OTTAWA, Monday, October 31, 2011
The Standing Senate Committee on National
Security and Defence met this day at 4 p.m. to examine and report on
Canada’s national security and defence policies, practices, circumstances
and capabilities (topic: Protecting Canada from Iranian attempts to acquire dual-use technology).
Senator Pamela Wallin (Chair) in the
The Chair: Ladies and gentlemen, welcome to
the committee proceedings for the Standing Senate Committee on National
Security and Defence. Today we will continue our look at the issue of how to
protect Canada from Iranian attempts to acquire dual-use technology to
further its nuclear weapons development program.
To do so, we have an impressive list of
witnesses from Public Safety Canada, the overall agency, and its separate
agencies underneath. Thank you very much for being with us today.
Let me introduce John Davies, Director General,
National Security Policy, Public Safety Canada; Geoff Leckey, Director
General, Intelligence and Targeting, Canada Border Services Agency — you
will hear people refer to it as the CBSA; Mike Cabana, Assistant
Commissioner, Federal and International Operations, and Guy Poudrier,
Superintendant, Director, Customs and Excise Branch, from the Royal Canadian
Mounted Police; and Jeff Yaworski, Assistant Director of Operations for the
Canadian Security Intelligence Service.
Gentlemen, welcome. We heard testimony last
week from two academics on the politics surrounding this, and from some
officials on the technical aspects of export control and some forms of
intervention. I will caution everyone again that you folks are not ministers
of the Crown and, therefore, not responsible for the decision-making, but
can explain the policy and how and why some decisions are made.
I gather there are some opening comments. We
will begin with Mr. Davies.
John Davies, Director General, National
Security Policy, Public Safety Canada: Good afternoon. I am pleased to
be here today to talk about Public Safety Canada's role regarding
Our mandate is to coordinate and support the
efforts of federal organizations, ensuring national security and the safety
of Canadians. To achieve this, our department relies heavily on the
operational expertise of the portfolio agencies that are here with me today,
as well as other departments, in the development of advice and policy
Our role with regard to proliferation, as with
any other threat to national security, is to leverage experts' knowledge to
examine the threat and to identify the risks that Canada faces, with a view
to developing the best policy advice for the minister.
Proliferation activities pose a threat to
global security and continue to evolve as global transport,
telecommunications and financial systems are increasingly interconnected.
Proliferation networks also continue to adapt by using covert or deceptive
techniques in an attempt to evade our controls. I have a brief overview of
the different approaches and tools available to us as we deal with this
The first and most obvious is that Canada has a
number of acts and regulations to manage the export of controlled goods and
to prevent proliferators from illicitly exporting materials of proliferation
concern. You heard last week from our colleagues at the Department of
Foreign Affairs and International Trade Canada and I will let Mr. Leckey
from CBSA go into more detail on that aspect.
Second, the government investigates and
prosecutes individuals and entities engaged in proliferation activities on
Canadian soil. The Canada Border Services Agency, RCMP and CSIS collect,
analyze and share information on suspicious activities of individuals and
entities, as well as on their methods and transactions. Canada also receives
intelligence on proliferation threats from our allies, notably in the U.S.
This information is critical for us in developing the necessary leads for
Third, the government controls access to
sensitive facilities to prevent proliferators from obtaining and sharing
Canadian high-tech goods, technologies or expertise. Securing access to
sensitive facilities like chemical plants, nuclear facilities and protected
laboratories is essential to prevent the sharing of information or goods for
Finally, we can impose sanctions, such as
restrictions on financial transactions related to proliferation activities,
as they are now in place for Iran and North Korea. Again, you heard from our
colleagues at Foreign Affairs last week on this matter.
In summary, Public Safety Canada continues to
work with its partners, notably our portfolio agencies, to develop policy
and legislative options to strengthen Canada's domestic capacity to counter
proliferation threats. Overall, our efforts must meet the evolving threat
environment and best practices of our allies. As we continue to examine
these proposals to improve Canada's counter-proliferation regime, we are
mindful of the current fiscal environment, however.
I hope this overview is helpful to you and I
look forward to your questions.
The Chair: Mr. Leckey, you may go next.
Geoff Leckey, Director General, Intelligence
and Targeting, Canada Border Services Agency: Madam Chair and honourable
senators, I want to thank you for the invitation to speak to you about the
role of the Canada Border Services Agency (CBSA) in preventing exports of
controlled, restricted, and dual-use technology.
The committee may be more familiar with the
CBSA’s role and processes when it comes to goods entering the country.
However, I would like to focus my remarks today on our efforts concerning
goods leaving the country, and how those efforts fit into the continuum of
The CBSA's counter-proliferation efforts are
based on a multi-layered approach. In the first layer, there are specific
legislative requirements for exporters to report goods to the Government of
Canada under the provisions of the Customs Act. The CBSA verifies that these
exports comply with Canada's laws.
The next layer involves domestic and
international cooperation, as well as intelligence-sharing with law
enforcement partners. This intelligence is used to identify high-risk
entities prior to export in order to issue border lookouts at ports of
With export and inspection personnel posted at
all of Canada's major international air and marine ports, the CBSA is
Canada's primary counter-proliferation enforcement arm. This enforcement
layer at the front line is part of the CBSA's export program, which is
designed to control strategic and dangerous goods from leaving the country,
as well as those in transit through Canada.
Specifically, the CBSA interdicts exports to
countries that pose a threat to us or our allies; countries involved in or
under imminent threat of hostilities; countries under UN Security Council
and/or Canadian sanctions; and countries whose governments have a persistent
record of human rights violations.
If the goods do not comply with these acts,
enforcement actions may be taken, ranging from the imposition of fines, to
seizures of goods, to the laying of charges.
The CBSA plays an important role in national
security at the physical border and, just as importantly, behind the scenes.
All of these layers demonstrate the agency's commitment to stopping various
goods, such as controlled, restricted and dual-use technology, from ending
up in the wrong lands.
The Chair: Mr. Cabana, please go ahead.
Mike Cabana, Assistant Commissioner, Federal
and International Operations, Royal Canadian Mounted Police: I would
like to start by thanking you for providing us with the opportunity to speak
to the proliferation issues that are affecting Canada.
If the committee so wishes, in an effort to
afford the committee sufficient time to ask questions, my understanding is
that you have a copy of my opening remarks that touch on our mandates, some
of our prevention efforts and our outreach to the industry. If you wish, I
will just leave it at that.
The Chair: That is wonderful. I appreciate
your concern for time to allow us to ask questions.
Jeff Yaworski, Assistant Director Operations,
Canadian Security Intelligence Service: Good afternoon. I am pleased to
be here today to offer CSIS's perspective on issues related to
As set out in our founding act, CSIS is
mandated to collect and analyze information and intelligence from Canada and
abroad. We then report to and advise government on national security
CSIS is interested in the procurement of
dual-use technology when the attempts are made covertly and when they
implicate Canadian companies or citizens. The proliferation of chemical,
biological, radiological or nuclear weapons and their delivery vehicles
poses a real threat to the security of Canada and to the international
community. The pursuit of programs by certain states to acquire such weapons
increases global tensions and could even precipitate armed conflicts, while
their actual use in war could greatly increase levels of suffering and
Intelligence plays a key role in detecting
proliferation-related activity and in disrupting procurement. It can provide
early indications that terrorists are developing or deploying chemical,
biological, radiological or nuclear capabilities, that related material or
designs are being traded or sold, or that the security of a national program
has been compromised.
Intelligence can also provide information on
the status of highly secretive weapons of mass destruction programs of
countries hostile to Canada, details on their procurement networks and
whether or not they have a Canadian nexus. Iranian activities in this regard
are well documented, but other countries are also advancing weapons of mass
destruction programs. Needless to say, collecting intelligence on activities
of this kind involves multi-dimensional and pan-geographic efforts.
That being said, the threat caused by the
procurement of dual-use technology remains difficult to investigate,
precisely because some of the technology used to develop weapons of mass
destruction can also be used for peaceful and legitimate purposes.
I will end my remarks here.
The Chair: Thank you very much; I
appreciate you all laying it out.
To begin with Mr. Davies, do you look at this
in terms of Iran only, or are you looking at other countries that may be
doing this as well? How is the net cast — geographically or the content of
Mr. Davies: Right now in terms of our
department's work, it is not really cast by geographic areas; it is more
thematic, with different components of Canada's domestic proliferation
regime and counter-terrorism efforts more broadly — what kind of things,
whether that be export controls, powers to investigators, information
sharing and that type of thing. We do not have the geographic expertise in
house; we rely on the operating agencies for that.
The Chair: In that sense, it is not Iran
Mr. Davies: That is right.
The Chair: Is everyone else in that
category as well? Are you looking for the product, the piece of equipment
that might be a problem, not necessarily where it is coming from or going
Mr. Yaworski: From a service perspective, I
would suggest that the threat is multi-dimensional. Iran is one of several
countries of proliferation concern.
The Chair: Do you have a comment on that
from the CBSA point of view?
Mr. Leckey: I agree with what Mr. Yaworski
said. CBSA efforts are heavily focused on Iran, but not exclusively.
The Chair: There are many questions to ask
you today. Senator Dallaire will begin.
Senator Dallaire: Gentlemen, you have given
us an introduction to what you would give a nonsecure-cleared committee,
which is pretty superficial, to say the least. Essentially, you are telling
us that you are doing a lot of coordinating and, hopefully, doing your job.
Thank you very much for that. That is to be expected. It does put an
extraordinary limitation on this committee to get into some of the hard data
that I think is essential for us to really provide advice to the government,
but that is another battle for another time. You are probably happy that we
do not have it because when I was sitting where you are sitting, that was
the position I had, but I am no longer there.
To get to the specifics, I would like to ask a
question of Mr. Davies and Mr. Yaworski. There is collation and
dissemination of information. Collation happens; few intelligence
organizations are good at dissemination. In fact, they do not like sharing.
I am seeking from you not the direct threat or
direct targets, let us say Iran in this case, but the middlemen exercise,
those who are intermediaries in that, and to what extent you can tell me
what your structure is for collation and dissemination. How are you
coordinating all these different efforts tangibly amongst your different
agencies to go to the middlemen of this exercise, be it a country or an
Mr. Davies: Every two weeks at the working
level there is a meeting of counter-proliferation experts who compare notes
and work through issues as needed. That is very much done at the
operators-analyst level and then all the way up from DG, ADM, DM to cabinet
level. There are cascading-up meetings on the same issues. From that point
of view, we think the people who have the information meet regularly to
discuss appropriate ways forward and appropriate actions.
Senator Dallaire: Our colleagues to the
south discovered that, although that was supposed to be happening, that was
not necessarily very effective between their 39, 40 or 60 different
What is your process at the DG if not at the
ADM level on a regular basis to ensure that the collation and dissemination
of information is brought about and that your two agencies are coordinating
efforts? I am looking for an answer on the non-target countries. What means
do you have for the middlemen who are acquiring this capability for
Mr. Yaworski: It is very difficult. These
are complicated investigations involving a multitude of individuals and
groups; involving a multitude of countries potentially; and involving front
companies and hubs of business traffic. They are not easy to investigate,
let alone prosecute.
In terms of your question as to how we share,
we do not have the same restrictions as sharing with this committee.
The Chair: Thank you for pointing that out.
Mr. Yaworski: We are all security-cleared.
As Mr. Davies has pointed out, we do meet at the working level on a regular
basis. We also meet at more senior levels. I am a representative of our ADM
national security ops group and we meet to discuss a wide array of national
security issues that are confronting us, one of which is proliferation. It
is an investigation that we take very seriously. Certainly, Iran is a
priority amongst those others that we are looking at.
Senator Dallaire: There are movements like
the Pugwash movement in this country that are concerned about proliferation
and, ultimately, looking at disarmament even. I put this to our colleagues
from the RCMP.
As a matter of fact, I am happy to see you here
wearing your uniform. I would have a question about various movements inside
the country having an influence on the purchasing of this type of material
and its shipping abroad rather than other counter-proliferation actions;
aside from the list, have you got a methodology allowing you to identify
these information sources and the entities existing in the country,
particularly in the communities becoming more and more dynamic here?
Mike Cabana, Assistant Commissioner, Federal
and International Operations, Royal Canadian Mounted Police:
Thank you for your question. It is not easy to answer.
The role of the RCMP in all of this is the
criminal prosecution, criminal investigation side of the proliferation
In the course of our everyday business, we do
engage different communities in Canada. We do have sources of information
within different communities and we have partnerships with different law
enforcement agencies, police at the front-line level, as well as with other
nongovernment agencies and with the industry. Through all of those contacts,
we gather intelligence. Even though we are a law enforcement agency, our
mainstay really is gathering of intelligence to identify criminal offences
that are being committed and trying to secure sufficient evidence to
prosecute. In that process, we collect from every walk of life. We are not
focused necessarily on one specific community. We receive referrals from
different agencies and we collate, as you pointed out, the intelligence,
which informs us in which direction we are supposed to be going.
Senator Lang: We have heard over a series
of meetings that dual-use technology is of concern not only to this country
but to a lot of other countries and utilizing for purposes that we obviously
do not want to see happen.
The concern I have is from the Senate
committee's point of view. Exactly what is being asked further of government
to put more laws or policies in effect to allow your various departments to
do your jobs and do them effectively?
The first question I have would be to Mr.
Davies. It concerns how we prosecute a situation of terrorism now using the
Criminal Code and that high bar with respect to how we proceed through the
courts. In the future, will we be looking at changes to how we prosecute and
pursue a case where we have a situation that is in most cases circumstantial
from the point of view of evidence? Are we looking at a situation where we
will, perhaps, have to change how we advance through the courts so that we
can properly prosecute those individuals that are set out to do us harm in
the long term as far as our society is concerned?
Mr. Davies: Are you talking particularly
about potential changes to the Anti-terrorism Act or other related acts?
Senator Lang: Yes, and in any of the other
legislative frameworks that you have in place for all your various
organizations to do the job of security in general.
The Chair: Last session the Special Senate
Committee on the Anti-terrorism Act looked at whether or not you treat
terrorism and the surrounding activity as criminal behaviour; whether you
have separate rules for it. I think that is part of what the senator is
Mr. Davies: A major effort we are
undergoing now is related to following up of the Air India action plan that
was presented to the public last December. A specific commitment in that is
how to improve information-sharing related to national security, which gets
into the basis from which terrorism cases can be brought forward.
We are working through that proposal now and we
are willing to meet with the minister and will be presenting options in the
The Chair: Mr. Cabana, do you want to
comment on that as well?
Mr. Cabana: I believe it is on point with
your question, senator.
Within the RCMP, as you pointed out, there is
some activity that is considered purely criminal and there is some activity
that has a clear national security terrorism nexus.
Internally within the RCMP we have a
de-confliction mechanism to decide how to treat any referrals we receive or
information that surfaces from one of our field offices. A lot hinges on the
termination of the end user and the kind of evidence which surrounds that.
If there is clear indication that we can identify the end user and purpose
for the proliferation or transaction — the export of the goods — then our
national security program will take ownership of the file. It will be done
in accordance with the governance of national security investigations. If
the evidence is not clear, it stays on the criminal side and is handled in
accordance with framework that governs criminal investigations, which we
I do not want to speak for my colleagues on the
panel, but one of the key issues is intelligence to evidence. Even in the
context of a criminal investigation, a lot of the information that is
provided originates from the intelligence side. In the context of criminal
prosecution, the ability to manage that is still difficult. The mechanisms
are not necessarily there yet.
Mr. Davies: The Department of Justice is
working on that issue right now. You may want to talk to officials in the
department if that is particularly your interest.
Senator Lang: Could I pursue this further?
I direct this to everyone on the panel and anyone can speak to it.
It is safe to say that the government will be
looking at further legislative steps that should be taken — in order to meet
the threats that are facing us as a free world — so that your various
departments can do their job effectively. Is that what I am hearing?
Mr. Davies: Yes.
Senator Lang: I will pursue the question of
immigration. I do not know how closely you are tied to Citizenship and
Immigration Canada, CIC. We are centring on Iran. From a point of view of
security, hopefully there is a tie-in. Take a look at the banking scandal
out of Iran that has been written about in the last two months. We have one
dual Canadian and Iranian citizen who has now moved to Toronto. Another one
that was involved in that particular scandal has now moved to Montreal.
According to what I read in various newspapers, there is some question with
respect to how we tie in as a country with our immigration policy and how
easily these individuals get Canadian citizenship. There are allegations
that one individual was in charge of Bank Melli. It was thought they might
be tied into terrorism and other aspects we would be concerned about. How do
your departments work with CIC to ensure we are not giving outside Canadian
citizenship to individuals who could use it for their own purpose and make
it difficult down the road?
The Chair: Last week we talked about the
imposition of sanctions on Iranian nationals, but not about what happens
with dual citizenships.
Mr. Davies: The Immigration and Refugee
Protection Act is the main piece of legislation. CIC is leading an
admissibility review, particularly the sections of that acts linked to
security. Our department is looking at the security certificate process and
the process around that as well. From my perspective, there is an active
look at this area.
Mr. Yaworski: Perhaps I could add to that
from a CSIS perspective. In the case you are alluding to, Bank Melli is a
state-owned Iranian bank. One of the two individuals in question is the
former chair of the bank and is in Toronto, as you alluded to.
The charges against him relate predominantly to
embezzlement, as I understand it. We have no extradition treaty with Iran,
and Mr. Cabana can speak to that issue. It is not related to the
counter-proliferation issue per se. In terms of the role of CSIS, we
investigate threats to the security of Canada and individuals in Canada,
regardless of their citizenship. We provide advice to CIC with respect to
individuals of security concern. In the case of this particular individual,
nothing came to the surface that I am aware of.
Mr. Cabana: I fully agree with my
colleague. There is a process in place, as Mr. Yaworski alluded to. Our
agencies are supporting CIC in their decision-making process.
Senator Lang: I will pursue this to keep
the train of thought going.
What caught my attention in the early part of
October was the article which stated "the international community had long
been concerned about the bank's other activities . . . of funding Iran's
nuclear missile programs."
In respect to this situation, I do not think I
accept the premise that it is only embezzlement we should be concerned
about. I am not here to try this individual. I am here to bring forward the
point of view of how this ties in with our immigration policy. Perhaps
people are getting Canadian citizenship because they happen to be in a
certain elite side of society and it could be easier than applying it
elsewhere. I am just saying there is something that must be looked at.
The Chair: I know you are in a bind about
speaking about the specific case.
Mr. Leckey, would you like to make a comment?
Mr. Leckey: It might be worth mentioning
that there is a security screening program within the Government of Canada.
All of the partners you see sitting at this table collaborate to provide
information and intelligence to CIC, and guide it in making decisions on
temporary residents entering Canada or permanent residents seeking
The security screening program has a
collaborative framework that almost mirrors that of the
counter-proliferation strategy of the Government of Canada. For example, if
an applicant from Iran wanted to come to Canada to work in one of those
highly sensitive research laboratories that Mr. Davies talked about in his
introduction, that person would come in for particularly close scrutiny.
Senator Dawson: Mr. Cabana, you talked
earlier about a case study. There seems to be a tradition of silo attitude —
it was indeed mentioned in the Air India report and there is also what
Mr. Lang just said about this immigration case — meaning that organizations
represented here today have a tendency to work in isolation and that
information-sharing has historically been difficult.
Using the elements of this case study, I would
like you to tell us how the information-sharing led you to this particular
Mr. Cabana: I suppose you are referring to
the Yadegari case which was revealed in Toronto in 2009.
The information came to us from the RCMP
through CBSA, the Canada Border Services Agency. This agency received the
intelligence from ICE, the US authority. After obtaining this information,
an investigation was initiated in partnership with several agencies,
including the FBI, some local police departments, DHS/ICE, CBSA and the
RCMP. The investigation took place on an extended period of time, due to the
complexity of the case, but the information was shared by these agencies in
support of the process.
Senator Dawson: Was the process centralized
or did the information come from documents? Was there a particular mechanism
for information transactions?
Mr. Cabana: I don’t believe there was a
particular mechanism or some group responsible to circulate this information
among the agencies.
No actual group was created for the purpose of
sharing this information. The sharing was part of the processes already in
place in the agencies. Every single day, we share information with our US
and Canadian colleagues.
Senator Dawson: Once again, I am referring
to Mr. Yaworski’s comments.
When you talked about Air India, one of the
parts of the report was that the silo effect of many organizations in Canada
in particular, but also at the international level, led to a lack of useful
information being given to the right people. In this case study, what are
the improvements that have been done and what are you looking for so more
information is shared — in a confidential way, I understand?
I totally respect the confidential aspect of
this information. However, the process is important.
Mr. Yaworski: I agree with your comments.
In days gone by, I would suggest that there have been more silos, as you
described them, in terms of sharing information. I can tell you that those
days are behind us. The cooperation that we have, certainly between CSIS and
the partners you see before you at this table, is better than it has ever
On issues of national security, particularly on
issues where there is an immediate threat to life, there are no silos. That
sharing is extensive and timely.
In terms of international partnerships, you
strike on a very important issue, which makes Mr. Cabana's job more
difficult when it comes time to prosecute certain cases. A lot of
information we receive comes from allied intelligence services. Canada is a
net consumer of intelligence. We receive far more intelligence than we
produce, and a lot of times it comes with caveats and does not easily
translate into evidence that can be used in a court of law.
We are working closely with the RCMP on our own
sharing and moving intelligence into evidence, as Mr. Cabana has referred
to. However, from an international perspective, it makes the job more
difficult when it comes to prosecutions.
Senator Dawson: I understand that; and my
colleague, Senator Plett, who has sat on the Transport Committee, can tell
you that silos exist in Canada at Transport Canada, so I imagine they can
exist in your world. I am just hoping they have less.
Have Iran's regional ambitions been modified
through the Arab Spring?
Mr. Davies: I am not sure I can comment on
that. I would refer that to our colleagues at Foreign Affairs.
Senator Plett: I am not sure who would be
the best person here, Mr. Leckey or Mr. Davies. There are a lot of valid
things to be exported to one country but not necessarily valid to be
exported to Iran. What do you do to prevent something from being exported to
one country and then being sent to Iran? What controls do we have for
preventing them from simply getting something second and third hand?
Mr. Leckey: The point you are raising is
the issue of suspicious routings of goods being exported from Canada. CBSA,
together with its partners, is very aware of certain countries used more
than others as transhipment hubs — which permit themselves to be used as
transhipment hubs for goods on their way to Iran or other countries of
concern. We also are aware, and we learn more every day in the course of our
work, about companies such as brokers and freight forwarders that have no
compunction about allowing themselves to be used in terms of switching the
end destination and the ending user certification of a piece of technology
that will end up in Iran or another country of concern.
Senator Plett: What would set off the alarm
bells? You are saying there are questionable companies, but what would set
off the alarm bells on this or on the manifests of product going?
Mr. Leckey: When we say our entire system
is led by intelligence, as we do, the indicators we are looking at are such
things as the nature of the goods, the country of destination, the routing
being used, the declared end user or end use, the exporting company and some
of those intermediate companies such as brokers. Those are the kinds of
things that, in the many shipping manifests we review on a daily basis, will
trigger a particular concern on the part of our counter-proliferation
Mr. Cabana: If I may add to what Mr. Leckey
just said, all of those indicators — and there are more — are a clear
indication of the importance of the outreach to the industry. For some of
the indicators, the industry is in some cases better positioned to identify
that there is something just not right with the transaction. That is why,
collectively, we have programs in place to engage the industry across the
country and educate them on all those indicators and what to do if they are
not comfortable with the transaction.
The Chair: Help us out here because you
have the rules as you have laid them out, but how much is dependent on a
CBSA border guard having a gut instinct or some kind of training? Do you
know this and you are looking for it as it comes through the system, or is
someone just walking through a line and you say "That does not look good"?
Mr. Leckey: The entire system is
intelligence led from headquarters. We do have export control teams at the
major airports and major marine ports; 99 per cent of their work is directed
by headquarters based on recognized patterns of concern.
Senator Plett: I have one more question to
Mr. Yaworski on the dual-use threat. How active is Iran in Canada, and is
there a pattern to it? Has it grown or has it receded? Where is it at?
Further to that, is it mostly just a threat of nuclear weapons, or is it
broader in relation to chemical and biological weapons?
Mr. Yaworski: I have to be careful here
because of the unclassified nature of the briefing, but I can tell you that
we do look at all threats and they are multi-dimensional when they come from
Our act defines threats to the security of
Canada in section 2 and speaks predominantly to espionage, foreign influence
and activities, and the use or threatened use of violence.
Counter-proliferation is held within that remit.
Iran, in and of itself, is one of countries we
look at. I can tell you Iran is a significant factor in terms of the issue
of counter proliferation. They are looking at acquiring anything and
everything. I believe you had presentations from Foreign Affairs already in
terms of the list of dual-use goods. It is extensive. It is virtually
anything that will help further their program along, whether it is
industrial hardware right up to the knowledge of going forward with a
Anything that can help them advance their
program, they are interested in acquiring. They are interested in acquiring
it from countries like Canada because we are technologically advanced and
have free trade systems that can be exploited.
However, it is important also to get on the
record that the multitude of individuals that may come in contact with an
item that is ending up in an Iranian nuclear program are not necessarily
witting of that involvement. Because of the free flow of business, because
of the trade hubs that Mr. Leckey referred to in the Middle East and
predominantly Southeast Asia, for example — the different links along that
chain — individuals are not all witting that the particular product will
ending up in the hands of Iranians.
They are very good at circumventing sanctions
and finding ways to acquire the pieces of equipment that they do need, and
they multitask. If they cannot get it here, they will try to get it
Senator Plett: As a follow-up, last week we
spoke, and it was already alluded to, there were different opinions on that
subject of sanctions. Maybe no one here can share an opinion on that, but
the question I still have is this: Have the sanctions done any good? Have
some of the problems receded or are they continuing to grow? There were
different opinions on the merits of the sanctions.
Mr. Yaworski: I read the testimony of
Ms. Charron and Mr. Jones, I believe, academics who spoke to that issue
quite soundly. I concur with what they have suggested. I think they used the
term "silver bullet." There is no silver bullet. Sanctions are one part and
have been effective to this point, but they are only one part. Intelligence
is an important component; diplomatic pressure is important. All of these
things contribute to reducing their capability to acquire the goods that
they are looking to.
Senator Day: First, I wonder if I could
have a confirmation from the clerk whether these written comments by the
witnesses were circulated to our offices beforehand.
The Chair: No, we just received them.
Senator Day: That is what I thought. I
thought I would let Mr. Cabana be aware that it would have been helpful if
he had gone through his remarks because we did not have the chance to review
them, and as I reviewed those I missed the remarks of some of his
The Chair: Sorry, I had asked the witnesses
to help us out with the time.
Senator Day: Sometimes trying to be helpful
turns out not to be as helpful as you think, especially when we have as
important a panel as this. We could spend the meeting with any one of you to
talk about issues. I wanted to make that point.
My colleague Senator Dawson asked you to
explain the case study in more detail. My question is more mundane than
that. If you had gone through your report, you would have told us what CP
stands for. I assume that is criminal prosecution.
Mr. Cabana: It is "counter-proliferation."
Senator Day: That is a point of
clarification that probably would not have been necessary had you gone
through the document.
Mr. Davies, do you have a team of analysts that
are separate from the analysts that take in information and help develop
intelligence in each of what you call the portfolio agencies within the
Mr. Davies: I have two teams. I have a team
of policy analysts that look at counterterrorism policy, broadly speaking —
immigration policy, counter-proliferation policies. Counter-radicalization
policy is a big aspect of their work. The other team works on intelligence
issues; it is more operational, in terms of managing specific cases and
managing committee meetings and so on. I have about one expert on
Senator Day: Is most of the
counter-proliferation analysis that goes on done by the various other
departments or agencies within the overall group of Public Safety Canada?
Mr. Davies: That is right.
Senator Day: Mr. Poudrier, you are with the
RCMP but you are involved with the Customs and Excise Branch. Is that only
the criminal prosecutions or are you involved in some other aspects of what
otherwise would be done by the Canada Revenue Agency or the Canada Border
Services Agency? Could you help us with your role?
Guy Poudrier, Superintendant, Director, Customs
and Excise Branch, Royal Canadian Mounted Police: Customs and Excise
Branch has the mandate to investigate counter-proliferation infractions,
which means anything that is related to criminal activities, transhipments
and all that. We have the responsibility to enforce legislation within point
of entry and share this responsibility with CBSA at points of entry.
Mr. Cabana: If I may, the distinction we
need to make is that this is one mandate of many mandates that the customs
and excise program holds. They are also responsible for enforcement of
firearms and tobacco smuggling into Canada. Counter-proliferation is only
one of the priorities that they try to manage.
Senator Day: From an RCMP point of view, is
it always with a view to prosecution?
Mr. Cabana: Of course, yes.
Senator Day: You apply a different standard
from some of the other agencies that are concerned about acquiring
information that might lead to something else not necessarily into a court
Mr. Cabana: Absolutely. Our focus is
Senator Day: Thank you. I wanted to clarify
We have focused a lot on nuclear weapons of
mass destruction, but Senator Plett mentioned that chemical and biological
weapons are also weapons of mass destruction. Who focuses on those or are
they all part of your focus? Do different people look out for the kind of
material that might be used for that?
Mr. Yaworski: You are looking at me,
senator, so I will give that one a try. Certainly, in my opening remarks I
did reference CBRN — chemical, biological, radiological and nuclear — as all
being weapons of mass destruction. We certainly look at all of them in terms
of state-run programs of countries hostile to Canada, but we also look at it
from a counterterrorist perspective, in terms of terrorist or non-state
actors who are looking to acquire these goods for nefarious purposes. It is
equally important and certainly one might argue even more important that we
look at counterterrorist groups and their ability to acquire these materials
from a security perspective for Canada.
Senator Day: Are you able to tell us
generally the type of strategies that are used, the type of flow of product
that might be used by a country like Iran to acquire product that we would
rather they did not acquire?
What are they doing? Are they going through
another country? Is the majority of this product that you are finding out is
actually destined for Iran going through a friendly country first, or is it
just direct and you say: "This is going to Iran; we had better look at
Mr. Yaworski: Mr. Leckey can speak to that
in more detail, but in kicking it off, their approach is multidimensional.
They will use front companies. They will use individuals who are witting and
those who are unwitting. They will use multi-countries and intentionally go
from one country to another to another, because they know it is more
difficult to track that.
Mr. Leckey may want to add to that.
Mr. Leckey: Some of the strategies we have
observed are, as Mr. Yaworski mentioned, the use of front companies, front
companies that can change their name, sometimes literally from the morning
to the afternoon, and it is the same people doing the same business. They
will open multiple businesses. They will close down a business as soon as
the goods are detained and reopen the next day. They falsify end-use
There is a technique called ports or mode
shopping. If a particular port has a high enforcement rate, they will tend
to avoid it, or if they find that detection rates have increased in the
marine mode they will switch to the air mode.
Another technique is to procure goods just
below the control threshold, which can still be of such a quality that they
could be used in a program of weapons of mass destruction. As I mentioned,
there is the use of third-country transshipment hubs, complicit freight
forwarders who re-manifest goods. There is the exploitation of loopholes in
reporting requirements — for example, reporting a piece of technology as
being of less than $2,000 in value when it may be worth many times that.
Senator Day: Last day, when we had a
session with Foreign Affairs, they told us about two pieces of legislation:
one, the United Nations Act and the other, the Special Economic Measures
Act, that allow us as Canadians and the government to list those products
that we did not want shipped to certain countries.
I am assuming that all of you are fully aware
of that list. However, I wonder how we get the information to Foreign
Affairs that perhaps there should be other items on that list? We are seeing
a lot that is just under the threshold and could be used for a dirty bomb.
It would not initially be thought of as being strong enough.
The Chair: I will interrupt for one moment
and have you hold that thought. Senator Wallace has to go, but I want him to
put his question on the record.
Senator Wallace: The question touches on
the issue raised by Senator Day. You described ways in which the nature of
the risk that Iran poses has changed and the sophistication of it. Compared
to three years ago, has the magnitude of risk that the national security of
this country faces from Iran has increased? Has it increased dramatically?
Perhaps Mr. Yaworski could tackle that?
Mr. Yaworski: Yes, it has increased. The
current regime has made certain statements and had actions that clearly
indicate they are advancing their desire to acquire capabilities to build a
nuclear weapon. They have not indicated they will, but have indicated a
desire to get that capability. As I articulated earlier, the threat is
multi-dimensional. It is not just from a counter-proliferation perspective.
As Senator Dawson referenced earlier, the Arab Spring has had impact as
well. Instability in that part of the world is a problem to all neighbours.
Uncertainty is a problem. If you look at a country like Iran — that is
looking to increase influence in the Middle East and wading into affairs in
Bahrain — there is multitude of things in that region that increase the
overall risk to Canada and our interests here and in that part of the world.
Without getting into detail, the answer to your question is yes.
Senator Wallace: As the magnitude of the
risk increases we are wondering what counter measures can be taken. The
appropriate measures being taken to respond to increased risk is ultimately
the issue. I realize you cannot get into details in responding. However, is
there anything you can say generally about how it is being approached and in
what way this increased risk is being dealt with by our government agencies?
Mr. Yaworski: From the CSIS perspective, we
are in the business of mitigating risk. That is what you are speaking to. We
prioritize our files. I can assure you Iran is an important file to us. I
have probably said too much already, but we look at that file. We devote the
appropriate resources to investigating that threat.
Senator Wallace: If there are national
security issues, you may not be able to say anything more. However, is there
is anything you can add as to how the increased risk is being dealt with?
That would be of interest to us.
The Chair: If you want to ponder it for a
moment we can get back to Senator Day's question. He was asking about export
controls and where the rules are going.
Mr. Davies: If it looks like certain items
are off a list or thresholds are being averted, how do you close the loop?
Operators get together every two weeks at the working level. It is the
perfect chance to talk about emerging trends, ways to fix things and compare
Beyond the agencies here that are working
better together, there are other departments not normally linked to national
security. When you think the information sharing regime in Canada, it is
risk averse. People wonder about their lawful authority to share or they
push decisions up. There is a slight culture aversion to sharing. In
following up on the Air India Inquiry Action Plan, one of the things we are
looking at is whether you can improve on the lawful authority to share.
Other bits of information come into this loop as security agencies, more
proactively as it is now.
Senator Day: When your group gets together
and shares information, it is not just within Public Safety Canada. Are
other government agencies there as well, including Foreign Affairs?
Mr. Davies: Yes, the issue is whether
information from other departments can be brought to the attention of
agencies that participate in this counter-proliferation working group. We
are working on that.
Senator Day: If the counter-proliferation
working group develops information that should go to Foreign Affairs so they
can add this to the prohibited list, it flows that way as well?
Mr. Davies: Yes.
Mr. Cabana: Canada is also a participant in
a number of international forays that look at identifying emerging trends in
terms of counter-proliferation. That actually serves to populate the list.
As a signatory to the UN, Canada has a responsibility to enforce the
controls that are being put in place and the restrictions to the export of
certain technologies. They are identified through nuclear suppliers groups
and missile technology control regimes. The Australia Group was in our
arrangement and there is a proliferation security initiative as well.
Internationally, there is a significant body that meets to make sure there
is a mechanism to identify what goods should be controlled.
Senator Mitchell: My questions concern the
Special Economic Measures Act, the SEMA, under which Canada has imposed
sanctions. One of them concerns making any new investment in the Iranian oil
and gas sector. That begs several questions. First, what level of investment
exists there now? Second, if new investment is a problem, why is existing
investment not? Third, how do you police that?
Mr. Cabana: I am not sure I can answer your
whole question. I can answer the component of the role of the RCMP. If
investments are identified, it is our responsibility to take appropriate
action to make sure they are secured, that they are frozen until a
determination is made. I believe your question was much broader than that,
and it falls outside the scope or mandate of the RCMP.
Mr. Davies: This is really back to Foreign
The Chair: We talked to them last week.
Senator Mitchell: Perhaps this is in
relation to DFAIT as well, but there is indication that the neighbours of
Saudi Arabia — Bahrain, Jordan and others — are concerned about the U.S.
taking action. What kind of action are the neighbours taking? Are we
coordinating our efforts with these neighbours? They have a huge interest in
this as well. You talk about silos and sharing the information. Are there
links that you are finding productive or is that an issue?
Mr. Davies: Again that is a Foreign Affairs
Mr. Yaworski: From an intelligence
perspective, we have approximately 280 different relationships with
intelligence services in different parts of the world. We work
collaboratively with them on the counter-proliferation threat. We need their
assistance in many cases.
We need their assistance because the material
is often transiting their countries. We need to know what they are doing in
relation to the threat; and, as you have suggested, it is not always a
friendly neighbourhood in that part of the world. Certain countries are
looking at that threat more actively than others.
Without getting into specifics, I can reiterate
that we do receive intelligence from those partners on a fairly regular
Senator Mitchell: Finally, we have been
hearing for a long time about this threat. Perhaps it has been approached
but, more specifically, how far along are they? Do they have enough parts?
Are they getting parts? Are we not winning this process?
As I said, it has been going on a long time,
yet you are saying they have expressed an interest in building one but you
are not certain that they will.
Mr. Yaworski: There is not a conclusive
answer to that question; there is not a uniform position on how far along
they are. I think you are alluding to how far away are they from the
creation of a bomb, basically.
Senator Mitchell: Yes.
Mr. Yaworski: The timeline varies. They
will make progress and they will have significant setbacks. The issue of
sanctions that we referred to earlier, diplomatic and political pressure,
all weigh in on their ability to achieve their ultimate goal.
What is important for the committee to
understand is that they are not giving up. They are constantly moving in
that direction. Despite the setbacks they may have, they are continuing to
proceed down that road.
Senator Plett: When you say they are
getting closer, how cooperative are they with inspectors going in?
Mr. Yaworski: I would suggest that is
probably a DFAIT question to answer. The reason we know they are moving down
this road is, in part, because of their inability to allow inspectors in to
do their job as appropriately as they should. I think the short answer is
not very cooperative at all.
The Chair: Let me try it this way. Without
saying what has slipped through from Canada to Iran, because we know you
cannot say that, do you know if stuff has and, therefore, how they obtained
it? After the fact, do you at least know the system and then try to plug the
Mr. Yaworski: We do not know everything. I
think it would be foolhardy on any of our parts up here to suggest that
things have not gotten through. In terms of whether or not we are notified
after the fact, on occasion that will happen; but if we get enough advance
notice, it is our collective job to prevent that from going through.
The Chair: I agree.
Senator Stewart Olsen: I apologize for
being late. I will not ask you any questions on much of what you have
covered because I understand the constraints you are placed under.
In this brave new world that we face, I worry
sometimes that our security departments do not have the wherewithal that
they need. Could you give me some idea of what would make it easier for you
to move forward with this business that you are doing? I am not asking you
to bare your souls, but I would like to get some sense of what we, as a
government, can do collectively for your agencies.
Mr. Davies: In national security?
Senator Stewart Olsen: In the broad sense,
Mr. Davies: Talking from more of a
policy-maker's point of view, in the next few years it will be difficult
getting new resources. Everyone here would have their own wish list — if you
had a marginal dollar, where would you allocate it?
I would encourage the committee to not be
constrained by that, although be realistic. There are ways of profiling
things and expenditures. There are ways of being innovative. There are ways
that can be a big difference that are cost neutral. Those are the kinds of
things we are looking at, especially in the counter-proliferation area.
New developments and infrastructure cost a lot
of money. If you are smart about it and think about it a different,
outside-the-box way, there may be important things we can do in the short
term. The advice from the committee on layering things, piloting things,
looking at best practices around the world and bringing those here would be
Mr. Yaworski: First, thank you for that
insightful question. As Mr. Davies has suggested, we each work within the
resource envelopes we are allocated. We do prioritize within those monies
that are allocated to our respective agencies.
I honestly think that in this time of fiscal
restraint, the onus is on us to be more efficient and effective in what we
do. Often in our discussions, certainly with my allied partners and
particularly among our closest allies, the subject of burden sharing comes
up, and the ability to work more collaboratively and to divide up the pie of
the nature of the threats. The onus, I think, is actually on us.
We know there will not be any more monies
coming our way; we recognize that. We are working to maximize what we can do
and to ensure our prioritization is dealing with the greatest level of
Mr. Cabana: Without repeating, I agree with
what Mr. Davies and Mr. Yaworski said. I think that part of the focus for us
must be on ensuring that our prioritization mechanisms that we have in place
are appropriate to ensure that we have focused on the right priorities.
I will go back to the investigation issue. As
Mr. Davies pointed out, a lot of work is already being done around that to
come to terms on potential options for that kind of information to be more
readily available in the context of criminal prosecution. Also, our effort
must be placed toward enhanced outreach to ensure that we communicate to the
industry that they play a significant role and they have ownership of this
as well — as well as internationally, to ensure that we maximize and
leverage the abilities and the intelligence of our partners internationally.
Mr. Leckey: First, I would like to agree
with everything that my colleagues have said so far and to add the
following. Clearly, we are all working within a risk management paradigm
here. We have nothing like the resources to check every single export
manifest. We do what we can with the resources that we have.
In general, anything that could enhance our
risk management practices would be extremely helpful; for example, the
ability to share information that may have been collected by another
department that is not necessarily sitting here and may have been collected
for a different purpose, to be shared with us for the purposes of protecting
national security. Anything that would enable us to join up our IT systems
to work together on a case-by-case basis — to permit that to happen more
freely than it happens today — would also advance the cause.
The Chair: Unfortunately, that probably
does have a price tag, but it seems so simple just to have the computers
talk to each other.
Senator Dallaire: I will rattle my
questions off, if you want to take note, gentlemen.
Canada was a leader in nuclear inspection. As
you are saying, you are leveraging your colleagues. What niche has Canada
staked out in the fight in favour of non-proliferation?
That brings me to my second question. Although
we are targeting Iran, who else is coming up the priority pole of effort
with regard to seeking that capability you are looking at? Does Iran also
have a delivery system or will they deliver that thing in the back of a
On the IT side, particularly with the RCMP,
having been on the national police services advisory board and
intelligence-based policing, what legislation is actually being moved from
the RCMP through Justice to give you the capability of using that
intelligence in a more appropriate way?
The Chair: We now have four questions. Does
anyone want to take just one?
Senator Dallaire: We can take it one at a
The Chair: Go ahead, if someone has a
Mr. Davies: To answer your first question,
Canada's niche area in non-proliferation is a good question for Foreign
Affairs. That is my thinking here, unless any of you have thoughts.
The Chair: Are there any comments on any
Mr. Cabana: On the information-sharing
piece, in terms of what legislation is moving at the current time, it is
probably a little premature. It is a very complex issue that is not strictly
a reality in Canada.
In discussions that I have had with some of my
international counterparts, it is an issue that many countries are grappling
with. There is no legislation moving forward that I am aware of at the
present time, but work is being done within the legal community to develop
options that hopefully will lead to a legislative solution in the future.
Senator Dallaire: But how far advanced are
you? Do we have to wait for three or five years?
The Chair: We have the questions out. I do
not think it is for him to decide when that is coming forward.
Mr. Cabana: Discussions are still going on;
the timeframe is still being discussed.
The Chair: Are there any other questions?
Mr. Yaworski: To answer Senator Dallaire's
question about delivery systems, absolutely, that is very much a concern
that CSIS has. They are advancing what they are calling their ability to
launch a satellite. That is the approach that they are taking to develop
technology that you are well aware could be transformed into something much
more nefarious in terms of a delivery system for a payload other than a
satellite. Yes, indeed, we are very concerned about that.
Senator Lang: I want to refer back to the
case of 2009 that was referred to the RCMP by CBSA, namely, the Mahmoud
Yadegari case. It was successfully prosecuted. From the short discussion we
are having today, I feel that we are facing a very serious threat in the
world. I do not think it can be understated. At the same time, you gentlemen
have told us clearly that you are doing your job. You are aware of how this
dual-use technology can or could be exported from this country and is being
exported from this country; yet, to my knowledge, we have one successful
case that has been prosecuted.
I would like to ask this question, following up
on those of Senator Stewart Olsen. What further tools have to be put in your
toolbox from a legislative policy point of view so that we can apprehend
these individuals whether they have come into this country with us knowing
they have come into this country or if they have been homegrown, these
individuals that are aiding and abetting terrorism in another part of the
world that could come back to affect us dramatically?
The Chair: We do know dollars are scarce.
We have that as the preface, yes, but if there are other things in response,
that would be great.
Mr. Davies, do you want to answer that?
Mr. Davies: It is difficult to answer
because we have a number of discussions with the minister on this.
Obviously, you want to look at the export regime and powers given to CBSA,
penalties and so on. That would be certainly one place to start. I am not
sure if Mr. Leckey has anything to add.
Mr. Leckey: In terms of successes, of
course prosecution and successful conviction is a good deterrent, but it is
not the only possible success. There is a continuum of successes here.
Canada has had a number of successes. I would like to put on the record a
couple of statistics, if I may.
Since the beginning of the current fiscal year,
CBSA has made 24 seizures of goods valued at $2.1 million. Six of those have
been assessed as prohibited under SEMA. Four others were controlled nuclear
dual-use goods and they are still being assessed.
Since the implementation of SEMA in July 2010,
CBSA has seized 14 shipments valued at approximately $4 million total. Most
of those were going to listed entities or involved prohibited goods or a
CBSA has also prevented the export of 16 other
shipments that have been assessed as prohibited under SEMA. Those were
allowed to be withdrawn so there was no administrative consequence to them.
We have also in the same time frame referred
two seizures to the RCMP for possible criminal prosecution.
When I talk about the continuum of successes,
you might put a successful conviction at the top end. Other measures of
success can be simply stopping goods, making sure that the exporter lost
that particular contract so he may not be contacted again. Simply disrupting
and delaying the shipment of goods is also a success. Outreach efforts to
private companies, to the manufacturers have resulted in a number of
successes that we are aware of where, after an outreach session, a company
has come and spoken to us about an order that is being placed that just does
not seem right to them anymore.
Senator Lang: I really appreciate that
Are any steps being taken by your various
departments or by you collectively to inform the public that this is being
done and your successes on the continuum way of doing it? Also, people who
would be interested in doing this, once they know that we have this type of
system in place, it is a fair warning, then they do not come forward to
Canada because they know we are doing the job we said we would do. If we do
not tell people and people are not aware of it, it will be cloak-and-dagger
every day of the week. Do you have any kind of PR program?
Mr. Davies: There is no direct PR program
right now, but I think it is a good idea and one worth looking at.
Senator Lang: Thank you.
The Chair: We started here today. We are
Senator Day: Yes, we are done.
On a point of privilege, Senator Lang posed a
question I thought was an important one and you put a restriction on that by
saying, "We all know that dollars are scarce."
The Chair: We had that discussion earlier,
Senator Day: Surely, it would be helpful
for this committee to know if these gentlemen or any of them are not able to
do the job they should be doing because they do not have enough money.
The Chair: Would anyone like to answer that
Senator Day: We know dollars are scarce. It
is a matter of prioritizing the amount of scarce money that is available.
The Chair: It is just that they had all
spoken to it, Senator Day. That was why I made my comment. They all
addressed the remarks, all five of them had said that, and they agreed with
each other on that. I felt that that was firmly on the record.
Are there further comments, gentlemen, on that
Thank you all very much, gentlemen, for your
testimony here today. We appreciate it.
Ladies and gentlemen, we will terminate our
meeting, but I would ask senators to stay for two minutes for some
information on upcoming meetings.
(The committee adjourned.)