mediate, I do not think we have a role at this point, partly because our policies on the Middle East generally have changed significantly from some years ago. I will not get into the rights and wrongs of that — some think that is good, some think it is bad — but the result is that our ability to play any kind of a role is probably not so great as it might have been.
I have met many people in Iran, including in the Iranian government, who feel that because we are located close to the United States, we may still have some role to play in fostering quiet informal dialogues so that people could explore the territory of a possible compromise. Some of those dialogues have gone on, but officially I am not sure.
On listing the Islamic Revolutionary Guard Corps, Professor Charron would know more about that as a matter for sanctions. I get rather nervous about listing entire government entities. I think that certainly the leadership of it, those corporations within it that are active in trying to bust sanctions and acquire dual-use technologies — we know they are doing that — all those things should be listed, along with the leadership cadre.
However, for the organization as a whole, it should not be forgotten that the IRGC, like the rest of Iran, is diffuse; it is a large thing and there are different opinions within it. Just as was, in a strange sort of a way, the KGB the solution to the problems of the demise of the Soviet Union, and they were the people who perhaps recognized it coming sooner than others and were people who helped to try to manage the transition — for their own benefit, of course, they have made money off it — perhaps there are elements of the Revolutionary Guard who might play the same role in Iran. We will have to wait and see.
Finally on the chair's comments, I was not saying their capabilities have not advanced. They have — of course they do. However, Iran has been trying, so far as we are told by some, to get a nuclear weapon for 25 years now. It took the Americans during the Manhattan Project about two and a half years. It took the British, when they decided to do it, less than that, the Russians less than that and the South Africans about four years. If this is a race for a bomb, it is an awfully slow race, and it is a race they have not done very well.
I think because of the technical challenges they are finding, and the problems being put in their way by way of sanctions, espionage and sabotage — the murder of scientists, explosions at sites, et cetera — the Iranians are being slowed dramatically in this attempt.
Finally, on Mr. Dubowitz's comments about this regional cascade of proliferation that will happen, that will be a cascade in very slow motion. It will take any other country in the region who wants to get a bomb decades to do so from a standing start, just as it has taken the Iranians. There will be many people trying to stop it. The Americans will be offering them the protection of their nuclear forces as an alternative to building a bomb.
Therefore, I think these people who proclaim there will be this immediate waterfall cascade of proliferation across the Middle East in a matter of months are dramatically overstating it. It is a real problem, but they are dramatically overstating it.
Ms. Charron: On the question about oil sanctions, if you start to sanction oil, what happens inevitably is you are reducing the supply so the cost of oil goes up. That benefits Iran; but for you, I and anyone else who is trying to buy new gas and oil, it is going to get more expensive. Considering the economic situation we have in Europe, Canada and the U.S., we may feel the bite more than Iran.
We tried oil sanctions with Iraq. We had to put in place oil for food programs, which was very administratively intensive, very difficult and messy to do. I am not sure we are prepared to do that again, at least not the UN.
Regarding whether we need more sanctions, specifically Canadian sanctions or generally, my concern is keeping that cost of defiance and cost of compliance. More sanctions tend to make the cost of compliance go up, which is not necessarily what we want because it does not endear Iran to eventually be coerced into stopping the proliferation activities.
Canada applying more sanctions is not going to do anything. Iran is not going to look to see what Canada does to decide that it is time to cry uncle. What it does do is perhaps make us feel good and we look like good allies to the U.S. and to the EU, but I think we have put in place the sanctions that we can to stop the proliferation exercises, which was the intent in the first place.
The Chair: We have run over time. I know there are many more questions and comments. We do accept more submissions — any reflections in any technical form you wish.
Thank you. You can see that you have generated a thoughtful discussion on this issue. I think after our two panels we have a lot to think about, and we have other witnesses to explore Canada's foreign policy vis-à-vis Iran further.
Thank you for generating this interest and for bringing us your thoughts.
Senator Downe, can we deal with it in steering?
Senator Downe: My concern was addressed by your comments after I raised them, chair.
The Chair: Thank you very much. Our next session will be with the department people to give us the state of the foreign policy initiatives within our government; that is good information. Then we will go to other witnesses as they become available.
(The committee adjourned.)