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THE STANDING SENATE COMMITTEE ON FOREIGN AFFAIRS AND INTERNATIONAL TRADE

EVIDENCE


OTTAWA, Thursday, November 29, 2018

The Standing Senate Committee on Foreign Affairs and International Trade, to which was referred Bill C-47, An Act to amend the Export and Import Permits Act and the Criminal Code (amendments permitting the accession to the Arms Trade Treaty and other amendments), met this day at 10:30 a.m. to give consideration to the bill.

Senator A. Raynell Andreychuk (Chair) in the chair.

[English]

The Chair: Honourable senators, I call the meeting of the Standing Senate Committee on Foreign Affairs and International Trade to order.

We are meeting today to continue our examination of Bill C-47, An Act to amend the Export and Import Permits Act and the Criminal Code (amendments permitting the accession to the Arms Trade Treaty and other amendments).

Before I turn to our witnesses, I will ask the senators to introduce themselves, starting on my left.

Senator Coyle: Hello. I’m Mary Coyle from Nova Scotia.

Senator Boehm: Peter Boehm, Ontario.

Senator Bovey: Patricia Bovey, Manitoba.

[Translation]

Senator Saint-Germain: Raymonde Saint-Germain from Quebec.

[English]

Senator Dean: Tony Dean, Ontario.

Senator Greene: Stephen Greene, Nova Scotia.

The Chair: I would like to welcome Senator Coyle as a permanent member of the committee. I received the notice. So welcome. I think your contribution and your experiences will be very helpful to us.

I’m Raynell Andreychuk from Saskatchewan, chair of the committee.

I’m going to introduce our witnesses in the order that I have them from our clerk: Mr. Thomas Woodley, President of the Canadians for Justice & Peace in the Middle East; Ms. Peggy Mason, President of Rideau Institute; Mr. Cesar Jaramillo, Executive Director of Project Ploughshares; Mr. Kenneth Epps, Policy Advisor on the Arms Trade Treaty at Project Ploughshares; Ms. Catherine Gribbin, Senior Legal Advisor, International Humanitarian Law at the Canadian Red Cross; and Mr. Alain Dondainaz, Head of Mission to Canada, International Committee of the Red Cross.

Welcome to the committee. I’m going to ask you to make short presentations so that we can leave time for questions from senators. I’m very pleased that you are all able to be here this morning. You are our final witnesses, and this will complete our testimony to the committee.

We have a senator who has just arrived just a touch late. We are not pointing you out, but we would like you to introduce yourself.

Senator Cordy: Welcome to the committee. I’m Jane Cordy, a senator from Nova Scotia.

The Chair: I’m going to start with Mr. Woodley, President of the Canadians for Justice & Peace in the Middle East.

Thomas Woodley, President, Canadians for Justice & Peace in the Middle East: Good morning. My name is Thomas Woodley and I am President of the Canadians for Justice & Peace in the Middle East, CJPME. I wish to thank the committee for this kind opportunity to speak to you. I look forward to a frank and honest discussion about Canada and its role in the sad realities of the international arms trade today.

CJPME is an organization whose mission it is to empower Canadians of all backgrounds to promote justice, development and peace in the Middle East. Because of the devastating role that arms have played in the Middle East over the years, my organization has become increasingly involved in attempts to limit the flow of arms to the Middle East.

At the end of 2015, we had high hopes that the newly elected government would sign on to the Arms Trade Treaty in a way which addressed the long-standing shortcomings of Canada’s existing arms export controls. Nevertheless, when Bill C-47 was introduced, it was immediately clear that many of the fundamental objectives of the ATT were being circumvented through the provisions of the bill, whether through omissions, through exclusions or through deferral to regulations.

For example, in their testimony before the house committee, government witnesses suggested that accession to the ATT would not require Canada to track and report arms sales to the U.S. Nevertheless, CJPME disagrees with this position, as does a plain English reading of the ATT. For example, Article 1 of the ATT insists on the highest possible common international standards in the sale of arms, yet Canada’s existing arrangement with the U.S. is neither a high standard nor a common standard.

Article 2 of the ATT also makes clear that its implementation applies to all arms exports of acceding nations. Exempting Canadian arms exports to the U.S. specifically contradicts this obligation.

Finally, Article 5 of the ATT calls for the treaty to be implemented in a consistent, objective and non-discriminatory manner. A separate less stringent process for Canadian arms exports to the U.S. is not the consistent standard demanded by the ATT.

Canada’s arrangement with the U.S. under the Defence Production Sharing Agreement clearly does not meet Canada’s obligations under the ATT.

In defence of the bill’s approach, government witnesses explain that Canada considers certain countries like the U.S. to be open policy countries, given that Canada considers the export control regimes of its NATO partners to be sufficiently stringent. They suggested that Canada and the U.S. “share objectives about preventing the acquisition of these arms by terrorist organized crime, or those who are engaged in armed conflict.”

There are two important problems with such justifications. First, whereas Canada and the U.S. may have common goals in terms of preventing arms from getting into the hands of certain groups, for instance, in 2018 with ISIS and the Taliban, the alignment is less clear with, for instance, the U.S.’s occasional tendency to arm non-state actors in countries with which it has policy disagreements or the U.S.’s occasional tendency to arm authoritarian regimes where U.S. arms are ultimately used in serious human rights abuses.

Second, as is abundantly clear with the Trump administration, not all U.S. governments behave similarly, and Canada cannot blindly bank on the fact that every U.S. administration will maintain strong export controls. As we speak, arms control groups in the U.S. note that the Trump administration is pushing hard to make “sweeping changes in U.S. conventional arms export policies in order to sell more weapons, more quickly, and typically with less transparency and oversight”, all simply to boost the American economy.

Questioned whether he would limit the flow of arms to Saudi Arabia in light of the Khashoggi murder, Trump’s response was that as long as the Saudis were spending billions on U.S. arms, he wasn’t going to make an issue of the murder of a U.S.-resident journalist.

As such, my organization calls for Bill C-47 to be amended to make sure that Canadian controls and reporting on arms sales to the U.S. under the ATT be handled no differently than such arms sales to other countries.

I suggest that committee members ask themselves whether Canada really is the human rights paragon that many Canadians believe it to be. A coalition led by Saudi Arabia is conducting a war in Yemen that has become possibly the world’s worst humanitarian crisis, with more than 22 million people — three quarters of the population — in did desperate need of aid and protection. According to the UN Human Rights office, Saudi coalition air strikes are the leading cause of child casualties. About 3,000 of the civilian deaths were reportedly caused by the Saudi-led coalition forces.

Despite being aware of all of this for years, and despite the fact there is compelling evidence that Canada-made combat vehicles are being used in Yemen, the Canadian government initiated, signed, approved and still stands by an arms sale of $15 billion in armoured vehicles to the Saudis. Under Canada’s existing export control regime, this deal should never have been approved; yet against all logic, and against public opinion, it was.

Government witness, Richard Arbeiter, claimed last year before the House Committee on Foreign Affairs that “Canada has been on the forefront of promoting export controls as a means to reduce the risks posed by elicit unregulated trade.” Government witness, Wendy Gilmour, claimed that “accession to the ATT will cement our leadership role in the global effort to universalize best practices for effective export controls.”

In light of the Saudi arms deal, these claims and boasts from government witnesses don’t bear out. Canada needs the rigour of full and complete accession to the ATT to ensure that such deals are never inked in the future.

My verbal comments cannot summarize all of our recommended amendments to this bill. As such, I would refer you to the document issued by a group of Canadian NGOs, including CJPME, entitled Bill C-47 and Canadian Accession to the Arms Trade Treaty: Civil Society Concerns and Recommendations. We have several proposed amendments relating to: reporting, the scope and exclusions under Bill C-47, parliamentary oversight and the assessment of risk.

Through rigorous accession to the ATT, Canada has the opportunity to prevent unnecessary misery and suffering around the world as a result of unwise or illicit arms sales. My organization and I exhort this committee to propose the amendments necessary to ensure that Canada’s accession to the ATT adheres to both the letter and the spirit of the treaty.

Thank you for your attention.

The Chair: Thank you, Mr. Woodley.

We’ll turn to Peggy Mason. Please go ahead.

Peggy Mason, President, Rideau Institute: Thank you very much. I do apologize to members of the committee that you don’t have my written text in front of you. The stenographers and interpreters do have it, and hopefully you will get it later on when it’s been translated.

I want to briefly make a comment on what I think is the most significant advance in Bill C-47. Then I want to briefly touch on a couple of specific amendments and how they might be done.

In my introduction, I want to focus on hard legal limits on the minister’s discretion. There has been much discussion in these hearings of the balancing of commercial interests and broader Canadian values, but it is important to understand that international law permits no such trade-offs when it comes to our fundamental legal obligations not to commit or to facilitate serious violations of international, humanitarian or human rights law.

The Arms Trade Treaty catalogues these obligations in Articles 6 and 7. Article 6 contains an absolute prohibition if there is knowledge at the time of the authorization that the arms or items would be used in the commission of genocide, crimes against humanity or grave breaches of the Geneva Conventions of 1949. I’m sure that our Red Cross and international committee friends here are going to say more on that.

Article 7 of the Arms Trade Treaty requires an assessment of the risk that the transferred arms would undermine peace and security or could be used to commit or facilitate serious violations of international, humanitarian or human rights law.

If the assessment determines there is any overriding risk of any of these negative consequences that cannot be mitigated, then the exporting party “shall not authorize the export.” In other words, there is no discretion to approve the transfer for other reasons if the ATT Article 6 or 7 negative criteria are met.

It is therefore with great satisfaction that we commend the government for their amendment of Bill C-47 at the committee stage in the House of Commons — and, of course, you heard the minister discussing this yesterday — to include a new Article 7 that provides that the minister “shall not issue a permit” if there is a “substantial risk” that the export would result in the commission or facilitation of serious violations of international, humanitarian or human rights law, and that substantial risk cannot be mitigated.

In our view, this new provision imposes hard legal limits on the hitherto unduly broad ministerial discretion; is firmly in line with Canada’s existing legal obligations under international, humanitarian and human rights law; and will allow the courts to exercise an appropriate judicial oversight role.

It therefore goes some way to allowing Canada to re-establish itself as a leader in this area.

To do that, however, there are a couple more amendments the bill requires. Forgive me for getting a little bit technical. I’ll go into one of them in a little bit of detail, because there’s been a lot of argument about legislative rules preventing amendments that might otherwise make sense.

I want to talk about how we can close the glaring gap between what the ATT requires and what Bill C-47 provides. I’m referring to the exemption of most of Canada’s exports of military goods and technology to the United States, despite the clear treaty requirement that all conventional weapons to all destinations be included.

The government has argued that ending this exemption would unduly hamper defence trade between Canada and the U.S., but you heard testimony from Martin Butcher, an expert on defence trade within the European Union, that there are very workable “light-touch mechanisms” that enable full treaty compliance, on the one hand, and deep defence trade integration on the other. Note also that the Government of Canada would not be starting from scratch because there is already a mechanism in place under the Export and Import Permits Act for its application to a small category of U.S.-destined military exports, where export permits are already required. In other words, there already is a mechanism in place in the Export and Import Permits Act for that small category of U.S.-destined weapons that now require export permits.

I’ll speak more on that in a moment.

You have also perhaps heard, or will hear from the government when you get to clause by clause, that the legislative rule, the parent act rule, only allows amendments to those provisions of the Export and Import Permits Act that has already been opened up by the government through Bill C-47. So you can only amend provisions of the Export and Import Permits Act that the government itself is already proposing to amend. Therefore, it has been argued, and was argued at the House stage, that the government, even if it wanted to, cannot amend Bill C-47 to include all military exports to the U.S.

With the greatest respect to that legal argument — and, for my sins, I’m a lawyer, too — it seems to me that the inclusion of all military exports to the U.S.A. can indeed be accomplished through a further amendment to a provision of the Export and Import Permits Act that has already been opened up by Bill C-47.

Consider how the Export and Import Permits Act currently handles those U.S.-destined military exports where a permit is required. To explain this, I turn to a most useful document, navigating the highly complicated EIPA, which is known as the Export Controls Handbook, which is what the exporters all use to figure out what’s going on and how to comply.

Here’s what it says regarding exporters under section D.5, “Exports to the United States”:

Export permits are not required for many of the goods and technology listed in the Export Control List if they are destined to a consignee in the United States.

And here’s’ the important part:

Items that do require an export permit to the United States are defined on the Export Control List (there is a statement that the control applies to “All Destinations”).

In other words, all the goods on the Export Control List that have the designation “All Destinations” next to them require permits for all destinations, including the United States.

Thus, a simple amendment to the Export Control List to specify “All Destinations” for all of Canada’s military exports would thereby include all U.S.-destined exports.

But what about the parent act rule? Can the Export Control List be amended by Bill C-47? In other words, is there already a proposed amendment relating to the Export Control List? There is.

I go through and I include in my comment that proposed section 6 of Bill C-47 proposes an amendment to the Export Control List, which means that you, the committee, can propose a further amendment to the Export Control List to specify all destinations for all of Canada’s military exports. I suggest to the committee, respectfully, that this glaring loophole can be closed rather easily following a mechanism that exporters are already familiar with in the Export and Import Permits Act.

Time is short, so I will indicate and welcome questions, that I have a specific proposal for narrowing the exemption power, because we’re concerned — and we noted that in our top concerns — that under the regulations there is a power to grant exemptions to the application of the act. We would like to see that narrowed to not include exemptions to the new Article 7, substantial risk criteria. I comment on how we can do that, the amendment. Again, it’s another amendment to a paragraph that’s already been opened by the government itself in Bill C-47.

I welcome questions on proposing an amendment to ensure that Crown agencies, Canadian Commercial Corporation, for example, that all departments and agencies act in full compliance with the Export and Import Permits Act. I welcomed the comments by the minister yesterday when she said that in her view it was clear that all departments and agencies would have to act in full compliance with the Export and Import Permits Act, as amended by Bill C-47. We welcome that assurance, but we would like to see it in writing, shall we say, in the act.

Finally, I have a proposal with respect to promoting transparency, one of the key goals of the act, and preventing the abuse of commercial confidentiality. I welcome questions on that, because that has been something that has really frustrated all civil society organizations and Canadians who have been trying to follow and understand the government’s position with respect to the continued export of weapons and parts, components, and servicing of equipment to Saudi Arabia for use in Yemen. The secrecy surrounding that contract I would suggest goes so far actually as to offend public policy. If it was ever argued in court, that’s what I would be arguing.

I think we want to make it clear — and I hope the committee would consider how to make it clear — that commercial confidentiality should be kept within the narrowest bounds in order to allow democratic accountability and oversight.

I thank the committee very much for their attention.

The Chair: Thank you.

Now we will turn to Mr. Jaramillo and Mr. Epps from Project Ploughshares.

Cesar Jaramillo, Executive Director, Project Ploughshares:

Thank you very much for the kind invitation to address this committee.

For decades, efforts to better regulate illicit and irresponsible arms exports and to strengthen arms control regulations have been a key focus of the activities of Project Ploughshares. We were strong advocates of the landmark international Arms Trade Treaty long before its adoption and have participated in every ATT Conference of States Parties as civil society representatives. We also keep a comprehensive database of Canadian military exports and have done so for more than 30 years.

We were greatly encouraged by Canada’s decision to join the Arms Trade Treaty after a highly conspicuous absence and have engaged in a constructive spirit with colleagues at Global Affairs Canada on this important file. Our expert assessment, however, is that the proposed legislation, as currently considered by this committee, would not enable Canada to fully meet the requirements and expectations of the Arms Trade Treaty.

We welcome a crucial amendment made to the bill that responds to one of the key concerns we and other civil society stakeholders expressed to the Standing House Committee on Foreign Affairs, concerning the inclusion of a substantial risk clause.

I will focus my remarks today on what is perhaps the major remaining shortcoming of the proposed legislation. As Bill C-47 stands, it does not address the exemptions that have long been afforded to Canadian military exports to the United States.

Under current practice, Canadian military exports to the U.S. are exempted from licensing and reporting requirements applicable to every other destination. Though related, these are two separate, major exemptions, one concerning licensing, the other concerning reporting. These exemptions are plainly incompatible with the letter and the spirit of the Arms Trade Treaty.

We are aware that the position of Global Affairs Canada is that the exemptions granted to U.S.-bound exports are consistent with the ATT. For several reasons, we must express our disagreement with this view.

As my colleagues have said, the ATT calls for the highest possible common international standards. There are two interrelated and equally important elements in this requirement: Highest possible standards and common international standards. Yet, the arrangement with the U.S. neither constitutes the highest possible standard, nor is it consistent with the standards applied to others.

Article 2 is explicit about its applicability to all military exports covered under the treaty. Article 5 calls for the ATT to be implemented in a consistent, objective, and non-discriminatory manner.

We find it very hard to see how “all” could be interpreted to mean anything other than the totality of Canadian exports, including those destined for the United States. Further, the treatment afforded to the U.S. is obviously out of line with the expectations of consistency, objectivity, and non-discrimination specified in Article 5.

Such exemptions would be incompatible with ATT obligations regardless of the recipient. In the case of the United States, they are especially problematic. The United States is the largest exporter of weapons and military equipment in the world. Canadian components can be incorporated into systems in the United States and then exported to third parties without requiring further authorization from Canada.

The United States is also, by far, the largest recipient of Canadian military goods. Despite the lack of transparency in this regard, Project Ploughshares estimates that Canadian exports of military goods to the U.S. are worth as much as $2 billion annually, and this is typically more than half of total Canadian military exports. In the end, with Bill C-47 in its current form, the majority of Canadian military exports will neither be reported nor subject to export permit requirements, even after Canada joins the ATT.

Critically, the United States is not an ATT state party and is not expected to become one in the near future. Canada, on the other hand, will be a state party, and the expectation is that all its arms export regulations will be entirely consistent with the provisions of the treaty.

The notion that Canada’s arrangement with the U.S. is consistent with the treaty simply does not hold water. If such an arrangement were acceptable, imagine that every ATT state party exempted their largest recipient of military exports from both reporting and licensing obligations, even when the recipient is not an ATT state party.

Clearly, this would defeat the purpose and aspiration of the treaty to have the highest possible universal standards. The whole regime upon which the treaty is founded would crumble under the weight of its ineffectiveness.

Distinguished committee members, I would be remiss if I did not take this opportunity to highlight what I consider to be the most egregious challenge to the otherwise welcome rhetoric we have heard from Global Affairs Canada about the commitment to greater rigour and transparency around Canadian arms exports. I’m talking about continued exports to Saudi Arabia. The arguments given thus far for arming Saudi Arabia have all been morally and legally unconvincing. Ottawa now claims that stopping arms shipments may result in hefty financial penalties.

How can it be that the Government of Canada’s sovereign mandate, prerogative, and obligation to faithfully implement the law, including cancellations of export permits, as the Minister of Foreign Affairs confirmed before this committee two days ago, are somehow subordinated to the language of a commercial contract and considerations of financial expediency?

The government’s explicit recognition of its sovereign prerogative to freeze arms exports to Saudi Arabia, while not actually exercising this prerogative, only gives the illusion of firmness. As the debate unfolds, Canadian arms exports continue to be sent to Saudi Arabia, which is also the chief instigator of the devastating humanitarian crisis in Yemen, now on the brink of the worst famine in a century.

Our government speaks loudly and proudly of Canada as a beacon of human and women’s rights. It touts its commitment to more stringent and transparent arms control regulations at every opportunity. It says it will be firm when human rights violations occur. It declares feminism and the pursuit of a rules-based international order to be key pillars of Canada’s engagement with the world. But as Canada continues arming one of the worst human and womens’ rights violators on the planet, the gap between rhetoric and reality is becoming wider.

In this context, we encourage all stakeholders, including members of this committee, to seek strong, effective legislation for Canadian arms exports that is truly in line with modern expectations of rigour, accountability and transparency in the global arms trade, including full compliance with the obligations of the Arms Trade Treaty. Thank you.

Kenneth Epps, Policy Advisor, Arms Trade Treaty, Project Ploughshares: My thanks to the Senate committee for the invitation to appear here today.

Bill C-47 provides a rare opportunity to review and strengthen Canadian arms export controls. It is our view that this opportunity must be seized upon to ensure Canadian controls meet all the obligations of the Arms Trade Treaty.

More than this, we believe that Bill C-47 provides the occasion for Canada to regain the leadership it once demonstrated in the tracking and control of the international arms trade.

Canadian control of the export of military goods has not changed significantly since 1986, at the height of the Cold War. The sole study by Parliament of Canada’s arms exports was undertaken a few years later, in 1992, by a subcommittee of the House of Commons Standing Committee on External Affairs and International Trade.

The study was motivated, in part, by the first sale by Canada of more than 1,100 armoured vehicles to Saudi Arabia. The subcommittee offered 20 recommendations in its final report, including a recommendation that further review of the military export control system be undertaken by a parliamentary committee after five years.

Needless to say, this recommendation, along with most others, was ignored by the existing and subsequent governments. As a result, the parliamentary committee meetings associated with the passage of Bill C-47 have provided the most detailed legislative attention to Canada’s arms export control system in more than a quarter century.

My intention here is to underline why it is important to get Bill C-47 right. Based on the past record, failure to fully reflect ATT obligations in Canadian law now could mean that omissions or failings in Canada’s implementation of the treaty would take years, or even decades, to correct.

During this period, Canada would not only fail to meet the object of the treaty to establish the highest possible common standards but, also, opponents of the ATT would convincingly argue that Canada was a state party of convenience rather than commitment.

Among the failings of Bill C-47, the government’s plan to implement many ATT obligations in the form of regulations is particularly worrisome. This is because little to nothing is known about the number, nature or scope of these regulations. It is impossible to determine the extent to which the regulations will meet ATT obligations not addressed by Bill C-47.

We know only that the government plans to formulate the regulations following Royal Assent of the bill. Whether the government will provide opportunity for meaningful public or parliamentary scrutiny in advance of implementation remains unknown.

As only one example of this problem, the ATT obligates states parties to actively tackle the diversion of weapons transfers. Diversion to unauthorized users for unauthorized end purposes is a universal concern, important enough to be an object of the treaty and to rate its own article, Article 11.

Diversion was also the main theme of the 2018 Conference of States Parties to the ATT. Yet the two paragraphs in Canada’s Export and Import Permits Act referring to diversion do not address ATT provisions, nor does Bill C-47 contain related amendments. Thus it can only be assumed that Canada will meet its treaty obligations related to diversion through regulations. However, the government has not declared if, how or when this will occur.

It appears that other important treaty obligations await unspecified regulations, yet to fulfill its purpose to reduce human suffering, the ATT deserves comprehensive implementation from all states parties, including Canada. To this end, we propose that Parliament provide oversight in a process to ensure that ATT-related regulations are suited to the obligations of the treaty. In particular, we recommend the creation of a subcommittee of the House of Commons Standing Committee on Foreign Affairs and International Development charged with a review of arms export regulations.

Canada has demonstrated important leadership in the tracking and control of weapons exports in the past. It was one of the first arms exporting states to publish annual reports on the export of military goods. It was an early advocate of the UN Register of Conventional Arms, another important transparency mechanism. Canada’s Automatic Firearms Country Control List is unique in conventional arms control through its identification of eligible weapons recipients.

All these initiatives are more than 25 years old, however, and the standards for conventional weapons controls, including those the ATT, have advanced and widened beyond those of Canada. To retrieve its leadership role, Canada will need to make an effort.

Bill C-47 thus represents an opportunity for Canada to not only join the welcome ATT but to set an example for others to follow. It will not be able to do this without amendment of the existing bill.

Thank you.

Catherine Gribbin, Senior Legal Advisor, International Humanitarian Law, Canadian Red Cross: Thank you so much for the invitation this morning. This is a joint submission between the Canadian Red Cross and the International Committee of the Red Cross, which I’ll deliver.

As my fellow colleagues at this table have demonstrated, the ATT is an arms treaty with a humanitarian focus. Due to the devastating impact of conventional arms around the world, the Red Cross and Red Crescent Movement is committed to working with governments to improve the regulation of arms trade in order to reduce the harm associated with and caused by these weapons.

While we congratulate the government, as well, on taking steps to accede to the ATT, we do have concerns.

With a humanitarian mandate to protect the lives and dignity of persons affected by armed conflict and natural disasters, both the ICRC and the CRC have an interest in working with the Government of Canada to ensure respect for international humanitarian law.

International Humanitarian Law, IHL, is a body of law that seeks to protect those who are not and no longer participating in hostilities, as well as to restrict the means and methods of warfare. The regulation of conventional arms transfers around the world can increase the probability that these weapons end up only with those who will use them in accordance with IHL and with international human rights law, which can have a great impact on the protection of civilians. Our submission today outlines this series of issues we have with the bill. They’re not exhaustive but are the points that we wish to raise for this moment.

Article 11(2) of the ATT requires an exporting state party to assess the risk of diversion of the export. The risk of diversion, as was mentioned earlier, is not mentioned in proposed subsection 7.3(1) of the bill. We recommend that the risk of diversion be mentioned in the bill’s list of risks as Article 11(2) of the ATT requires that diversion to be taken into account.

Our second concern relates to the implementation of Article 6(3) of the treaty. The proposed legislation does not reflect this prohibition listed in Article 6 and this prohibition prohibits the transfer of conventional arms when a state party “has knowledge at the time of authorization that the arms would be used in the commission of genocide, crimes against humanity, grave breaches,” attacks against civilians and other war crimes.

In order to comply with the treaty, text should be introduced into the proposed legislation that reflects this obligation.

Article 7(1) of the ATT, which is the basis of 7.3(1) of the bill, only comes into play if the export is not permitted under Article 6.

Our third concern is related to risk assessment in proposed section 7.4 of the bill. Article 7(3) of the ATT prohibits export when there is an overriding risk that the negative consequences listed could be committed. In Bill C-47, proposed section 7.4 uses the language of “would result in,” which in our opinion is an unnecessarily higher threshold. Therefore, we recommend that the bill adopt the language of “could,” as per the treaty.

Our fourth concern is related to reassessments. Article 7(7) of the ATT requires that:

If, after an authorization has been granted, an exporting State Party becomes aware of new relevant information, it is encouraged to reassess the authorization . . . .

Neither the Export and Import Permits Act nor Bill C-47 includes a revocation of the permit if conditions in the importing country change such that the exporting arms to that country would create a substantial risk of the negative consequences.

In orders to ensure that the legislation reflects the object and purpose of the ATT, an option to revoke an export permit based on these grounds is needed. A subsection could be added in to reflect this treaty language found in Article 7(7).

Our final concern is related as well to those military exports to the United States.

Article 5(1) of the ATT states that states parties must implement the treaty in a consistent, objective and non-discriminatory manner. Again, it is a legal obligation within the treaty. The treaty does not contemplate or allow for exceptions to these obligations. What is currently being proposed is not in line with these treaty obligations nor do they respect the treaty’s object and purpose of transparency. Even if the U.S. is considered to have a robust arms export system, Canada cannot rely on the U.S. to undertake the analysis that Canada is bound to do as a State Party to the ATT. In order to meet our obligations to the ATT, there must be no exemptions.

In conclusion, one of the three purposes of the ATT is to reduce human suffering, which we hope effective incorporation of the treaty into law, policy and practice will do.

We’re very hopeful that these suggestions will be taken into consideration, and we look forward to ongoing dialogue and any further questions. Thank you very much.

The Chair: Thank you. That concludes the presentations for the two?

Ms. Gribbin: It does. Thank you very much.

The Chair: I’m going to turn to Senator Saint-Germain for the first question.

[Translation]

Senator Saint-Germain: Thank you very much for your presentations and briefs that we received. This is very interesting.

I fully understand both your desire for transparency and exemplarity in protecting the victims of a certain illicit arms trade.

I am particularly interested in two of your recommendations in terms of pragmatism. In considering this bill, there is a need to balance the issues related to the protection of persons, such as the lawful trafficking of weapons that will be used to protect persons and to prevent the illicit trafficking of weapons that will be used to commit war crimes and violate international humanitarian law.

On the other hand, there are the economic issues that are still important. When you talk about the transfer of parts and components to the United States, you want parts and components to be considered weapons. We have heard from industry representatives, and I understand that, in the reality of the integration of the Canada-U.S. weapons industry, it is something that is impossible with respect to components, because we never know if a particular component will be used to produce a particular type of weapon and, ultimately, to whom the weapons will eventually be sold. This is a very important issue. In your opinion, how can this recommendation be implemented in practice?

Ms. Mason: Thank you very much for the question. If I may, I will answer in English.

Senator Saint-Germain: Of course.

[English]

Ms. Mason: One of the interesting things that isn’t often realized when we talk about the United States is that they track everything. Canada is required, for U.S. origin goods, to similarly closely control through the export permit process. We may disagree with the U.S. on decisions they reach with respect to where the component or the full system is going, but the problem with the U.S. is not that they cannot and do not track very closely each of these export items. There is a full robust system that works and clearly does not impede U.S. trade. So I don’t think there is a technical problem here. The Canadian industry, of course, will resist greater demands than before, but they will be facing the same demands that the U.S. industry already faces.

I don’t think there is really a practical problem here with how to do this.

Perhaps my friend Kenneth Epps has something to add on this.

Mr. Epps: Not at the moment.

[Translation]

Senator Saint-Germain: This is contrary to what industry representatives have told us, but I will go further with this question. If I understand correctly, you would like Canada to take the decision to limit certain exports, namely the export of components and weapons to the United States on the basis of the presumption that the United States will eventually export these weapons to countries that will use them for purposes contrary to the treaty. Is that the meaning of your recommendation?

[English]

Ms. Mason: Yes. Thank you very much. You have hit the nail on the head. The problem is if we are a sovereign country, we need to make our own decisions on this. Therefore, we have to be sure that, through this non-regulation of Canadian-made military equipment to the U.S., we don’t end up having U.S. judgments made. Of course, the ATT requires that. It specifically requires that we control all of our exports, including parts and components. It isn’t good enough to say the U.S. is doing it. We’ll just leave it to them. It flouts Canada’s sovereign obligations to ensure that our exports of military equipment to all destinations conform to the obligations in the Arms Trade Treaty and with Canadian legal requirements.

Mr. Woodley: Your point about limiting arms to the U.S. is sort of the second step. The first step is to include it in the reporting regime. Let’s be clear on that. What we’re recommending is to expand reporting to include exports to the U.S. If, at some point in the future, we determine that the U.S. is doing things that we’re uncomfortable with in terms of the Canadian components, that’s a decision to take at that time by the government at that time. Let’s be clear that we’re just talking about reporting at this point.

Ms. Mason: Perhaps I should better clarify. We are also talking about knowing what’s going on and controlling. In other words, the limiting is a further stage. We don’t know; we need the information. We’re talking about requiring the export permits on all equipment and all destinations, so we know what is exactly going where and reporting on it as well. Then, hopefully, there would be parliamentary oversight and some review of what that information is telling us. Are there problems with re-export to other destinations? Again, when it’s the United States and we are importing U.S. equipment for re-export, they require that we meet their standards on re-export. We’re really talking about reciprocity between Canada and the U.S. here. Thank you.

Senator Cordy: It’s almost like you all got together with your presentations because you presented a uniform message. Thank you for that.

I welcome particularly Catherine Gribbin, who is from Dartmouth and went to school with my daughter.

Ms. Gribbin: It’s a pleasure to see you.

Senator Cordy: I want to talk about the risk of diversion which all of you mentioned. It should be taken into account in Canada that if we’re going to export to the United States — because that’s the one we’re looking at — that we should be aware of whether or not it’s being sent outside the United States and to where and to whom.

Are you suggesting an amendment, or are you suggesting that be put in regulations?

Mr. Epps: I think Catherine was suggesting a particular amendment, which I think we would agree with, but as things stand now, our understanding is that diversion is certainly not covered by Bill C-47, so it would have to be met through regulations, about which we know nothing.

Mr. Jaramillo: Thank you, senator. Regarding the possibility of diversion — or even the possibility raised earlier about the U.S. re-exporting to a third party to whom Canada would not otherwise authorize our components to go, which is a realistic possibility and which has happened and there are precedents of that happening — these are manifestations of what might happen, but the ultimate reason is compliance with the Arms Trade Treaty. We feel this is not a matter of opinion or a matter of interpretation.

The only source you will hear saying it is consistent with the Arms Trade Treaty is Global Affairs Canada. The primary point of reference for the counterargument is the treaty itself and the lack of ambiguity and care that was given when it was crafted to include words such as “all,” “consistent,” “the totality of,” “non-discrimination,” et cetera, precisely to avoid these situations where you have one of exemptions which, in our case, happens to be to a non-signatory states party which also receives more than half of our military exports.

Ms. Mason: I also have to declare I’m from Nova Scotia. I wanted to add, of course, we would like to see very good language addressing the risk of diversion. The current Export and Import Permits Act recognizes that is a serious problem and prohibits it, and there are penalties for that, but that needs to be updated.

Our problem is that we are faced with this legislative rule that if the government itself has not opened up that section for amendment, then we’re prohibited from proposing that. That is why I spent so much time finding areas that had been opened up where it’s easy to make amendments.

It seems to me that, at a minimum, the committee could respectfully ask the government for a formal commitment that, in all of the follow-up that must take place with respect to the implementation of Bill C-47, they undertake parallel measures to ensure that these serious non-compliance aspects with the ATT are addressed.

Ms. Gribbin: The answer is twofold: yes and yes. One, it’s a possibility to add it into the list of risks. That’s one possibility that has been opened for review and there is a possibility of listing it in 7.

Then, of course, it will be addressed in further detail in the regulations. It’s the nature of the regulations. We would be happy to see it listed as an additional risk, and then, of course, further buttressed with additional steps as my colleagues have mentioned, or in regulations.

Senator Cordy: You have all spoken about the exemption for the United States. We also heard from business because we’re trying to hear from every side before we make decisions on this. When we heard from Pratt and Whitney, their comment was that an open border is essential for their business and that they have 13,000 employees worldwide and 6,000 in Canada.

I think you all presented an excellent argument why there should not be an exemption, but from our perspective, what do we say to industry?

Ms. Gribbin: I am happy to start this one. When it comes to the ATT and the data and information that went into negotiating it, it was clear that the presence of weapons in particular places has an impact on the protection of the civilian population. The negotiations, which Cesar can speak to in more detail, highlighted the fact that in decisions, when it comes to export, we’re really focusing within the ATT implementation on looking at the impact and Articles 6 and 7 as regards the steps that are taken in order to prevent violations of IHL.

So if you look at signing onto the ATT, it results in Canada having several legal obligations they have to consider and that obliges Canada, in order to consider the use of the prohibition if the arms would be used, and then the prohibition on export in Article 7 if they could be used.

In the debate and discussion between the two issues, if you’re looking at what the bill is meant to be doing regarding amending and in order to be in compliance with the ATT, these are the obligations we have to look at and consider.

Mr. Jaramillo: That is an excellent question, and concerns of industry, of course, are an important part of this conversation.

The first thing I would say is that we need to collectively avoid the false dichotomy that it is either trade with the U.S. or cumbersome and very troubling regulations that are going to bog it down completely. That is not the case.

In fact, our position is that trade with the U.S. is entirely compatible with compliance. There are mechanisms, some of which will expedite and allow us to comply with the ATT and continue to have that trade with the U.S., because no one denies the special and long-lasting relationship and the size of the border. Those things are taken as a given.

We do not think compliance means bogging down trade with the U.S. But as Catherine said, if you join a treaty, there is a certain commitment to live up to the expectation of this treaty.

Finally, regarding arms exports, we are not talking about wheat or barley or medical supplies. Arms exports are a special category and with good reason. They are a very sensitive category, not just for Canada, but everywhere. I think there are certain expectations that are not unreasonable when you have such a sensitive category of experts.

Mr. Woodley: These agreements that currently govern U.S.-Canada trade have been established for decades, most of them under the Cold War era. A lot has changed since that time. I’m not necessarily saying everything has to be reopened for Bill C-47, but we do need to rethink what has changed since the 1950s, 1960s and 1970s when come of these agreements were established. Does it warrant us taking a second look at these agreements with the United States and, maybe, rethinking that? Maybe we need to look at this a bit more carefully.

Ms. Mason: I hope I’m not belabouring the point, but regarding the open border and U.S. origin goods, the U.S. requires permits to be applied. We’re talking about reciprocity and the Canadian industry following that, as well, in order to comply with the international standards set out in the Arms Trade Treaty.

The Chair: There is concern about diversions through the United States. Obviously, your concerns come not just from reading the legal text. Lawyers can always find difficulties, as we know. Peggy and I have worked together a long time ago.

Are there actual cases you can point to of recent vintage where these goods finally found their place outside of the United States and that Canada may or may not have known about them?

Mr. Epps: The problem in this area, of course, is there’s very little transparency. In fact, diversion, of course, is an illegal activity for the most part, so by its very nature it is hard to track.

We do know of one relatively recent instance of Pratt & Whitney Canada, coincidentally, being fined US$75 million by the U.S. State Department for a diversion situation. Basically they conspired to send aero engines to China and got export permits because they were dual use and the claim was they were being used for civilian purposes. Sorry, it’s aero engine software rather than the engines themselves. The original export permit granted by the Canadian government was for the software to be used in a commercial context. In the end, they were used for military helicopters being built by China.

The additional interesting aspect of that case is it was the U.S. government that fined the Canadian company, not the Canadian government, because the Canadian government did not pursue that particular situation and did not go after any kind of legal avenues in that case.

The current situation is such that Canada is so dependent on U.S. decisions around arms exports, even in cases of diversion or known diversion, it’s also dependent on the U.S. government acting, even though it’s a Canadian company that’s involved.

Ms. Gribbin: If I may, I think it’s also important to distinguish the discussion around export versus diversion. Just to reiterate, when it comes to exports, there are obligations — again coming back to the object and purpose of the treaty — that have to be consistent, objective and non-discriminatory. That’s a separate legal obligation from the obligations associated with diversion.

I think it’s also important, when we’re looking at edits, suggestions and amendments to the bill that we’re looking at the obligations with Canada as acceding to the treaty, that they have to meet those objectives. That’s one obligation. Then there are obligations around diversion. I think it’s important, when we look at possible amendments to the bill, to separate those as well.

I think oftentimes they can be mixed together, but I think it would be important, when we’re looking at possible changes to the bill, that there are actually ways in which to separate them and then capture the legal differences and obligations that flow from the treaty. I just wanted to make that clarification, if I may. Thank you.

The Chair: Thank you. We’ve come to the end of our time. Thank you for the presentations. On behalf of the committee here, I think Senator Cordy indicated that obviously you as groups work together and individually, and we thank you for bringing the message of your position to us on Bill C-47 and the Arms Trade Treaty.

Senators, just this morning we received the CCC report. I have not read it. It has just been filed. You will have received it electronically, but we just received the testimony this morning. We’re going to try and deal with the bill expeditiously, but we will be adjourning for clause-by-clause to next week. You will receive a notice about the timing. We want to move expeditiously, and we will have the weekend to reflect.

(The committee adjourned.)