Speech to the Global Business Forum

The Honourable Gary Filmon
Chair, Security Intelligence Review Committee

“Global Threats to National Security”

Global Business Forum
Banff, Alberta
September 22, 2006

This morning's topic is Global Safety and Security, something which I think a lot about as Chair of Canada's Security Intelligence Review Committee ... or SIRC as it is known.

To put things in perspective for you, I was appointed to the Committee a month after 9/11 and was named Chair a year ago, so I have been immersed in the murky waters of security intelligence for some time. Over the past five years, I have been privy to highly classified information about threats to Canada's national security ... and I have also seen how these threats are changing ... in response to globalization and the interdependence and integration which it brings.

I'm also a businessman – so I'm very aware of the factors that contribute to Canada's social stability and economic prosperity. These include: effective government and social institutions ... an adherence to the rule of law ... respect for individual rights ... and, of course, a vibrant market economy based on the healthy flow of capital, trade, people and knowledge.

There is no question that opportunities for prosperity in today's global economy are often accompanied by significant security threats. I believe that if we are to maintain Canada's prosperity ... then we must be prepared to confront emerging security threats ... and demonstrate our willingness to protect our vital economic interests.

Of course, when I'm talking about threats, I'm not referring to the legitimate competition occurring within Canada or abroad. I'm referring to the criminal, terrorist and espionage activities of individuals, organizations and foreign states.

Today, I'm going to discuss some of these threats. I will also talk about the important role that the Canadian Security Intelligence Service or CSIS, plays in responding to them ... and the role that SIRC plays in reviewing CSIS's operations.

International terrorism

The most ominous threat facing Canada and other democracies today is international terrorism.

Ironically, the very conditions that spurred the growth of the global economy have also enabled terrorism to flourish. Increased communication and mobility ... and the openness of our economic and technological systems ... have enabled extremists to hide within our societies and carry out terrorist attacks with relative impunity. The human and economic cost has been enormous.

September 11th remains the most striking terrorist action. Those attacks, by a small group of determined Al Qaeda terrorists, resulted in more than 2,600 deaths at the World Trade Centre, 125 at the Pentagon and another 256 who died on four hijacked aircraft. Among those killed in the towers were 24 innocent Canadian men and women.

Beyond this horrific human toll, the attack on the World Trade Centre resulted in an estimated $30 billion in property losses and insurance costs to the American economy.

That's why it is so important for the business community to have a full and complete picture of the current threat environment facing Canada ... as well as an appreciation of the work being done by those organizations charged with safeguarding Canada's national security.

Current Threat Environment

The arrest of 18 alleged terrorists in Toronto in June of this year ... and most recently, 6 Canadians arrested as a result of a US-investigation into the Tamil Tigers ... should be a constant reminder to Canadians of just how much we take our security for granted.

A sense of physical security is fundamental to the exercise of all the other rights we enjoy in a free and democratic society. Security creates the conditions that allow us to invest, to live and work without fear. It is the basis of our economic prosperity and quality of life. That's why it's vital that we maintain both the will and the means to protect it.

I'm not suggesting that Canada is avoiding these challenges. Indeed, Canada has shown that it will do what's necessary to combat terrorism and increase international security. The best example is our current mission in Afghanistan. Canadian men and women are on the front lines of the war on terror, and 37 have made the ultimate sacrifice since 2001.

This commitment is based on a recognition that Canada ... and its citizens ... are not immune from terrorism. Remember that of the six countries targeted for terrorist action by Osama bin Laden, Canada is the only one which has not yet experienced an attack on its own territory.

Speaking of the possibility of terrorist violence in our country, CSIS Director Jim Judd has confirmed publicly what the Service has known for some time: that it's not a matter of “if” there will be an attack, it is a matter of “when”.

I do not want to come across as alarmist, because there's plenty of evidence to suggest that Canada has a very professional and competent security intelligence service. They do an extremely good job with the resources at their disposal, and they've chalked-up some significant victories in the war on terror ... even if they can't tell most Canadians the details of their successes.

The bottom-line is that Canada is not immune from terrorist violence. To think otherwise ignores the lessons of Bali, Casablanca, Madrid, London and Mumbai. No government can provide absolute assurance that its citizens will remain safe and no one should believe otherwise.

Terrorism in Canada

Canada's openness ... and its democratic and multicultural nature ... make it very attractive for terrorists. Indeed, CSIS has observed that with the possible exception of the United States ... there are more international terrorist organizations active in Canada than anywhere else in the world.

Terrorists here are linked to religious, ethnic and nationalist conflicts around the globe. They are here because Canada offers a relatively safe haven for recruiting ... fund-raising ... lobbying through front organizations ... coercing and manipulating immigrant communities ... and coordinating the illegal movement of individuals to and from the United States.

The arrests in Toronto show that western democracies are particularly vulnerable to threats posed by “home-grown” converts to Islamic extremism. Canadians and people residing in Canada have been involved in terrorist attacks and conspiracies around the world ... and these “home-grown” terrorists pose yet another threat to our own country.

Some of you may remember an unsuccessful Al Qaeda attack against an oil installation in Saudi Arabia, which could have disrupted world oil supplies and struck a major blow to industrialized economies. Just imagine that “God forbid” type of scenario here.

As a major oil and gas producer ... and supplier to the world's economic superpower next door ... Canada's pipeline infrastructure is highly exposed and very vulnerable, making it an ideal target. Should such an attack occur, the effects would be catastrophic. We're not talking about a one-day market downturn, but a major economic blow which would have long-lasting repercussions. We must remain vigilant.

CSIS's Role In Combating International Terrorism

Given the threat posed by international terrorism, it's not surprising that CSIS's number-one priority is counter terrorism ... with investigators focused on preventing terrorist acts from being planned or carried out in Canada ... and from affecting Canadians abroad.

The Service devotes significant resources to investigating targets, be they groups or individuals, who pose a threat to Canada's security. Some of these investigations have been underway for some time; others are quite recent.

CSIS is also providing advice to the Government on virtually a daily basis, through threat assessments. These are documents which evaluate the scope and immediacy of terrorist threats in Canada or abroad, and are used by intelligence and law enforcement agencies to keep on top of emerging global threats.

The Service also carries out security screening of immigrant and refugee applicants at our borders, in order to identify and prevent terrorists from entering our country. And within Canada, it conducts community interviews to build contacts and establish a presence, in order to build trust and prevent extremism from taking root.

Transnational criminal activity

Another reality of the new global economy is transnational criminal activity.

Technological advances over the past twenty years have made national borders irrelevant to telecommunications and financial transactions, and have enabled terrorist and criminal organizations to expand globally.

United Nations estimates place the cost of transnational criminal activity in developed countries at two per cent of annual gross national product. This means that transnational crime in Canada ... with its GNP of about $1.3 trillion dollars ... is potentially as much as $26 billion a year. In the case of Alberta, with a GDP of about $216 billion, this translates into roughly $4.3 billion a year.

CSIS has identified scores of transnational criminal organizations in Canada, including Asian triads, Colombian cartels, Japanese yakuza, Jamaican posses, Mafia groups from the USA, Calabria and Sicily, Russian and Eastern European mafiyas, Nigerian crime groups and virtually all of the major outlaw motorcycle gangs.

These organizations' criminal activities include large-scale insurance fraud, the depletion of natural resources, environmental crime, migrant smuggling, bank fraud, gasoline tax fraud and corruption. If there is big money at stake, they are involved.

Economic Espionage

Another threat I want to highlight is economic espionage. While less visible, it is equally harmful to our national security interests.

Economic espionage is best described as illegal or coercive activity by foreign governments to gain access to Canadian economic intelligence.

What is most disturbing is that rapid globalization is actually making the situation worse. The military conflicts which symbolized the Cold War have been replaced by economic confrontations ... and in an era of integrated transportation and communications systems ... and an increasingly borderless world of finance ... economic espionage will only get worse. Canada is especially vulnerable because we are a knowledge-based society ripe for the taking.

Canada is a world leader in many technology-intensive fields ... aerospace, biotechnology, chemicals, communications, informatics, mining and metallurgy ... as well as nuclear, oil and gas technologies. The targeting and theft of Canadian economic intelligence results in lost contracts, jobs and markets, and a diminished competitive advantage. In short, it costs us billions of dollars every year.

CSIS has identified a minimum of two dozen countries that acknowledge using their intelligence services to conduct economic and industrial espionage. And they are not limited to the “usual suspects” like China or Russia ... they include some of our closest allies.

Foreign espionage activities in Canada include office break-ins ... database hacking ... the recruitment of employees or consultants who have access to sensitive information ... and the illegal exploitation of joint ventures.

CSIS works to counter this type of espionage by monitoring the activities of known or suspected foreign intelligence officers ... and by preventing foreign visitors, students or delegates suspected of clandestine intelligence activities from entering the country.

Foreign espionage is not limited to Canadian territory. Canadian business people traveling abroad are also vulnerable. A foreign government can operate more easily within its own borders, making hotel rooms, restaurants, offices and telecommunications systems vulnerable to economic espionage.

A key component of the Service's efforts to combat economic espionage is its Liaison and Awareness Program for Canadian companies. By participating in this voluntary program, Canadian businesses can gain a better understanding of the threat posed by espionage and take appropriate steps to protect themselves.

Foreign acquisitions

Another subject which has been in the news is the foreign acquisition of Canadian companies and sensitive Canadian technologies ... acquisitions that allow other countries to gain a strategic stake in our economy.

I'm very concerned about this. Why? Because some of the state-owned companies seeking a foothold in Canada are run by the same governments who are directly involved in economic espionage against us.

I am not opposed to foreign investment here, but state-owned companies concern me because as business people, we all know that an open marketplace with fair competition and limited government intervention ... is in everyone's best interests. But when it's not a fair fight and when the competition is another government ... using every dirty trick in the book to undermine our national security, then our Government has a responsibility to step in.

That is what happened in June 2005, when the former Government introduced amendments to the Investment Canada Act that would allow it to review ... and potentially block foreign investments on the grounds that they pose a threat to Canada's national security.

The amendments ... which were intended to bring our legislation in line with other G-8 countries ... died on the order paper when the federal election was called. I hope that the new Government will reintroduce them. Personally, I think these amendments are long overdue, because they would help ensure that sensitive sectors of our economy remain in Canadian hands.

As you can see, Canada's intelligence service faces many challenges in countering threats to Canada's physical and economic security. The complexity and sheer volume of these threats means that CSIS must be very sophisticated and much more proactive in its intelligence gathering ... which could lead to overstepping the bounds of what is acceptable in this country.

And that's where SIRC comes in. Our Committee makes sure that CSIS's operations and activities are carried out in a manner consistent with its role and mandate, as outlined in the CSIS Act.

SIRC's Relationship to CSIS

To fully understand the Committee's role, I want to take a few moments to talk about the creation of both CSIS and SIRC.

Prior to 1984, security intelligence in Canada was handled by the RCMP's Security Service. All this changed in the late 1970s, due to a series of scandals ... the most infamous being the burning of a barn used by left-wing Quebec intellectuals. These scandals led to the creation of the McDonald Commission of Inquiry Concerning Certain Activities of the RCMP, whose recommendations resulted in the disbandment of the RCMP's Security Service and the creation of CSIS.

With the passage of the Canadian Security Intelligence Service Act in 1984, Canada became one of the first democratic governments anywhere in the world to establish a legal framework for its security service. For the first time, Canada had legislation that clearly defined the mandate and limits of state power to conduct security intelligence. And equally significant, the CSIS Act created a framework to keep those powers in check — a framework which by and large, has stood the test of time.

While the CSIS Act gives the Service considerable power to investigate threats to national security, it also provides several accountability measures to ensure that these powers are not misused. The Act describes in detail how the Service's work is to be monitored through a rigorous system of political and judicial controls ... including an Inspector General who reports directly to the Minister of Public Safety ... and our own independent, external review body, the Security Intelligence Review Committee.

Basically, SIRC has two functions: to conduct reviews of CSIS's activities and investigate complaints made against the Service. We have the absolute authority to examine all of CSIS's activities, no matter how sensitive and how classified that information may be. The sole exception is Cabinet confidences, which means discussions among Ministers.

Reviews

SIRC reviews are done by assessing CSIS's activities against four instruments, which together form the legislative and policy framework of the Service. These are: 1) the CSIS Act; 2) Ministerial direction; 3) National requirements for security intelligence; and 4) CSIS operational policy.

In each of its reviews, the Committee tries to answer several essential questions:

Complaints

SIRC's second responsibility is to investigate complaints against CSIS that may come from individuals or groups. These can be complaints about:

When SIRC is dealing with a complaint, we have all of the powers of a superior court. If we accept jurisdiction, the complaint is investigated through a quasi-judicial hearing presided over by one or more Committee Members, assisted by our Legal staff.

Complaint cases can be very complex, involving many documents, transcripts and other evidence. After the hearings are completed, the Presiding Member issues a report including findings and recommendations, to both the Minister and the Director of CSIS. And once any information with national security implications is removed, the complainant is also advised in writing of SIRC's findings.

I should also mention that SIRC produces an Annual Report, which is publicly tabled in Parliament. Because of legal obligations to protect national security and personal privacy, our Annual Report can only summarize our classified, internal reports. However, every Annual Report dating back to SIRC's creation is available on our website at www.sirc-csars.gc.ca.

Striking the Right Balance

I suspect that if I had asked for a show of hands on how many of you had heard of SIRC, there would have been very few raised. It's not surprising given that the last time we asked Canadians this question, 74 percent of respondents could not name any Canadian review body.

We know – from polling conducted by EKOS Research – that most Canadians believe the Federal Government has responded appropriately to the threat of terrorism. Indeed, 55 percent believe that more emphasis should be placed on protecting public security, compared to 39 percent who would prefer a greater emphasis on guaranteeing our civil liberties.

That's troubling to me, because public safety and human rights are not in conflict ... in fact, they are complementary. A society that bends the rules confirms the worst prejudices and suspicions of its enemies, while individual rights are meaningless without real and lasting human security. That's why it is so important that police and national security agencies are held accountable for their actions and choices.

Yes, we want Canada to have a strong capacity to deal with terrorism and other threats to our national security. But at the same time, SIRC exists to make sure that CSIS maintains an absolute respect for the rule of law.

Conclusion

Twenty-two years after it was created, SIRC has never been more relevant, especially given the complex and volatile security environment we now live in.

By maintaining the traditional Canadian balance between public safety and individual rights, SIRC plays a vital role in preserving the values which make this country such a wonderful place to live and do business.

That is why national security is so important to our economic well-being. I'm proud to be SIRC's Chair, because the Committee is helping to safeguard a free and democratic society ... and in the process ... allowing Canadians to continue to build a dynamic and prosperous economy.

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