Bill C-21 (Historical)

An Act to amend the Customs Act

This enactment amends the Customs Act to authorize the Canada Border Services Agency to collect, from prescribed persons and prescribed sources, personal information on all persons who are leaving or have left Canada. It also amends the Act to authorize an officer, as defined in that Act, to require that goods that are to be exported from Canada are to be reported despite any exemption under that Act. In addition, it amends the Act to provide officers with the power to examine any goods that are to be exported. Finally, it amends the Act to authorize the disclosure of information collected under the Customs Act to an official of the Department of Employment and Social Development for the purposes of administering or enforcing the Old Age Security Act.

[Wesley Wark]

Let me just turn to SATA very quickly, if I could. There are short sections.

Section 11 of the SATA indicates:

the Minister may disclose information obtained in the exercise or performance of the Minister's powers, duties or functions under this Act for the purposes of transportation security or the prevention of the travel referred to

Basically, that's indicating that this is a ministerial responsibility. It doesn't specify how exactly the minister may create regulation around domestic intelligence sharing or information sharing under C-21, but at least it puts the spotlight on the ministerial responsibility there, specifically with regard to domestic federal government information sharing. Given that there's a lot of concern around this and that it will likely resurface when C-59 comes into discussion again, some clarity in that regard would be important.

More importantly, from my view, the notion that we are going to create an entry-exit initiative for air travel and not share it with any of our close partners or any foreign state strikes me as a nonsense and something that is likely to be abused because it is a nonsense. I would prefer to see something like SATA section 12, which says:

The Minister may enter into a written arrangement relating to the disclosure of information referred to in section 11 with the government of a foreign state, an institution of such a government or an international organization

It's setting down rules around how the minister can interact with foreign partners in the sharing of entry-exit data, which is the sensible way to go, rather than having a blanket restriction that will ultimately face pressure and potential abuse.

[Wesley Wark]

I think I would agree with the CBSA testimony that I've seen before this committee to the effect that the provisions of Bill C-21 will not make the border stickier in the sense of holding back the flow of people or goods. As I see it, the challenge is how CBSA at headquarters is going to be able to handle the data flow, and by “handle” it, I mean really two things: one, make sense of it, and the other, store it in some systematic way and secure it in some systematic way. I'm sure they have thought that through, but they haven't yet in practise met that full challenge, because they haven't seen the full flow of the data come yet.

The initial testing in phase one suggested that they were pretty capable of handling a relatively limited flow of data back and forth across the land border. Whether they're fully capable of handling both the land border exchanges and the exit air information I think is an important question that I don't have an answer to, but I think it's worth posing to them directly.

[Wesley Wark]

On that, I would say two things, sir.

One is that the Canadian federal government is in a good position in terms of data security protection, in the sense that it is able to call in the services of the Communications Security Establishment, which is well regarded as a cybersecurity organization.

The question then becomes the fit between what are going to be called the CSE's defensive cyber-operations and the CBSA's capability to lock down its data. We have that advantage. In part this is why I would encourage the committee to at some point take a close look at CBSA. If you look back at previous reports of Auditors General over a number of years, you'll see that CBSA has struggled with its electronic data and data systems, both at the border and at headquarters. It's not clear to me whether they've overcome those struggles or whether those struggles are going to become only worse as they're flooded with this kind of information.

I don't have an expert view at all on how well they're going to be able to manage that data flow. It's been tested to some degree, but not fully. I think it's certainly something that needs to have a watch kept on it. That's partly why, in addition to encouraging the committee to look specifically at CBSA, which is probably the fastest-growing, most expansive security and intelligence agency in the Canadian government, I would also encourage thinking around Bill C-21 that would require annual reporting on the impacts of the bill.

[Peter Fragiskatos, Liberal, London North Centre, ON]

Does this relate to efficiency? If a child is abducted, to use that example, would something like Bill C-21 provide Canadian authorities with the knowledge of when the child and the abductor had left the country? It would help to have that information on hand immediately instead of relying on the phone call across the border and waiting for a response from American authorities. This would speed things up and make things, as I say, more efficient.

Would you agree?

[Wesley Wark]

Thank you, sir. It's a good question.

I guess I would say that it is a tool. I think it's a modest tool. It's probably not important as some existing tools that have already been in place for some time, like the passenger protect program, for example. It's primarily an investigative tool. It would allow the tracking of individuals who might be of concern under the different portions of Bill C-21 . It would only be a supplementary tool. I don't see it as a magic bullet in any sense. I think it's a useful tool. It fills a gap. I don't think any government intelligence or security agency is going to look to it as a principal instrument. It's just a supplementary investigative technique.

[Peter Fragiskatos, Liberal, London North Centre, ON]

Thank you very much, Chair.

Thank you, Professor Wark, for being here today. It's always great to hear your insights on security matters.

After the attack in Edmonton a few weeks ago, you were quoted in the press as saying, “Even lone wolves give off vapour trails that are potentially discoverable by security agencies.” The article goes on to say that you've advocated for a number of approaches to deal with such threats, better educating the public, and working with the Muslim community.

As far as our purposes today are concerned, you've talked about boosting the resources of security agencies. Legislation can be considered a resource in the fight against terrorism. To what extent does Bill C-21 provide CBSA and the Canadian state writ large with a resource to combat terrorism?

[Wesley Wark, Visiting Professor, Graduate School of Public and International Affairs, University of Ottawa, As an Individual]

Mr. Chairman and members of the committee, I thank you for the invitation to appear and testify on Bill C-21, an act to amend the Customs Act. I'm going to read my remarks, in a desperate academic attempt to stay within your 10-minute time frame.

Bill C-21 provides statutory powers for the final phase of the entry-exit initiative. As the committee will be aware from previous testimony, the entry-exit scheme dates back to promises made under the Beyond the Border action plan agreed to in 2011 between Canada and the United States. Its provisions are, for now, Canada-U.S.-centric. The Beyond the Border action plan is the latest iteration of agreed schemes for post-9/11 border security, dating back to the safe border accord of December 2001. The Liberal government affirmed its commitment to the entry-exit information plan during a summit meeting between Prime Minister Trudeau and then U.S. President Obama in March 2016.

The entry-exit scheme has had a staged rollout since its first phase, which lasted from September 2012 to June 2013. It served to test the data exchange between Canada and the U.S. at select land border ports of entry. The second phase began in June 2013 for fuller land border crossing information exchange for third country nationals, permanent residents of Canada, and lawful permanent residents of the United States. The final stage of entry-exit, requiring statutory force in Bill C-21, would see the biographical exchange of information on all travellers, including Canadian citizens, at the land border, and the collection of biographical exit data on all air travellers, again including Canadian citizens, leaving Canada.

Biographical data acquired under Bill C-21 would consist, as you've heard, of the page 2 information from Canadian passports presented to Customs and Border Protection officials at U.S. ports of entry when crossing the land border. This information includes, as you'll know, name, nationality, date of birth, sex, and place of birth.

For the air mode, it would involve what is referred to as API/PNR, or advance passenger information/passenger name record, data provided by air carriers and air reservation systems for exit records for air travel. API data includes page 2 biographical passport data plus flight information. PNR derives from airline departure control and reservation systems, and varies depending on the collector. It can include type of ticket, date of travel, number of bags, and seat information.

The information flow that Bill C-21 augments is meant to be automatic. It would involve the passage of electronic data from U.S. CBP at land entry—U.S. entry data becoming Canadian exit data—in near real time. For air travel, it would involve the transmission of electronic passenger manifests from air carriers. All of this information would go to the Canada Border Services Agency for processing.

The backgrounder published by the government when the legislation was first introduced in June 2016 indicates that the entry-exit initiative is meant to serve a large number of objectives. It is not specifically a national security tool, but could, in my view, enhance investigations into the movements of suspected terrorists, foreign espionage actors, and WMD proliferators, among other actors of concerns, and it could provide a useful investigative supplement to other powers available to security and intelligence agencies.

It is worth noting that Mr. Bolduc of CBSA testified before this committee on October 3, making the point that one additional benefit that Bill C-21 powers would provide was “it will bring Canada on par with the rest of the world and our Five Eyes partners. There's a huge, huge benefit for Canada.” This was a direct quotation from Mr. Bolduc. I am not quite sure how to read this enthusiasm, except to say that Bill C-21 measures are, in keeping with a long tradition in Canadian national security, meant to demonstrate our ally worthiness.

In this same vein, it is also important to note the restrictions that the government has said it will put in place in terms of information sharing from the vast pool of data that will be collected under Bill C-21. Land border exit information will inevitably be shared with the United States government, because the information is collected by U.S. CBP agents. We are assured that exit information from the air mode would not be shared with the United States or any other foreign government. Whether this blanket restriction makes sense is questionable, in my view. The committee may wish to consider an amendment to the legislation in this regard, which would bring it more into line with the Secure Air Travel Act, of which I'll speak a little later.

Minister Goodale has testified before this committee that “exchange of information both within Canada and with the U.S. will be subject to formal agreements that will include information management safeguards, privacy protection clauses, and mechanisms to address any potential problems.” These are important promises that presumably will be fulfilled through regulation. Notably absent, however, is any commitment to transparency around the entry-exit initiative. There is no requirement, for example, for any annual report to Parliament and the public on its application and efficacy.

This lack of a transparency commitment is compounded by the current absence of meaningful independent review of CBSA, the core actor that will operationalize Bill C-21.

While government officials have testified that the information flows provided for through Bill C-21 will be seamless and automatic, the real issues, it seems to me, involve analysis of the data by CBSA, retention and security of the data, and information sharing. Bill C-21 legislation is a black box in these regards, leaving much to regulation. There is a question in my mind as to whether the legislation needs to be more forthcoming in three particular areas: data retention schedules, information sharing protocols, and transparency requirements.

Before I come to some modest proposals to improve Bill C-21, a note on a parallel and existing legislative power might be in order. There exists already a limited form of entry-exit controls for air travel, which have been in place since 2007 but which were amended with Bill C-51 in 2015 under the title of the Secure Air Travel Act or SATA. SATA, often referred to as the passenger protect program, creates a list of persons that the Minister of Public Safety “has reasonable grounds to suspect will (a) engage or attempt to engage in an act that would threaten transportation security; or (b) travel by air for the purpose of committing” a terrorism offence. I'm slightly paraphrasing the sections of SATA here.

SATA contains some provisions that are not held in common with Bill C-21, including specific powers and information disclosure, both domestically and through written agreements with foreign states and entities. These are under sections 11 and 12 of the Secure Air Travel Act. These sections, incidentally, are not proposed to be amended in Bill C-59 as that bill comes forward, presumably, to this committee.

There is also an important statutory reference to retention of data received from air carriers or air reservation systems in the SATA legislation, and this requires:

The Minister of Transport must destroy any information received from an air carrier or an operator of an [air] reservation system within seven days after the act on which it is received, unless it is reasonably required for the purposes of this Act.

That's section 18 of SATA. In other words, the minister is empowered to retain records of air travel for the listed persons but not for the general public.

To bring Bill C-21 into closer alignment with SATA on data retention and information sharing protocols and to enhance transparency and ensure independent review of its powers, I would suggest the following responses to Bill C-21, which the committee might want to take under consideration:

First, Bill C-21 should adopt the explicit SATA references in sections 11 and 12 for information sharing domestically and internationally. I think this would be an improvement on doing this by regulation.

Second, Bill C-21 should adopt a reasonable retention schedule for entry-exit data based on expert government advice on the minimum period necessary for the retention to meet the many different objectives of the entry-exit initiative as listed in the backgrounder document published with the bill in 2016. A seven-day retention cycle as provided for in SATA would be self-defeating, but so would overly lengthy retention periods. CBSA must not become a data swamp.

Third, Bill C-21 should contain a mandatory requirement for annual reporting to Parliament on its provisions by CBSA.

Fourth, the committee should encourage the government to be explicit about its plans for the conduct of regulatory review of CBSA national security activities, either through an independent body or captured by the paragraph 8(1)(b) mandate for the proposed national security and intelligence review agency, NSIRA, under Bill C-59. This may require future clarifying amendments to Bill C-59.

Fifth, the committee should encourage the government to finalize its plans for an independent complaints mechanism for CBSA. There have been discussions under way about this for some considerable time now.

Sixth, and finally, I would encourage the committee to hold early hearings on CBSA and its rapidly expanding mandate. Doing so might serve as a foundational exercise for the new national security and intelligence review agency when it is created.

Thank you for your time and attention.

[Glen Motz, Conservative, Medicine Hat—Cardston—Warner, AB]

Thank you, Mr. Chair.

Thank you very much, ladies, for being here.

I'm going to direct my questions to you, Ms. Cherniak, if I could. It's just a statement and then a request, with the indulgence of the chair.

I initially thought, as we reviewed C-21 and generally reached an all-party agreement on the gaps that this was going to fill—and we had some amendments that needed to be made to the existing legislation—that we were on the right track. After hearing you, I'm not so confident that we are. You mentioned that we're missing some key definitions, which don't exist anywhere else in legislation, to help identify and clear up some ambiguity. We know that those who play out the practical application of this legislation will struggle with it and have difficulty.

I'm wondering whether you would be gracious enough to provide us with some recommendations on amendments that we will take under advisement in addition to the report you've given us, recommendations specific to those issues you identified where we still have major gaps in this legislation, so that we complete the intent, which is what we want to do as a committee. You can respond if you wish. If you could provide that to the committee, I know I personally would appreciate it as we start going through this act clause by clause. These are things we could tighten up.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

Thank you very much.

Ms. Todgham Cherniak, the committee members heard from first nations representatives on the effects on snowbirds, exporters, national security, and criminality. On your website you wrote a piece called “What Businesses Should Know About Bill C-21 Amendments to Customs Act (Canada)”. Taking the lead from your title, what's going to be the effect of Bill C-21 on businesses?

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

Have you calculated how much your department could save once Bill C-21 has been passed? Have you determined that savings may be made in terms of labour or resources?

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

My other question is about the information that will be collected once Bill C-21 has been passed. Proposed subclause 92(1)(a) talks about the surname, first name, date of birth, citizenship or nationality and sex. How can you obtain reliable information if you have my surname, for example, but there are four other people named Pierre Paul-Hus in Canada. You don't have my social insurance number. How can reliability be ensured?

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

Thank you, Mr. Chair.

Ladies, thank you for your reports, which are very comprehensive and informative.

I will first turn to you, Ms. Boisjoly. You did a really good job of analyzing the impact of Bill C-21 on ESDC. You determined that you could potentially save $5.5 million. So you already have a good idea of the number of people who commit employment insurance fraud.

I assume that the amount was obtained based on a percentage of cases you know about and over which you have no control. Is that correct?

[Cyndee Todgham Cherniak]

I have not looked at it for the narrow issues in Bill C-21. I have looked at the U.S. export control rules. I have looked at U.K., Australia, and Japan export control rules, but in the creation of a smuggling offence, I have not looked there with a focus on what this particular piece of legislation is doing.

[Cyndee Todgham Cherniak]

In part.

However, in listening to the previous witnesses, I noted they were talking about the $2,000 Canadian limit and that certain goods don't meet that threshold and they're not being captured. That particular threshold or condition is in the reporting of exported goods regulations. The export control list is another regulation that can be changed, but it is very difficult to manoeuver that piece of legislation. That piece of legislation sends you over to the guide that is on the Global Affairs website. From there, you have to try to interpret words like “intrusion software”, which is on the list. I'm sure there aren't many people in the room who know what intrusion software is, so you'd have to go somewhere else.

The average Canadian and the small to medium-sized business, both trying to comply with Canada's export laws, have another issue to deal with when it comes to the smuggling provision and the reporting of goods requirement in Bill C-21.

[Cyndee Todgham Cherniak, Counsel, LexSage Professional Corporation, As an Individual]

Thank you, Mr. Chairman.

Thank you for inviting me to provide comments on Bill C-21, an act to amend the Customs Act. My name is Cyndee Todgham Cherniak. I am a Canadian international trade lawyer, and I specialize in the areas of customs law and export controls and economic sanctions.

Bill C-21 amends the Customs Act to implement the Beyond the Border initiative between Canada and the United States. It has three main parts.

Bill C-21 starts with the provision to authorize the CBSA to collect limited information about persons and conveyances that are leaving or exiting Canada. Then, Bill C-21 adds proposed new section 94 of the Customs Act, which requires that, if requested, every person who is leaving Canada present themselves to the CBSA and answer questions truthfully. Bill C-21also amends section 95 of the Customs Act, which puts a positive obligation on persons to report all goods that are exported. Finally, Bill C-21 adds a new export smuggling offence in subsection 159(2) of the Customs Act.

Whenever a new offence provision is created, the government needs to be careful. When interpreting a statutory provision, we must ask what the intention of Parliament was when they passed this provision. The rules for an export smuggling offence need to be very clear. It's not fair to Canadians and travellers to Canada for there to be punishable export-related smuggling rules and only be told when the rule has been broken. Proposed new subsection 159(2) of the Customs Act provides:

Every person commits an offence who smuggles or attempts to smuggle out of Canada, whether clandestinely or not, any goods that are subject to duties, or any goods the exportation of which is prohibited, controlled or regulated under this or any other act of Parliament.

What does smuggle mean? This term is not defined in Bill C-21 or the Customs Act.

Proposed subsection 159(2) of the Customs Act tells us what can't be smuggled out of Canada: one, “goods that are subject to duties”, and, two, goods that “the exportation of which is prohibited, controlled or regulated” under the Customs Act or any other act of Parliament.

Let's start with goods that are subject to duties. The term “duties” is defined in section 2 of the Customs Act with reference to imported goods. There is no definition of duties in the context of exported goods. Bill C-21 does not amend the statutory definition of the word “duties” in the Customs Act.

The words “subject to duties” must have meaning. Is it the intended result that all goods that are not duty-free when imported into Canada are covered by the new export smuggling provision when they are exported? Or, is the intended result, by virtue of amended subsection 95(1) of the Customs Act, which requires all goods to be reported, that all goods will be considered to be regulated and therefore all goods must be reported, and if the goods in your luggage or my luggage are not reported, they will be considered to be smuggled?

What is envisioned? Will there be export clearance at Canadian airports for all passengers, so that they must report the goods in their luggage? Will there be a new export checkpoint staffed by the CBSA? When travellers pre-clear U.S. customs, do they also have to go through a CBSA export checkpoint, or this going to be like the requirement in the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, which puts a positive obligation on persons to report all exports of more than $10,000? Are travellers supposed to find the small CBSA office in the airport and complete some paperwork before leaving Canada?

With respect to the second category of goods to be covered by the export smuggling offence, do any of you know what are “goods the exportation of which is prohibited, controlled, or regulated” under the thousands of acts and regulations that we have? What does this even mean? The terms “prohibited”, “controlled” and “regulated” are not defined in Bill C-21 or the current Customs Act. I can tell you from experience in my practice that most people do not know how many restrictions there are under Canadian laws and regulations relating to exports.

This is not just the Export and Import Permits Act and the export control list that place restrictions on exports. There are hundreds of restrictions that are not obvious, and there are hundreds of different disconnected statutes and regulations. Do you have a complete list? Does a complete list even exit?

The export control list is only one list, and not an easy list for the average person or even a business person at a small to medium-sized business to use. Dual-use goods, miscellaneous goods, U.S.-made goods, computers, encryption software—the export control list is really complicated. In addition, the export control list does not contain or include many other export-regulated items, such as, rough diamonds, hazardous materials, fireworks, live animals, cultural property, fish, seafood, health products, regulated drugs, precursor chemicals, and the list goes on.

Did you know that there are restrictions on exports of honey, maple syrup products, and peanut butter under different and disconnected regulations? These and other goods are covered by other laws and other regulations.

My recommendation would be that there needs to be some clarity with respect to which goods must be reported and will be considered to be smuggled out of Canada if they're not reported. There needs to be a consolidated list of goods that are subject to export restrictions, and if there isn't a single, consolidated, searchable database of export restrictions and regulations, good Canadians will make mistakes.

There are inconsistencies between the regulatory schemes. A second recommendation I'd like to give you is that there needs to be some consistency. As you know, the minister of foreign affairs does not have the authority to issue export permits to non-residents, but non-residents of Canada leave by air, ship, and rail. How is this new smuggling offence provision going to be applied to the millions of foreign visitors to Canada who can't obtain export permits? As you know, when a Canadian resident uses a general export permit to export controlled goods under the Export and Import Permits Act, they must refer to the general export permit number on the export documentation. How will the CBSA enforce this general export permit requirement in respect of the individual traveller who does not use export documentation when leaving with goods in their luggage?

While I can understand that the Government of Canada would like to be able to charge individuals who try to break export control rules by personally exporting the goods, this proposed provision is going to capture a whole lot of other people. Further, the Export and Import Permits Act and other statutes contain punishment for not obtaining export permits and export licences when required. Ask what the export smuggling provision is really supposed to accomplish. We may already have this covered in our law.

What about information on electronic devices? On September 27, 2017, Mr. Martin Bolduc of the CBSA testified before the ETHI committee that the CBSA's position is that, pursuant to the Customs Act, the word “goods” includes electronic records on electronic devices. He took the position that the CBSA may examine all electronic documents that are being imported. The CBSA's analysis on imported goods would also apply to exported goods.

Based on the proposed amended subsection 95(1) of the Customs Act, all electronic documents on your computer, my computer, or our electronic devices must be reported. There have to be regulations promulgated to support proposed subsection 95(1). I would hope that, in those regulations, electronic records would be specifically addressed and an exception cover electronic records. Laptops contain hundreds of thousands of emails and documents, and it would take a long time to report these goods at the airport before leaving Canada, and it's not even feasible to report all the goods.

Anyone, including all of us, could commit a smuggling offence if every electronic record on our computer must be reported to the CBSA, and anyone with a NEXUS card would be at risk of losing their NEXUS card if they failed to recall one document.

We should also protect solicitor-client privilege at the border. Solicitor-client privilege is fundamental to the proper functioning of the Canadian legal system. As a result, steps must be taken to ensure that solicitor-client privilege is protected at Canadian airports and Canadian ports of exit when lawyers and clients are leaving Canada. It is essential that the CBSA maintain a transparent policy and process to address solicitor-client privilege when questioning persons leaving Canada.

Finally, on the issue of privacy and the sharing of information, the CBSA's information can be wrong. We need to have a mechanism so that travellers can correct the information relating to answers they've provided to the CBSA and when they've left.

I'd be happy to answer any of your questions.