Annual Report 2001–2002

An Operational Audit of the Canadian Security Intelligence Service

Security Intelligence Review Committee
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Ottawa, Ontario
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© Public Works and Government Services Canada 2002
Cat. No. JS71-1/2002
ISBN 0-662-66755-7

September 30, 2002

The Honourable Lawrence MacAulay, P.C., M.P.
Solicitor General of Canada
House of Commons
Ottawa, Ontario
K1A 0A6

Dear Mr. MacAulay:

As required by section 53 of the Canadian Security Intelligence Service Act, we transmit to you theReport of the Security Intelligence Review Committee for the fiscal year 2001–2002, for your submission to Parliament.

Yours sincerely,

Statement from the Committee

The 12 months since SIRC last reported to Parliament coincide with what must be one of the most unsettling periods for Canadians since the end of the Second World War. Concern about public safety and the government's ability to protect the country and its citizens is at an all time high. Canada's security and intelligence apparatus—CSIS in particular—has become the object of public and media scrutiny of a kind not seen in decades. In the immediate aftermath of the attacks on September 11, the Government of Canada quickly adopted additional security measures and drafted new laws to combat terrorism. Within three months the comprehensive new Anti-terrorism Act was in place.

The Committee is also aware of the palpable shift in public mood since September 11. For the time being at least, Canadians appear broadly tolerant of the government's public safety initiatives, and the agencies that comprise the government's law enforcement and security apparatus have the benefit of most Canadians' doubts. Although public sentiment on such matters is often as fluid as it is hard to measure, the effect overall of the terrible events in the United States has been, we believe, to alter the public's sense of where government should strike the balance between protecting individual liberties on one side, and maintaining public safety and national security on the other.

Today, all democratic governments walk a fine line between these two claims. In watching over the activities of CSIS, the Review Committee helps ensure that balance is maintained. Although we must be sensitive to public and expert opinion—and take deliberate steps to inform ourselves—we must also take care not to be unduly swayed.

Recent history, in this country and elsewhere, teaches us that public opinion driven by scandals or calamitous events can profoundly affect how security intelligence bodies carry out their tasks. The Review Committee believes that its work must transcend events and politics, and that continuity of principle, meticulous research and sober judgement are its chief assets.

More than ever, security and public safety are shared, international responsibilities with many countries, among them our closest allies and friends, seeking to work together in unprecedented ways. Just as terrorists and violent criminals function in a world effectively without borders, so must the efforts to combat them.

The internationalization of the anti-terrorist effort imposes obligations on statesto share information, coordinate plans and operations and find ways to harmonize laws and regulations. However, these pressures present their own dilemmas. Among the thriving democracies who are our closest allies—and not incidentally the Service's closest international partners—security intelligence practices and cultures vary considerably, as do perceptions of individual rights. The Review Committee remains seized with the need to uphold distinctly Canadian core values while exercising its mandate.

The events of September 11 introduced concrete new realities to SIRC's work in reviewing CSIS's activities. On the its chief assets legal side, while Parliament has not given CSIS new powers, the newly enacted legislation is expected to increase the number of complaints about CSIS that are lodged with us. Both the new Anti-terrorism Act and the Charities Registration Act contain provisions for naming individuals and groups engaged in terrorist-related activities. Once these provisions are implemented, some of the people and entities so named can be expected to file complaints against CSIS with the Review Committee—as is their right under Canadian law.

Of immediate impact on the Service, the government's Public Safety and Anti-Terrorism initiative gave it a 30 percent increase in budget. As a result, the Service can be expected to engage in significantly more of those very activities that are of compelling interest to the Committee—more intelligence officers hired, more investigations launched, more warrants applied for, more liaison with domestic police and international intelligence agencies and more human sources recruited.

The Committee continues to review and assess the Service's activities, while adjusting its program of research and analysis to the new domestic and international realities. As in the past, we will report our findings—including as much information as law and prudence permit—to Parliament and the people of Canada.

Table of Contents

• Statement from the Committee
• How SIRC's Report is Organized
• Section 1 : Review of CSIS Intelligence Activities
  1. Areas of Special Interest for 2001-2002
  2. CSIS Reporting on Operational Activities
• Section 2 : Investigation of Complaints
• Section 3 : CSIS Accountability Mechanisms
  1. Policy and Governance Frameworks
  2. Reporting Requirements
  3. Duties and Functions of CSIS
• Section 4 : Inside the Security Intelligence Review Committee
• Appendices
  1. Acronyms
  2. SIRC Reports and Studies Since 1984
  3. Key Findings and Recommendations

How SIRC's Report is Organized

Section 1: Review of CSIS Intelligence Activities

A. Areas of Special Interest for 2001–2002

How SIRC Carries Out its Review Function— An Overview

A significant component of SIRC's review activity takes the form of research projects carried out by staff analysts directed by Committee Members. As a matter of policy and in accordance with the Committee's role in the Service's governance and accountability structure, the Committee reviews CSIS's performance of its duties and functions on a retrospective basis to assure itself—and by extension Parliament and the people of Canada—that the Service has acted appropriately and within the law. The Service continues at all times to be accountable for current operations through the existing apparatus of government, specifically the Ministry of the Solicitor General and the Inspector General of CSIS.

Research projects for any given fiscal year are designed to yield assessments across the range of CSIS's operational activities. This approach helps ensure that the Committee delivers a comprehensive overview of CSIS's performance. A number of factors influence the selection of topics for in-depth inquiry:

• shifts in the nature of the international threat environment
• changes in technology
• need to follow up on past Committee reviews or issues arising from complaints
• significant alterations to government policy with implications for CSIS operations
• interests of individual Members.

Although the selection of research projects is approved by the Committee at the beginning of each fiscal year, the Committee has always recognized the need to adjust its review plans to respond to unexpected events. To meet the resource demands of these unforeseen reviews, the Committee maintains the capability to redirect research resources to priority issues on short notice. Our inquiry—launched in the wake of the events of September 11—into the Service's investigation of Sunni Islamic extremism, is one such example.

The review function is essentially one of risk management—deciding which areas of the Service's extensive activities warrant the most careful monitoring.

Moreover, for the first time in many years the Service is dramatically increasing its own activities in areas where SIRC has a compelling interest and legal responsibility. The Committee, together with senior staff, is currently assessing the possible implications of the anticipated rise in the level of CSIS's activities on SIRC's statutory review functions. The Committee can then develop an effective strategy, make any necessary adjustments to ensure SIRC's continued ability to meet the expectations of Parliament and the public and fulfill its statutory obligations under the CSIS Act.

CSIS Investigation of Sunni Islamic Extremism - Report # 2002-01

Background

The events of September 11, 2001 in the United States made shockingly real to both the Canadian government and the Canadian public the threat of Sunni Islamic extremism. In very short order, the government took a number of administrative, budgetary and legal measures intended to increase public safety and boost public confidence in the national security apparatus.

For their part, Canadians were left shaken, anxious and angered by September 11—aghast at the nature of the attacks and apprehensive about what terrorism on such a scale might mean for daily life in Canada and the rest of the world. Underlying the national anxiety was the fear that similar attacks could have occurred in Canada or that they might happen in the future.

These worries gave rise to some serious questions: How well did Canadian authorities understand the gravity of the threat? How much did they know and how much ought they to have known about the attacks, which ultimately occurred so near to home? And finally, what are those who are supposed to guard our public safety doing to prevent future attacks here and abroad?

To begin the search for answers to these and other pertinent questions, at least insofar as CSIS is involved, the Review Committee launched a broad study of the Service's investigation of the Sunni Islamic and Al Qaida terrorist threat to Canada prior to and around the time of the September 11 attacks. Past Committee reviews have explored various aspects of the Service's role in counter terrorism in general, and Sunni Islamic terrorism in particular, so the area is not new for the Committee.

Objectives and Methodology

The Committee recognized from the outset that CSIS's investigation of Al Qaida specifically and Sunni Islamic terrorism generally was complex and of long standing. The Committee's inquiries for this study were therefore chiefly informational in nature, designed to survey the Service's activities in the months leading up to September 11— information and analysis we regard as prerequisites for any additional examinations.

The objectives of this overview study were fourfold:

1. to gain a broad understanding of the reach and focus of the Service's investigation of Sunni Islamic extremist activities;
2. to determine the nature and quantity of assessments, analyses and other forms of advice about the threat transmitted by CSIS to relevant government and law enforcement clients;
3. to review the character and quantity of information exchanges about Sunni Islamic extremist activities with the intelligence services of allied nations; and,
4. to identify subjects meriting further study by the Committee.

The nature of the Committee's inquiries necessarily influenced the sorts of conclusions that we drew from the information reviewed. For example, the Committee did not examine all the raw intelligence collected by the Service or passed to it from other agencies. Nor did we review specific warrants or delve into the handling of individual human sources with a view to ensuring compliance with law and policy.

Instead, the Committee's focus in this study was on examining material that would aid in understanding how the Service ran its investigation, who its chief interlocutors were, the analytical outcomes generated by the intelligence it collected and the content of the Service's advice to government. We also inquired into how CSIS adapted to the immediate crisis created by the September 11 events with respect to the redeployment of human and technical resources.

The Committee's review covered the period April 1, 2001 through September 12, 2001. However, to complete our investigation we examined additional documents and relevant data that fell outside the formal review period.

Findings of the Committee

The Service's investigation of Sunni Islamic extremism is a long-standing one and has grown steadily in scope and complexity since its inception. At the time of the September 11 attacks, the Service's investigation of Al Qaida appears to have been extensive.

Through all manner of intelligence gathering—direct and indirect—CSIS appears to have run an aggressive investigation. It managed human sources, obtained and implemented Federal Court warrant powers and exchanged intelligence with allied agencies.

With respect to making use of this information to advise government, CSIS was active as well. Since the beginning of the investigation, the Service has disseminated to government departments and law enforcement agencies numerous publications and intelligence advisories (most of them classified) on the matter of Sunni Islamic extremism—almost half of them in the more recent past. In addition, CSIS gave numerous briefings and presentations to government dealing wholly or in part with Sunni Islamic terrorism.

Based on our examination, the Committee believes that the Service disseminated widely within government timely information about the potential for Sunni terrorism. Although none of the intelligence products or threat warnings we reviewed pointed directly to the events of September 11, the Service clearly was aware of the potential for Al Qaida-inspired terrorist attacks of some kind and communicated this information to the appropriate bodies in government. In the Committee's view, however, none of the advice or communications the Committee reviewed warned of a threat sufficiently specific in time or place to have alerted government authorities to the events of September 11.

Conclusion

From the information and documentation we reviewed, the Committee concluded the following:

• CSIS has for some time been actively seized with the issue of Sunni Islamic terrorism and continues to investigate this threat aggressively.
• In its duty to advise government, CSIS acted in a timely manner to tell government what it knew of the Al Qaida/Sunni Islamic threat.
• In the wake of September 11, the Service continued to deploy human and technical resources with the aim of countering this and related threats.

In carrying out this overview study, the Committee has laid the foundation for future in-depth inquiries into specific elements of the Service's Sunni Islamic extremist investigation. We will elaborate on our findings in future reviews and annual reports.

Source Recruitment - Report # 2001-01

Background

Human sources are an extremely valuable tool in the Service's gathering of intelligence about potential threats to Canada. Clearly, the recruitment of sources is a sensitive area of CSIS's operations. Thus a considerable amount of Ministerial Direction and Service policy is devoted to ensuring that all operations involving human sources are managed appropriately and within the law.

This study arose from Committee findings in a previous complaint case. Our report on the complaint identified several shortcomings in the Service's procedures and the Committee expressed its intention to undertake a follow up review at a future date. The goal of this study was to re-examine the Service's source recruitment practices in this most sensitive area.

Methodology

The Committee's review drew on a sample of cases that met the study criteria between October 1999 and September 2000. We examined all relevant electronic and hard-copy documentation related to each case and measured these against current Service policies and procedures for source recruitment. The policies were themselves examined to determine their effectiveness. The Committee also inter-viewed the relevant CSIS senior officials in charge of the source recruitment program.

Findings of the Committee

Overall, the Committee found that the human source operations we reviewed were carried out in conformity with law, Ministerial Direction and policy. Those files we examined showed that the Service conducted itself appropriately and in accordance with policy adjustments made in the wake of the Committee's previous report. The Committee also determined that the Service had assessed the reliability of the sources with appropriate caution and that all transactions we reviewed complied with established policies.

The Committee's review did identify two administrative shortcomings in the management of the source files: first, in a few instances, inadequate record keeping; and second, Headquarters approval necessary for a particular activity was not obtained in a timely manner. With the aim of avoiding similar difficulties in the future, the Committee made two recommendations to CSIS, which for reasons of national security cannot be elaborated here.

Given the potential for misunderstanding, the Committee stressed to the Service that it should continue making every effort to ensure that sources are fully aware of the nature of their relationship with the Service. The Review Committee will continue to monitor the Service's activities in this especially sensitive area.

Domestic Extremism - Report # 2001-03

Background

For more than a decade, CSIS has conducted periodic investigations in this area on the basis that the activities being investigated represented threats to public safety and to national security. In light of the sensitivity of the subject and the need to ensure that the rights to legitimate advocacy, protest and dissent were not being in any way infringed, the Committee has monitored the Service's activities closely.

This study is one of several examinations by SIRC of the Service's activities in the area. As in previous cases, the aim was to determine whether the Service had reasonable grounds to suspect that the activities of the targeted groups and individuals represented threats to the national security of Canada; whether the Service recruited and managed human sources appropriately; and, whether CSIS acted in compliance with the CSIS Act, Ministerial Direction and relevant operational policies. The Review Committee also reviewed the nature of the Service's co-operation with federal and provincial departments of government and law enforcement agencies.

Scope and Methodology of the Audit

The Committee reviewed all relevant Service documents and files (electronic and hard-copy) for the period April 1998 through September 2000. These documents included but were not limited to targeting authorizations, warrants and their supporting documents, operational reports, human source logs, internal CSIS correspondence and records of exchanges of information with other agencies and departments.

Findings of the Committee

Targeting and Investigations

The Service issued two targeting authorities related to this issue during the period under review: one was issue-based; the other focused on a particular organization. The Committee reviewed all the relevant files and randomly selected individual targets investigated under the two authorities. For each case, the Committee posed three basic questions:

1. Did the Service have reasonable grounds to suspect a threat to the security of Canada?
2. Was the level of the investigation proportionate to the seriousness and imminence of the threat?
3. Did the Service collect only information that was strictly necessary to advise the government of a threat?

With respect to the investigations conducted under the issue-based authority, the Committee found that the Service had reasonable grounds to suspect an imminent threat of politically motivated violence; that the level of the investigations was appropriate to the nature of the threat; and, that all information reported met the “strictly necessary” test. The Committee's research found no extensive reporting on individuals who were not engaged in threat-related activities.

The records also show that the Service exercised the issue-based authority judiciously, terminating investigations when it determined that individuals did not pose a threat. Overall, CSIS appeared sensitive to the need to distinguish between threat-related activities and legitimate political ones. (see inset “Issue/ Event-based Targeting”.)

The second targeting authority the Committee reviewed named a particular organization. Here too, the Service conducted its investigations in an appropriate and lawful manner. It was clear to the Committee that in one specific instance, information gathered in the course of the investigation helped to minimize the potential for serious violence.

The Committee's only reservation arose from a review of information collected under the targeting authority in the year prior to its expiration. In the Committee's opinion, most of the data concerned activities by the target that were not threat-related. It was evident to the Committee that the organization no longer posed a threat of politically motivated violence as defined under section 2(c) of the CSIS Act. It is the Committee's view that the Service should have considered terminating the investigation before the mandated expiry date. In response to our concerns, the Service stated that it required the full 12 months of investigation to assess accurately the group's potential for engaging in politically motivated violence.

Human Source Operations

Such is the sensitivity of human source operations that they are the subject of special Ministerial Direction, detailed policy requirements and regular scrutiny by CSIS senior management. Historically, the Committee, in any investigation it reviews, has looked closely at the manner in which the Service complies with these rules.

In connection with our review of the Service's investigation, the Committee selected a number of human source cases for extensive audit. In each case, the Committee was satisfied with the Service's recruitment and direction of the source and found CSIS to have been diligent in complying with operational policy requirements.

Inter-agency Co-operation

The objective of this part of our review was to assess the quality of the cooperative relationship on this investigation between CSIS and other relevant agencies—specifically, federal and provincial departments of government and law enforcement bodies.

Overall, the Committee found the nature and level of co-operation between the Service and other domestic agencies to be both appropriate and productive. The Committee took special note of the high level of information sharing between CSIS and the RCMP.

The Committee will continue to pay close attention to all the Service's activities in this area and intends to revisit the investigation regularly.

Collection of Foreign Intelligence - Report # 2001-05

Methodology

The Committee's review encompassed all Ministerial requests for assistance, all section 16 information retained by CSIS for national security purposes and all exchanges of information with the Communications Security Establishment (CSE) in the context of foreign intelligence gathering. Besides this material, which is regularly subject to Committee scrutiny, we reviewed a random sampling of feedback from Service clients on section 16 intelligence products.

The goal of the audit was to:

• Review CSIS's role in section 16 requests to ensure compliance with the CSIS Act, directions from the Federal Court, any related Ministerial Direction and the governing 1987 and 1990 Memoranda of Understanding (MOUs).
• Examine the nature of the relationship between CSIS and CSE as it relates to section 16 matters to ensure that it complies with the law, Ministerial Direction and operational policy.
• Understand the role of client feedback in how the Service prepares intelligence products for its clients in government.

Findings of the Committee

Requests for Assistance

All Ministerial requests under section 16 complied with the necessary legal and administrative requirements. For the period under review, no new legislative, policy or judicial guidelines were issued in relation to activities under section 16.

Warrant Implementation

The Committee examined a selection of warrants directed at section 16 collection including all related working files, affidavits and logs. We also interviewed relevant Service officers. In each of the cases reviewed, we found the collection activities were correctly administered and identified no instances of non-compliance with law or policy.

Requests for Identifying Information

Information that CSE gives to the Service is routinely “minimized” to comply with various prohibitions against targeting Canadian nationals and Canadian businesses. Under specific circumstances, the Service may request identification from CSE if it can demonstrate that the information relates to activities that could constitute a threat to the security of Canada as defined in section 2 of the CSIS Act. In its review of these requests for supplementary information, the Committee determined that all complied with law and policy. We saw no information about Canadians collected in the course of section 16 operations that was inappropriately retained in Service files.

Access to Section 16 Information

Given the extremely sensitive nature of section 16 operations, access to the database containing this information is restricted to only those CSIS employees who have received special clearance and indoctrination. The database is thus not normally accessible to intelligence officers involved in investigations under section 12. The Committee reviewed random samples of correspondence related to the indoctrination of intelligence officers requiring access to this database and their requests for access. We found all requests and reports examined to be appropriate.

Client Feedback

Client assessment of intelligence product is an essential part of the intelligence cycle. The Committee examined a sampling of client assessments received by the Service during the period under review and found that the Service appeared to weigh all such feedback carefully and make adjustments where appropriate.

CSIS Liaison with Foreign Agencies: Audit of an SLO Post - Report # 2001-04

Background

Security Liaison Officer (SLO) post audits address the Committee's obligation, under section 38(a)(iii) of the CSIS Act, to examine the Service's performance of its duties and functions in connection with arrangements with foreign governments and institutions thereof. By focusing on a single CSIS security liaison post, the Committee is able to review the Service's relations with foreign security and intelligence agencies, the management of controls over the dissemination of CSIS information, post profiles and foreign agency assessments prepared by the SLO and the nature of the information collected and disclosed. The audit also allows the Committee to identify developments, pressures and emerging issues specific to the post and the foreign agencies within the post's ambit.

This year the Committee selected a post whose existence predates that of CSIS. International events and intelligence activities of mutual interest to the Canadian government and host country helped influence our choice. Also, last year's SLO post audit pointed to this particular post, among others, as having an especially heavy and expanding workload. The Committee wished to review the situation first-hand.

Methodology

As with all Committee SLO post audits, the essential goals were twofold: first, to ensure that relationships and contacts with foreign agencies complied with the specific arrangements that govern them; and second, to monitor the controls over information disclosed to foreign agencies or received from them. More broadly, the activities of the selected post for the period under review— April 1, 1999 through March 31, 2001—were examined in the context of the CSIS Act, Ministerial Direction and CSIS operational policies.

At CSIS Headquarters (HQ) the Committee reviewed:

• post profiles and assessments of foreign agencies prepared and updated by the SLO;
• liaison arrangements with the foreign security and intelligence agencies covered by the post; and,
• the information and intelligence exchanged between HQ and the SLO.

At the post we examined:

• the content and scope of correspondence released by the post to foreign security and intelligence agencies; and,
• a sample of the files relating to the Assistant Security Liaison Officer's (A/SLO's) assistance to Citizenship and Immigration on security assessments of applicants for landed immigrant status.

The Committee's on-site review also included interviews with the SLO and A/SLO, the resident RCMP liaison officer, senior staff of Citizenship and Immigration Canada (CIC), Canada's Head of Mission and the Mission's Counsel General.

Findings at the Post

Overview

Our observations, reviews of documentation and interviews all led the Committee to conclude that the SLO post was effectively managed and its staff held in high regard by the senior staff of the mission. Unlike the substandard conditions identified in last year's SLO post audit, the Committee saw no deficiencies in either the physical facilities or the security arrangements.

One reason why the Committee selected this post for audit was its pivotal role in events of mutual interest to the Canadian and host country's security services. Actions by the security intelligence and law enforcement agencies of both countries, before and after these events, directly affected the character and volume of exchanges handled by the post. For the Committee, the exchanges provided additional insight into the greater demands being placed on the Service's relationships with other intelligence agencies.

Workload

During the two years under review, heavy workloads at the post necessitated repeated requests to CSIS HQ for temporary, additional resources to address administrative and operational backlogs. The Committee concluded that the work backlogs were neither the result of inefficiencies nor were they one-time events. Rather they arose from the consistently high demands made of the SLO post staff. In the Committee's view, the Service may wish to reconsider whether short-term, temporary staff assignments are indeed the most effective way of dealing with this ongoing situation.

Visits to the post

The Committee also followed up on the concern expressed at CSIS HQ that the planning of a large number of visits to SLO posts for the purpose of meeting with foreign agency counterparts imposed an undue organizational burden on the SLOs who had to coordinate the visits. The SLO at this post stated that, to the contrary, well-organized meetings of visiting Service officers with their counterparts generated an increase in the exchanges of information and contributed positively to the overall credibility of the liaison program. The Committee's review of the available records, as well as feedback from foreign agencies provided to CSIS HQ, all bore out the SLO's assessment.

Information exchanges

The Committee examined both the documentation prepared for disclosure by the SLO to foreign agencies and the information exchanged between CSIS HQ and the post. The information reviewed included exchanges of intelligence and that dealing with operational co-operation. In preparing CSIS information for disclosure to foreign agencies, the SLO must follow specific administrative procedures. With only a few minor exceptions, all the disclosures prepared by the SLO complied with these procedures. The Committee found that the remaining exchanges of information between CSIS HQ and the SLO post, and information disclosed by the SLO to foreign agencies, were in compliance with the CSIS Act, Ministerial Direction, operational policy and the relevant foreign arrangements.

Co-operation with Citizenship and Immigration

Another issue raised in last year's SLO post audit, which the Committee intended to revisit, was that of SLO assistance to CIC in the form of immigration screening. Last year's study cited Service senior management as sharing Committee concerns that the overburdening of SLOs with immigration matters, which we identified at one post, in fact extended to certain others, including the post reviewed here.

The Committee's examination of records this year showed that temporary assistance to the post was provided by the Security Screening Branch in each of the last three calendar years. The SLO noted to the Committee that requests to HQ for temporary assistance have, to date, always been granted.

It was evident to the Committee that the growing volume of work posed challenges that continue unabated. During on-site interviews, CIC staff advised the Committee that their referrals for immigration security screening to the Service were greater than at other CIC offices abroad. As with the more general issue of workload at SLO posts, the Committee believes the Service may need to reconsider whether temporary staff assignments are the best means of handling the growing workload. It is important to note that, notwithstanding the demands imposed by the immigration security screening program, the Committee saw no evidence that the post was failing to meet its obligations.

Foreign Agency Assessments

In past reviews, the Committee has emphasized the importance it places on the Service's responsibility to take all possible care to ensure that the information it exchanges with foreign agencies is not used in ways that could result in violations of human rights. The SLO is responsible for regularly updating assessments of foreign agencies and promptly submitting these to CSIS HQ. The agencies are assessed both s for their human rights records and their propensity to pass information on to third parties without authorization. After reviewing the agency assessments prepared by the SLO post, the Committee was satisfied that they were complete and properly carried out.

Warrant Review - Report #2001-06

Background

A warrant issued by the Federal Court of Canada is the legal mechanism by which CSIS is authorized to exercise its most intrusive powers in the course of investigating threats to the security of Canada. The legislative mandate for Federal Court warrants is found in section 21 of the CSIS Act, which allows the Service to obtain warrants to assist in its investigations of threats to the security of Canada.

By regularly examining a sample of cases in which CSIS has acquired and implemented warrant powers, the Committee gains insight into the Service's core investigative activities. From among the warrants issued in 2000–2001, the Committee selected one counter terrorism warrant and one counter intelligence warrant. Each case was examined from two perspectives: first, the Service's activities in acquiring warrant powers from the Federal Court; and second, the manner in which CSIS implemented those warrant powers. The overall objective was to ensure that all the Service's activities complied with the CSIS Act, Ministerial Direction and operational policy.

Methodology of the Audit

Warrant Acquisition

In reviewing the Service's acquisition of warrant powers, the Committee examined all documents relating to how the warrant applications were prepared, including the affidavits; supporting documentation used to substantiate the affidavits; the working files related to the affidavits; the Requests for Targeting Authority; and the Target Approval and Review Committee (TARC) minutes.

The purpose of reviewing the documentation on how the Service acquires warrant powers is to ascertain whether

• the allegations in the affidavits are factually correct and are adequately supported in the documentation;
• all pertinent information is included in the affidavits; and,
• the affidavits are complete and balanced, and the facts and circumstances of the cases are fully, fairly and objectively expressed.

Warrant Implementation

In reviewing how the warrant powers were implemented, the Committee examined the warrants themselves; the Service's regional and headquarters warrant administration files; all regional files concerning warrant implementation and sensitive operations; and electronic operational reports pertaining to the targets of the warrants. The purpose of the review is to assess the Service's use of the powers granted by the Federal Court and to determine whether CSIS complied with all clauses and conditions contained in the warrants.

Findings of the Committee

The Service's procedures for managing warrants through the entire life cycle of acquisition and implementation are both exhaustive and complex. In reviewing both the counter terrorism and the counter intelligence warrants, the Committee found that, on the whole, the Service managed each warrant properly and complied with both the CSIS Act and Ministerial Direction.

Warrant Acquisition

The Committee found that CSIS managed the warrant applications in a thorough and objective manner, although there were several minor instances in which the affidavits were not consistent with the supporting documentation. While none of the errors were material in nature, the Committee believes strongly that CSIS must continue to pay scrupulous attention to its affidavit drafting procedures. Accordingly, the Committee recommended that,

CSIS should strive for the utmost rigour in its warrant acquisition process, ensuring that allegations in the affidavit are factually correct and adequately supported in the documentation.

Warrant Implementation

With respect to how the Service complies with its own operational policy requirements and administrative practices, we identified a number of shortcomings in how one warrant was implemented. Although none materially affected the overall management of the warrant, the Committee made four recommendations to the Service designed to avoid future problems. Two were recommendations to amend or clarify specific policies so that they could be implemented more consistently. A third spoke to the need for the Service to adhere more consistently to a specific existing policy.

Giving rise to the fourth recommendation was an instance in which a particular administrative oversight had the potential of creating the perception that the Service was implementing warrant powers after the warrant had expired. Although the Committee determined that the warrant was properly managed by the regional office concerned, we did recommend to the Service that it adopt a new administrative procedure that would eliminate the potential for ambiguity.

The “Strictly Necessary” Test

For both warrants reviewed, the Committee found that CSIS adequately justified its choice of information collected and retained and in general met the “strictly necessary” test set out in section 12 of CSIS Act. However, the Committee identified a small number of instances where CSIS collected personal information that the Committee felt was of questionable relevance to the targets' threat-related activities. The Service disagreed with our observation.

Given the centrality of the “strictly necessary” test to the integrity of the intelligence gathering process, the Committee felt prompted to make a formal recommendation. Accordingly, the Committee recommended that,

CSIS should maintain a strict awareness of the conditions stated in Federal Court warrants and of the “strictly necessary” test outlined in section 12 of the CSIS Act so that its collection of information continues to meet legal and policy directives

B. CSIS Reporting on Operational Activities

Counter Terrorism

The role of the Counter Terrorism (CT) Branch is to advise the government on emerging threats of serious violence that could affect the safety and security of Canadians and of Canada's allies. Whether of domestic or foreign origin, addressing the threat of violence in support of a political, religious or ideological objective continues to be one of the Service's chief priorities.

As discussed in some detail in the Committee's study of CSIS's investigation of Sunni Islamic extremism (see pages 4–8), the threats represented by Sunni extremists have been and remained in 2001–2002 a major priority for the CT Branch. CSIS reported no significant changes in operational focus or priorities in the year under review. Reporting on the threat of terrorism more generally, the Service continues to regard the spread of advanced communication technologies, the ease and speed of international travel and the diffuse nature of terrorist alliances as its greatest challenges. In the Service's view, these factors have rendered “geographic constraints to the spread of terrorism . . . virtually non-existent.”

Threat Assessments

CSIS provides threat assessments to departments and agencies within the federal government based on relevant and timely intelligence. CSIS prepares these assessments—dealing with special events, threats to diplomatic establishments in Canada and other situations—either upon request or unsolicited.

In 2001–2002, the CT Threat Assessment Unit produced 795 assessments for government clients—a considerable increase over the previous t year's 544. CSIS attributed the increase to three factors: first, a greater number of special events (for example, major conferences and diplomatic events); second, increased demand from various departments of government; and third, its own more “proactive stance” to issuing assessments.

Counter Intelligence

The Counter Intelligence (CI) Branch investigates threats to national security caused by the hostile intelligence activities of foreign governments, as well as threats to Canada's social, political and economic infrastructure. The Service reported that the CI Program continues to change with the evolving geopolitical environment.

The Committee had asked the Service for information regarding the impact of the events of September 11 on the CI Branch. The Service provided detailed information to the Committee on the effect of the events of September 11 on the CI Branch's operational activities and deployment of resources. The Service reported on a number of active and successful investigations across the spectrum of CI's activities.

Research, Analysis and Production

As the research and analysis arm of CSIS, the Research, Analysis and Production Branch (RAP) is responsible for producing and disseminating finished intelligence product to the Government of Canada on threats to the security of Canada through such documents as CSIS Reports, CSIS Studies and CSIS Intelligence Briefs. When and where appropriate, RAP intelligence product is also distributed to a broader readership.

Authorized disclosures of information obtained in the performance of CSIS's duties and functions—subject to sections 19(2)(a) through (d) of the CSIS Act— are another means by which RAP disseminates intelligence product. RAP reported that in 2001–2002 there were 778 section 19 disclosure reports, a dramatic increase over previous years: namely 307 in 2000–2001 and 101 in 1999–2000.

According to the Service, the rise in numbers was the result of greater sensitivity of CSIS officers in Canada and abroad to section 19 issues, and documents being more effectively disseminated by foreign intelligence services in accordance with exchange arrangements.

In 2001–2002, RAP also produced 83 classified reports compared to 93 the previous year. RAP's intelligence publications generally fall under two categories:

1. Public safety reports examine the threat to Canadians at home and abroad from international terrorism.
2. National security reports refer to the activities in Canada of other national governments' intelligence services, and global issues such as counter-proliferation and transnational criminal activities.

CSIS also contributes to the wider government intelligence community by participating in the Intelligence Assessment Committee (IAC). This body is made up of senior officials from departments and agencies of the Government of Canada most concerned with intelligence matters. In the year under review, RAP staff wrote or contributed to the writing of eight IAC reports. These reports are distributed to a senior readership across government.

Security Screening

The Service has the authority, under section 13(1) of the CSIS Act, to provide security assessments to federal government departments. The Service may also, with appropriate Ministerial approval, enter into arrangements to provide assessments to provincial government departments or provincial police forces, as outlined in section 13(2). Arrangements for providing security screening advice to foreign governments, foreign agencies and international institutions and organizations are authorized under section 13(3).

For federal employment, CSIS security assessments serve as the basis for determining whether an individual should be granted access to classified information or assets. In immigration cases, Service assessments can be instrumental in Citizenship and Immigration Canada's decision to admit an individual into the country and in granting either permanent resident status or citizenship.

Security Screening for Federal Employees

2001–2002 Key Statistics

• The Service received 65 066 requests for security screening assessments for clearance, levels one through three, new upgraded and updated. This number represents a substantial increase from 36 803 in 2000–2001. CSIS attributed the increased volume to government client concern following the events of September 11 and extra prudence in the context of Canadian military operations in the Afghan theatre of operations. Also, 312 requests were for action relating to administrative procedures such as transfers and downgrades.
• This year, CSIS reported on median turnaround times for security screening assessments in two separate categories—DND and Government (see Table 1). The Service reported that administrative practices in the client departments accounted for the discrepancies between screening times for DND requests and those for the rest of the government.
• The Branch reported that it had improved turnaround times, which it attributed to government clients expanding their use of the Electronic Data Exchange (EDE). CSIS expects the trend to continue as almost all government departments will have switched to EDE by the end of fiscal year 2002–2003, obviating the need to handle about 6000 cases per year by hand.
• The Service reported that they had completed 4000 government security screening investigations and that another 1376 were still ongoing. Of these requests, the largest number came from the Department of National Defence, followed by the Communications Security Establishment, Canadian Security Intelligence Service, Department of Foreign Affairs and International Trade, Public Works and Government Services, the Privy Council Office and Citizenship and Immigration Canada.

• The Service reported that they received 33 108 requests for assessments under the Airport Restricted Access Area Clearance Program (ARAACP). This number represents a 10.8-percent decrease in requests for security assessments reported by CSIS last year, because the Service completed most of the clearances required for this program in the previous fiscal year. The median turnaround time for ARAACP requests is 15 days.
• There were 20 803 requests for security assessments related to “site access,” of which only 2954 were from federal government clients. The significant increase in the number of these security assessments is attributed to the fact that the Canadian Nuclear Safety Commission enacted order #01-1 on October 19, 2001 for enhanced security measures, including security screening by CSIS of all employees at nuclear power facilities.
• The Service reported that their security screening investigations resulted in 26 information briefs and one denial brief.
• With the RCMP acting as intermediary, the Service received 214 requests for accreditation to access the Parliamentary Precinct and 16 781 requests for accreditation to special events and functions to which access is controlled.

Immigration Security Screening Programs

Under the authority of sections 14 and 15 of the CSIS Act, the Service conducts security screening investigations and provides advice to the Minister of Citizenship and Immigration Canada (CIC). Generally speaking, the Service's assistance takes the form of information-sharing on matters concerning threats to the security of Canada as defined in section 2 of the CSIS Act and the form of “assessments” with respect to the inadmissibility classes of section 19 of the Immigration Act.

Applications for Permanent Residence from Within Canada

The Service has the sole responsibility for screening immigrants and refugees who apply for permanent residence status from within Canada. In 2001–2002, the Service received 45 902 such screening requests.^{Footnote 1} Of these requests, 26 735 were immigration applications and 12 226 came through the Refugee Determination Program.

The time required for the Service to issue its recommendations based on an immigration application differs considerably based on how the application was filed. Those applications filed using the EDE took a median of 77 days, whereas those filed on paper took a median of 159 days. The average number of days for the Service to respond was 86.

Application for Permanent Residence from Outside Canada

Immigration and refugee applications for permanent residence that originate outside Canada or the United States are managed by the Overseas Immigrant Screening Program under which the Service shares responsibility for security screening with CIC officials based abroad. Generally, CSIS only becomes involved in the screening process either upon being requested to do so by the Immigration Program Manager (IPM) or upon receiving adverse information about a case from established sources. This division of labour allows the Service to concentrate on the higher-risk cases.

In 2001–2002, the Service received 28,775 requests to screen refugee and immigration applications initiated outside of Canada. Of these, CSIS reported that 7155 were referred to SLOs for consultation.

Nature of CSIS Advice to CIC

Immigration requests for security screening resulted in 415 briefs from CSIS to CIC—282inadmissible briefs and 133 information briefs. Of those requests, the average time required for a “no reportable trace” (NRT) was 55 days, for an information brief 401 days and for an inadmissible brief 498 days. In the latter two categories, the figures represent a significant improvement over the previous year, which were 661 days and 644 days, respectively. For applications under the Refugee Determination Program, information briefs required 355 days on average and inadmissible briefs 433 days.

The Service reported reduced turnaround times for security screening assessments as compared to the previous year. This improvement is attributed to the fact that more clients are using the EDE software, including several foreign immigration posts. Also, the Service sent 50 “incidental letters” to CIC.

Citizenship Applications and the Watch List

As part of the citizenship application process, the Service receives electronic trace requests from CIC's Case Processing Centre in Sydney, NS. The names of citizenship applicants are cross-checked against the names in the Security Screening Information System database. The Service maintains a Watch List, which is made up of individuals who have come to the attention of CSIS through, inter alia, TARC-approved investigations.

In 2001–2002, the Service reviewed 144 346 citizenship applications for CIC. Of these, 2 resulted in inadmissible briefs and 129 in information briefs. In 10 instances the Service sought Ministerial approval to defer its advice.

Front-End Screening Program

The Front-End Screening Program is a recent government initiative through CIC, to ensure that all refugee claimants arriving in Canada are subject to a screening process similar to that for applicants for permanent residence. The aim of the program is to identify potential security and criminal cases in the refugee claimant stream as early as possible in the determination process.

In the four months of operation, between November 25, 2001 and March 31, 2002, the Service received 5522 cases from CIC for processing.

Screening on Behalf of Foreign Agencies

The Service may enter into reciprocal arrangements with foreign agencies to provide security checks on Canadians and other individuals who have resided in Canada. For 2001–2002, the Service reported that 1908 screening checks were done on behalf of foreign agencies. Of these, 91 resulted in either field investigations, information briefs or recommendations for rejection. These statistics compare to last year's 995 and 66, respectively.

Three reasons were given by the Service to explain the sharp rise. First, following the events of September 11, the demand for security screenings increased in all categories; second, requests for foreign agency screenings typically increase during any year in which the Olympic Games are staged; and third, the Screening Branch cleared a backlog of immigration cases late in the fiscal year under review.

CSIS Funding Following Events of September 11

In its December 2001 budget, the government allocated an additional $7.7 billion for the purpose of enhancing the personal and economic security of Canadians. Of this total, $1.6 billion was to augment the nation's capacity for intelligence- gathering and policing. Beginning almost immediately after the events of September 11 and extending into future years, CSIS received authorities for increased spending of 30 percent for fiscal year 2001–2002 with smaller increments in subsequent years. By fiscal year 2006–2007, the Service's budget will have increased by 36 percent over the level in fiscal year 2000–2001.

The Committee sought and received briefings and other detailed, classified information from the Service on various elements of its spending plans. The Service intends to increase its staff complement by 283 full-time positions and channel more resources to carrying out the increased volume of security clearances for various government clients. The new funds will also be used to upgrade and replace technical equipment and information systems.

On how it intends to use its new resources, CSIS stated in its most recent public annual report:

The additional resources, both human and financial, will allow the Service to broaden its daily activities and inject more flexibility into its choices of intelligence operations. Priority investigations will be maintained and areas reduced to address the priority threat will return to a full investigative posture.^{Footnote 2}

The Committee will continue to inform itself on the issue as the new funds come on stream in future years.

Section 2: Investigation of Complaints

Complaints Case Histories

This section summarizes complaint cases submitted to the Review Committee on which decisions were reached during the past year. Not addressed here are complaints that were handled through administrative review, were misdirected or were deemed to be outside the Committee's jurisdiction. The summaries are edited to protect the privacy of complainants and to prevent disclosure of classified information.

Where appropriate, complaints are investigated through quasi-judicial hearings presided over by a Member of the Committee. After the hearings are complete, the presiding member issues a report to both the Solicitor General and the Director of CSIS. After any information with national security implications is removed, the complainant also is advised in writing of the findings.

Pursuant to the CSIS Act, the Committee reported on seven complaint cases reached during the period under review: three were complaints lodged in accordance with section 41—“any act or thing”; two were section 42 complaints (denial of security clearance); two were referrals from the Canadian Human Rights Commission (CHRC) (see Table 2).

Reports of Decisions

Section 41—“Any Act or Thing”

Case #1: Allegations of Improper Conduct

The complainant alleged that CSIS had improperly used its resources to assist a former employee. Specifically, the complaint alleged that the Service had improperly collected information, disclosed information to a third party in violation of CSIS policy, deliberately misled a court proceeding and attempted to intimidate the complainant.

The Committee determined that there was no foundation to any of the complainant's allegations of wrongdoing by the Service. The Committee made two recommendations for modifying CSIS policy designed to avoid circumstances in the future that might lead to similar such complaints.

Case #2: Allegations of Improper Conduct and Violation of Privacy

The complainant alleged that in receiving and retaining without consent items of personal property belonging to the complainant, the Service acted beyond its authority, without just cause and in violation of the complainant's privacy rights.

The Committee learned that during an investigation the Service had recovered certain items belonging to the complainant. Without informing the complainant, the Service retained possession of the items for several days before returning them to the owner. The Committee found that the complainant's contention that CSIS had acted inappropriately and outside the normal functions of its duties was justified. The Service acknowledged to the Committee that the recovery and return of the complainant's property could have been handled in a manner more sensitive to the complainant's concerns and needs.

The Committee recommended that the Service address the lack of policy guidelines regarding the retention of personal items that come into its possession. The Service has since acted on the recommendation.

Case #3: Allegations of an Improper Investigation of Lawful Advocacy, Protest and Dissent

The complainant alleged that the Service was illegally and improperly investigating a group of persons involved in lawful advocacy, protest and dissent. The complainant requested that the Service make public any evidence in its possession suggesting the involvement by this and other like-minded organizations in activities posing a threat to the security of Canada.

In correspondence with the complainant prior to the filing of the complaint, CSIS stated that it did not make a practice of investigating lawful advocacy, protest and dissent. The Service declined to confirm or deny the existence of an investigation of the group in question. As a general rule, CSIS neither confirms nor denies the existence of any particular investigation.

The Committee found no evidence that the Service was involved in the activities alleged by the complainant.

Section 42—Denial of Security Clearance

Case #1: Denial of Security Clearance Based on Loyalty

The complainant, an employee of a federal institution, was denied a level 2 (Secret) security clearance. As a result, the complainant's employment with the federal institution was terminated. The Deputy Head of the federal institution based the decision to deny the complainant's security clearance on advice received from CSIS. The employee elected to contest the denial of clearance by filing a complaint under section 42 of the CSIS Act.

In its investigation, the Committee learned that the Service's advice was based on its assessment that the complainant was engaged in activities that constituted threats to the security of Canada and that the complainant associated with persons or groups regarded as security threats. The Committee found the Service's information to be credible and that the decision of the Deputy Head to deny the security clearance met the standard of “reasonable grounds to believe” as required by Government Security Policy.

The case raised two subsidiary issues for the Committee. Some CSIS investigators employed a certain format for preparing interview reports. The Committee recommended that this particular format be revised or abandoned. The Committee also reiterated its view (see SIRC Report 1999–2000, p. 73) that CSIS could mitigate the potential for conflicting accounts of security clearance interviews either by recording them and retaining the tapes on file, or by preparing an interview summary for the interviewee's comment and signature.

Case #2: Denial of Security Clearance Based on Loyalty

The complainant was a former employee of a federal institution whose application for a level 2 (Secret) security clearance was denied. As a result, the complainant's employment with the federal institution was terminated at which time the complainant contested the denial via a complaint to the Committee under section 42 of the CSIS Act.

Following a review of the evidence gathered by the Service to justify its advice to deny a security clearance, the Committee agreed that the complainant's loyalty to Canada was extremely doubtful. The Committee recommended that the decision of the Deputy Head of the federal institution to deny the clearance based on this advice be upheld.

Canadian Human Rights Commission Referrals

Case#1: Allegations of Discrimination Based on Gender and Ethnic Origin

The case was a referral from the CHRC of a discrimination complaint by a group of 12 current and former employees of CSIS. The complainants alleged that they had been subject to discrimination by their employer because of their gender and their ethnic origin.

The complainants asserted that their exclusion from positions that paid a higher salary for similar work amounted to gender and ethnic discrimination. For its part, the Service maintained that the higher-paying positions required a particular skill that the complainants did not possess.

With respect to the complaint of sexual discrimination, the Committee found that the complainants had failed to make a prima facie case that CSIS had discriminated against them based on gender. With respect to the complaint of ethnic discrimination, the Committee found that here too, the complainants had failed to make a prima facie case.

Based on the evidence presented to it, the Committee concluded that the salary bonus afforded to those employees with the requisite particular skill was based on a bona fide occupational requirement, and that there was no discrimination by the employer. The Committee provided the CHRC with its report. The CHRC will render a decision on the matter.

Case #2: Allegations of Discrimination Based on Ethnic Origin

The complaint alleged that because the complainant was a member of an ethnic minority, CSIS had treated the individual in an adverse and discriminatory manner and, through its actions, caused damage and prejudice to the complainant's personal and professional life. The complainant maintained that the Service had conducted surveillance; had interrogated employers, colleagues and friends; and had caused the complainant to lose employment on several occasions.

From its investigation, the Committee determined that the Service had in fact contacted a former employer as well as an acquaintance of the complainant in an effort to locate the individual for an interview. However, the Committee saw no evidence that these contacts were the result of discrimination of any kind. Nor could the Committee find any evidence that these contacts resulted in prejudice to the complainant's employment status. The Committee concluded that the allegations of discrimination were without foundation. The Committee provided the CHRC with its report. The CHRC will render a decision on the matter.

Section 3: Accountability Mechanisms

A. Policy and Governance Frameworks

Governor in Council Regulations and Appointments

As set out in section 8(4) of the CSIS Act, the Governor in Council may issue any regulations to the Service in regard to the powers and duties of the Director of CSIS, as well as the conduct and discipline of Service employees. No such regulations were issued during 2001–2002.

2001–2002 National Requirements for Security Intelligence

National Requirements contain general direction from government about where CSIS should focus its investigative efforts, as well as guidance on the Service's collection, analysis and advisory responsibilities. The 2001–2002 National Requirements were generally similar to those of preceding years; however, several alterations seemed to reflect certain shifts in the government's concerns.

Specific changes that drew the Committee's attention were:

• The list of groups identified as threats to national security for investigation by the CSIS Counter Terrorism Program was altered slightly and now specifically includes Sunni Islamic extremism.
• An entirely new section addressing Intelligence Liaison has been added, giving renewed emphasis to the importance of maintaining an intelligence network that is as wide as possible.

Ministerial Direction

Under section 6(2) of the CSIS Act, the Minister can issue directions governing CSIS's activities and investigations. No new directions were issued in the year under review.

Changes in CSIS Operational Policy

The Committee reviewed 4 new operational policies issued by the Service in 2001–2002 and 14 separate amendments to 9 existing CSIS operational policies.

Of the four new operational policies issued in the past year, the first focused on the Service's investigative activities and operational assistance outside Canada.

The second related to joint operations and operational assistance with foreign agencies in Canada. Both policies were created to accord with recent Ministerial Direction.

The third new policy dealt with the investigative techniques used by the Service to acquire intelligence or assessments. It prescribes the process for authorization and other matters necessary to advance Service objectives under the CSIS Act. The fourth policy concerned events of an urgent or unpredictable nature which constitute a threat to the security of Canada or which necessitate support to allies under threat.

With respect to the 14 separate amendments, the existing policies covered areas such as targeting, general conduct of operations and co-operation with CIC.

The Committee found that both the new and revised policies conformed to the CSIS Act and Ministerial Direction.

B. Reporting Requirements

Certificate of the Inspector General for 2001

The Inspector General of CSIS reports to the Solicitor General and functions effectively as the Minister's internal auditor of CSIS, reviewing the operational activities of the Service and monitoring compliance with policy and the law. Each year the Inspector General must submit to the Minister a certificate stating the “extent to which [he or she] is satisfied” with the Director's annual report on the operational activities of the Service, and informing the Minister of any instances of CSIS having failed to comply with the Act or Ministerial Direction, or which involved an unreasonable or unnecessary exercise of powers. The Minister forwards the certificate to the Review Committee.

This year's certificate was the first for which the Inspector General and his full complement of staff had the benefit of an entire 12-month work cycle to complete their inquiries. As described by the Inspector General, his review consisted of a comprehensive inspection of documentation supporting the Director's report to the Minister, an analysis of significant Service operations and regular interviews with senior CSIS management at HQ and in the field.

With respect to the Director's report for 2000–2001, the Inspector General declared himself to be “fully satisfied.” He also determined that, with one exception, the Service had not acted beyond its authority, contravened any Ministerial Direction or exercised its powers unreasonably or unnecessarily. The single exception was reported to the Attorney General of Canada as required by the CSIS Act.

CSIS Annual Operational Report for 2000–2001

The CSIS Director's annual report to the Solicitor General on CSIS operational activities comments on the Service's operational activities for the preceding fiscal year. Among the functions of the Committee is to review this report. Last year the Committee did not receive the Director's report in time for us to include it in our 2000–2001 annual report. Therefore, we present the review here.

In November 2000, the Inspector General of CSIS recommended that the Director's annual report to the Solicitor General should in future be more concise and focused than had previously been the case. The Director concurred in the recommendation.

The aim in adopting the new approach was to highlight significant Service activities, and any serious issues related to operations, public policy, areas of potential controversy and anticipated challenges. The report meets these objectives and, in so doing, serves as a useful tool for the Committee in its task of selecting subjects for future review and inquiry.

Omitted in the report are descriptions of a statistical or procedural nature such as targeting levels or the warrant process. Supporting details about warrant numbers and specific targets are provided to the Minister in separate documents. The new, concise reporting format directs attention to the most salient issues and challenges facing the Service—in the Committee's view, a significant improvement over the earlier more voluminous reports.

Unlawful Conduct

Under section 20(2) of the CSIS Act, the Director of CSIS is to submit a report to the Minister when, in his opinion, a CSIS employee may have acted unlawfully in performing his or her duties and functions. The Minister, in turn, must send the report with his comments to the Attorney General of Canada and to the Committee.

In 2001–2002, the Service sent no reports of illegal conduct to the Minister. The instance of possible unlawful conduct, which the Committee noted on p. 43 of our 2000–2001 annual report remains unresolved at the time of publication of this report.

C. Duties and Functions of CSIS

Review of CSIS Domestic and International Arrangements

Relations with the RCMP

With respect to the Service's domestic arrangements, the Committee has always paid special attention to liaison activities and co-operation between CSIS and the RCMP. The mechanisms to facilitate liaison and co-operation between CSIS and the RCMP are set out in an MOU between the two agencies. This year the Service reported that the MOU was the subject of ongoing discussions between the two organizations. However, no final decisions on changes to the MOU have been reached. In addition, the formal liaison program is currently being re-evaluated with a view to shifting the program toward direct secondments between the agencies.

For the year under review, the Service recorded 1503 written exchanges of information with the RCMP, a small decrease over last year's reporting of 1678 exchanges. The Service also provided the RCMP with 378 disclosure letters^{Footnote 3} and 20 advisory letters.^{Footnote 4}

The Service identified several new programs initiated to promote co-operation and liaison with the RCMP. One initiative resulted in a CSIS–RCMP secondment agreement in a particular region. The RCMP and CSIS regional offices concerned drew up the parameters and conditions. This renewable secondment agreement has been implemented and supplements existing CSIS–RCMP liaison arrangements discussed in previous annual reports.

The Service reported to the Committee that the secondment program has exceeded expectations in contributing to the smooth progress of operations. The agreement has been in place for less than a year, and the manner of its implementation and whether it can be applied to other regions will be reviewed by the Committee in future assessments of the CSIS–RCMP relationship.

According to the Service, a number of other new programs were launched in 2000–2001, many as a consequence of the events of September 11, 2001. The Committee informed itself as to their details.

Domestic Arrangements

In carrying out its mandate CSIS co-operates both with police forces and with federal and provincial departments and agencies across Canada. Contingent on Ministerial approval, the Service may conclude written co-operation arrangements with domestic agencies pursuant to section 17(1) of the CSIS Act.

CSIS reported the signing of two new agreements in 2001–2002: one was with CIC; the other was with a provincial body.

The CSIS/CIC MOU of February 4, 2002 superseded four existing MOUs between the two parties. The arrangement was based on the obligation of CSIS and CIC not only to fulfill their respective mandates under the CSIS Act, the Citizenship Act and the Immigration Act, but also the parties' mutual requirement to exchange information related to immigration, security and citizenship. In accordance with the terms of the MOU and sections 13 and 14 of the CSIS Act, the Service may

• provide security assessments to CIC
• advise CIC on matters relating to the security of Canada
• provide CIC with information relating to security matters or criminal activities.

Foreign Arrangements

Under the CSIS Act, the Service must obtain the approval of the Solicitor General—after consulting with the Minister of Foreign Affairs and International Trade—to enter into an arrangement with the government of a foreign state or an international organization. During the initial phases leading to the approval of an arrangement, CSIS is not permitted to pass classified information to the foreign agency; it may, however, accept unsolicited information.

The Service reported that in 2001–2002 it had entered into five new arrangements with foreign intelligence services and expanded the scope of existing relationships with eight others. In an additional eight cases, CSIS says that it took steps to restrict the scope of co-operation because of concerns either about the agencies' human rights records, violations of the rule against transferring information to third parties or their overall reliability. The Service also reported that of 231 foreign arrangements, 48 were regarded as being dormant (dormancy defined as no liaison contact for a least one year).

As part of its Foreign Liaison program the Service maintains liaison posts abroadnormally co-located with Canadian diplomatic missions. One new post was openedin 2001. The Service reported that the events of September 11, 2001 led it to allocate additional resources for several new posts to be opened in the near future. CSIS also reported that its overseas posts continue to face an ever-increasing security screening workload connected with its program of assistance to CIC.

The recently revised compendium of Ministerial Direction issued in February 2001 (see SIRC Report 2000–2001, p. 7) also had implications for foreign arrangements generally. The Service reported that it had reviewed all existing section 17 foreign arrangements in light of the new Direction. The nomenclature for describing the scope of each arrangement was simplified and new procedures for managing foreign arrangements were put into place in December 2001.

The Service told the Committee that the events of September 11 had not altered the scope of existing liaison arrangements, which it regarded as already appropriate. CSIS took care not to rule out the need to enhance existing relationships or seek out new ones depending on how the terrorist threat environment evolves.

Federal Court Warrants and Warrant Statistics

Warrants are one of the most powerful and intrusive tools in the hands of any department or agency of the Government of Canada. For this reason alone, their use bears continued scrutiny, which task the Committee takes very seriously. In addition, our review of the Service's handling of warrants provides insights into the entire breadth of its investigative activities and is an important indicator of the Service's view of its priorities.

The Committee compiles statistics quarterly on CSIS warrant affidavits and on warrants granted by the Federal Court. We track several kinds of information annually, including the number of persons and targeted groups subject to warrant powers. Table 3 compares the number of warrants issued over the last three fiscal years.

The Federal Court issued 49 urgent warrants during 2001–2002 compared to 32 in the year previous. No applications for warrants were denied by the Federal Court and none of the Court's rulings had implications for existing warrants.

Observations on Warrant Numbers

Although the data collected by the Committee provide insight into how often theService seeks warrant powers from the Federal Court in a given year, comparing these numbers between years is of limited utility. A range of factors as disparate as court decisions and new developments in technology introduce significant variations into how often warrant powers are applied for and how they are implemented. Raw warrant numbers can be misleading because a single warrant can authorize the use of warrant powers against one person, several people or an organization.

It is also important to bear in mind that warrants are only one of several investigativeinstruments available to CSIS. Warrant numbers, therefore, do not necessarily indicate the level of Service investigative activity.

Regulations

Under section 28 of the CSIS Act, the Governor in Council may issue regulations governing how CSIS applies for warrants. In 2001–2002, no such regulations were issued.

Section 2(d) Investigations

According to Ministerial Direction any investigation of threats to the security of Canada as defined in section 2(d) of the CSIS Act—often referred to as the “subversion” clause—must be authorized by the Minister. The Service reported that the Minister authorized no such investigations in 2001–2002.

Disclosures of Information in the Public or National Interest

Section 19 of the CSIS Act prohibits information obtained by the Service in the course of its investigations from being disclosed except in specific circumstances. Under section 19(2)(d) the Minister can authorize the Service to disclose information in the “public interest.” The Service reported no such disclosures in 2001–2002.

In addition, CSIS acting as the Minister's agent, can disclose information in the“national interest” under specified circumstances. The Service reported that there were no such disclosures during the year under review.

Section 4: Inside the Security Intelligence Review Committee

Appointment of a New Member

In October 2001, the Governor in Council appointed the Honourable Gary Filmon, P.C., O.M. as a Member of the Committee for a five-year term.

Research and Review Activities

Reporting regularly to the Committee's senior management, SIRC's researchersand analysts divide their time between SIRC premises and the Committee's facilities at the Service. The Service makes available a separate office space with computers at CSIS Headquarters for the exclusive use of SIRC staff and members.

Section 54 Report

Under section 54 of the CSIS Act, the Review Committee may at any time furnish the Solicitor General of Canada with a special report on any matter that relates to “the performance of its duties and functions.” The Committee issued one such report in 2001–2002; it dealt with serious allegations made about the Service by an individual.

After examining all the available evidence and documentation the Committee determined that the allegations were without foundation.

Briefings

At its monthly meetings, the Chair and Committee Members meet with various senior government officials within Canada's security intelligence community to keep lines of communication open and stay abreast of new developments. When meetings are held outside Ottawa, Members visit CSIS regional offices.

Parliamentary Relations

In the aftermath of the September 2001 terrorist attacks in the United States, the Committee and selected staff made several appearances before various parliamentary committees including:

• In October 2001, the Chair, another Committee Member, and the Executive Director appeared before the Senate Special Committee on the topic of Bill C-36, the Anti-terrorism Act.
• In November 2001, the Committee gave a written submission to the Standing Committee on Finance.
• In December 2001, the Executive Director and the Senior Counsel appeared before the Sub-Committee on National Security.
• In March 2002, the Chair, another Committee Member, the Executive Director and the Senior Counsel appeared before the Sub-Committee on National Security.

Additional Committee Activities

• During the 2001–2002 reporting year, the Committee staff briefed delegations from the Czech Republic, the Republic of Mexico, the Republic of South Africa and the Kingdom of Norway. All these delegations were seeking to exchange ideas on models of security intelligence review and oversight. The Committee expects exchanges such as these to continue.
• In September 2001, the Executive Director, the Deputy Executive Director, and selected staff attended the annual conference of the Canadian Association of Security and Intelligence Studies in Halifax, NS.
• In October 2001, the Executive Director led a seminar for undergraduate students at Simon Fraser University in Vancouver, BC. That same month, she addressed a graduate seminar at the Centre for Security and Defence Studies, The Norman Paterson School of International Affairs, Carleton University, in Ottawa, Ont.
• In March 2002, the Executive Director and selected staff attended a conference in Montreal sponsored by the Canadian Institute for the Administration of Law and Justice entitled, “Terrorism, Law and Democracy: How is Canada Changing Following September 11?”

Inquiries Under the Access to Information and Privacy Acts

Every year, SIRC receives requests for the release of material under both the Access to Information Act and the Privacy Act. Table 4 records the number of requests for past two fiscal years.

With respect to requests for SIRC research reports, the Committee has adopted the practice of waiving the application fee because we receive numerous requests for the same report. The work required to process the first request for any given report thus does not have to be repeated.

Budget and Expenditures

The Committee continues to manage its activities within allotted resource levels. The chief expenses were for staff salaries and benefits, and for travel expenses within Canada for Committee hearings, briefings and audit activity (see Table 5).

SIRC Staffing and Organization

The Committee has a staff of 16: an Executive Director, a Deputy Executive Director, a Senior Counsel, a Counsel, a Senior Paralegal and an ATIP Officer/ Analyst (both of whom are Committee registrars for hearings), a Research Manager, a Senior Policy Advisor, two Senior Research Analysts, two Research Analysts, a Financial/Office Manager and an administrative support staff of three to handle sensitive and highly classified material using special security procedures.

At their monthly meetings, Members of the Committee decide formally on the research and other activities they wish to pursue and set priorities for the staff. Management of the day-to-day operations is delegated to the Executive Director with direction, when necessary, from the Chair in her role as Chief Executive Officer.

Appendices

Appendix A: Acronyms

A/SLO

Assistant Security Liaison Officer

ARAACP

Airport Restricted Access Area Clearance Program

CHRC

Canadian Human Rights Commission

CI

Counter Intelligence Branch

CIC

Citizenship and Immigration Canada

CSE

Communications Security Establishment

CT

Counter Terrorism Branch

EDE

Electronic Data Exchange

HQ

CSIS Headquarters Ottawa

IAC

Intelligence Assessment Committee (Privy Council Office)

IPM

Immigration Program Manager

MOU

Memoradum of Understanding

NRT

No Reportable Trace

RAP

Research, Analysis and Production Branch

SLO

Security Liaison Officer

TARC

Target Approval and Review Committee

Appendix B: SIRC Reports and Studies Since 1984

(Section 54 reports—special reports the Committee makes to the Minister— are indicated with an *)

1. Eighteen Months After Separation: An Assessment of CSIS Approach to Staffing Training and Related Issues (SECRET) * (86/87-01)
2. Report on a Review of Security Screening for Applicants and Employees of the Federal Public Service (SECRET) * (86/87-02)
3. The Security and Intelligence Network in the Government of Canada: A Description (SECRET) * (86/87-03)
4. Ottawa Airport Security Alert (SECRET) * (86/87-05)
5. Report to the Solicitor General of Canada Concerning CSIS' Performance of its Functions (SECRET) * (87/88-01)
6. Closing the Gaps: Official Languages and Staff Relations in the CSIS (UNCLASSIFIED)* (86/87-04)
7. Counter-Subversion: SIRC Staff Report (SECRET) (87/88-02)
8. SIRC Report on Immigration Screening (SECRET) * (87/88-03)
9. Report to the Solicitor General of Canada on CSIS' Use of Its Investigative Powers with Respect to the Labour Movement (PUBLIC VERSION) * (87/88-04)
10. The Intelligence Assessment Branch: A SIRC Review of the Production Process (SECRET)* (88/89-01)
11. SIRC Review of the Counter-Terrorism Program in the CSIS (TOP SECRET) * (88/89-02)
12. Report to the Solicitor General of Canada on Protecting Scientific and Technological Assets in Canada: The Role of CSIS (SECRET) * (89/90-02)
13. SIRC Report on CSIS Activities Regarding the Canadian Peace Movement (SECRET) * (89/90-03)
14. A Review of CSIS Policy and Practices Relating to Unauthorized Disclosure of Classified Information (SECRET) (89/90-04)
15. Report to the Solicitor General of Canada on Citizenship/Third Party Information (SECRET) * (89/90-05)
16. Amending the CSIS Act: Proposals for the Special Committee of the House of Commons (UNCLASSIFIED) (89/90-06)
17. SIRC Report on the Innu Interview and the Native Extremism Investigation (SECRET) * (89/90-07)
18. Supplement to the Committee's Report on Immigration Screening of January 18, 1988 (SECRET) * (89/90-01)
19. A Review of the Counter-Intelligence Program in the CSIS (TOP SECRET) * (89/90-08)
20. Domestic Exchanges of Information (SECRET) * (90/91-03)
21. Section 2(d) Targets—A SIRC Study of the Counter-Subversion Branch Residue (SECRET) (90/91-06)
22. Regional Studies (six studies relating to one region) (TOP SECRET) (90/91-04)
23. Study of CSIS' Policy Branch (CONFIDENTIAL) (90/91-09)
24. Investigations, Source Tasking and Information Reporting on 2(b) Targets (TOP SECRET) (90/91-05)
25. Release of Information to Foreign Agencies (TOP SECRET) * (90/91-02)
26. CSIS Activities Regarding Native Canadians—A SIRC Review (SECRET) * (90/91-07)
27. Security Investigations on University Campuses (TOP SECRET) * (90/91-01)
28. Report on Multiple Targeting (SECRET) (90/91-08)
29. Review of the Investigation of Bull, Space Research Corporation and Iraq (SECRET) (91/92-01)
30. Report on Al Mashat's Immigration to Canada (SECRET) * (91/92-02)
31. East Bloc Investigations (TOP SECRET) (91/92-08)
32. Review of CSIS Activities Regarding Sensitive Institutions (TOP SECRET) (91/92-10)
33. CSIS and the Association for New Canadians (SECRET) (91/92-03)
34. Exchange of Information and Intelligence between CSIS & CSE, Section 40 (TOP SECRET) * (91/92-04)
35. Victor Ostrovsky (TOP SECRET) (91/92-05)
36. Report on Two Iraqis—Ministerial Certificate Case (SECRET) (91/92-06)
37. Threat Assessments, Section 40 Study (SECRET) * (91/92-07)
38. The Attack on the Iranian Embassy in Ottawa (TOP SECRET) * (92/93-01)
39. “STUDYNT” The Second CSIS Internal Security Case (TOP SECRET) (91/92-15)
40. Domestic Terrorism Targets—A SIRC Review (TOP SECRET) * (90/91-13)
41. CSIS Activities with respect to Citizenship Security Screening (SECRET) (91/92-12)
42. The Audit of Section 16 Investigations (TOP SECRET) (91/92-18)
43. CSIS Activities during the Gulf War: Community Interviews (SECRET) (90/91-12)
44. Review of CSIS Investigation of a Latin American Illegal (TOP SECRET) * (90/91-10)
45. CSIS Activities in regard to the Destruction of Air India Flight 182 on June 23, 1985—A SIRC Review (TOP SECRET) * (91/92-14)
46. Prairie Region—Report on Targeting Authorizations (Chapter 1) (TOP SECRET) * (90/91-11)
47. The Assault on Dr. Hassan Al-Turabi (SECRET) (92/93-07)
48. Domestic Exchanges of Information (A SIRC Review—1991/92) (SECRET) (91/92-16)
49. Prairie Region Audit (TOP SECRET) (90/91-11)
50. Sheik Rahman's Alleged Visit to Ottawa (SECRET) (CT 93-06)
51. Regional Audit (TOP SECRET)
52. A SIRC Review of CSIS' SLO Posts (London & Paris) (SECRET) (91/92-11)
53. The Asian Homeland Conflict (SECRET) (CT 93-03)
54. Intelligence-Source Confidentiality (TOP SECRET) (CI 93-03)
55. Domestic Investigations (1) (SECRET) (CT 93-02)
56. Domestic Investigations (2) (TOP SECRET) (CT 93-04)
57. Middle East Movements (SECRET) (CT 93-01)
58. A Review of CSIS SLO Posts (1992-93) (SECRET) (CT 93-05)
59. Review of Traditional CI Threats (TOP SECRET) (CI 93-01)
60. Protecting Science, Technology and Economic Interests (SECRET) (CI 93-04)
61. Domestic Exchanges of Information (SECRET) (CI 93-05)
62. Foreign Intelligence Service for Canada (SECRET) (CI 93-06)
63. The Audit of Section 16 Investigations and Foreign Intelligence Reports (TOP SECRET) (CI 93-11)
64. Sources in Government (TOP SECRET) (CI 93-09)
65. Regional Audit (TOP SECRET) (CI 93-02)
66. The Proliferation Threat (SECRET) (CT 93-07)
67. The Heritage Front Affair. Report to the Solicitor General of Canada (SECRET) * (CT 94-02)
68. A Review of CSIS' SLO Posts (1993-94) (SECRET) (CT 93-09)
69. Domestic Exchanges of Information (A SIRC Review 1993–94) (SECRET) (CI 93-08)
70. The Proliferation Threat—Case Examination (SECRET) (CT 94-04)
71. Community Interviews (SECRET) (CT 93-11)
72. An Ongoing Counter-Intelligence Investigation (TOP SECRET) * (CI 93-07)
73. Potential for Political Violence in a Region (SECRET) (CT 93-10)
74. A SIRC Review of CSIS SLO Posts (1994–95) (SECRET) (CT 95-01)
75. Regional Audit (TOP SECRET) (CI 93-10)
76. Terrorism and a Foreign Government (TOP SECRET) (CT 94-03)
77. Visit of Boutros Boutros-Ghali to Canada (SECRET) (CI 94-04)
78. Review of Certain Foreign Intelligence Services (TOP SECRET) (CI 94-02)
79. The Audit of Section 16 Investigations and Foreign Intelligence Reports (TOP SECRET) (CI 94-01)
80. Domestic Exchanges of Information (A SIRC Review 1994-95) (SECRET) (CI 94-03)
81. Alleged Interference in a Trial (SECRET) (CT 95-04)
82. CSIS and a “Walk-In” (TOP SECRET) (CI 95-04)
83. A Review of a CSIS Investigation Relating to a Foreign State (TOP SECRET) (CI 95-02)
84. The Audit of Section 16 Investigations and Foreign Intelligence Reports (TOP SECRET) (CI 95-05)
85. Regional Audit (TOP SECRET) (CT 95-02)
86. A Review of Investigations of Emerging Threats (TOP SECRET) (CI 95-03)
87. Domestic Exchanges of Information (SECRET) (CI 95-01)
88. Homeland Conflict (TOP SECRET) (CT 96-01)
89. Regional Audit (TOP SECRET) (CI 96-01)
90. The Management of Human Sources (TOP SECRET) (CI 96-03)
91. Economic Espionage I (SECRET) (CI 96-02)
92. Economic Espionage II (TOP SECRET) (CI 96-02)
93. Audit of Section 16 Investigations and Foreign Intelligence Reports 1996–97 (TOP SECRET) (CI 96-04)
94. Urban Political Violence (SECRET) (SIRC 1997-01)
95. Domestic Exchanges of Information (1996–97) (SECRET) (SIRC 1997-02)
96. Foreign Conflict—Part I (SECRET) (SIRC 1997-03)
97. Regional Audit (TOP SECRET) (SIRC 1997-04)
98. CSIS Liaison with Foreign Agencies (TOP SECRET) (SIRC 1997-05)
99. Spy Case (TOP SECRET) (SIRC 1998-02)
100. Domestic Investigations (3) (TOP SECRET) (SIRC 1998-03)
101. CSIS Cooperation with the RCMP—Part I (SECRET) * (SIRC 1998-04)
102. Source Review (TOP SECRET) (SIRC 1998-05)
103. Interagency Cooperation Case (TOP SECRET) (SIRC 1998-06)
104. A Case of Historical Interest (TOP SECRET) (SIRC 1998-08)
105. CSIS Role in Immigration Security Screening (SECRET) (CT 95-06)
106. Foreign Conflict—Part II (TOP SECRET) (SIRC 1997-03)
107. Review of Transnational Crime (SECRET) (SIRC 1998-01)
108. CSIS Cooperation with the RCMP—Part II (SECRET) * (SIRC 1998-04)
109. Audit of Section 16 Investigations & Foreign Intelligence 1997–98 (TOP SECRET) (SIRC 1998-07)
110. Review of Intelligence Production (SECRET) (SIRC 1998-09)
111. Regional Audit (TOP SECRET) (SIRC 1998-10)
112. CSIS Liaison with Foreign Agencies (TOP SECRET) (SIRC 1998-11)
113. Allegations by a Former CSIS Employee (TOP SECRET) * (SIRC 1998-12)
114. CSIS Investigations on University Campuses (SECRET) (SIRC 1998-14)
115. Review of Foreign Intelligence Activities in Canada (TOP SECRET) (SIRC 1998-15)
116. Files (TOP SECRET) (SIRC 1998-16)
117. Audit of Section 16 Investigations & Foreign Intelligence (TOP SECRET) (SIRC 1999-01)
118. A Long-Running Counter Intelligence Investigation (TOP SECRET) (SIRC 1999-02)
119. Domestic Exchanges of Information (TOP SECRET) (SIRC 1999-03)
120. Proliferation (TOP SECRET) (SIRC 1999-04)
121. SIRC's Comments on the Draft Legislation Currently Before Parliament— Bill C-31 (PROTECTED) * (SIRC 1999-05)
122. Domestic Targets (TOP SECRET) (SIRC 1999-06)
123. Terrorist Fundraising (TOP SECRET) (SIRC 1999-07)
124. Regional Audit (TOP SECRET) (SIRC 1999-08)
125. Foreign State Activities (TOP SECRET) (SIRC 1999-09)
126. Project Sidewinder (TOP SECRET) (SIRC 1999-10)
127. Security Breach (TOP SECRET) (SIRC 1999-11)
128. Domestic Exchanges of Information 1999–2000 (TOP SECRET) (SIRC 2000-01)
129. Audit of Section 16 Investigations and Foreign Intelligence Reports 1999–2000 (TOP SECRET) (SIRC 2000-02)
130. CSIS Liaison with Foreign Agencies (TOP SECRET) (SIRC 2000-03)
131. Regional Audit (TOP SECRET) (SIRC 2000-04)
132. Warrant Review (TOP SECRET) (SIRC 2000-05)
133. Review of CSIS Briefs to Citizenship and Immigration Canada 1999–2000 (TOP SECRET) (SIRC 2001-02)
134. CSIS Investigation of Sunni Islamic Extremism (TOP SECRET) (SIRC 2002-01)
135. Source Recruitment (TOP SECRET) (SIRC 2001-01)
136. Collection of Foreign Intelligence (TOP SECRET) (SIRC 2001-05)
137. Domestic Extremism (TOP SECRET) (SIRC 2001-03)
138. CSIS Liaison with Foreign Agencies: Audit of an SLO Post (TOP SECRET) (SIRC 2001-04)
139. Warrant Review (TOP SECRET) (SIRC 2001-06)
140. Special Report following allegations pertaining to an individual (TOP SECRET) *

Appendix C: Key Findings and Recommendations

Key Findings and Recommendations

CSIS Investigation of SUNNI ISLAMIC Extremism

CSIS's investigation of Al Qaida specifically and Sunni Islamic terrorism generally was complex and of long-standing. The Committee's inquiries for this study were chiefly informational in nature, designed to survey the Service's activities in the months leading up to September 11—information and analysis we regard as prerequisites for any additional examinations. The nature of the Committee's inquiries necessarily influenced the sorts of conclusions that we drew from the information reviewed. For example, the Committee did not examine all the raw intelligence collected by the Service or passed to it from other agencies. Nor did we review specific warrants or delve into the handling of individual human sources with a view to ensuring compliance with law and policy.

The Committee's review covered the period April 1, 2001 through September 12, 2001. However, to complete our investigation we examined additional documents and data we deemed relevant that fell outside the formal review period. The objectives of this overview study were fourfold:

1. to gain a broad understanding of the reach and focus of the Service's investigation of Sunni Islamic extremist activities;
2. to determine the nature and quantity of assessments, analyses and other forms of advice about the threat transmitted by CSIS to relevant government and law enforcement clients;
3. to review the character and quantity of information exchanges about Sunni Islamic extremist activities with the intelligence services of allied nations; and,
4. to identify subjects meriting further study by the Committee.

The Committee believes that the Service disseminated widely within government timely information about the potential for Sunni terrorism. Although none of the intelligence products or threat warnings we reviewed pointed directly to the events of September 11, the Service clearly was aware of the potential for Al Qaida-inspired terrorist attacks of some kind and communicated this information to the appropriate bodies in government. In the Committee's view, however, none of the advice or communications the Committee reviewed warned of a threat sufficiently specific in time or place to have alerted government authorities to the events of September 11.

This study has laid the foundation for future in-depth inquiries into specific elements of the Service's Sunni Islamic extremist investigation. We will elaborate on our findings in future reviews and annual reports.

Source Recruitment

This study arose from Committee findings in a previous complaint case. Our report on the complaint identified several shortcomings in Service procedures for recruiting certain kinds of human sources and the Committee expressed its intention to undertake a follow up review at a future date. The goal of this study was to re-examine the Service's source recruitment practices in this most sensitive area.

Overall, the Committee found that the human source operations we reviewed were carried out in conformity with law, Ministerial Direction and policy. The files we examined showed that the Service conducted itself appropriately and in accordance with policy adjustments made in the wake of the Committee's previous report. The Committee's review did identify two administrative shortcomings in the management of source files. Two recommendations—which for reasons of national security cannot be elaborated on here—were made by the Committee to CSIS with the aim of avoiding similar difficulties in the future. The Committee stressed to the Service that it should continue making every effort to ensure that sources are fully aware of the nature of their relationship with the Service.

Domestic Extremism

For over a decade, CSIS has conducted periodic investigations in this area on the basis that the activities being investigated represented threats to public safety and to national security. This study is one of several examinations by SIRC of the Service's activities in the area.

As in previous cases, the aim was to determine whether the Service had reasonable grounds to suspect that the activities of the targeted groups and individuals represented threats to the national security of Canada; whether the Service's recruitment and management of human sources was appropriate; and, whether CSIS acted in compliance with the CSIS Act, Ministerial Direction and relevant operational policies.

With respect to the investigations conducted under the issue-based targeting authority, the Committee found that the Service had reasonable grounds to suspect an imminent threat of politically motivated violence, that the level of the investigations was appropriate to the nature of the threat; and, that all the information reported met the “strictly necessary” test.

The second targeting authority the Committee reviewed named a particular organization. Here too, the Service conducted its investigations in an appropriate and lawful manner. It was clear to the Committee that in one specific instance, information gathered during the investigation helped to minimize the potential for serious violence.

In connection with our review of the Service's investigation, the Committee selected a number of human source cases for extensive audit. In each case, the Committee was satisfied with the Service's recruitment and direction of the source and found CSIS to have been diligent in complying with operational policy requirements. The Committee found the nature and level of co-operation between the Service and other domestic agencies to be both appropriate and productive. The Committee took special note of the high level of information sharing between CSIS and the RCMP.

The Committee's only reservation arose from a review of information collected under a TARC authority in the year prior to its expiration. It was evident to the Committee that the organization no longer posed a threat of politically motivated violence as defined under section 2(c) of the CSIS Act. It is the Committee's view that the Service should have considered terminating the investigation before the mandated expiry date. In response to our concerns, the Service stated that it required the full 12 months of investigation to assess accurately the group's potential for engaging in politically motivated violence.

Collection of Foreign Intelligence

The goal of the audit was to:

• Review CSIS's role in section 16 (foreign intelligence) requests to ensure compliance with the CSIS Act, directions from the Federal Court, any related Ministerial Direction and the governing 1987 and 1990 memoranda of understanding.
• Examine the nature of the CSIS/CSE relationship as it relates to section 16 matters to ensure that it complies with the law, Ministerial Direction and operational policy.
• Understand the role of client feedback in how the Service prepares intelligence products for its clients in government.

In all areas of the Committee's examination of the Service's collection of section 16 information in the year under review, the Committee found CSIS to be in full compliance with law and policy. The Service appeared to weigh feedback from government clients and make adjustments where appropriate.

CSIS Liaison with Foreign Agencies: Audit of an SLO Post

As with all Committee SLO post audits, the essential goals were to ensure that relationships and contacts with foreign agencies complied with the specific arrangements that govern them, and to monitor the controls over information disclosed to foreign agencies or received from them. More broadly, the activities of the selected post for the period under review—April 1, 1999 through March 31, 2001—were examined in the context of the CSIS Act, Ministerial Direction and CSIS operational policies.

Our observations, reviews of documentation and interviews all led the Committee to conclude that the SLO post was effectively managed and its staff held in high regard by the senior staff of the mission. The Committee examined both the documentation prepared for disclosure by the SLO to foreign agencies and the information exchanged between CSIS HQ and the post. With only a few minor exceptions, all the disclosures prepared by the SLO complied with approved procedures.

With respect to SLO assistance to Citizenship and Immigration Canada in the form of immigration security screening, it was evident to the Committee that growing work volumes posed challenges that continue unabated. The Committee believes the Service may need to reconsider whether temporary staff assignments are the best means of handling the growing workload. It is important to note that notwithstanding the demands imposed by the immigration security screening program, the Committee saw no evidence that the post was failing to meet its obligations.

In past reviews, the Committee has emphasized the importance it places on the Service's responsibility to take all possible care to ensure that the information it exchanges with foreign agencies is not used in ways that could result in violations of human rights. From our review of the Agency Assessments prepared by the SLO post, the Committee was satisfied that the assessments were complete and properly carried out.

Warrant Review

Through a regular examination of a sample of cases in which CSIS has acquired and implemented warrant powers, the Committee gains insight into the Service's core investigatory activities. From among the warrants issued in 2000–2001, the Committee selected one counter terrorism warrant and one counter intelligence warrant. In reviewing both warrants the Committee found that, on the whole, the Service managed each warrant properly and in compliance with both the CSIS Act and Ministerial Direction.

Several instances drew the Committee's attention, however. In the first, our examination identified several minor instances in which affidavits were not consistent with the supporting documentation. Although none of the errors were material in nature, the Committee believes strongly that CSIS must continue to pay scrupulous attention to its affidavit drafting procedures. Accordingly, the Committee recommended that,

CSIS should strive for the utmost rigour in its warrant acquisition process, ensuring that allegations in the affidavit are factually correct and adequately supported in the documentation.

In the second, the Committee identified a small number of instances where CSIS collected personal information which the Committee felt was of questionable relevance to the targets' threat-related activities. The Service disagreed with our observation.

Given the centrality of the “strictly necessary” test to the integrity of the intelligence gathering process, the Committee felt prompted to make a formal recommendation. Accordingly, the Committee recommends that,

CSIS should maintain a strict awareness of the conditions stated in Federal Court warrants and of the “strictly necessary” test outlined in section 12 of the CSIS Act so that its collection of information continues to meet legal and policy directives.

With respect to the Service's compliance with its own operational policy requirements and administrative practices we identified a number of shortcomings in the implementation of one warrant. Although none had materially affected the overall management of the warrant, the Committee made four recommendations to the Service designed to avoid future problems. Two were recommendations to amend or clarify specific policies so that they could be implemented more consistently. A third spoke to the need for the Service to adhere to a specific existing policy more consistently.

Giving rise to the fourth recommendation was an instance in which a particular administrative oversight had the potential of creating the perception that the Service was implementing warrant powers after the warrant had expired. Although the Committee determined that the warrant was properly managed by the regional office concerned, we did recommend to the Service that it adopt a new administrative procedure that would eliminate the potential for ambiguity.

CSIS Funding Following Events of September 11

In its December 2001 budget, the government allocated an additional $7.7 billion for the purpose of enhancing the personal and economic security of Canadians. $1.6 billion of this total was to augment the nation's intelligence gathering and policing capacity. Beginning almost immediately after the events of September 11 and extending into future years, CSIS received authorities for increased spending of 30 percent for 2001–2002 with smaller increments in years following. By 2006–2007 the Service's budget will have increased by 36 percent over the level in 2000–2001.

The Committee sought and received briefings and other detailed, classified information from the Service on various elements of its spending plans. The Committee will continue to inform itself on the issue as the new funds come on stream in future years.