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Proceedings of the Standing Senate Committee on
National Security and Defence

Issue 11 - Evidence

OTTAWA, Monday, February 24, 2003

The Standing Senate Committee on National Security and Defence met this day at 5:10 p.m. to examine and report on the need for a national security policy for Canada.

Senator Colin Kenny (Chairman) in the Chair.


The Chairman: This evening the committee continues its briefings on Canada-United States relations in preparation for its trip to Washington to meet with members of Congress and administration officials during the last week in March.

My name is Colin Kenny. I am a senator from Ontario and serve as chair of the committee.

On my immediate right is the deputy chair, the distinguished senator from Nova Scotia, Senator Michael Forrestall. He has served the constituents of Dartmouth for the past 37 years, first as their member of the House of Commons and then as their senator.

Throughout his parliamentary career, he has followed defence matters, serving on various defence-related parliamentary committees, including the 1993 Special Joint Committee on the Future of the Canadian Forces. Senator Forrestall has also served as deputy chair of the Standing Senate Committee on Transport and Communications and as chair of the Special Senate Committee on Transportation Safety and Security.

On my far right is Senator Tommy Banks from Alberta. He is well known to Canadians as one of our most accomplished and versatile entertainers. His television variety program won a Gemini award. As a musician he has received a Juno Award and a Grand Prix du Disque-Canada. He has served as conductor or music director for many international events, such as the Commonwealth Games, the opening ceremonies for Expo 86, and the fifteenth Winter Olympic Games. He continues to work tirelessly on behalf of Canadian performing artists and recently helped to obtain funding for the Calgary Philharmonic. Senator Banks is chair of the Standing Senate Committee on Energy, Environment and Natural Resources. Currently this committee is studying nuclear safety and control.

Beside him is Senator Norm Atkins from Ontario. He came to the Senate in 1986 with a strong background in the field of communications. He also served as adviser to former Premier Davis of Ontario. He studied economics at Acadia University and recently returned there to accept an honorary doctorate in civil law. Senator Atkins has served on many standing committees, including Transport and Communication, Foreign Affairs, and Social Affairs, Science and Technology. He was active in support of Canadian merchant navy veterans and is a member of our Subcommittee on Veterans Affairs. Currently he serves as chair of the Senate Conservative Caucus. He is also an active member of the Standing Committee on Internal Economy, Budgets and Administration.

Beside him is Senator Cordy from Nova Scotia. She is an accomplished educator, who has an extensive record of community involvement. She has been a board member of Phoenix House, a member of the judging committee for the Dartmouth Book Awards, and a member of the strategic planning committee of Colby Village Elementary School. Senator Cordy has served on a number of standing committees, including Aboriginal Affairs, Agriculture and Forestry, Banking, Trade and Commerce, and Energy, the Environment and Natural Resources. In addition to serving on our committee, she is a member of the Standing Senate Committee on Social Affairs, Science and Technology that recently released a landmark report on health care and will now study mental health.

On the opposite side of the table on my far left is Senator David Smith from Ontario. He is a lawyer by training. He is a distinguished practitioner in municipal, administrative and regulatory law. In the 1970s he was elected as councillor and deputy mayor of Toronto. He was a member of the House of Commons from 1980-84 and was Minister of State for Small Business and Tourism in Prime Minister Trudeau's last cabinet and in Prime Minister's Turner's cabinet. In the Senate, he also serves on the Standing Senate Committee on Legal and Constitutional Affairs and on the Standing Committee on Rules, Procedures and the Rights of Parliament.

Finally, we have Senator Michael Meighen from Ontario, a successful lawyer and businessman involved in a wide range of charitable and educational institutions, such as the Salvation Army, the Stratford Festival, and the Prostate Cancer Research Foundation. He is the Chancellor of the University of King's College in Halifax. Senator Meighen has a strong background in defence matters, having served on the 1993 Special Joint Committee on the Future of the Canadian Forces. He is the chair of our Subcommittee on Veterans Affairs. Currently, this subcommittee is looking at benefits to veterans, especially for injuries received during active service. Senator Meighen is also a member of the Standing Senate Committee on Banking, Trade and Commerce, which is examining ways to improve corporate governance.

Our committee is the first permanent Senate committee with a mandate to examine subjects of security and defence.

Over the past 18 months we have completed a number of studies. After a seven-month study of major issues facing Canada, we produced in February 2002 a report entitled ``Canadian Security and Military Preparedness.'' Then the Senate asked our committee to examine the need for a national security policy. So far we have released three reports on various aspects of national security: First, ``Defence of North America: A Canadian Responsibility,'' which was issued in September of 2002; second, ...``Update on Canada's Military Crisis: A view from the Bottom Up,'' which was published in November of 2002; and, third, ``The Myth of Security at Canada's Airports,'' published in January of 2003.

The committee began its briefings about Canada-United States relations two weeks ago, with the presentation from the Canada Customs and Revenue Agency about Canada and United States border relations and the implementation of the 30-point Smart Border Action Plan. Last week we learned about the role and capabilities of the Canadian Coast Guard and about intelligence issues from the Canadian Security and Intelligence Service.

This evening, we will first hear presentations from the Privy Council Office and the Communications Security Establishment, followed by the Office of the Solicitor General.

These briefings are an essential part of the preparations of the committee for its fact-finding trip to Washington at the end of March.

In Washington we will discuss common security concerns with members of the United States administration and with our Congressional counterparts.

Our witnesses this evening from the Privy Council Office are Mr. Ron Bilodeau, Associate Secretary to the Cabinet and Deputy Minister to the Deputy Prime Minister and Security and Intelligence Coordinator; and Mr. Lawrence Dickenson, Assistant Secretary to the Cabinet, Security and Intelligence. Also appearing with them is Mr. Keith Coulter, Chief of the Communications Security Establishment.

Welcome to the committee, gentlemen. We have met with two of you before. Mr. Bilodeau, it is your first time before us and we are pleased to have you with us.

We understand both Mr. Bilodeau and Mr. Coulter have opening statements. If you would like to proceed, Mr. Bilodeau, the floor is yours.

Mr. Ronald Bilodeau, Associate Secretary to the Cabinet, Deputy Minister to the Deputy Prime Minister and Security and Intelligence Coordinator, Privy Council Office: Mr. Chairman, honourable senators, I am delighted to be here in my capacity as Security and Intelligence Coordinator to discuss with you the issues with respect to the Canada-U.S. security angle as you prepare for your trip to Washington. I hope this trip will be positive and allow for discussions of mutual interest. I myself spent two days in Washington last week and had a number of meetings at the official level. That revealed the Canada-U.S. relationship on security intelligence to be a strong one.

With me today is Mr. Lawrence Dickenson, Assistant Secretary to the Cabinet for Security and Intelligence, and Mr. Keith Coulter, Chief of the Communications Security Establishment.

I filed copies of my remarks, Mr. Chair, so I will not read them in totality but summarize the highlights. I would like to give you a summary of the intelligence relationship with the United States first, discuss the benefits of that relationship and then allude to some of the challenges we are now facing. At the conclusion of my remarks, we will be pleased to answer questions, and Mr. Coulter will have remarks on the CSE.


The Canadian security and intelligence community is relatively small, particularly as compared to the U.S. community.

The point that I want to stress is that, although we may be small, and clearly we cannot cover the range of issues the U.S. covers, those which we do cover, we do well.

We cannot inform you about all the activities involved in the relations between Canada and the United States concerning security and intelligence, but we can give you a good general overview of our relationship. I think that this relationship is very beneficial. I hope that during your trip you will have an opportunity to confirm this, and that you will have access to a great deal of information.


In terms of the structure of the intelligence community in Canada, it is important to remember that the Prime Minister, supported by the Privy Council Office, has ultimate responsibility for national security and intelligence matters, a prerogative he exercises by providing direction on key security and intelligence issues. As part of his responsibility, he chairs the meeting of the ministers on security and intelligence. The committee meets at least once a year to establish an intelligence priority framework for the security and intelligence community, including foreign and defence priorities, as well as national requirements for security and intelligence.

The following organizations have been known as the core members of the security and intelligence community: the Canadian Security Intelligence Service, CSIS, from whom you heard at your last meeting; the Communications Security Establishment, which Mr. Coulter will address, the main organization devoted to providing the government with foreign intelligence; the Royal Canadian Mounted Police; the Department of National Defence; and the Department of Foreign Affairs and International Trade.

There are other important players in the security and intelligence communities such as the following: Citizenship and Immigration; the Canada Customs and Revenue Agency, Health Canada; Transport Canada, the Office of Critical Infrastructure Protection and Emergency Preparedness, better known as OCIPEP; the financial tracking organization, FINTRAC; and the Canadian Food Inspection Agency. Those make up the security and intelligence community in Canada.


The accountability and review process is an integral part of the Canadian S&I community. The review of Canada's security and intelligence sector is accomplished in two basic ways. First, each organization within the community reports to a minister, who is accountable to Parliament.

Occasionally, senior officials from various departments and agencies also appear before parliamentary committees, as we are doing today.

Second, the sector is subject to a variety of review mechanisms which report either to Parliament directly, or to a minister who reports to Parliament in turn. All the review mechanisms are directly accountable to Parliament through the Prime Minister or a minister.


Let me turn to the subject of the Canada-U.S. intelligence relationship. International cooperation in intelligence has always played a pivotal role in Canada's foreign and security intelligence efforts. During World War II and the Cold War period, Canada developed particularly close intelligence relationships with the United States, the United Kingdom, Australia and New Zealand. These links are even stronger today, particularly, with the U.S., in light of our common fight against terrorism. We have also developed a variety of links with other countries, such as those in NATO. However, we do not sit at that table only or even primarily because of history and shared values. We sit there because we contribute to a joint information network in terms of both collection and analysis.

As a general point, I believe the Canada-U.S. intelligence relationship to be excellent, large and multi-faceted, encompassing not just intelligence in the narrow context but also relating to the sharing of information on counterterrorism, crime, defence, customs, immigration and transport. Intelligence products, including analyses, assessments and technical assistance, are exchanged. This relationship provides us with information that would be unobtainable otherwise through our current resources.

Immediately after the attacks on September 11, Canada's intelligence community offered its full support to U.S. agencies. RCMP investigations, CIC information, unique CSIS intelligence sources and the linguistic and analytical assets of CSE and DND were among those capabilities that we devoted to the national and international counterterrorism effort. Today, the Canadian security and intelligence community works closely with the U.S. to ensure that our borders are safe and efficient. The policy and legislative initiatives of the ad hoc committee on public security and anti-terrorism, chaired by Mr. Manley and established to coordinate Canada's response to the terrorist threat, provide direction in this matter.

Many Canadians and U.S. departments and agencies have long-standing exchanges through liaison officers. In some cases, we make outright exchanges of officers to do each other's jobs. For instance, in Washington, I had the pleasure of visiting the CSE office at the National Security Agency where we have six or seven Canadian officers serving as liaisons, and we have American officers here as their counterparts. Few other countries have this kind of relationship, and it shows a high level of confidence.

I will now go on to the factual benefits of the relation with the U.S. and some of the challenges we are facing. Through the exchange of technology, techniques, sources, intelligence reports and assessment, Canada shares the burden with its allies. We receive and return privileged access to intelligence resources we could not otherwise obtain. In this way, we benefit greatly from the intelligence relations with the U.S. that enhance our security through access to information and technology at relatively small cost. We have developed expertise on certain issues and countries, which is highly valued by our allies. The extent of exchanges and activities undertaken with international partners has been greatly enhanced since September 11. The number of requests for assistance and the amount of intelligence shared has become a challenge for the resources of our security and intelligence community and those of western countries. Canada is no exception. There is more work than resources.

Keeping up with a vastly increased demand is always a challenge, particularly when you are a relatively small country. Of course, we have received significant resources since September 11 — $7.7 billion over five years in the 2001 budget. This has helped enormously, but there is still much to do.

In the budget last week, the government provided $50 million for the security contingency reserve for 2003-04 and another $25 million for 2004-05. That is a hedge against future costs and unpredicted activities, and it is additional to the amounts previously announced. The government also announced investments in the Canadian Forces and the Coast Guard, which will add to our security.

One issue germane to Canada-U.S. security and intelligence relations that confronts us is that in the U.S. they have received much more money than we have, both in absolute and relative terms. The U.S. is racing ahead technologically in terms of personnel and technology, and we have to ensure that we can keep up.

We cannot keep up across the board — nor should we try to — but we must ensure that we retain the leading edge capability in at least some areas, if we are to have anything to trade. In other words, we have sectors of excellence, priorities and we trade information on those.

The creation of the Department of Homeland Security will have a substantial impact on how and with whom the Canadian intelligence community does business in the U.S. While the final exact shape is not yet known, the DHS will take functions from several existing departments with operational control over security issues related to the U.S. border and to major transportation systems. For Canada, the establishment of the DHS represents both an opportunity and a challenge. If the new department develops as the administration believes it will, we will face a much more centralized and organized U.S. approach to border and North American security. We will need to adjust some bilateral links in ways that are not yet clear. At the same time, we will have an opportunity, with the creation of the DHS, to enjoy for the first time one-stop shopping.

From discussions with the senior officials of the homelands security, Mr. Chairman, I believe that they are in the early days of organization. There were three senior officers appointed when I was there last week. Mr. England, the deputy director, told me that by April, 170,000 people will be there. There is a considerable challenge for us to relate to them effectively and substantively.

I will stop there, Mr. Chairman. I think some of our goals with the United States are to keep up the relationship, keep it positive, to ensure that we have open exchanges of information. They value the partnership. Perhaps, you will encounter that on your visit. Perhaps, we may find ways of cooperating even better in the future.

Mr. Keith Coulter, Chief, Communications Security Establishment: Thank you for the invitation to appear here today.

As Mr. Bilodeau said, Canada-U.S. intelligence cooperation is a critical element in the government's strategy for ensuring the security and well-being of Canadians. CSE plays an essential role in this strategy, particularly through our long-standing relationship with our American counterpart, the National Security Agency.

Before I describe this relationship to you, I will give you a short sense of how CSE has evolved since the attacks of September 11, and what we have done to respond to the security challenges facing Canada today.

As you know, the government moved forward within weeks of the attacks with significant changes to existing laws and funding to bolster Canada's counterterrorism capability in a number of key areas. For the first time, CSE's role was spelled out in legislation. Amendments to the National Defence Act, passed in December of 2001, confirmed CSE's three-fold mandate: To acquire and provide foreign intelligence, to help ensure the protection of electronic information and information infrastructures, and to assist federal law enforcement and security agencies.

At the same time, CSE's legal framework was broadened to permit more robust and vigilant counterterrorism efforts in support of the government's overall public safety agenda. This is translated into our focusing resources, investing in new technology, and accelerating our operational tempo.

In terms of funding, the 2001 budget provided CSE with a one-time allocation of $37 million to upgrade our infrastructure and to meet increased demands for our services. It also increased CSE's annual budget by approximately 25 per cent over previously planned spending levels over the two-year period of fiscal years 2002-2003 and 2003-2004. This increase has positioned CSE to respond much better to today's technological and operational challenges.

That being said, we all know that technology is constantly evolving, and that the global security environment remains extremely volatile. Maintaining this momentum and keeping pace with the efforts of our allies requires the long-term support of the government.


Due to its new powers and resources, the CSE can develop its potential in key sectors like anti-terrorism. We are still recruiting highly qualified candidates in many fields and we are continually building partnerships at home and abroad.

At home, the CSE has established solid working relations, especially with CSIS in the fields of terrorism and proliferation.

Some projects have been launched, such as an exchange of personnel or the implementation of new processing and distribution systems which allow intelligence to be shared more rapidly.

We continue to work together with other departments and organizations to clarify our roles and shared responsibilities. We are also trying to improve coordination to better meet the government's needs for foreign intelligence and information protection.

Abroad, the CSE is continuing to build its links with its traditional partners in the United States, the United Kingdom, Australia and New Zealand.


The most important of these relationships is with our American counterpart, the National Security Agency. Indeed, the CSE/NSA partnership is an excellent example of our two countries cooperating on security and intelligence matters. For over half a century, CSE has enjoyed a close and highly productive partnership with NSA, shaped by the cold war. This vital relationship has evolved with time, providing Canada with invaluable access to American intelligence and technology. At all levels, this cooperation is frequent and productive. CSE and NSA share intelligence, tackle common problems posed by rapid changes in communications technology and track threats to our collective security.

Though CSE is by far the smaller partner in this relationship, I can say with confidence that both sides derive significant benefit from it, and, in fact, look to bilateral cooperation to help advance national goals.

As chief of CSE, I consider it my job to maximize the benefits of this relationship. These benefits accrue to the entire Canadian security and intelligence communities, and ultimately, to Canadians themselves.

In closing, I would like to reiterate that the strength of CSE's relationship with our allies, and with NSA in particular, add significant value to the role we play in protecting Canadians.

Senator Banks: Mr. Bilodeau, you talked about the good old days when we had a warm relationship in intelligence with our erstwhile allies, who, I hope, are still our allies in most things; the fact that relationship continues and there is a wonderful cooperation understood in the security and intelligence community; and that our contribution is highly valued in that community.

As the chairman said, we are about to go to Washington, and test that to a degree, which we have done in the past. We have talked with Mr. Coulter about this before, as well as with Mr. Dickenson.

We have heard from other witnesses and from some folks in Washington the last time we were there that that high opinion is not universally shared. We have heard that because we do not have spies or active foreign operations, we are distanced to some degree from our traditional relationships with those countries, in particular, the Americans and the United Kingdom, and to some degree in that respect, we are no longer really in the game and less welcome at the table than we once were.

What are the recognized areas of excellence to which you referred and which we are held in esteem which makes us welcome at the table? I am asking this so we can be armed when we go to Washington. I am anticipating we might receive some questions in that respect, as we always do. Could you fill us in on what those areas are so we will be able to refer to them?

Mr. Bilodeau: Hopefully, you will find in your visit that the relationship is seen quite positively.

I have met with General Hayden, the head of the NSA and some of his colleagues, the senior members of the CIA. I have not picked up the comments or the concern that you have raised, but I have heard it elsewhere.

We are a small player, but what we provide to the Americans and to others is appreciated in terms of we are in certain places in the world that they are not, in the way they would like to be. We have a complementary role to them. I am not saying that if we had more resources, we could not do more, and we would be even more appreciated. I would agree with that statement. However, what we do, we do well, and my colleagues and I have been informed of that previously.

Canada does not have a foreign security agency to operate abroad. If we did, perhaps we would have a greater means. The government has not chosen to turn to that yet, while Mr. Manley did not exclude it. If there were more resources and more people to cover greater spans of information, our colleagues in the United States would be more pleased. The comment they have made several times is that they are surprised and pleased at what we are doing with what we have. We have heard that several times. The meetings that I have had recently were positive. We are not naive; we could do more. There could be countries in the alliance that feel we are not pulling our share and we may have views about our allies at times. A partnership means working together. When you work together, there are issues with which you either agree or disagree, but we work things out. I believe that we have a positive relationship and I hope you will hear that down there, too.

Senator Banks: So do I. Perhaps they are being more courteous to you than they are to us. ``Gee, you are not doing badly with what you have,'' is damning with faint praise. Is the reason that we do not have that kind of key international capability that would make us, in the view of some, more welcome at the table and better players in the game than we are, a function strictly of money, as you have mentioned, or one of philosophy?

Mr. Bilodeau: Money is essential to do more. If we had more, we would have a bigger program. That is true of any government program. It is not a question of philosophy. There was nothing that I could detect on that. It is a government-to-government partnership and it is seen on both sides of the border. It could be better, but I have not been told about specific points of concern.

Mr. Coulter: In terms of a welcome atmosphere, what I experience at meetings with the NSA and occasionally with the CIA, we are welcome and what we do is appreciated. Whether that is the right amount is something to be decided by our government. The U.S. realizes that it cannot get the information it needs solely through its own means. Therefore, it needs partnerships. That is played in my part of the piece. It is played powerfully in terms of creating all kinds of channels and things we can work on together to produce jointly, information that both our governments need.

Senator Cordy: Mr. Bilodeau, you spoke about the amount of money that the United States spends on security, defence, intelligence, and all those things. We certainly got an indication of that when we travelled to Washington last year. You are right. There is no country in the world that can keep up with the spending of the United States toward their defence matters.

You said that Canada could keep up in some ways because we have centres of excellence. Could you expand on what you mean? You mentioned that Canada is in places where the United States does not have access. Is that what you meant by centres of excellence?

Mr. Bilodeau: Perhaps the amount of information we exchange could be bigger, but what we do provide is appreciated and is complementary to what our allies are doing. We have a relationship that complements the United States, in particular. I think that is true of the other members of the western alliance.

There is no difference of view on the quality of what is received and what is exchanged. There is a good partnership in establishing priorities of common interests in the United States. We have a good working relationship at both the official and political levels. Although we want to invest more, and we are investing more, in techniques this evolves quickly. The Americans are throwing big sums at it. Not only to stay in step but also to walk with them in a positive way, we will have to look as well at future investments. Qualitatively, quantitatively, positively, it is positive at this time. However, if their spending increases exponentially as it has, the CSE establishment is about 1,200 people; the NSA has about 33,000. If you added military intelligence in Canada, you would have another 1,000 or so people. It is a partnership of a substantial scale, but it is positive notwithstanding the scale.

Senator Cordy: We were in Washington last year and, certainly, there is misinformation in the United States with their lawmakers and with the general public as to the Canadian border being porous. I am from Nova Scotia. After September 11, the word was out that the terrorists had come from Yarmouth, which proved to be a falsehood. Recently, the media picked up something that was wrong about terrorists that had crossed from Canada into the United States. It was found out that not one bit of that information was true.

Having said that, we have heard that Canadian-U.S. intelligence sharing has been responsible for catching people at the border. Without going into detail, is there a lot of exchange of information between Canada and U.S. in terms of people crossing over, in particular, the land borders?

Mr. Bilodeau: Yes. Under the 30-point Canada-U.S. border agreement, we have now integrated anti-terrorist teams with Canadian and American security agencies. We have them in 14 places now. Information is exchanged readily and locally at these border points. Information is exchanged between the Canada Customs and Revenue Agency and its American counterpart, between the immigration department and its American counterpart. It is not perfect, but there is more ``interoperability'' and more exchanges of information. The Americans remain concerned about the northern border and the southern border. They are concerned that we protect our economic relationship but that we do not let through people who are not desirable. Through our efforts so far, we have been able to prevent such a damaging event; that is, a terrorist coming through Canada and doing something bad in the United States.

Mr. Manley has met several times with Governor Ridge, and he will be meeting with him next month to take stock of the progress on border security. It is a challenge to say that we are inspecting everything that comes through for security but we are liberal on trade. How do you balance the interests of an open trade border with a secure border? It is a considerable challenge and one we are working at daily.

Senator Cordy: Mr. Coulter, you worked with your department forging stronger working relationships particularly with CSIS. What is the working relationship between your department and the large number of departments who are involved with security issues in Canada? What is your working relationship? I am talking about Canadian departments.

Mr. Coulter: Most departments and agencies in the Government of Canada are client departments for us. In other words, we produce information and intelligence, and they are users of intelligence. We get our product to them through our own people, and we try to get it on time, and have relevant information for their needs.

We also have a kind of partnership relationship with a few agencies — and CSIS is one of them — in which we work together closely in terms of sharing information and developing approaches so that our two organizations can fit together to tackle common problems. That post-9/11 is fairly new territory. Things are going in a good direction. It is not perfect yet and I will not rest until it is, but we are working in closer and closer and tighter and tighter partnerships so that two organizations with different histories, tackling different problems, can tackle common problems and get the job done.

Senator Cordy: You said we are strengthening our bonds with traditional allies. How do you do that? Do you meet with the people? Is that how you do that?

Mr. Coulter: The way I am going about it is getting together with my counterparts in the closest agencies that we work with, and developing an agenda, and caring about that, and pursuing it. The agenda for the moment includes things such as counterterrorism, counterproliferation and whatnot. We have had a traditional partnership with the United States, New Zealand, Australia and the U.K. However, the world is changing quickly, so we are trying to not only sustain the partnership and take it into new areas but also to tighten it up so we can do things more effectively. I have what I call a partnership agenda with each of those agencies in those countries.

The Chairman: Mr. Bilodeau, you commented, in response to Senator Cordy's questions, about the integrated border teams. You did not comment on problems that currently exist, and there are some. I understand that we do not have common radio frequencies, for example. I also understand that we have different jurisdictions that cause problems in terms of hot pursuit — if someone is going across the border, whether people who are in hot pursuit can deal with them. We have a different approach toward guns. Would you touch on these points for the committee, please?

Mr. Bilodeau: I did not want to suggest that the relationship is optimal and perfect. We have two countries and several departments involved. I think there is a positive attitude between the Department of Customs and Immigration and the Department of Agriculture, and the departments on the Canadian side and their counterparts. We will need to invest more in ensuring interoperability inside the Canadian departments.

The Canadian departments sometimes are imperfectly connected; their systems of information are different. I sit on many committees that examine this issue and we have work to do inside the House. I am not surprised that we have work to do when we share information with the United States.

I had not heard there were issues relating to hot pursuit and matters like that. Perhaps my colleagues will comment on that. We are working with the Americans to discuss their entry-exit obligations under the Patriot Act and we hope to have an arrangement with them that protects our economic and security interests. We are discussing closely the matters of road and rail transportation, but these things take time. There are many aspects to the border agreement. Mr. Manley is working hard and meeting frequently with Governor Ridge; but at the end of day, this will take time and require investments in people and dollars.

Compared to where we were 18 months ago, there is more focus. We know what areas we have agreed to improve; we know there are areas left to improve; and, as we appear before you over time, we will be able to show progress.

The first cognition of progress is awareness and sensitivity. Everyone in Washington will tell you that, while they are concerned about border security, they are interested in having a joint approach through better equipment, more people and more security teams, and they will continue to work at it. That is the message that was heard loud and clear.

Mr. Lawrence Dickenson, Assistant Secretary to the Cabinet, Security and Intelligence, Privy Council Office: I think your next person sitting at this table, Paul Kennedy, will be able to elaborate. In brief, he is one of the co-chairs of a group called the Cross Border Crime Forum. I had the pleasure of attending the most recent one in Alberta, and it was attended by our Solicitor General and Attorney General Ashcroft of the United States.

There are challenges in terms of radio frequencies on both sides, and there are legal and jurisdictional impediments that need to be dealt with. A group is working on that and it is being addressed. What was particularly impressive was that both sides recognized, and continue to recognize, the importance of rolling out IBETs, Integrated Border Enforcement Teams, right across the country. What started out as an experiment in British Columbia has become an objective to have right across the country.

The Chairman: The purpose of this hearing, Mr. Bilodeau, is to get a picture of both sides of the question, what is working well and where there are problems. If we go down on this visit and we have just the point of view that things are improving and everything is getting better, it will not be a constructive conversation. You referred to the Patriot Act. Could you describe for the benefit of the committee just what that act is, and why Canadians should be concerned about it?

Mr. Bilodeau: I have a number of points of view. Among the provisions of the Patriot Act, insofar as Canada is concerned, is the obligation by 2005 to register entries and exits from the United States for representatives of certain countries that the Americans have designated. If a point of entry in a country is also matched by a point of exit, you can appreciate the difficulty. It will defeat our economic objectives if both countries have to register people that leave. We are working with the Americans on that particular aspect to ensure that we can respect the obligations of their legislation and our own security needs, without doubling up on border stations on both sides. That is one aspect. There are several other aspects of the Patriot Act with which we are less concerned. They have to do with the American justice system and so on, the use of anti-terrorism measures much like our legislation. However, the ones we are focusing on now are the ones that impact on the border more directly.

The Chairman: I raised the question of guns and neither of you commented. Perhaps you could now?

Mr. Bilodeau: I would say only that, regarding guns in Canada, we have legislation and policies that serve our national interests. They have been voted on by Parliament, although there are some difficulties in administering them. The Americans have a different philosophy of guns.

We also have the question of gun-smuggling on which there have been recent discussions. The government is working on the best ways to prevent gun-smuggling. Senator Banks was referring to philosophy earlier and different approaches. Clearly, we have a different philosophy on guns, but it can be a case where we respect theirs and they respect ours. It is not something on which we can have a great consensus.

In the American liberty movement, the liberty to have a gun is part of the constitution. In Canada, we have a different approach. Two countries can have different policies on different legislation and respect themselves. It will create a point of debate between the governments, but we are a sovereign country and we have a right to our legislation and our views on that front.

The goal is to avoid smuggling, and the movement of guns into Canada is illegal. People were appearing today on firearms management. It is not a simple subject for us in Canada. It is a complex subject in our relations with the United States, but one on which we do have respect.

Mr. Dickenson: I would like to add a bit to what Mr. Bilodeau said. I think we can show to Americans that you can get the job done without guns. When Governor Ridge came to Canada for the first time, the first thing we did was to show him air pre-clearance at the Ottawa International airport. The American officials were working there quite securely, and we indicated that, if guns were required, they would be Canadian guns. He accepted that and recognized that, and basically invited his colleagues, who were proposing that guns were required on the Canadian terrain, to stand down a bit. I think we can demonstrate that there is a solution that does not require their guns.

The Chairman: I appreciate that explanation. I want to register with the panel that there are problems and challenges that we need to face. We would like you to describe them as you go along and not simply tell us that there is a good working relationship, although I am sure that, on balance, it is good. Having said that, everyone is aware of the fact that IBETs have difficulty because an American officer cannot bring his or her weapon into Canada. There is no problem with us having a discussion about that here, and I would hope that we could have that discussion as the rest of the hearing goes forward.

Senator Meighen: You touched on some points that concern me. Have we made any progress on the issue of gun smuggling? We seem to have made some progress, of a fundamental nature, on gun registration. However, we have not put much money against gun smuggling. I would like to hear about the things — myth or reality — that cause problems in your dealings with the Americans, because I am sure, one way or another, they will be reflected — filtered perhaps but no doubt reflected — in conversations that we have down in the U.S.

Mr. Bilodeau, you touched on the fact that the Americans have created one-stop shopping in one, if not two, areas. Are they pressuring us to do the same or do you take the view that we already have one-stop shopping? Our military is wrestling with the same kinds of problems as the intelligence community in terms of the growing technology gap with the Americans. How do you keep within shouting distance? Does putting more money against it work? Perhaps it could be accomplished by cutting out existing operations that we can no longer afford because we need the money for intelligence work — Mr. Coulter's well-known and well-respected area of responsibility? If we do not have something to bring to the table, this wonderful relationship, which we had during the Cold War, is likely to sour a bit because the Americans, if I may say, are particularly zealous and purposeful in their goals in the aftermath of September 11. It is a zeal that is not always shared by everyone, including Canadians.

What do we do about the Communications Security Establishment, CSE, which has always been, in my understanding, one of our leading lights when it comes to bringing something to the table? What do we do about one- stop shopping if there is a problem, which there may not be in the eyes of the Americans? What areas are they most likely to raise with us, to which we can give a reasonable response? Finally, who is the quarterback? Is it you, Mr. Bilodeau, for all of the operations?

Mr. Bilodeau: ``Quarterback'' is a good title because the work takes on that proportion.

Senator Meighen: I sat back in my chair when I read that the Prime Minister chairs a meeting once per year on security and intelligence. Presumably, in the present context, he has met more frequently than once per year. It seems that our Prime Minister chairing a committee on security and intelligence once per year does not manifest a degree of concern that we have about this area. Those few questions tie into the chair's earlier comments.

Mr. Bilodeau: The Prime Minister chairs the meeting annually to review intelligence priorities. It is not the only discussion among ministers involving the Prime Minister on security and intelligence. Those issues come up at cabinet meetings and at bilateral meetings. The Prime Minister is briefed on a regular basis. That annual meeting sets the intelligence priorities for the government, at large. It is a strategic look ahead on the priorities that we have given ourselves. It is a targeted meeting.

Senator Meighen: You said that these issues arise in cabinet. Is that because a particular minister has a specific security concern or information to discuss? It could be the Solicitor General or the Minister of Justice or the Minister of Finance.

Mr. Bilodeau: It could be a sectoral issue that requires approval of cabinet or it could be a general discussion of a situation involving security — for instance, security throughout Canada following the declaration of a war.

Senator Meighen: Security is not a standing item.

Mr. Bilodeau: That is right — it is a regular item that comes up periodically. It could concern a general situation or it could be just an update. The main committee is the House of Commons Public Security and Anti-terrorism Committee, chaired by Mr. Manley. It is comprised of all the ministers in the security and intelligence envelope based on cabinet.

We are observing homeland security carefully. From your deliberations in Washington, we would welcome the information that you will receive in respect of the American approach to homeland security. Homeland security constitutes the activities of nine departments. In the early days they had only three people on the job: Governor Ridge, Mr. Hutchison and Mr. England. Now, there will be 170,000. They are hoping for greater cohesion and more de- centralized management because they do not want to do everything in Washington.

Gleaning from their experience is useful to us, as we meet with them at the official level, and then learning how they do it and what benefits they are drawing from it. In Canada, we could then decide, after we review our own organization, whether there are adjustments to be made. I am a coordinator at the strategic level, not at the day-to-day level. Your observations and experience would be valuable and the government would want to take account of that to build on it. The Americans suggest that it is too soon to draw a conclusion because they have only just begun.

You referred to the myths that they have of us and how we can improve. There have been concerns about our immigration identification and refugee management, but the government has made changes following new legislation last year. Any concerns that you could bring back in that respect, and any assurance that you could give that we have a better refugee management and immigration identification abroad, would be helpful. We do better paperwork and security clearance and we have quicker provisions for turn-around for deportations. There is where our colleagues have concern.

Senator Meighen: Some hard facts would be required. Some approaches have been completed.

The Chairman: Senator Meighen is touching on what we found to make a big difference on such a visit. When attending a meeting with a Congressional committee, you may find someone trying to blind-side you with questions. You need to have the facts straight. For example, if you cannot say how long it takes us to deal with a refugee claim versus how long it takes them to deal with a refugee claim, then there will be a problem.

Mr. Bilodeau: Comparative statistics would be useful.

Mr. Dickenson: About the myth and reality, Senator Meighen, this whole immigration and refugee file is important. Americans can never believe that over 50 per cent of our undocumented refugees come across the American border because they seem to assume everyone wants to stay in America. Somehow or other, those people got into America.

They never touch upon the fact that there are millions and millions of people in the United States that they do not even know about. There are some real discrepancies in terms of the questions they will pose to you and to us, in relation to the ones they would turn back on themselves. I think we can provide you with some tighter documents or information on that.

Mr. Bilodeau: In 2001, more than half the refugees came through the United States. Those are background facts that we will provide to you.

Senator Meighen: I was hoping Mr. Coulter would respond, having thrown lavish praise his way.

Mr. Coulter: What is happening with respect to CSE/NSA relations, post-September 11 is a good news story. There is no question about it. I worry every day, the way that technologies are changing and the expenses of business are increasing, that our capability will not be sustainable over the long term. However, we are working at ways that we can contribute, that we will be able to sustain, in niches that are real contributions that you can leverage to position yourself well.

It will come back as an issue every year, in terms of how we can maintain the position, what it will cost us and what the right niches are. Post-September 11, it is a good news story in Canada-U.S. terms because of two things. First, we received authorities we did not have before. Bill C-36 and the amendments to the National Defence Act put us in the ball game, in terms of having the authorities that we needed to deal with the terrorism target. The resources were a significant infusion that was overdue but real. We are managing growth now. It is not perfect, in the sense that I have everything that I have asked for, but it is significant growth and it is making a difference.

Senator Meighen: I have two short questions on that, gentlemen. What success or challenge are you facing in terms of hiring high-grade, Arabic-speaking analysts and technical people in an area that, perhaps during the Cold War, was not one area in which you had to be particularly concerned? Also, I think you made the comment or alluded to the fact, Mr. Coulter, that Americans could not necessarily get all the intelligence information by themselves. I am sure there are limits, but to what extent do they want intelligence from other sources in the same fashion as they want military contribution from other nations. The military contribution, I put to you, is mainly not for military reasons, but for political reasons and having a coalition rather than a go-it-alone attitude. On a consistent basis, to what extent do we, the Brits, the Germans or the Dutch provide information that they probably would not have been able to get themselves even if they had thrown money at it?

Mr. Coulter: With regard to your first point, senator, when we started our growth scenario, I did not know what to expect in terms of the return we would get for a little bit of signalling out in Canadian society that we needed some talented people or, as you put it, high-grade analysts. We conducted a recruitment campaign in which we were looking for computer scientists, engineers, mathematicians and high-grade analysts, as well as linguists. You will appreciate that I will not go through the languages we were looking for, but in an intelligence-gathering business, you can imagine. Years ago, we looked only for Russian linguists, but now we are looking for them in a number of areas and they are not easy to come by.

We received a deluge of applications; the last time I counted, we had about 15,000 applications for a couple of hundred positions. They are high-quality applications. We are not sure about every single subcategory we will receive there. We may need to get out more to universities to get the right people, but it is going well. It surpassed all my expectations in terms of a return from a recruitment campaign.

People from all over the Canadian government are interested in working at CSE. I think they know that intelligence is a priority of the Canadian government, and it is a priority to which they respond. We are in an exciting phase in terms of developing our capabilities, which is going well. Our growth has been in two stages. We have gone through the first stage and when we receive the second part of our funding in 2003-04, we will go through another phase of growth.

In terms of what I said earlier about the United States and the way that it will have to partner to get information, and certainly in terms of all the contacts that I talk to in the United States, that is not just an odd view. It is a common view that they will have to develop new partnerships with new countries and strengthen old partnerships, because the information that they need post-September 11 is hard to get. The world is a big place, and it will take a lot of hard work and effort to bring in the information they need.

That corresponds with some Canadian government priorities, too. We have been producing information of value to both our governments, and then leveraging that to get all the information we can, back.

I do not see unilateralism in information space. I live in the information space, not the action space. The American model there is more multilateral. Because I do not live in the action space, I will not comment on where the U.S. is going in terms of unilateralism on actions. However, the reality is that, in information, you need a lot of partnerships. The world is a big place; you have to go out there and get information in many ways and it still may not be enough information to get the job done. With respect to military action, obviously the United States is very big in comparison. As I understand it, they have a military of greater size than the next seven powers in the world. It is a huge capability. Therefore, unilateralism is more possible in action space than in information space.

Senator Atkins: In your own words, you say that the Prime Minister is ultimately responsible for security and intelligence. To follow up on Senator Meighen's question, it amazes me that the Prime Minister would only meet, as you say, about once a year. I would have thought that after September 11, it would have more priority than that.

Do you report directly to the Prime Minister or do you report to Minister Manley?

Mr. Bilodeau: I report to the Prime Minister through the Clerk of the Privy Council, Mr. Himelfarb, and to Mr. Manley as his Deputy Minister directly. That is the arrangement.

Senator Atkins: How often does Mr. Manley chair his ad hoc committee?

Mr. Bilodeau: We have been meeting regularly. We have had meetings every second week, which is normal for cabinet committees. Some meet weekly; others meet bi-weekly. We have been steady since I took on the responsibilities in the fall, and have had meetings about every second week. They have full agendas and good attendance.

As I said earlier in response to Senator Meighen, that is the key committee for policy and information and taking stock of our progress and our undertakings.

Senator Atkins: Does he give you enough time in those meetings to feel you are getting the right direction?

Mr. Bilodeau: Yes, sir. There is normal documentation, like any cabinet committee. We follow the same procedures as other committees, with a chair and vice chair and a membership. Attendance has been good. There is no lack of interest in the topic, let me assure you.

Senator Atkins: I hope not. You said that you had just returned from two days of meetings. If we asked what we could do to be more helpful, what suggestions would they offer? Do you sense there is a key priority in terms of your relationship with them?

Mr. Bilodeau: I would say counter-terrorism. I think that they are very concerned about that. You see that in their daily pronouncements from responsible cabinet officials and the president. They are concerned about counter- terrorism in all its forms: Intelligence, analysis, border security, sectoral security, and weapons of mass destruction, dissemination.

As I said earlier in my remarks, if we had more resources, we would do more, but we are doing quite a bit on that both domestically and internationally. You may find in your discussions in Washington that it would be interesting for you to probe how they feel their own achievements have fared. The Department of Homeland Security is an attempt to bring more people together that had been operating separately. I guess they feel that they need more cohesion. They have established an integration centre recently in the CIA to bring together the analysis of functions of the CIA, the FBI, the National Imagery Agency and the NSA. They are not entirely satisfied with the results they have had on counter-terrorism. I have heard that as being very much a concern.

Senator Atkins: When we were there last year speaking on this, when it came to shipments that came through our ports, the suggestion was again that we were the sieve. The truth is that we inspect more of the containers than they do. As a result of Minister Manley's meetings with Governor Ridge, they now have American inspectors working out of our ports. How do they feel that is going?

Mr. Bilodeau: I have not heard any comments on that. We hope to do more pre-clearance of one kind or another. We are examining the rail sector. They would like to do more work there. The issue for us and for them is whether you inspect every container or do it by sampling. They feel that, to the extent that pre-clearance and the programs we have to cross the border more efficiently can accommodate security, they are willing to look at it.

Mr. Collenette announced a major marine security program over five years, a few weeks ago. That will facilitate the physical security on the marine side, the security-checking of people who get off boats, more policing, and inspection techniques through containers. We can do more. We have American inspectors in three ports now. We can do more over time. There is a willingness to do it, sir.

Senator Atkins: Do the inspectors in Canada carry weapons?

Mr. Bilodeau: No.

Senator Atkins: When you have these meetings, is there any sign of frustration that they are not able to get the suppliers to provide the equipment that they feel is necessary for security purposes?

Mr. Bilodeau: I have not heard that. I think they have had budget increases that have been so great that there is probably an administrative backlog. I know the Department of Homeland Security has ambitious objectives on that front, and they have flexible arrangements. I have not heard that preoccupation.

In Canada, even with our modest $7 billion, and I know that senators have commented on this, it takes time to bring the physical assets into place. I have not heard that our American colleagues, other than the homeland people, are trying to gear up quickly. They had not mentioned that. Perhaps this is something you can explore with them, because the numbers and investments there are so massive that there are bound to be supply issues.

Senator Atkins: They get the priority.

Mr. Bilodeau: That is right.

Senator Atkins: In our report, there are certain areas where there is a requirement for equipment, and we could not get it as quickly as the Americans have. I assume most of that equipment does come in from the United States?

Mr. Bilodeau: It would be mostly from the United States. Since they have longer production chains through their supply, they get first call. If it is an American company, one can understand that. This is a problem in establishing the capital equipment and machinery for security work that all departments in Canada have. It takes more time than we estimate. Hopefully we stay on price, but supply is a problem.

The Chairman: Could you comment on something briefly, Mr. Bilodeau, and then perhaps send us information later? We have heard concern about the design of Canadian airports, and more particularly, the safety and protection of American customs and immigration officials providing pre-clearance at approximately seven locations. Some of the new facilities that had been built were designed pre-9/11. It would be helpful if you could provide, either now or to the committee in writing later, the Canadian position on that. We are aware we are providing at least some police presence there, but what physical barriers are there to provide security for them?

Mr. Bilodeau: We will provide information, sir, on what we do for our own people and for our American colleagues. To the extent there have been any problems, we will outline what they have been.

Senator Smith: Since my colleagues have been thorough, I will be brief. A few times tonight you have referred to the fact that when this Department of Homeland Security is fully operational, it will have about 170,000 personnel. Give us some yardstick or benchmark of the sort of spending priorities that the Americans have put into this area of expenditure post-September 11. I imagine the bulk of those employees would be reassigned from other departments. Do you know what the incremental personnel count would be?

Mr. Bilodeau: I have not seen any numbers on that. The number given to me was from the deputy director himself. It is a ballpark number. It is the sum of the existing agencies, which number nine, ranging from Transportation, Immigration, Border Security —

Senator Smith: None of those would be necessarily incremental?

Mr. Bilodeau: I do not have that information, sir. I think he was referring to the people who were already in place who would be coming under the department's responsibility, but it may be they also have more. They put money into pretty well everything.

Senator Smith: When you go into an airport and you have people who check the screening and the luggage, here that is contracted out to security firms. Were they not going to change that and have those people in the States become federal employees?

Mr. Bilodeau: I understand some have become state employees.

Senator Smith: That would be a big component perhaps. It would be helpful to have a breakdown of the incremental jobs that have been created, as a barometer. We do not need it tonight, but at some point.

Mr. Bilodeau: I will send you a piece on the homeland security department; what there is now and the estimated growth in terms of money and people. The U.S. budget was tabled recently.

Senator Smith: Were you saying that their restructuring might cause us to do a review of whether it makes sense for us? I think you perhaps did not use those words, but I picked up a little of that flavour.

Mr. Bilodeau: We keep an open mind to reviewing the efficiency of government organizations, because over time they must evolve.

Senator Smith: It is a never-ending job?

Mr. Bilodeau: Yes, it is. We talked about this a few weeks ago. We have not had a major change in our security arrangements in Canada for some time. It is important to take account of the experience of the United States with homeland security and see how it works for them. We will see what it means for their relationship with us. If we need different arrangements for cohesion and efficiency, we will be prepared to make those recommendations to the Prime Minister.

Senator Smith: That is fair, I think.

Reference has been made to the fact that our radio transmissions are on different wavelengths from theirs. Do we take as a given that they want us having access to their transmissions? I do not think they will change their system to fit with ours. If we are to have a complementary system, I imagine we would need to make the changes. Is it reasonable to assume that they want us to have access there?

Mr. Bilodeau: It is important for information to be exchanged efficiently between our governments and departments. Once we have agreed on which information we want to exchange, we had better have the equipment to make that possible, whether it be phone, fax or computer. On the question of cost, how will that be shared? We take the costs on our side and they take the cost on theirs. That is an issue. You cannot want to share information and then have incompatibility of computers. That is also true of Canadian departments.

Senator Smith: I am not suggesting that we would be eavesdropping. Are you getting vibes from them to the effect that they want closer communications and that wavelength is one such area of communication?

Mr. Bilodeau: That is right. There are areas where they would like closer cooperation and we have areas we would like to change. We need to agree on how to protect access beyond that point.

Senator Smith: I jotted down your reference to our refugee claimants. The Americans never seem to touch on the fact that millions are in the United States that they do not know about. Are they in total denial about that, or is it just too unpleasant a subject to talk about?

Mr. Bilodeau: No, they are not in total denial. They are concerned. You have seen some of the counterterrorism activities by the FBI in Buffalo and elsewhere. They have had some surprises. They are candid about it. Thank God that we do not have surprises in Canada. We have certain people who come to Canada and we do not know if they are still here or not. The Americans have that as well, sir. They discuss that as a concern.

Senator Banks: In respect of Senator Smith's question, I am assuming that the third safe party agreement, which is now in place or is about to come into place, will change fairly substantially the number of refugees coming to Canada from the United States and vice versa. Is that a reasonable assumption?

Mr. Bilodeau: Yes, sir.

Senator Banks: You said something to the effect that the Americans accommodate the cultural differences and the philosophical differences between our two countries vis-à-vis guns. That may be true of the Americans to whom you speak. It is less true of Americans to whom we have spoken. All generalizations are false, yours and mine. In respect of the border, questions arise such as incidents of hot pursuit and whether customs and immigration inspectors should serve from mutual accommodations. In those issues, when the question of guns comes up, it is a source of great friction. All the logical arguments in the world from the Americans' viewpoint cannot sway us because of our different philosophical view and that view will not go away.

Do you have any words of advice for us about that? Americans cannot understand what they consider to be the ``illogic'' of our view and they ask questions:

``Our customs and excise officer must take off his gun when he goes across that line to go to the bathroom?''

``If an immigration officer is working on that side of the line, why should he or she not be armed?''

``If two officers are working at a little post in Vermont, you are expecting us to look after the security with the gun in case your guy gets in trouble; right?''

Those are the kinds of questions that arise. Do you have any help for us there?

Mr. Bilodeau: I wish I did, senator. This is a sensitive area, as I said earlier. We need to show them that we are doing the job with them but differently on the subject of guns; that we are not putting the security of Canadians and Americans or third-party nationals at the border at risk but that we are doing our jobs competently. If we cannot show them that, we may have a concern. I believe we can show them that competence. It may not require the customs or immigration person to have a gun but it requires that there be law officials available there.

We may have to agree to disagree on that. We can say that, notwithstanding that our customs officers are not armed, there are armed security personnel on the Canadian side protecting our security in the same way. So we are different but we arrive at the same point. If we cannot show that we have the same standard of security, then we would have a concern. I have no reason to believe that we do not have the same standard of security. Perhaps more people there have guns than here, but are we less secure because of that? I am not sure.

The chairman spoke a lot about a security policy. Do the standards on our side match the standards on their side? What about when people cross the border? I cannot give you absolute words of comfort. Try to probe the Americans as to why they feel a certain way, and then you should have the answers as to why we feel our way. We might have to agree to disagree. We might have to take steps to work around their policies and achieve the goal differently.

The Chairman: We look forward to receiving further information from you. We will get back to you after our trip to share the information that comes to us at the political level.

To those of you at home following our work, within the next few minutes we will be hearing from Mr. Paul Kennedy, Senior Assistant Deputy Minister, Department of Solicitor General.

In three weeks' time, on March 17, the committee will have a full day of hearings beginning at 10 a.m. The witnesses will include General Daigle and Colonel Rick Williams from the Department of National Defence; Mr. Robert Fonberg from the Privy Council Office; Mr. Daniel Jean, Acting Assistant Deputy Minister from the Department of Citizenship and Immigration; and officials from the Department of Foreign Affairs and International Trade.

If you have any questions or comments, please visit our Web site by going to We post witness testimony as well as confirm hearing schedules. Otherwise you may contact the clerk of our committee by calling 1-800- 267-7362 for further information or assistance in contacting members of this committee.

Senators, Mr. Paul Kennedy from the Office of the Solicitor General will give us a presentation on cross-border security and policing issues with regard to Canada-U.S. relations.

Please proceed.

Mr. Paul E. Kennedy, Senior Assistant Deputy Solicitor General, Policing and Security Branch, Office of the Solicitor General of Canada: I am joined by my colleague Mr. Marc Pilon, senior policy analyst with the National Security Directorate of the Department of the Solicitor General.

Having been advised that this hearing is in preparation for a fact-finding visit to Washington, I marshalled some thoughts to assist in that regard. I will first give a quick overview of some measures that Canada has put in place since September 11, 2001, as well as important bilateral initiatives on public safety and national security issues. It is important to bear in mind that while our relationship has been enhanced post-September 11, cooperation and coordination between our two countries existed for 50 or 60 years before that time.

As a sovereign nation, we do, and likely always will, have different views from our American colleagues. However, we recognize the importance of continuing to work closely with them to address common threats to our continent, to our shared commerce and to our common beliefs in freedom, democracy and the rule of law. While we enjoy a close relationship with our Americans counterparts and collaborate closely on a range of key policy and operational fronts related to public safety and security, there are, of course, some irritants as well as challenges in the near and longer term.

Following the terrorist attacks in New York and Washington, our government quickly established the ad hoc committee on public security and anti-terrorism, with which I am sure you are familiar by now, to address immediate and longer-term challenges to national security. Since then, the government has made significant investments in public safety. Budget 2001 was the landmark event, but it must be recognized that in the December 2000 budget the government invested approximately $1 billion over five years in public safety. That was enhanced by another $7.75 billion in December of 2001. Those funds were directed at public security in the widest sense, including at the borders.

I will touch upon the highlights from our perspective. The RCMP will receive $576 million over the next five years while CSIS will receive $334 million over that time. That is roughly a 30-per-cent increase for both those organizations in terms of their national roles.

The anti-terrorism act was passed by Parliament in December of 2001. That was a key event in putting Canada on the world stage in terms of having legislation specifically directed at terrorist activity. Prior to that date, we treated terrorist activity as criminal activity. If there was a kidnapping, it was treated as kidnapping. If there was an assault, it was treated as such. If there was a murder, it was treated as murder. This legislation deals with such activities as part of terrorist activities.

Canada quickly joined the global effort to curb terrorist financing. That is a key point as that was a major gap in our efforts. We had legislation in place since 1989 dealing with the funding of organized crime. That legislation was updated with the implementation of FINTRAC. FINTRAC provided a procedure to collect proceeds of organized crime. That mandate was expanded to address terrorist financing.

We had the listing of terrorist entities identified by the UN Security Council. That was established according to international law. Canada has listed and frozen the assets of more than 360 terrorist entities in concert with the international community. In addition to signing and ratifying all 12 United Nations counterterrorism conventions and protocols, Canada has implemented UN Security Council resolution 1373 that requires states to enact specific counterterrorism measures.

Domestically, legislative amendments have been established creating the listing of terrorist entities under the Criminal Code. Once listed, an entity's assets are frozen and can be subject to seizure and forfeiture. The consequences for dealing with a listed entity are severe. Penalties include up to 10 years imprisonment for dealing with the property or finances of a listed entity or for knowingly facilitating the activities of a listed entity. Nineteen entities are now listed under the Criminal Code.

That is a creative piece of legislation in the sense that, in addition to criminal sanctions, it provides a regime for civil forfeiture on balance of probabilities. It has unique provisions dealing with the use of hearsay evidence and provisions for in camera proceedings. Absent these kinds of techniques, and it would be difficult to address this phenomenon.

We have made good progress. Our ongoing cooperation and coordination domestically, interdepartmentally and with provinces and territories, as well as internationally, particularly with our American counterparts, is an example of our dedication and commitment to our national security and public safety regime. The Smart Borders Declaration and the 30-point action plan are a testament to this.

While some of our approaches may be different, Canada and the United States are equally committed to the security and integrity of our nations, the well-being of our citizens and our interdependent trading relationships. Our public safety and security mandates relate directly to an important U.S. priority — homeland security. The U.S. expects Canada to participate as a strong partner in strengthening cross-border law enforcement and counter-terrorism arrangements that affect both countries.

Given the impact of both security and the economy, border issues have emerged as one of highest priorities in Canada-U.S. relations. In addressing these issues, the portfolio's key American interlocutor is the U.S. Attorney General. However, the recent amalgamation of several U.S. border and public security agencies into the newly created Department of Homeland Security will also translate eventually into close ties with the new U.S. government institution.

Longstanding American and Canadian law enforcement efforts at and across our common border are a testament to how two countries can and should work together. However, a relationship can also be complex because you must, of necessity, take the balanced approach to trans-national criminality and border security in order to reduce security risks while at the same time promoting economic prosperity.

While our relationship has been extremely productive, there have been irritants. For example, some high profile American representatives and the media have been quick to report unsubstantiated information that has perpetuated false assumptions about Canada. An example of this is the unfounded allegation that some of the September 11 terrorists came from Canada. As committee members are aware, there appears to be an American misconception that Canada is the Achilles heel of U.S. homeland security, whether in the case of the 9/11 hijackers or the more recent media articles regarding the alleged F.B.I. Five, the U.S. media is quick to falsely accuse Canada of harbouring terrorists and allowing its space to be used as a launching pad for potential attack on the United States.

The same can be said about the movement of illicit drugs from Canada into the United States. There is a false perception that Canada is a major source country for marijuana destined for the United States.

However, the reality is that a very small percentage of marijuana smuggled into the United States originates in Canada. In fact, according to the American sources, seizures of marijuana originating in Mexico totalled over 600,000 kilograms for the first six months of 2002. In contrast, only 9,000 kilograms seized in the United States can be traced back to Canada. This represents 1.5 per cent of the marijuana seized, in comparison to marijuana coming from Mexico.

In addition, there appears to be misconception about Canada's efforts to control the movement of precursor chemicals to the United States. These things are all important because they touch on the security of the border. Efforts to block terrorists equally block drugs, alien smuggling — the works. The reality is that Health Canada has developed new precursor control regulations under the Controlled Drugs and Substances Act to establish more effective measures to monitor and control precursor chemicals used in the manufacturing of illicit drugs while minimizing the impact of legitimate trade and use of precursor chemicals. That is important because some in the United States believe there is a strong nexus between criminal activity and the financing of terrorist groups in this area.

Furthermore, Canadian and U.S. law enforcement officials enjoy excellent cooperation in addressing the threat of drug trafficking. This close cooperation has been publicly recognized several times by the Bush administration. Recognizing the need for accurate information upon which to base plans and develop solutions, our two countries must work together to ensure that our American counterparts on Capitol Hill are properly informed and have the necessary facts at their disposal to correct myths and accurately portray realities.

Regarding the case of the supposed 9/11 hijackers entering through Canada, the U.S. Department of State, in a report entitled ``Patterns of Global Terrorism, 2001,'' indicated the following:

Media in the United States and elsewhere erroneously reported that some of the 19 hijackers responsible for crashing the four U.S. commercial airliners had come to the United States via Canada; these allegations were proven false by subsequent investigations.

Yet, how often do you see an event where the stories are re-circulated despite published records by the American government to the contrary?

On February 10, 2003, before the Council of Foreign Nations, John Ashcroft, the U.S. Attorney General, noted:

Under the leadership of the former Solicitor General of Canada, Lawrence MacAulay, and the current Solicitor General Wayne Easter, Canadian law enforcement has been an indispensable and strong partner with the United States. Long before the attacks of September 11, Canada provided consistent and invaluable assistance to law enforcement officials in the United States. And since the attacks, our nations have collaborated more closely than ever to secure our borders and protect our citizens from the threat of terrorism.

Transnational organized crime is complex and multifaceted. It has direct impacts on our relationship with the United States and includes a variety of cross-border activities such as illegal drugs, economic and high-tech crime, money laundering, smuggling, and mass-marketing fraud. These problems require a collaborative and cooperative binational approach that relies on an intelligence-led and multidisciplinary approach to law enforcement and security agencies. This means exchanging strategic and criminal intelligence, sharing tactical and operational knowledge, and commuting effectively.

Established in 1997, the cross-border crime forum has evolved to become one of the most effective bilateral law enforcement mechanisms. Co-led by the U.S. Attorney General and the Solicitor General of Canada, the forum brings together some 150 senior law enforcement and justice officials from Canada and the United States, representing nearly 50 departments and agencies on transnational crime problems such as smuggling, organized crime, mass-marketing, money laundering, computer crime and other emerging cross-border issues, including terrorism.

In addition to promoting best practices, such as the Integrated Border Enforcement Teams, the forum has created a mechanism whereby the grassroots level through its partnerships with Project North Star — which is an association of police officers running across the Canada-U.S. border from coast to coast — can raise operational impediments and obstacles faced in the day-to-day operations to the policy and legal realms for resolution. The complex issues range from the joint targeting of organized crime groups to radio communications interoperability — you heard reference to that earlier — at the border. It also produces annual threats and special assessments concerning such issues as the Canada-U.S. drug flow, the movement of firearms and explosives, and alien smuggling.

Through its operational subgroups, the forum develops concrete tools and mechanisms to allow our law enforcement communities to better target transnational organized crime and terrorism, and to gauge and identify emerging trends and threats to our respective nations. An example of this is the emergence of identity theft, which was identified as a common challenge at last year's forum. If you look at identify theft today, it runs right across all issues, such as taking benefits from federal governments through false identities, credit card frauds from the banks, and immigration matters. It speaks to the whole issue right across organized crime and terrorism. That is an issue at which we are looking.

While we have always enjoyed a strong relationship with our American counterparts, never have we worked so closely together with the U.S. officials as we have since September 11, 2001. As noted in the U.S. report, Patterns of Global Terrorism, excellent law enforcement cooperation between U.S. and Canada is essential to protecting our citizens from crime and maintaining the massive flow of legitimate cross-border trade. Day-to-day cooperation between law enforcement agencies is close and continuous.

Interagency and interdepartmental cooperation is a daily activity that takes place between officials on both sides of the border to advance practical, on-the-ground collaboration and coordination. Nowhere is it better demonstrated than with the expansion of the Integrated Border Enforcement Teams. Established initially as a pilot project in 1996, IBETs are joint Canada-U.S. multi-agency law enforcement teams that target cross-border terrorism and criminal activity. They enhance border integrity and security by identifying, investigating and interdicting persons and organizations that pose a threat to national security or engage in other organized crime activity.

Since their inception, IBETs have evolved into a major enforcement success and have effectively disrupted smuggling rings and confiscated illegal weapons, liquor, tobacco and vehicles, and have made numerous arrests. For example, since the inception of the Cornwall-Massena IBET last February, smuggled commodities valued at $7 million have been seized. From November 2001 to December 2001 they seized, by way of illustration, 2,000 pounds of marijuana, $2 million in U.S. currency, 43,000 cartons of cigarettes, 23 pounds of what is called magic mushrooms, and 250 grams of hashish. More importantly, migrant smuggling has declined significantly from 402 incidents in 2000 to 32 cases in 2002. The reason is a more effective border patrol effort in place.

Given their success, IBETs have been expanded across the entire Canada-U.S. border and are currently operational in 11 of 14 planned geographic areas. They represent some 22 IBETs in 11 geographic areas.

Our efforts in the IBET program were recognized by American counterparts on November 21, 2002, when the RCMP was presented with the U.S. Immigration and Naturalization Service Commissioner's Award for ``Inter-agency Assistance.'' The U.S. Attorney General also declared on December 17, 2002, that this close cooperation has reduced substantially the ability of terrorists to move across our borders to harm our citizens.

The pilot project that was in place in B.C. was showcased at the cross-border crime forum for the then-Solicitor General and then-Attorney General of the United States. Based upon what they saw there, it was their will that made that program that both countries bought into and is what we see currently in this country.

In addition, our intelligence capabilities have been enhanced with the creation of the integrated security enforcement teams, which are in Vancouver, Toronto, Montreal and Ottawa. Made up of more than 200 investigative and analytical personnel, the INSETs focus exclusively on investigating and routing out terrorist threats.

While investigations are national and international in scope, the intelligence gathering and communications networks that exist between the IBETs at the borders and INSETs at rural centres also significantly improve border and security integrity.

On February 11 of this year, the combined special enforcement Integrated National Security Enforcement Teams announced the opening of their new integrated operational centre in Toronto. I will go through some of these because there was money, obviously, given in December 2001. That does not translate overnight into enhanced capacity. There are skill sets to be acquired and things to be put in place. Just to give you a sense, though, this thing is marching out and rolling as times progress.

Building on an agreement to share police technology in 1999, the U.S. Attorney General and Solicitor General signed a new memorandum of cooperation on the exchange of fingerprint records on September 17, 2002. Expected to be fully implemented by the end of May 2003, this agreement will significantly improve fingerprint record exchanges between the RCMP and the FBI.

The challenge in the area, whether it is crime or terrorism, is always identification: Whom do you have before you? What is their record? In April 2002, the RCMP entered into an agreement with Interpol for the sharing of DNA information for investigative or criminal offence purposes. The agreement permits the RCMP to compare crime scene information from Interpol with profiles contained in the national DNA databank's crime scene index or convicted offenders index. The RCMP is currently exploring an agreement with the FBI that would permit a more direct method of sharing DNA information with the United States.

Canada has recently acquired the Integrated Ballistic Identification System, which collects data from guns linked to crimes. Canada and the United States are currently exploring the possibility of linking Canada's IBIS machine to that of the Bureau of Alcohol, Tobacco and Firearms National Integration Ballistic Information Network. It is an important system. It was used, in fact, during the unfortunate events in Washington when they had the sniper loose at that time. The two countries collaborated to help track down the particular weapon. This type of information exchange is just the beginning as we embark upon more complex and exhaustive information sharing initiatives, both domestically and the long-term across the border.

Canada and the U.S. share a long history of successful cooperation in combatting terrorism and transnational crime bilaterally and multilaterally. Joint investigations and operations, and the sharing of information and intelligence, demonstrate the unique relationship between our two countries.

In its most recent report on the patterns of global terrorism, the U.S. department of state indicated that, overall, anti-terrorism cooperation with Canada is excellent and stands as a model of how the U.S. and another nation can work together on terrorism issues. The relationship is exemplified by the U.S.-Canadian Bilateral Consultative Group on Counterterrorism Cooperation, or BCG, which meets annually to review international terrorist trends and to plan ways to intensify joint counterterrorism efforts. The subgroups meet continually to carry out specific projects and exercises.

That particular group was established in 1989 and is co-chaired by the U.S. Department of State and our Foreign Affairs. It is a forum that includes representatives from all major players and responds to shared terrorism issues from a policy perspective and facilitates collaborative program effort.

In 1995, it established a counterterrorism research and development memorandum of agreement that was signed between the two countries. It provided $18 million over 10 years to conduct research on various prototypes that could be used. This is approximately 50/50 in terms of cost sharing. There are over 30 individual projects at various stages in the areas of protection and countermeasures, forensics, explosive detection, disposal, surveillance, chemical, biological, radiological and nuclear response. I will not go into them in detail, but, as an example, it would include a chemical, biological, explosive ordinance disposal suit for bomb technicians. Therefore, the two countries are getting together, sharing money and sharing R&D, to develop products directly related to the threats that we are talking about here today.

Under the Smart Border Action Plan, we remain actively engaged in enhancing and increasing our joint counterterrorism exercises. We have a history of these kinds of exercises dating back to 1989. There was the ``Excise Transborder Three,'' in 1989. In 2000, there was a tabletop exercise that lasted for two days. There was an additional one called ``Thin Ice'' that went on for two days. We are currently working on a major one called ``Exercise Top-Off'' which was scheduled for May of 2003. Therefore, the two countries have been working collaboratively on these issues for quite some time. Senior officials, hopefully at the level of ministers, will be participating in ``Exercise Top-off.''

Both countries realize that they must engage the world community in a fight against terrorism. Multilateral cooperation is essential as global terrorism and international crime cannot be successfully dealt with unilaterally or bilaterally.

There is a group called Auscanukus that is, obviously, the Australia-Canada-U.K.-U.S. forum, which is chaired by representatives from each of the four countries. It is an international forum that coordinates efforts and exchanges information to counter chemical and biological terrorism. I am giving you some sense of the international bilateral work we do.

Other international examples of Canada-U.S. cooperation include the signature on ratification by both Canada and the United States of the 12 UN instruments on terrorism, including the two most recent ones, terrorist bombing and terrorist financing.

Both countries are active participants in the G8 fora. Two groups of importance to you are the Roma Group experts on counterterrorism and the Lyon Group on transnational organized crime. As well, there is the Financial Action Task Force and the Organization of American States counterterrorism policy experts group. These are all fora in which Canada and the United States are heavy participants in dealing with these particular issues.

I will not take you through those particular groups unless you want me to. To indicate the leadership of the two countries, with respect to the G8 Lyon group, which is currently meeting under the French presidency, Canada had tabled and received approval, under Canada's leadership in this area, for testing and evaluation of a 24/7 high-tech crime investigators network. It was developed by the G8 and now includes 31 countries. It is a network that provides computer crime investigators with mechanisms to seek assistance from foreign states at all hours, seven days a week, during the course of investigations. Computers can be used for anything these days. It is clearly a tool used by crime, but it is also a tool used by terrorists. This mechanism allows countries to collaborate effectively. It is in an area where the information is highly perishable because it is on computer data banks.

At the G8 Lyon Group, work is also continuing to finalize an agenda for the first multilateral meeting of experts on critical information infrastructure protection. This is an initiative flowing out of the Canadian presidency of the G8 group in Mont Tremblant. It was signalled as being an important issue by our American colleague, Attorney General Mr. Ashcroft.

Following the events of 9/11, the Financial Action Task Force set international standards related to anti-money laundering measures, which were quickly expanding to include money laundering, to include measures to counter- terrorist financing. Of note here is the fact that the Department of the Solicitor General assists in the development of a best practices document relating to the issue of combating abuse of non-profit organizations. You have clearly seen in the media quite a bit in terms of charitable and non-profit organizations being used as fronts and vehicles to aid in financing terrorist activities.

With reference to the Organization of American States, I would like to point out that the particular committee established to deal with terrorism prepared the Inter-American Convention Against Terrorism, and Canada was the first country to ratify that particular convention.

Global terrorism and transnational crime, to say the least, are an evolving phenomenon. Canada and the United States must remain alert to the changing face of terrorism and crime, and, in cooperation with like-minded countries, continually develop methods to defend our countries from these threats. Long-term initiatives across all sectors — political, diplomatic, military, legal, intelligence, law enforcement, and financial — are critical. An important issue for the government is that the global reality of terrorism and transnational crime creates a flash point for debate between the need to balance public safety and security with individual rights and freedoms as well as privacy. Part of this reality is that we must ensure that our safety and security needs are met while respecting our democratic values and principles. This is a challenge we collectively face, and it is one that we will continue to meet.

The continued advancement of integration of law enforcement and national security efforts must and will ensure a balance between these fundamental principles. In our ongoing discussions with international partners on the sharing of information, Canada will ensure that our obligations as set out in the Charter and the Privacy Act are respected.

Disparate progress and interoperability efforts at all jurisdictional levels across Canada and the United States, and long-term financial commitments required to support these efforts pose significant challenges in achieving immediate and affordable information integration with the United States. Also, the creation of the Department of Homeland Security means that the existing Canada-U.S. relationship and linkages on homeland security issues must be maintained while seeking opportunities to forge new relationships within the leadership of the Department of Homeland Security.

Canada is engaged and committed in an ongoing relationship with the United States. We will continue to work together to improve and strengthen our national security and public safety regimes to prevent and address global terrorism and transnational crime.

In conclusion, honourable senators, we need to dispel misinformation pertaining to our porous border, our ineffective drug policies and other myths.

Senator Forrestall: I hope to God you never brief a minister like that. I have 27 questions, largely because I am not sure that I understood you. You leave me with the impression that things are not too bad at all, that we are moving along fairly well.

I am one of the members of this committee, who is going down to the United States with some apprehension about the subject of criticism, who will be singled out by people who we meet and talk to.

I do not know even how to put this question. On a scale of one to ten, are we doing as well as you have painted? I am impressed.

Mr. Kennedy: I have tried to make the point fairly forcefully that jurisdictions have problems, both jurisdictions are addressing those problems, and both jurisdictions are doing it within their constitutional framework.

There is a misapprehension in terms of what the relative standard of performance is between the two countries; in other words, as if you have something to be shy of or concerned about. What I am trying to indicate to you is, you do not.

Is there room for improvement? Of course. We are always working and always improving. That is why I indicated to you some of the efforts that were out there.

To address some of the criticisms that you are concerned with and your apprehension, I put certain comments to you that are on the record by the U.S. administration. We have one of those unfortunate situations that, no matter how much the United States State Department or the United States Attorney General tells you that we are working together and matters are working, there seems to be shyness or a sense of underachievement on the part of Canadians that we are not doing well. Clearly, there are challenges.

Yes, we are doing well. Can we improve? Yes. Are we working on that? Yes.

It would be a mistake to assume that others are doing better than we are, and that we are far behind. You may paint others in too rosy a picture.

Senator Forrestall: No one in the world is in the same position as we are, Mr. Kennedy.

Let me try to educate myself a little bit. The contacts that you have in the United States, do you find them well- advised and informed about Canada?

Mr. Kennedy: For the officials with whom I work, the answer is yes. We have to realize that it is a country of 290 million people. They have a free and vigorous media. They have a Congress with its own perspective, et cetera. Those that we interface with, which would be the American administration who are knowledgeable about these issues, have made the comments that I have referred to. The comments indicate a close collaboration with Canada, an effective information exchange, and a model in terms of how other countries can effectively cooperate. The challenge you will run across will be those who are uninformed and have facts that are, perhaps, inaccurate.

I have made these comments so the committee can point hopefully to some of that text put out by the American government to say: Well, Mr. Senator or Mr. Congressman, have you looked at that, and have you asked yourself why is your administration saying that in the context of Canada-U.S. relationships?

Senator Forrestall: The whole area of transborder difficulties and problems that we are facing would seem to us, and from what we have heard, to pose still some difficult walls or hills to climb, to find solutions for them. Do your contacts in the United States with whom you are talking have the feeling that, yes, we know a fair amount about Canada-U.S. cross-border problems? What will they say to you about the general awareness of the United States Congress and Senate to these same problems?

Mr. Kennedy: This is the challenge we face. This is why I am hoping that, perhaps, your presence there will push back a little bit.

What we do, senator, for instance in the cross-border crime forum, is to have a proper debate. What we have asked, for instance on the drug smuggling issue or alien smuggling issue, is to say, we want the respective organizations from the two countries to have their experts sit down and tell us what is the threat assessment? What is the actual event that is happening at the border? What quantities of drugs, for instance, go from Canada to the United States and vice versa? How many illegal migrants are smuggled between the two countries? Only when we do that exercise and have a common document signed off by the respective investigative authorities in the two countries, do we have a text. Once we have that text, that allows us to dispel the myths.

We have heard concern about the border with illegal immigrants entering Canada and flowing southward. When we did an assessment and looked at it, we found there was a greater flow of people coming from the south to the north than the north to the south. We needed to have that common document to do that. We found that 60 per cent of our undocumented illegal refugees in Canada were coming to us from the United States.

Prior to having that report, what was the perception? Clearly, the perception was one-sided, from their side of the border. As a matter of process, we want to know what illegal smuggling, what drugs, and what guns flow across the border. When we have that information, we can have a constructive debate. Yes, there is marijuana going from Canada to the United States. By the way, there is cocaine coming from the United States to Canada. The snow we have here is frigid. It is different than the snow they have.

When we look at it, we can sit down and debate. We indicate the border is a common problem. It is a border that is abused by criminals or terrorists on both sides. We have heard of problems about the ease of obtaining documentation in Canada.

I have comments from a prosecuting attorney, who appeared before the Senate of the United States, dealing with a case in North Carolina where individuals in North Carolina were involved in tobacco smuggling. The purpose of the smuggling was to finance Hezbollah activities. When you look at it in terms of the 25 people charged, what do you find? You find individuals who entered the United States from Venezuela using false visas, who stayed in the United States, who obtained all sorts of documentation, who stayed there for multiple years and who obtained marriages of convenience; all the kinds of criticism that we see levied at Canada, replicated in the United States. In other words, it is a challenge that the two jurisdictions have. How do we address that? I talked about identity theft. It is a problem not just for Canada but also for the United States. We both have the same challenges and we are both trying to address them.

Senator Forrestall: You are making an interesting point. Has anyone made an estimate of the number of people in the United States that American officials are vaguely aware of but do not know?

Mr. Kennedy: I have heard a number. I would not take it as authoritative, but there is a number bandied around, maybe a magnitude of five or six million people who would be illegally in the United States. From the size of the country, you can understand why. I suspect it would be difficult for New York City to function without a population of people who are not illegal. We have about 30,000 in Canada. I have heard a figure of five to six million. The challenge is estimating an unknown. I would not say that is scientific. You must have something more rigorous to estimate it. It is a significant problem for both jurisdictions. If you approach it that way, then you sit down and ask, how can we resolve that? These two countries are unique countries in the world. They are unique for the following reasons: Both countries have a British common law system. Both have constitutionally enshrined rights and freedoms that are similar in terms of constraint that governments and officers work within. That allows us to craft models that are somewhat analogous. We can learn from each other, which is why we can sometimes carry on a dialogue that is more constructive than any other countries.

Senator Forrestall: I cannot find too much fault with that.

Can I move briefly to integrated border enforcement groups and the corresponding group? How many did you indicate that we have now?

Mr. Kennedy: There were 22 working in 11 geographic areas. We tried to put them into geographic areas so that if the flow changes as people abuse a particular area, then the team will react to that.

Senator Forrestall: Could you tell me generally where the 11 regions are? Does it embrace the country?

Mr. Kennedy: Yes. I have a document that we could leave with you. It runs across from the Pacific region to the Okanagan Valley, the Rocky Mountains, the Prairies, the Red River, the head of Lake Superior, the Detroit-Windsor area, Niagara Falls, Thousand Islands, Cornwall-Massena area, Valleyfield, Champlain, eastern New Brunswick and the Atlantic. We can give you other details, but those are geographically where they are across the country.

Senator Forrestall: Where would you have them in Atlantic Canada; in New Brunswick?

Mr. Kennedy: I believe it is New Brunswick. Obviously, there are smuggling activities that occur in New Brunswick.

Senator Forrestall: How do you handle the water-borne movement of traffic?

Mr. Kennedy: That is a challenge. The RCMP put in place a coastal watch program that has been in the Maritimes for a while. They are seeking to extend it across the Great Lakes and to areas like that. Clearly, the challenge for the country is the great expanse of water, including the Great Lakes.

Senator Forrestall: I was going to ask about the Great Lakes. We are still working that problem out.

The Integrated National Security Enforcement Teams, INSETs, what about them? How many are there and where are they located?

Mr. Kennedy: There are four. They are located in Montreal, Ottawa, Toronto and Vancouver.

Senator Forrestall: Why Ottawa?

Mr. Kennedy: These are areas that we look at in terms of size of population. Also, Ottawa has a lot of foreign missions and things of that nature. They are put where we thought there would be business.

Senator Forrestall: That makes sense.

The Chairman: On the subject of information, Mr. Kennedy, do we have a copy of your remarks this evening?

Mr. Kennedy: I could make a copy available. I have not read them exactly because I wanted to speed up the presentation, but I will leave a copy with you.

Senator Cordy: You have certainly given us a lot of information. I am a visual person, so I would be delighted to receive something to read instead of listening.

Getting back to something Senator Forrestall raised with you, namely border security issues, you mentioned in your presentation the misinformation that both Canadians and Americans have been given by the American media. You said that the border is abused by criminals and it does not matter which side you are on because the criminals will look at ways to abuse the border and to get their goods or themselves across the border.

Could you give our committee a list of policies that Canada would like the U.S. to adopt to enhance border security from their side?

Mr. Kennedy: I tried to make it a collaborative effort with our American colleagues and not to be too directive- related. We try to develop a consensus that allows us to go there. Our dialogue with them has not been, you must do this or that. At times, we have been subjected to that, by the United States at large and not necessarily the administration, in terms of suggesting improvements that we could make. I would indicate merely that we both face common problems. We have tried to say, ``There it is. Will you look at it and please fix it?'' One area that clearly is of concern to us recently, and you may have read about it in the paper, is the issue of illegal handguns. Approximately 85 per cent of the handguns used in the commission of crime in Canada come to us courtesy of the United States.

The challenge there, clearly, would be, is there anything they could do to assist us in dealing with, for example, the acquisition or the smuggling of those guns across the border? We can clearly look at our side of the border; once they have them and they are coming in, if you apprehend them, fine. Anything they could deal with in terms of Canadians acquiring those weapons in the United States would be useful. How that could be accomplished, I am not sure. They would have to look at it within the constitutional framework of their own country, what their laws are and what they can do. It may be a case of more vigilant enforcement. The U.S. Attorney General recently launched a program called ``Operation Safe Neighbourhood.'' In the program, more resources have been dedicated in terms of prosecutors dedicated to firearms offences in the United States, and greater direction to make penalties more severe to act as deterrent. Those are the things that can be done on the ground, which is obviously more vigorous enforcement of current laws. Anything else within their power to tighten up those laws would be useful.

Senator Meighen: On that point, first, is there anything that would act as leverage on the Americans to exercise greater control of handguns smuggled from the U.S. to Canada? Once they are across the border, other than being good neighbours, I do not know what the incentive is. Second, have we launched any initiative, and have we put any money specifically, against this problem of handgun smuggling? I will not make my editorial comment about better to prevent that than to worry about registration, but are we spending any new money specifically on prevention of smuggling of handguns from the south?

Mr. Kennedy: First, the leverage comes from collaborative partnership. I will give you an illustration. At the cross- border crime forum the Americans said, ``American retirees are being victimized by telemarketing fraud operations based in Canada. What can you do about that very significant problem?'' Canada looked at its Competition Act and put provisions in the law dealing with telemarketing fraud. They put wiretap provisions in there, because that is the kind of activity and technique you need to do it. We changed the provisions in the Criminal Code dealing with what evidence could be used in a trial. With telemarketing, you might have 500 victims; how can you afford to bring 500 U.S. victims to a trial in Canada? It becomes prohibitive after awhile. Provisions were changed to allow people to go to centres in the United States to give audiovisual testimony to be used in the proceedings.

Concrete things were done. Pilot projects were put in place in Toronto, Montreal and Vancouver, jointly operated by the RCMP and the FBI, focusing on telemarketing fraud. It was addressed as a problem. It was an irritant. We have an obligation to ensure the border is not being abused and we have responded in an effective way. We have used the fact that we respond to their concerns as a vehicle to say, here is one activity where we would like your assistance.

With reference to border enforcement, every resource you put on the border for enforcement has an effect in terms of stopping abuse of that border. If you put more RCMP or customs or immigration, they will pick up the gun and drug smugglers. They will pick up the alien smugglers. It is like a fish net at the border. What you have done each time is added another strand and made it harder for them to swim through that border. You do not have to dedicate additional resources to gun smuggling. Any kind of enforcement will pick that up as another product. The same routes will be used for all the illegal activities. If you close down the routes and focus on them, it has an effect for you.

Clearly, it is easier to smuggle a gun across than a ton of something else, so there are those unique challenges. Equipment has been put in place that will assist detection. Obviously, the big scanners that customs will put in place will pick up that kind of stuff. A more alert and vigilant enforcement at the border will pick up suspicious conduct that, hopefully, will also pick up more of this kind of stuff.

Senator Cordy: I would like to talk about the Smart Border Plan that you mentioned earlier. I do not have my copy of the 30-point action plan in front of me, but I would like to know which points are under the jurisdiction of your department. You have given us a lot of information. However, could you extrapolate some of the changes that have been made, from the information you have given us, that relate specifically to the Smart Border Plan?

Mr. Kennedy: They run from point 25 on in terms of that particular list, and three or four new ones were added recently. The Integrated Border Enforcement Teams are one of the things that were there. Part of our challenge is to put training in place for those officials. One thing you must be aware of is that you have officers in two different jurisdictions. The cultures are somewhat similar, but obviously a little bit different. You have heard references to their customs officers carrying guns and ours not. We have a culture to establish, saying ``Here it is, and let us train these people.'' Once you get them working together in teams there is a different dynamic.

These units are not intended to be only enforcement teams. They also facilitate by reaching out because they have representatives from customs, immigration, RCMP and groups like this to reach out longer term and pass along information to their respective organizations that will take additional enforcement. They can do some quick hits on the border but, more importantly, they should be sharing information and allowing us to react across the border. To date, we have scheduled seven training sessions. Four have been done, with three more in place. Then there will be a second phase.

You talked about interoperability. One thing that was not a problem previously, when you had two forces acting independently, is that they must be able to talk to each other if you want to integrate them. How do you do that? You must develop some kind of technology where they can have shared radio systems.

A pilot was put in place for the IBETs to allow them to communicate with each other. The RCMP has invested $2 million to date, and it will cost approximately $3 million to put in place a system that allows IBET members to communicate with each other.

There is a longer-term challenge of integrating police forces across the border. The example is simple. Airwaves — bandwidths — are sold off to the private sector. In Canada, the police used bandwidth X; in the United States, X is in the private sector and the police use Y. To recapture that and come to the same bandwidth, someone has to buy back that bandwidth, which is expensive. We do not want to go down that road, so we have an interim solution for the IBETs to communicate. We will have to look longer term to see what can be done for interoperability in the other areas.

We are also looking at a bigger sense of interoperability. What do we have in Canada, for instance, that allows Immigration, Customs and the RCMP to communicate effectively with each other electronically? We are looking at that interoperability in Canada among federal departments and agencies. We have had ongoing discussions with our provincial and municipal colleagues so that police can have interoperable systems.

We also have started a dialogue with our American colleagues. I was in Washington recently with officials from the Homeland Security, including their chief information officer. We can start a dialogue now as we both are investing money in information technology to see how we can develop systems that are interoperable. Start the dialogue before you spend the money. Build toward particular standards.

That still will leave us with significant policy issues. Can we share? What can we share? What is the appropriate level of sharing, bearing in mind sovereignty, privacy and all these policy issues? To be in the position to have the debate, you must have systems that can talk to each other. If the systems are built, and they are not interoperable, it is not beneficial to even have the discussion. At least we are starting to have that discussion — to give them a sense of where we are going in terms of technical interoperability — so we both will be building our things in the same direction. That is one thing that is also in the cross border action plan.

Senator Cordy: I wonder about the Canada-U.S. Cross Border Crime Forum, which sounds fascinating. Do the U.S. Attorney General's department and Minister Easter's department in Canada come together with issues that have to be solved between the countries beforehand? How is it working?

Mr. Kennedy: This particular forum is a major success. I have been involved with it since its inception in 1997. At that time, I headed up a prosecution group dealing with American colleagues. Since 1999 onwards, I have been co- chairing it with an assistant deputy U.S. attorney general in Mr. Ashcroft's office. Our respective ministers lead the forum; and we have a regular annual meeting. The last one lasted approximately three days.

We also have working groups that are established during the year. We have ones on alien smuggling, mass-market fraud and organized crime; and we are going to do one on interoperability. You think these things are simple, but they are hard to do across countries. When you do them, they are strategic and beneficial for you.

In Canada, we might have the police force sit down and say, this is my list of criminal priorities — these 10 areas or 10 organizations. On the U.S. side, depending on the model they use to establish their investigative priorities, they may have five that are different from yours. To the extent that they do not overlap, those people can potentially abuse the border because we are not doing effective collaboration.

We have established a group whereby the two countries get together with the same common vehicle at the border so that they can use this criteria, apply it and identify the areas of concern and, more importantly, groups or individuals of concern. In this way, both countries would now be using the same model to target the same things. These working groups operate throughout the year to identify their particular problems and either put things on a practical level to make it work, or identify the obstacles and impediments such as resources, radio interoperability, or a difference in the law — a hole — that is being used.

That then prompts us to ask if the hole is on our side or on their side; and can we fix that hole? I meet with my American counterpart at the midterm to know where the working groups are and to set an agenda for an action plan to be delivered to the minister and the Attorney General when we next meet. Our next meeting will be in Washington in May. It is a concrete model that is designed to identify impediments and to find solutions. The solutions are not always easy.

Senator Cordy: You would not have to create a committee to solve them.

Senator Atkins: The subject is marijuana. How do you deal with your American counterparts as a result of the report by the Senate social committee?

Mr. Kennedy: I think the members of this committee were also on the social committee, which I appeared before when the committee looked at the marijuana issue. American colleagues realize that we are two sovereign nations. The major issue that our colleagues have is that we are dealing with the cultivation and the exportation of large amounts of drugs. That really is the threshold issue.

On the ground, the reality is that both countries actually take similar approaches to dealing with the marijuana possession issues. In other words, we both recognize that it is a health problem and, in an ideal world, no one would use the substance. No one is out trying to rack up points by the number of people locked up for marijuana possession; that is not it. We both have the same philosophy: Get people off the drug, if you can.

In addition, the Americans are heavily involved in diversion, just as we are — by the police officers exercise of diversion and diversion by the courts. They have some 700 courts in their jurisdiction that specialize in marijuana cases and that deal with diversion, not only with marijuana but also with other drugs. The object is to get people off those drugs. There is recognition of the addiction problem and that the addict is forced by that behaviour to consume the drug. We both take vigorous action against traffickers, importers and cultivators.

Our philosophy in dealing with users is similar. We may be dealing with a case of optics more than anything else — perception. Clearly, the challenge will be to articulate that whatever the government may do with respect to marijuana does not signal an approval of the use of the drug. No one has suggested for a moment that it is beneficial to use that substance.

However, it is a challenge for us that the Americans have almost identified marijuana use as their number one priority. They have looked at pharmacological information that causes them to believe that marijuana has a major effect on the mind of young people going through puberty. I am not in a position to debate the science but it has been portrayed as a major issue for the United States.

For us, the border issue is usually for larger quantities and not for possession. It is an irritant and probably will be brought to your attention.

Senator Atkins: When we have our annual meeting of the Canada-U.S. Interparliamentary Association, Minister Easter will know that the American's two priority issues are marijuana and other drugs, and the other is energy. They are obsessed by the whole drug issue. I would have thought that our report would have made our representation in the U.S. a little uncomfortable.

Mr. Kennedy: Amongst other things, I am the Vice-Chairman of the Organization of American States Commission on Drugs. Obviously, the U.S. is a member. Mr. John Walters, the U.S. drug tsar, attends and speaks there. I am aware of the position in the 34 countries in the Western Hemisphere, including that of our American colleagues.

We are a democracy, we have parliamentary systems, and we have legislators and committees. We look for guidance from the Senate as well as from the House committees. I am sure the government takes all that under consideration.

Senator Atkins: In respect of container shipping, we know that there are Americans in our ports for the purpose of inspections, certainly, in Halifax. A majority of containers go through our ports to the United States. Once they get through the inspections in Canada, they cross the border into the U.S. Are any of them re-inspected?

Mr. Kennedy: I would not pretend to answer that question. I know that Mr. Denis Lefebvre, Assistant Deputy Minister, Canada Customs and Revenue Agency, CCRA, who appeared before the committee, would be a good choice to answer that question. I am clearly cognizant of the container issue and the flow of containers through ports. In Halifax, about 60 per cent of the containers that go through are destined for the United States. I would defer to Mr. Lefebvre on that and I could refer the question to him on your behalf.

Senator Atkins: Are you interested in port policing?

Mr. Kennedy: I am aware of the issue and I have heard questions asked about it over the years.

The government had a recent announcement in terms of additional efforts that were put in place to deal with ports and their maritime security. It is clear that we are seized by the issue of ports and either organized crime and/or national security concerns. The RCMP is working closely with customs, immigration and transport to determine what can be done in that area. Local policing has the primary responsibility in those sites and they are working in close cooperation with the agencies I have just indicated.

Issues have been looked at in the past that involved port policing. It was found that that was not the solution. There is no doubt that a focus on major entry points to the country — airports or seaports — is important because they are vulnerable to organized crime. They should be of interest to us and they are of interest to us. Steps will continue to unfold that will enhance our capacity to address that. Hopefully, it will reach the point when you will not be asking about the need for ports police because you will be satisfied with the way that it is being done. We are aware of the need for greater work in that area.

Senator Forrestall: Could you tell us about your understanding of the term ``diversion?''

Mr. Kennedy: Are you asking that in terms of the drug issue?

Senator Forrestall: Yes, and in terms of the role of the courts.

Mr. Kennedy: I indicated that, right from the beginning, a police officer that has to deal with a marijuana issue may exercise discretion to charge or not charge someone under Common Law. Years ago, I looked at some statistics in British Columbia, I believe. When a drug is seized, that seizure must be reported. In about 50 per cent of the cases where a seizure occurred, an officer exercised his discretion not to lay a charge. That same discretion can be used in the case, for example, of two young lads having a scuffle. The officer may lay an assault charge or a public disturbance charge, or he may exercise discretion. Our system is designed so the officers can exercise discretion, so it is exercised in that area as well.

When the matter goes to court, the prosecutor can exercise discretion as to whether to take it to trial. The prosecutor is separate and distinct, in terms of his or her function. If you check with the Department of Justice and their federal prosecution service, a prosecutors' manual includes a chapter on diversion. The Crown will exercise its discretion to divert someone without having him or her proceed in the normal fashion. That can be done by the prosecutor or in instances where we have specific court models in place. There are pilot projects in Toronto and Vancouver, and we are looking to establish a pilot in Ottawa, where there will be a particular model of court in place. The judge would be involved in a decision to divert, where someone is set off to follow an addiction treatment, life skills or job skills development program. If they do, the agreement would be for the person to return to the court, where the Crown could stay or withdraw proceedings. Those are the kinds of formal procedures and diversion models in place.

Senator Forrestall: That is what I would have understood, but I wanted you to say that for those who are following our work. I appreciate your explanation.

The Chairman: You mentioned Vancouver, Mr. Kennedy. Certainly, when the drug committee was there, the police chief informed the committee they were not prosecuting simple possession. We asked the view of the Crown and the Crown supported that position. They are just not there.

Mr. Kennedy: I do not have particular knowledge. I am sure the Department of Justice could say what they are doing, but there is discretion that can be used.

The Chairman: This is an example of that discretion being used, but in that city, it appears to be a total discretion.

Coming back to your response to Senator Atkins on ports police, we have not yet found police in Canada that specialize in ports. At airports, the transfer from the federal level to municipalities has resulted in significantly fewer police being present, which appears to be one of the motivations for the transfer.

Mr. Kennedy: I think there are two things, if I can speak to that issue. There were two roles that were played by enforcement agencies, particularly at our major airports. There was the kind of job that was, as you pointed out, subsequently tendered out by competition, for which police forces like Peel competed. That job is to provide security there and to respond to passengers that pose difficulty. That was put out to tender. The RCMP is at some of the airports, because they are under contract. There are also permanent federal resources that are there, independent of this other policing. There are obviously RCMP officers dealing with drug smuggling investigations who are posted there, in addition to customs, immigration and the intelligence services. There was always a cadre of federal police officers fulfilling a national police service at those airports, independent of the other security components. The question becomes what concerns we are looking at and whether they are adequately addressed. However, I wished to indicate that there are two levels of policing.

The Chairman: The committee is aware of that. The information we have collected from the RCMP would indicate about a 40-per-cent overall reduction in police individuals or person-years over the last 10 years, while there has been a 100-per-cent increase in traffic at the airports.

Mr. Kennedy: Three years ago the government made an additional 100 or so police available to the major airports, such as Montreal, Toronto, Halifax and Vancouver, to supplement the core capacity, in addition to whatever the airports were contracting. When you go back over that period of time, clearly that role had gone to the local police. To that extent, it would be a reduction to the RCMP presence. Whether it meant a total reduction in the number of officers, I am not sure. I suspect, if you did a head count, there has been an increase.

The Chairman: No, Inspector Sam Landry did a head count at Pearson. You spoke about an extra 100 officers across the country, but he is down more than 100 officers in total, including dedicated RCMP, Peel Regional Police and OPP. The total number of police is down over 100 at Pearson airport, if Inspector Landry is correct. He provided that information under oath before the committee.

Mr. Kennedy: I do not have the information. I tried to indicate what I do have. I did not do a head count, so if you have specific information, I must defer to that.

Senator Banks: I will revert to marijuana. I want some help from you on that issue. As you pointed out, both the chair and I had the honour to be members of the special committee. You know therefore what our opinion is. I think it is fair to say that, while we do not expect the government to do what we recommended, we are expecting the government to move in the direction of decriminalizing it, because of pronouncements that have been made subsequently and because of the House committee that has reported subsequently. It would be a misdemeanour, subject to a ticket of some kind. You are, as you said, the vice-chair of the Inter-American Drug Abuse Control Commission. Canada is signatory to some international conventions with respect to the law, and we will be, as you quite rightly said, questioned about this when we go there. You said when you were talking about that question that the American view and ours were essentially the same. We met with Mr. Walters and other Americans who were involved with this, and we found them not to be the same, to put it most kindly. We disagreed fundamentally with them, not so much as to what is being done with respect to the diversion and certainly not in respect of anyone promoting the use of any drug that is bad, or suggesting that one is okay because that is not true. It was rather a distinct difference that our committee saw, between marijuana on the one hand and opiates and other chemical things on the other hand, which are demonstrably different.

You made an equation between saying to them, when they complain about our marijuana problem, ``you have this cocaine problem.'' We see such a gulf between those two things that I wonder, when you go to the meetings of the Inter-American Drug Abuse Control Commission and if our government moves in the direction which I have described, will you be comfortable and should we be comfortable in saying, ``We are a sovereign country and we have decided to do something differently.''

Notwithstanding our international conventions, with which I assume you are familiar, my question is, will you be comfortable in that situation? If you are, that will give us some comfort in that situation.

Mr. Kennedy: Well, to date, my comfort has been irrelevant, so I think it will continue to be irrelevant.

Perhaps it was how I articulated myself in terms of the American view and ours. I am saying that once we get into practice in terms of how we treat these people, we treat them much the same way. That was what I was endeavouring to get at. There is no doubt that the position the Americans take on marijuana is very clear and very strong. I have indicated that they view it as their number-one drug problem.

In terms of the international convention, I do not propose to give any legal advice here, because that is not the function. I believe the convention talks about a prohibition but does not necessarily indicate what the nature of that prohibition would be. I believe there would be some scope for movement there.

I am sure that the legal experts at the Department of Justice would be advising the government as to whatever regime it crafted so as to ensure it would in fact respect that particular convention. Other signatories to the convention have moved away, to some extent, from a strict, harsh criminal model as well. There appears to be, across the world, some room for how these things are crafted.

In terms of the commission itself, it will have its next annual meeting in Canada, because Canada has been elected vice-chair. What normally happens is the chair becomes the chair of that commission, and at that point the event is held in Canada. In the fall or thereabouts of 2003, the Organization of American States drug commission will be somewhere in Canada holding its meeting. At that time, if movement is taken, we will be able to discuss it then.

In terms of a comfort factor, I am a Canadian official. We are in Canada. Canada is a sovereign country. Whatever the laws of Canada are that Parliament passes, those are the laws of Canada.

Senator Banks: Damn right!

On a different subject, you mentioned the preying upon seniors and retired people by those despicable people who run those phone scams. Many of them, it is fair to say, were hiding behind, if that is the word, or taking advantage of, a different regime of civil law in the Province of Quebec. In particular, they had certain advantages there that they would not have enjoyed in other provinces in respect of what they were doing. Has the movement to which you refer been successful in finally getting at some of those people who were practising that nefarious thing in Quebec?

Mr. Kennedy: In terms of telemarketing fraud, we have made regular reports to the Attorney General of the United States and to the Solicitor General of Canada for the past number of years. There has been vigorous and increased enforcement in the cities that were of concern. We are starting to get more significant penal sentences. The problem frequently with what is called ``white collar crime'' is the sentence does not reflect the amount of damage being done. There seems to be a propensity that if there is a crime of violence, you get a big sentence, but if you render someone destitute, it does not seem to translate into that same degree of severity. Yet, for these people, it is life destroying.

On two fronts — one is to get some sentences that are actually deterrents and to increase the number of investigations, and of course to secure convictions — we have been doing more. It is not just coupled with that kind of action. There is a fairly vigorous public education campaign in Canada — a warning system — that when the latest scam comes out, it warns people as to what it is. You have probably seen it on television and radio, and we try to do mail-outs. Prevention is the best solution. If you know the scam, you will get it.

I have to confess. I have received at least five to ten scams over my Internet soliciting various kinds of things that to me are transparent frauds, but obviously people respond to them. Once you educate people, they know it is a fraud and do not respond to it.

It is both of those: increased enforcements and enhanced education. We are doing well in Canada, certainly relative even to our American colleagues. They are looking at some of our best practices.

Senator Banks: Do you know offhand whether any successful prosecutions of those people have been made in Quebec? If not, could you find out and let us know?

Mr. Kennedy: I believe the answer to that is ``yes.'' We will find out for you. If we have reports, I will make available to you some of the documents we have made available to the Attorney General and the Solicitor General.

Senator Meighen: I may have found the answer to my own question. It is amazing what you find out when you read. I was interested in the degree of interaction between you and Mr. Bilodeau. Am I correct in saying that you are the Solicitor General's representative to the interdepartmental Intelligence Policy Group, and that group is chaired by Mr. Bilodeau, or by the Privy Council Office?

Mr. Kennedy: Yes. Mr. Dickenson, who was seated here, chairs the IPG, and his boss is Mr. Bilodeau. Mr. Bilodeau chairs what is called ICSI, which is the Interdepartmental Committee on Security and Intelligence. Because Mr. Dickenson and I try to split the world between ourselves, I chair a committee at the ADM level on public safety issues, which has 15 or 16 departments and agencies. Between the two of us, we lever coordinating the intelligence and policing world and any overlap between them. I sit on his committee, and he sits on my committee, so we keep it all straight.

Senator Meighen: You heard the reference from Mr. Bilodeau, because I think you were in the room at the time, that there is a move to one-stop shopping in the United States. Presumably this interaction between these various committees, if not in name but in fact, does provide some place where information of common interest is exchanged. To that extent you could call it one-stop shopping on our side of the border.

Mr. Kennedy: Our system is quite good. It really is. We have critics who find it hard to believe, but I keep saying it is quite good. Yes, we meet and share information and coordinate our activities. You have to be aware that creating one department or agency is not necessarily the solution. If you create a department with 170,000 people in it, I do not know how you think they fit any better than before. We could say yes, we have one department, the Government of Canada. You would still break it down into different roles and responsibilities and require people to talk to each other.

Senator Meighen: Is that not a challenge the Americans have on the border, with a broad diversity of agencies responsible for various aspects?

Mr. Kennedy: Well, even in terms of homeland security, it is not the total take, because the Attorney General of the United States still has the FBI. The Alcohol, Tobacco, and Firearms folks will be there. You still have separate intelligence community folks, such as the CIA.

There is a point where, almost like regionalization, it can work, but you have to be careful. The best thing is to address the behaviours and have people realize that you should be at the table. You need that information. We should work together. We should share information and be interoperable. It does not matter if you are in 1,000 departments or agencies or one, if you have that kind of culture there.

Senator Meighen: We have CSIS, which, to put it in vulgar terms, looks out for bad guys in Canada before they commit some heinous crime. The Americans have the CIA, which appears to be concerned with bad guys outside the United States. They have the FBI, which is concerned with bad guys who have committed a crime in the United States. Who worries about the bad guys in the United States before they commit a crime, similar to our CSIS?

Mr. Kennedy: The FBI also has representatives around the world, so they are located not just within the United States. In terms of policing, their mandate is just like that. The RCMP has liaison officers abroad who work with other foreign police officers. The American FBI does the same thing, so there is representation abroad from them.

Senator Meighen: It never trips over the CIA, I am sure.

Mr. Kennedy: The CIA does not purport to have a law enforcement mandate. It has a foreign intelligence mandate, whereas the FBI clearly does counter-intelligence and law enforcement, which would include, in their particular case, terrorism activities. Hopefully between them, they have it sorted out that there is not an overlap or a gap.

Senator Meighen: Essentially you are saying the FBI would be responsible for monitoring the activities of a suspected terrorist within the United States.

Mr. Kennedy: That is the mandate.

The Chairman: Thank you, Mr. Kennedy and Mr. Pilon. Your comparison was helpful to the committee. If we could have a copy of your text and the other information we have asked for, we would appreciate that very much. We are grateful to you for the time and effort you have put into assisting us, and we will also be back to you with more questions in the future.

To those following at home, we have, three weeks from today, on March 17, a full day of hearings beginning at 10 a.m. We will hear from General Daigle and Colonel Rick Williams from the Department of National Defence, Mr. Robert Fonsberg from the Privy Council Office, and Mr. Daniel Jean, Assistant Acting Deputy Minister from Citizenship and Immigration.

If you have any questions or comments, please visit our Web site by going to We post witness testimony, as well as confirmed hearing schedules. Otherwise, you may contact the clerk of the committee by calling 1- 800-267-7362 for further information or assistance in contacting members of the committee.

This portion of the committee's meeting is adjourned, and we will continue in the next room in camera.

The committee continued in camera.