CHAPTER III
Overview
Protection of Critical Infrastructures
Committee Observations and
Recommendations
Encryption
Committee Observations and
Recommendations
Nuclear, Biological and
Chemical Weapons Attacks
Committee
Observations and Recommendations
The Government's Threat
Analysis Capability
Committee Observations and
Recommendations
Parliament's Role and Responsibility
Committee Observations and
Recommendations
CHAPTER III
EMERGING ISSUES
Since the reviews conducted by the previous Senate Special Committees on Terrorism and Public Safety, several new issues of relevance to security and intelligence have arisen. These issues include the protection of Canada's critical infrastructures from terrorist penetration or sabotage, Canada's approach to encryption policy, the threat assessment capability of the government of Canada and the consumption of intelligence generated by the security intelligence community.
Protection of Critical Infrastructures
Critical infrastructures are both physical and cyber-based systems essential to the day-to-day operations of the economy and government. Critical infrastructures include, but are certainly not limited to, telecommunications, energy, banking and finance, transportation, water, sewage and emergency systems. Historically, critical infrastructures were physically segregated. Because of advances in technology, however, critical infrastructures have progressively converged and have become linked, sometimes interdependent. Advances in technology have also resulted in a high and growing level of automation in the operation of critical infrastructures. The growth of and our increased reliance on critical infrastructures, combined with their complexity, have made them potential targets for physical or cyber-attacks.
Canada is one of the most advanced nations of the world in terms of power generation and transmission, telecommunications and information technology. Canada has become an information- intensive society and economy. These advanced technologies and infrastructures have greatly assisted Canada in bridging our vast geography and enhancing our global interconnections, but have also increased our vulnerability to potential terrorist disruption.
Not surprisingly, the rapid advances in interconnections and information technology create a huge challenge in protecting the systems from intrusions and perhaps even sabotage. This is particularly true where various generations of systems are connected, making the older and less sophisticated a potential entry point through which to attack the entire system.
Witnesses before the Committee, from various government agencies, used the example of the recent ice storm to illustrate their concern with the devastating impact a serious disruption in our critical infrastructures could have on Canadian lives and indeed on the security of the country. The Committee heard repeated evidence from witnesses, including the Solicitor General,(52) of efforts under way to protect our critical infrastructures. The Committee was informed that this effort is being coordinated at a senior level in the Privy Council Office and that international efforts are also underway to address these very serious risks.
With the explosion in new technologies, government departments and agencies responsible for the security of Canada's critical infrastructures have a major challenge to address. The results of vulnerability tests performed in certain departments to replicate a cyber-attack have not been comforting. The Committee was assured that federal departments and agencies are well aware of the challenges and that they have much to do to meet them; but they are confident that they can do it. Canada's close cooperation and mutual interest with the United States in this regard should be very helpful.
The United States has taken concerted measures to address the vulnerability of their government and private sector critical infrastructures beginning with Presidential Directive 39 in 1995. That Directive created a small interdepartmental task force (the Critical Infrastructure Working Group, or "CIWG"). In its 1996 report, the Critical Infrastructure Working Group recommended development of a national strategy to protect critical infrastructures and an interim group to coordinate the federal government's existing assets should an infrastructure attack occur (the Infrastructure Protection Task Force, or "IPTF"). The United States government also conducted exercises to assess the vulnerability of critical infrastructures in various departments, including the Department of Defense and Federal Bureau of Investigation. On May 22, 1998 the President issued Presidential Directive 63. That directive, among other things, organizes the United States economy and government into four horizontal sectors, each headed by a lead agency. Each sector is supposed to assess the level of vulnerabilities of its critical infrastructures and devise a plan to reduce those vulnerabilities, develop a system to identify and prevent major attacks and also develop a system to respond to an attack in conjunction with the Federal Emergency Management Agency ("FEMA")(53). The goal is to be able to protect United States' critical infrastructures from deliberate sabotage by 2003. Should sabotage occur after that date, the subsidiary objective is to ensure the effects would be "brief, infrequent, manageable, geographically isolated and minimally detrimental to the welfare of the United States." (54)
At the heart of the United States' structure is the National Infrastructure Protection Centre ("NIPC"). The National Infrastructure Protection Centre is part of the Federal Bureau of Investigation and utilizes the resources of the Federal Bureau of Investigation's Computer Investigations and Infrastructure Centre ("CITAC"). The National Infrastructure Protection Centre's mandate is to conduct vulnerability analyses and to detect, deter, respond to and investigate unlawful intrusions into public or private networks. A sub-division of the National Infrastructure Protection Centre is FedCERT (Federal Computer Emergency Response Team), in effect a SWAT team for major cyber- terrorist attacks or network sabotage(55). In 1997, FedCERT identified 2,300 "hits" (illegal penetrations or intrusions) on the networks under their supervision. In addition, many departments of the United States government have their own CERTS to counter an attack on their critical infrastructures.
Canada has no government organization equivalent to the National Infrastructure Protection Centre or FedCERT. In fact, Canada is one of the few information-intensive nations that is not part of FIRST, the Forum for Incident Response Teams. The Forum for Incident Response Teams is an international coalition of vulnerability analysts and computer incident response teams from governments as well as the private sector. There is in Canada, however, a private sector organization, CANCERT (the "Canadian Computer Emergency Response Team") that performs a role analogous to that of FedCERT. CANCERT was evidently established in an attempt to fill a vacuum left by government.
Each federal government department and agency has information technology security ("ITS") policy and procedures. The organizations within the security and intelligence community have particularly aggressive information technology security programs. The Communications Security Establishment and the Royal Canadian Mounted Police also co-chair the Interdepartmental Information Operations Working Group ("IIOWG") that shares information relating to threats to networks and discusses issues of mutual concern. The Communications Security Establishment, in its mandate to advise the federal government on the security aspects of its automated information systems, also has work underway that includes: developing a threat and vulnerability database; evaluating the threat posed by hacker tools and technologies; seeking partnerships with industry; developing and evaluating new security devices to thwart a cyber-attack; and discussing cooperation between Canada and existing CERT organizations. The Royal Canadian Mounted Police's Security Evaluation and Inspection Team ("SEIT") conducts security vulnerability services for government departments that include vulnerability analyses of computer systems. The Canadian Security Intelligence Service has designed its networks to be stand-alone and maintains its own ITS to respond to a major incident.
Committee Observations and Recommendations
In response to questioning by the Committee relating to Canada's preparedness to deal with attacks on our critical infrastructures as compared to the United States, the government witnesses stated that, while the United States is further advanced, Canada knows where it needs to go and it will get there. The Committee urges the government to develop the policies and provide the resources to allow us to get there as soon as possible.
The Committee urges the government to give immediate and careful attention to the creation of a capability to assess and reduce vulnerabilities in critical infrastructures and to prevent or respond to physical and cyber-attacks. Because of the interconnected nature of our systems, the initiative should include both government at all levels and the private sector and should cover both public and private infrastructures. The Committee was impressed with the work done by the Department of National Defence to test the Canadian Forces networks. The Committee is concerned that this initiative appears to be confined to the one department. It should provide a template for a comprehensive program in which other departments and agencies test their networks in a cooperative and coordinated manner.
The Committee recommends that the Government consider providing for specific criminal offences and penalties under the Criminal Code to deal with cyber-attacks. At the present time, the most relevant section of the Criminal Code appears to be subsection 430(1.1) and 430(2), which provides:
(1.1) Everyone commits "mischief" who wilfully
a) destroys or alters data;
b) renders data meaningless, useless or ineffective;
c) obstructs, interrupts or interferes with any person in the lawful use of data; or
d) denies access to data to any person who is entitled to access thereto.
(2) Everyone who commits mischief that causes actual danger to life is guilty of an indictable offence and liable to imprisonment for life.
The expansion and increased reliability of the Internet have created an explosion in the growth of electronic commerce. Witnesses before the Committee cited sources that forecasted up to $350 billion (USD) in world-wide Internet-based electronic commerce by 2002.
The growth in electronic commerce and electronic communication brings with it a need to protect confidentiality and privacy. While most electronic communications and transactions are legal, terrorists and other criminal elements also use telecommunications and the Internet extensively and have a particular interest in safeguarding their communications from the prying eyes of government and security intelligence organizations. There are several techniques that have been available for some time to conceal information such as steganography, using obscure languages and "chaffing and winnowing"(56). The electronic encryption of communications and stored data, however, represents a quantum leap in the ability to conceal communications and data from third parties. Once the exclusive preserve of the military, encryption is now in the public domain through a range of encryption technologies.
Cryptography is vital to the growth of electronic commerce because it brings security to communications, provides for the encryption of databases and documents and provides for digital signatures to electronically authenticate messages and transactions. Cryptography technology also allows governments and security intelligence agencies to protect their sensitive communications. Cryptography obviously also creates challenges for law enforcement and security intelligence agencies in their ability to gain access to illegal or suspect communications or data; and the stronger the encryption technology used, the greater the challenges.
As indicated in Chapter I, in February, 1998 Industry Canada released a discussion paper on a cryptography policy framework for Canada. Within a broad policy framework on cryptography are three subsidiary issues: policies on the encryption of stored data, policies on the encryption of real-time communications, and export controls on encryption technology(57). Industry Canada witnesses who appeared before the Committee indicated the policy framework considers a number of objectives, some of which are in competition or in conflict with each other. Those objectives include facilitating electronic commerce to promote economic development, protecting personal and commercial privacy and confidentiality, avoidance of a burdensome regulatory regime, promotion of the development of cryptography technology in Canada for the domestic market and for export and development of a cryptography legislative framework that allows for lawful interception by authorities for tax, law enforcement, security intelligence and other purposes.(58)
Witnesses who came before the Committee from the Royal Canadian Mounted Police and the Canadian Security Intelligence Service stated a very clear preference for a legislative or regulatory regime that provided them with mandatory access to the "keys" used to encrypt and decrypt communications and stored data. In August, 1997, the Canadian Association of Chiefs of Police issued a press release urging the federal government to adopt a mandatory key access system. Of the 18 law enforcement agencies that responded to the Industry Canada paper, each one supported mandatory key access(59). Law enforcement and security intelligence agencies that appeared before the Committee and those that responded to the Industry Canada paper assert that they do not seek increased investigative capabilities through mandatory key access or otherwise, but instead seek only to restore and maintain their existing investigative capabilities.
Law enforcement and security intelligence agencies also seek legislative amendments, in particular changes to the Criminal Code, to compel the holder of a cryptographic key or password to give it up in response to a judicial warrant. The Canadian Association of Chiefs of Police has also asked for Criminal Code amendments to criminalize the use of cryptography in the commission of a crime.
From the responses to the Industry Canada paper it is clear, in numerical terms at least, that the law enforcement and security intelligence agencies are on the losing side of the debate over encryption(60). According to the analysis of the responses, 78% feel that there should be a lessening of controls over encryption. The law enforcement and security intelligence agencies were alone in arguing for more control, namely mandatory key access. The majority view has clearly come down on the side of cost, economic development including facilitating the export of cryptography technology and on the side of privacy and confidentiality. A theme in many responses was a fear that the government would emphasize law enforcement and security intelligence requirements at the expense of privacy, cost, exports, economic growth and other considerations. As has happened in the United States, it now seems clear that any policy predicated on mandatory key access is not to be accepted in Canada.
In the absence of mandatory key escrow, law enforcement and security intelligence authorities will have to rely on technological and other solutions to break encrypted messages and stored data. Technological solutions will be very expensive, time-consuming and, in the case of strong encryption, in some cases ineffective. Problems exist even with a key escrow system in terms of real-time, or immediate conversion of encrypted messages into plain text.
Committee Observations and Recommendations
It is clear to the Committee that there is no perfect solution to balance the spectrum of interests that revolve around cryptography. Any attempt to develop a cryptography policy that balances law enforcement and security intelligence interests on one hand with commercial, economic development and privacy or confidentiality interests on the other hand presents a conundrum to policy-makers.
It is beyond the Committee's mandate and competence to suggest which approach to a cryptography policy is best. From testimony before the Committee it is clear, however, that the police and security intelligence agencies much prefer a mandatory key escrow system in order to maintain their current position. It was equally clear from the evidence that a mandatory key escrow system is not likely to be adopted given all of the competing interests and issues. Therefore, the Committee urges the police and other agencies to actively investigate and explore other methods and techniques to address this very serious obstacle to intelligence-gathering and that government also consider other approaches, some of which the Committee understands are being considered by other countries.
Whatever the solution, the organizations within the security intelligence sector, namely the Canadian Security Intelligence Service and the Communications Security Establishment, will require additional resources to acquire the technology and to do the work necessary to maintain their current level of access to electronic communications and stored data. Even if a mandatory key access system were instituted, additional resources would be required, albeit of a smaller magnitude. The Committee was relieved to hear that, in the case of the Canadian Security Intelligence Service and the Communications Security Establishment, the incremental expenditures required for each would be in the "tens of millions" range annually, rather than the "hundreds of millions" range, or even higher. The Committee urges Industry Canada to include estimates of incremental costs for the Canadian Security Intelligence Service and the Communications Security Establishment in whatever policy proposals it makes to Cabinet.
The Committee also endorses recommendations to amend the Criminal Code to provide lawful access to encryption keys by law enforcement and security intelligence organizations and to criminalize encryption when used in the commission of a crime. The Committee also urges the law enforcement and security intelligence communities to consult with developers and suppliers of cryptography technology and with carriers and service providers so that each side may better understand the requirements and objectives of the other and, hopefully, arrive at mutually-agreed solutions.
Even should the encryption conundrum be effectively addressed from a security intelligence perspective, encryption is only one of a panoply of technological advances likely to affect, or having the potential to affect, the security intelligence community. Technology will continue to evolve and the security intelligence community will be on a technology treadmill in order just to keep up.
Nuclear, Biological and Chemical Weapons Attacks
As indicated in Chapter I, one of the new tactics available to terrorist groups is a range of nuclear(61), biological and chemical weapons. Authorities have assured the Committee that the actual direct and current threat to Canada and Canadians is low. Notwithstanding, recent incidents such as the release of Sarin gas in the Tokyo subway may have let the "genie out of the bottle" and acquainted terrorist groups with the power of nuclear, biological or chemical weapons.
The United States government considers that the threat of a chemical or biological terrorist attack has increased in recent years(62). The same degree of threat does not apply to Canada, although Canada could be a conduit for transporting nuclear, biological or chemical materials into the United States, or could be a venue for planning a nuclear, biological or chemical attack against the United States.
Experts in the security intelligence field suggest that because of their disdain for human life, the militant fringes of certain religious fundamentalist groups are most likely to mount a nuclear, biological or chemical attack. The United States has taken several initiatives to combat a nuclear, biological or chemical attack. The Antiterrorism and Effective Death Penalty Act (Title V) brings nuclear, biological and chemical weapons and materials within the ambit of United States' counter-terrorism legislation. Among other things, the United States legislation expands the scope of previous restrictions on the sale and use of nuclear substances, requires reports to Congress on any thefts of nuclear materials from United States military installations, and increases the penalties and controls pertaining to biological agents.
United States Attorney General Janet Reno has announced a federal organizational structure to counter the use of nuclear, biological and chemical weapons. That structure includes what has been called a "single window"(63) for state and municipal authorities to train first responders(64) and includes a commitment to buy appropriate equipment to counter a nuclear, biological or chemical incident. The Antiterrorism and Effective Death Penalty Act includes a long list of appropriations to fund training and equipment purchases and for a number of federal government departments and agencies to enhance their ability to monitor and control the movement of nuclear, biological and chemical materials. Those appropriations and others include $100 million (USD) to provide diagnostic, detection and protective equipment to local and state governments; a research program into gene mapping to trace and counter designer biological agents; and the development of a national stockpile of specialized medicines. The Secretary of Defence has also announced his intention to create and train up to 10 national guard units to be the second responders to a nuclear, biological or chemical incident.
The United States' approach to counter a nuclear, biological or chemical attack, albeit still largely on paper, consists of four levels. The first level is the segregation of United States territory into 120 metropolitan areas, each with an inventory of assets available to respond to a nuclear, biological or chemical incident and each with its specialized response strategy. The second level is enhanced coordination at the federal level and a single contact point for state and local authorities, including a national response capability. The third level is the detection and interception of biochemical precursors and equipment being shipped to rogue states or terrorist groups. The fourth level is deterrence of and response to those who would use a nuclear, biological or chemical weapon against United States citizens, installations or interests.
Canadian government witnesses before the Committee allowed that Canada lags behind the United States in planning for a nuclear, biological or chemical attack, but indicated that work is certainly underway in order to improve our defences and response capability. Centres of excellence(65) have been identified by Emergency Preparedness Canada and through the National Counter-Terrorism Plan that can be used to identify and help respond to the release of a biochemical substance. The inter-departmental Special Threat Assessment Group ("STAG")(66) exists in part to monitor trends and to help counter the use of nuclear, biological or chemical materials as weapons. Other initiatives taken include the Department of National Defence's development of a capability to respond to a nuclear, biological or chemical incident to assist local police forces and first responders; the Royal Canadian Mounted Police and the Department of National Defence have trained police explosive technicians in strategic areas across Canada in the detection and disarming of a nuclear, biological or chemical weapon; the creation of a Joint Nuclear, Biological and Chemical Response Team ("NBCRT") by the Royal Canadian Mounted Police and the Department of National Defence; development of specialized equipment for responding to a chemical or biological attack; and the training of first responders in containing and handling a nuclear, biological or chemical incident.
Although much has been accomplished at the federal level, the role that first responders play in an incident is critical. First responders are primarily employees of municipal services. First responders will (by definition) be first on the scene and will have to manage a nuclear, biological or chemical incident until help in the form of the Royal Canadian Mounted Police and the Department of National Defence arrives. Depending on the circumstances, help may be some time coming. Most municipal police forces and other first responders make no claim to having an effective response capability against a nuclear, biological or chemical attack.
The Committee heard from the National Capital First Responders' Committee. The First Responders' Committee is obviously aware of the nuclear, biological or chemical threat and is preparing to respond appropriately and effectively to a nuclear, biological or chemical incident. The Committee was also pleased to hear of the extensive cooperation between the First Responders' Committee and the Royal Canadian Mounted Police, the Department of National Defence and the Canadian Security Intelligence Service. The First Responders' Committee made it clear, however, that much more is required by way of equipment and training and inter-service coordination.
Committee Observations and Recommendations
Although the risk of a nuclear, biological or chemical attack in Canada or against Canadian interests is low, much needs to be done in order to be able to respond properly should the unexpected happen. We must also guard against Canada being used as a conduit for nuclear, biological and chemical materials for terrorist purposes and also guard against Canada being used as a venue to plan or mount nuclear, biological or chemical attacks elsewhere. We require continuing development of technology to respond to a nuclear, biological or chemical attack. We need to ensure first responders receive the protective and diagnostic equipment they require in order to be able to perform mass decontamination, have available approved drugs for first responders and casualties and sufficient quantities of ventilators and hospital beds for mass casualties and to treat people with injuries who may also be chemically contaminated. We need regular joint training exercises among first responders, the Department of National Defence and the Royal Canadian Mounted Police. A national inventory should also be established of equipment and other assets that are available to respond to a nuclear, biological or chemical incident.
To the extent reasonably possible, the federal government should support the training of first responders across Canada. First Responders must be trained to identify a nuclear, biological or chemical incident and to respond appropriately. A conventional response to a nuclear, biological or chemical incident will increase the damage and thus play into the terrorists' hands. A model appears already to exist in the National Capital First Responders' Committee. The Senate Committee recommends that government encourage the proliferation of training and equipping of First Responders on the National Capital model or some enhanced version.
There is little that can be done to deny terrorists' access to basic chemical and biological weapons. Domestic laws or international conventions that restrict the export, manufacture and sale of certain explosives or explosive compounds are of little use in the fight against chemical and biological weapons. Such weapons can be made from easily accessible items and recipes for their manufacture are readily available on the Internet and from other public sources. Accordingly, the focus must be on intelligence to identify groups likely to use such weapons and their targets and on responding to and managing an actual incident.
The Government's Threat Analysis Capability
The terminology used within the security and intelligence community is often arcane and filled with mystifying acronyms such as SIGINT, MILINT, COMINT, HUMINT and the like. This makes comprehension and demystification of the security intelligence sector more difficult and also sometimes leads to misunderstandings by the public.
Within the Government of Canada four generic types of intelligence are collected:
Security intelligence is about activities that constitute a threat to the security of Canada. These threats and the intelligence relating to them can come both within and from outside of the country. The Canadian Security Intelligence Service is the agency primarily responsible for the development of security intelligence.
Criminal intelligence refers to that information which the police should know in order to counter and apprehend those engaged in criminal activities. It is gathered primarily by law enforcement agencies and at the federal level by the Royal Canadian Mounted Police.
Military intelligence includes intelligence about military threats, capabilities, tactics and strategic assessments of future or potential military threats. Military intelligence is vital to Canada's peacemaking and peacekeeping commitments and to any incident where Canadian forces may be deployed, including the deployment of Joint Task Force Two ("JTF2")(67) in response to a terrorist incident. Military intelligence is the exclusive preserve of the Department of National Defence and the Communications Security Establishment.
Foreign Intelligence, at its broadest, is information about the capabilities, activities or intentions of foreign states, organizations or individuals. Usually, however, it is distinguished from security, criminal or military intelligence. It includes data of a political, economic, military, security, technological or social nature, obtained from overt as well as covert sources. Its purposes are to advance and facilitate the foreign policy process and to provide advantage in the pursuit or overall foreign policy objectives. The Department of Foreign Affairs and International Trade, the Department of National Defence, the Communications Security Establishment, the Canadian Security Intelligence Service and the Privy Council Office are each engaged, from time to time, in collecting, assessing or producing foreign intelligence.(68)
When the last Senate Special Committee on Terrorism and Public Safety reported in 1989, the then Department of External Affairs maintained a substantial foreign intelligence assessment (and threat analysis) capacity. With the end of the Cold War that capability has been substantially reduced. In fact, personnel were transferred to the Intelligence Assessment Secretariat of the Privy Council Office.
Distinctions between various categories of intelligence are sometimes blurred and the activities of the various organizations often intersect and are mutually supportive. The Privy Council Office plays a coordinating role and also continuously monitors the security and intelligence environment to identify emerging and evolving trends and to consolidate intelligence from multiple sources into a balanced, comprehensive view for the information of the Prime Minster, ministers and senior officials.
Under the Committee's terms of reference, the Committee is to "examine and make recommendations with respect to the threat assessment capability of the Government of Canada relative to terrorism". The task is a difficult one. How does one evaluate a threat analysis capability when there is no "product" per se? How can a procedure that is conducted largely in secret for the exclusive use of a very limited number of very senior government officials and often relying on secret sources be evaluated by an outside authority? In such circumstances, the Committee's evaluation could only be done on a very macro, and perhaps superficial, level. Is there evidence that major terrorist threats to Canada have been missed or materially misapprehended by the Canadian security intelligence community?
On an on-going basis, the Canadian Security Intelligence Service is primarily responsible for threat analyses pertaining to terrorism. These can take a number of forms, from assessments of overall trends, to general assessments of particular targets or movements, to particular assessments about specific situations which have a threat potential.
The Canadian Security Intelligence Service has a comprehensive program of threat assessments (TAs) under which it prepares and disseminates to other Canadian government departments and agencies evaluations relating to specific threats – sometimes produced as a result of specific events (such as visits or meetings) but often as a result of requests from departments such as the Department of Foreign Affairs and International Trade or the Royal Canadian Mounted Police. These are usually time sensitive and deal with current intelligence, describing recent developments. The Coordinator of Security and Intelligence has characterized these threat assessments as "excellent, timely, clear and reliable". Furthermore, there is near-absolute consistency in the threat assessments made by the Canadian Security Intelligence Service and threat assessments made by provincial authorities and local police forces consulted by the Committee.
The Committee was, however, mainly concerned with the longer term and broader assessments produced by the Canadian Security Intelligence Service and others relating to real and potential threats to Canada's national security. As stated in Chapter I, Canada and Canadians have not been a major target for terrorist attacks over the past decade. There is nothing, therefore, to suggest that the security intelligence community has missed or misapprehended any threats. Furthermore, there is near-absolute consistency in the threat assessments made by the Canadian Security Intelligence Service and threat assessments made by provincial authorities and local police forces consulted by the Committee. Finally, there is a consistency in the Canadian Security Intelligence Service's international threat assessments with those of the United States, the United Kingdom and private and academic experts in the field of terrorism. Accordingly, there is no evidence to suggest that deficiencies exist in Canada's threat assessment capability vis-à-vis terrorism.
Several witnesses appeared before the Committee with suggestions as to how the threat assessment capability could be improved, however.
One concern was that the Canadian Security Intelligence Service makes less-than-optimal use of all the intelligence gathering assets spread across a range of departments and agencies of the Government of Canada. Many departments have their own "eyes and ears in the field", as well as their own specialized expertise. Concern was expressed that these assets are not being fully used by, or integrated into, the threat assessment capability.
Chapter I referred to resource constraints and their impact on the security intelligence community. The Auditor General also noted that resources allocated to the community have declined significantly.(69) Should constraints on resources go too far, there will inevitably be negative repercussions on the community's threat analysis capability, in particular on its ability to respond to technological advances and on the ability of the Canadian Security Intelligence Service to collect security intelligence both within and outside of Canada.(70)
Evidence before the Committee indicated that there has been some re-allocation of resources by the Interdepartmental Committee on Security and Intelligence because of downsizing and changes in world conditions, so that the larger percentage of resources go to counter-terrorism and a smaller proportion into counter-espionage and other work. The Committee was informed that the Canadian Security Intelligence Service will continue to post liaison officers abroad who will share intelligence it generates in Canada and will continue to receive intelligence from foreign security intelligence and other intelligence services abroad.
There is concern, however, that Canada's needs may not always be given the priority they deserve by foreign security intelligence organizations and, furthermore, that the intelligence Canada receives may be filtered through the prism of other nations' domestic and foreign policies. There is also the concern that Canada's needs may not be satisfied if other nations' intelligence agencies retrench due to fiscal constraints, or if other nations withdraw from parts of the world due to changes in their national policies and priorities.
Canada relies on its allies for much of its security intelligence on international terrorists operating abroad. Although Canada itself faces little threat from terrorist violence, evidence indicates Canada is second only to the United States in the number of terrorists or potential terrorists organizations represented here. Accordingly, the careful monitoring of these terrorists or terrorist organizations by our security services provides a quid pro quo to our allies, particularly the United States.
In one particular area, the immigration screening area, there must be a careful balancing of information received from allied services. The McDonald Commission (1981) warned that,
"There is a danger in the immigrant screening process of putting too much faith and uncritical reliance on foreign agency information. The information received must always be carefully analysed in the context of the political circumstances of the country providing it. No foreign agency should be considered a "reliable source" in the sense that its reports can be accepted uncritically."(71)
More generally, reliance on friendly intelligence agencies may be problematic, or at least not sufficient, in the identification of regional and national trends and events that will impact on immigration flows to Canada. This reliance on foreign agencies informs the long standing debate as to whether Canada should expand its foreign intelligence capability. While Canada does not lack a foreign intelligence capability since "as noted earlier" several agencies are engaged in the collection and/or assessment and production of foreign intelligence, what Canada does lack is a single agency with a mandate to collect foreign intelligence overseas on an on-going basis. We do not have the Canadian equivalent of the Central Intelligence Agency in the United States or the British Secret Intelligence Service (BSIS or MI6) in the United Kingdom.
A related point raised before the Committee was Canada's reliance for intelligence on nations that reflect the World War II and Cold War alliance. Canada's closest intelligence allies are the United States, Britain, Australia and New Zealand. Although intelligence relationships are expanding, this expansion should be pursued aggressively so that we are not dependent on one particular perspective of the world.
Another concern raised is that the conduct of intelligence-gathering and analysis at the Canadian Security Intelligence Service may be driven by operational concerns and that threat analysis is performed by the Canadian Security Intelligence Service within an operational rather than an analytical mind-set. The Committee also heard proposals that the security intelligence community spend less resources on collection and more on analysis of intelligence. It was pointed out to the Committee that in today's information society there is almost a surfeit of information, mostly from open sources. Witnesses from the security intelligence community disputed this proposal pointing out that much of the information is not necessarily reliable, nor necessarily germane to Canada's interests and often becomes available after an event or after the subject becomes topical. A final concern expressed by one witness before the Committee is that the coordination of intelligence gathering, analysis and assessment by the Privy Council Office reflects a management orientation rather than a strategic one.
Committee Observations and Recommendations
The previous Special Committees on Terrorism and Public Safety raised issues about the federal government's (particularly the Canadian Security Intelligence Service's) threat assessment capability relating to terrorism. In the past, the Canadian Security Intelligence Service and the security intelligence community as a whole appeared to have missed, or at least underestimated, the threat in several instances.
Because the Committee did not have access to review or analyse any past or present threat assessments prepared by the security intelligence community, the Committee does not have the best evidence upon which to make an objective evaluation of the government's current threat assessment capability. There is, however, no evidence of deficiencies or other problems that came to the Committee's attention. The Committee is of the view, however, that such an evaluation should be done periodically by an objective authority that has full access to the gamut of threat assessments prepared by the community (See Chapter IV).
With increasing globalization, dramatic changes in the tools and tactics available to terrorists, the changing political climates throughout the world and Canada's active international role and interests, the Committee believes there will be a growing need and demand for foreign intelligence. In the past, Canada has met its needs without taking the step of creating an intelligence service whose sole function would be to operate outside of our country's borders. Indeed, the fact that Canada does not have a separate foreign intelligence agency may have served us well in our role as a moderate power broker. To create such a new agency would create a different international image and would change Canada's perceived "neutral role" in many international forums. On balance, the Committee believes that this continues to be the appropriate and the most effective position for our country.
However, in the absence of a foreign intelligence service, the challenge for Canada will be to meet the increasing need and demand for relevant foreign intelligence. Much can be done through existing mechanisms. For example, existing bilateral and multilateral relationships should be continuously re-examined within an evolving climate. Canadian foreign service officers and other Canadian employees working abroad should be refocused to ensure that their information capabilities are working optimally to meet Canada's evolving needs. Our effectiveness in improving our foreign intelligence capabilities will largely depend upon increasing the level of cooperation and coordination that can be brought to bear both within the security and intelligence community and in the wider government sphere.
Canada needs a more strategic orientation to the collection, analysis and production of foreign intelligence. Therefore, the Committee strongly urges the Government to ensure that adequate and appropriate resources: policy, financial and personnel, be directed to this important task. This appears to be an appropriate role for the Privy Council Office to ensure that maximum use is made of all existing intelligence sources from across the Government of Canada. While the Committee is not recommending at this time the creation of a separate foreign intelligence service, we do not rule it out. The Committee views this option as a last resort to be considered in the future should efforts to improve the current situation prove to be inadequate to meet our country's total intelligence requirements.
Parliament's Role and Responsibility
An overarching assumption made in Canada is that "intelligence" including security intelligence is exclusively for the administrative branch of government. With very few exceptions, Parliament is not part of the loop in terms of receiving intelligence analyses or assessments generated by the intelligence community. In our system, the consumers of intelligence have been limited to policy makers and decision makers within the executive branch of government. Parliament, in being asked to approve legislation, budgets and policy initiatives, is largely deprived of direct access to any intelligence analyses or assessments.
For example, in discussion of proposed legislation to address money laundering, should not parliamentarians be fully briefed on the security intelligence that helped identify the problem and the proposed solution? During the forthcoming review of the Immigration Act, should not parliamentarians have access to security intelligence to help assess how effective the Act will be in addressing valid security concerns? Would parliamentarians not have a better understanding of domestic and international developments and the Government of Canada's response if they had reasonable access to foreign intelligence analyses? Access to intelligence would also allow parliamentarians to gauge its value, accuracy and timeliness.
According to a study on information-sharing between Congress and the intelligence community in the United States,
"...intelligence has made Congress a smarter, more effective critic of the executive branch, often complicating the lives of policy officials." (72)
Therein, perhaps, lies the answer. As long as the administrative branch has a monopoly on intelligence it exercises a distinct advantage over Parliament.
Committee Observations and Recommendations
The Committee recommends that the security intelligence community explore ways by which parliamentarians may be brought at least partially into the intelligence loop without prejudicing national security. Obviously, Parliament cannot and need not have access to all, or the most sensitive, national security information, all of the time.
In this regard, the Committee proposes regular briefings for parliamentarians on security issues and trends and accommodating parliamentarians' requests for briefings on specific issues.
