Bill C-47 (Historical)

An Act to amend the Export and Import Permits Act and the Criminal Code (amendments permitting the accession to the Arms Trade Treaty and other amendments)

This enactment amends the Export and Import Permits Act to
(a) define the term “broker” and to establish a framework to control brokering that takes place in Canada and that is undertaken by Canadians outside Canada;
(b) require that the Minister take into account certain considerations
before issuing an export permit or a brokering permit;
(c) authorize the making of regulations that set out additional mandatory considerations that the Minister is required to take into account before issuing an export permit or a brokering permit;
(d) set May 31 as the date by which the Minister must table in both Houses of Parliament a report of the operations under the Act in the preceding year and a report on military exports in the preceding year;
(e) increase the maximum fine for a summary conviction offence to $250,000;
(f) replace the requirement that only countries with which Canada has an intergovernmental arrangement may be added to the Automatic Firearms Country Control List by a requirement that a country may be added to the list only on the recommendation of the Minister made after consultation with the Minister of National Defence; and
(g) add a new purpose for which an article may be added to an Export Control List.
The enactment amends the Criminal Code to include, for interception of private communications purposes, the offence of brokering in the definition of “offence” in section 183.

[Peggy Mason, President, Rideau Institute on International Affairs]

Thank you for giving me this opportunity to address the committee on this most important legislation.

I fully support the comments just made by Alex Neve and will pick up from where he left off.

My work toward achieving robust Canadian and international standards for the export of military equipment started with my time as an international security policy adviser on the staff of then foreign affairs minister Joe Clark when he was shepherding through cabinet new guidelines for Canada's military exports, which became known as the “1986 policy guidelines”. They are still in effect today and can be found in the regulations to the Export and Import Permits Act—which I'll call EIPA from now on to save time—conveniently collated in the “Export Controls Handbook”.

Let me quote the human rights criteria in those guidelines:

Under present policy guidelines set out by Cabinet in 1986, Canada closely controls the export of military items to: ...countries whose governments have a persistent record of serious violations of the human rights of their citizens, unless it can be demonstrated that there is no reasonable risk that the goods might be used against the civilian population.

We had high hopes when the 1986 guidelines were established that Canada would set a global standard for responsible arms exports. Beginning in the 1990s, however, the human rights guideline became more honoured in the breach than in its observation, with more and more military equipment going to Saudi Arabia, precisely the destination the 1986 guidelines were meant to avoid. So what went wrong?

The answer is very simple and equally easy to fix. The 1986 guidelines, like other criteria in the EIPA itself, are not mandatory, but are, as the name implies, guidelines. This became painfully clear when the Federal Court considered a challenge to the $15-billion Saudi arms deal launched by McGill law professor and former MP Daniel Turp.

Before turning to that court decision, we need to consider, in addition to the policy guidelines—because they're of course not the only criteria, and they're contained in the regulations—the relevant section of EIPA itself, since Bill C-47 leaves this section almost entirely unchanged. Subsection 7(1.01) of the EIPA identifies the factors to be taken into account by the minister in deciding to issue an export permit, in addition to the guidelines I mentioned. I quote:

In deciding whether to issue a permit under subsection (1), the Minister may, in addition to any other matter that the Minister may consider,

—like the policy guidelines—

have regard to whether the goods or technology...may be used for a purpose prejudicial to...the safety or interests of the State...or...peace, security or stability in any region of the world or within any country.

The relevant language there is “may have regard to”. The language used in subsection 7(1.01) is extremely permissive, and there are no legal limits placed on the foreign minister's discretion to approve arms exports.

Now, turning to the Federal Court decision on the legality of the Saudi arms deal, in approving the six export permits in April 2016, Minister Dion, then the foreign affairs minister, relied on a memorandum prepared by officials in Global Affairs.

The memorandum acknowledged serious concerns about Saudi Arabia's human rights record; however, the memorandum affirmed that Global Affairs Canada was “not aware of any reports linking violations of civil or political rights in the kingdom with the proposed military exports.” I hasten to add that, since that statement and that ruling, which is now being appealed, ample evidence of such misuse with Canadian equipment has come forward.

The government argued that the EIPA includes guidelines and policies that “provide for strict controls over the export of goods such as [light armoured vehicles], but contain no prohibitions.” The minister's “sole obligation” is “to take into account all the relevant factors having regard to the existing legislative framework...”.

The court ruled in favour of the government—as I noted, it's under appeal now—declaring:

These factors guide the Minister. It is for him to decide how to assess them and how much weight to give to each, as long as he exercises his power in accordance with the object and in the spirit of the EIPA....

The court observed that even a “plain reading of the language chosen in the EIPA”—language not being changed by Bill C-47—“indicates that the Minister has broad discretion in issuing permits for controlled goods.”

The ruling of the court concluded:

The role of the Court is not to pass moral judgment on the Minister's decision to issue the export permits but only to make sure of the legality of such a decision. Of course, his broad discretion would have allowed him to deny the permits.

The Federal Court's judgment that the minister acted within his discretion demonstrates that the discretionary power under the EIPA is too broad and that there is a need for hard legal limits on that power. This conclusion is highly relevant in the context of Canada's planned accession to the ATT, since both the EIPA, as it now stands, and the Saudi arms deal are inconsistent with that treaty.

Let me now turn to article 7 of the Arms Trade Treaty, which reads:

If the export is not prohibited under Article 6,

—and Alex Neve has already referenced that provision that prohibits exports if you have knowledge that they're going to be used to commit genocide or other war crimes—

each exporting State Party, prior to authorization of the export of conventional arms

—or components—

...shall, in an objective and non-discriminatory manner, taking into account relative factors...assess the potential that the conventional arms...would contribute to or undermine peace and security...[or] could be used to...commit or facilitate a serious violation of international humanitarian...[or] human rights law....

Here's the relevant part of the Arms Trade Treaty:

If, after conducting this assessment and considering available mitigating measures, the exporting...Party determines that there is an overriding risk of any of the negative consequences

—undermining peace and security or committing or facilitating serious violations of human rights—

the exporting...Party shall not authorize the export.

The words “shall not authorize the export” in article 7(3) of the Arms Trade Treaty must therefore be given their full and intended effect. This requires hard legal limits on the discretion of the minister of foreign affairs, limits that we left out of the original policy guidelines and limits that are absent from Bill C-47.

Again, with the Federal Court having ruled that it is currently within the discretionary power of the minister of foreign affairs to approve arms exports to countries that are undermining international peace and security or engaging in serious violations of international human rights or international or international humanitarian law, a key step in bringing Canada into line with the ATT involves placing hard limits on this discretion. If Canada is to comply with this treaty fully and truly set a global standard, the minister must be legally obligated under Canada's implementing legislation to deny exports that carry an “overriding risk” of contributing to undermining international peace and security or committing or facilitating serious violations of international human rights or international humanitarian law.

Bill C-47 contains no new provisions in the EIPA proper, the actual legislation, to limit ministerial discretion; however, as Alex Neve also alluded to, Bill C-47 proposes to amend the EIPA to “authorize the making of regulations that set out mandatory considerations that the Minister is required to take into account before issuing an export permit...”. Note that the bill does not establish any mandatory considerations; it only authorizes the making of regulations that will include them.

Even the idea of mandatory considerations at the regulatory stage, however, is misleading, since the considerations will not actually be mandatory or prohibitive, but only “mandatory...to take into account”, which is what we have right now in the EIPA and which the Federal Court has ruled does not fetter the minister's discretion in any way. This amendment does not result, therefore, in any change in the scope of the minister's discretion.

The absence of any real substance to these mandatory considerations “to take into account” renders Bill C-47 incompatible with the Arms Trade Treaty. Under article 7 of the treaty, Canada will be obligated to “assess the potential that the conventional arms...could be used to...commit...a serious violation of international human rights” and if there is an “overriding risk of any of the negative consequences”, it “shall not authorize the export”. That's the requirement under the ATT.

The legal obligation under the ATT goes far beyond the consideration of certain factors. It is an obligation to refuse permits in certain high-risk circumstances.

By leaving the decision to approve or disapprove a permit to the minister's discretion as opposed to creating hard legal limits on that discretion, Bill C-47 is, in terms of ATT implementation, a failure.

I end with a point of comparison with respect to a model law which the Government of New Zealand developed and enacted. I end with this one section, subsection 5(3) of the model ATT implementation law. It reads in part:

If on the basis of the assessment conducted under subsection (2) the Authority

—because it need not be the minister in some cases—

determines that there is a substantial risk that the conventional arms, ammunition, or parts and components: (a) would undermine peace and security; or (b) could be used to commit or facilitate: i. a serious violation of international humanitarian law; ii. a serious violation of international human rights law;... and the risk cannot be mitigated, the Authority shall refuse the application for an export licence.

The key language here is “shall refuse”, firm and binding language of the kind that is strikingly and fatally missing from Bill C-47. I associate myself with the comments that Alex Neve made about how anything to do with mandatory consideration of factors should not be in the regulations because it deprives you, the committee and other parliamentarians, from knowing and impacting on the content of those regulations.

Accordingly, the Rideau Institute recommends that hard legal limits, based on the risk assessment criteria set out in article 7 of the ATT, be imposed on the foreign affairs minister's discretionary power to approve arms exports, and that these hard legal limits be set out in a statute and not in regulations.

Thank you very much.

[Alex Neve, Secretary General, Amnesty International Canada]

Thank you so much, Mr. Chair.

Good afternoon, members of the committee.

Two years ago I was on the ground in the isolated Sudanese state of South Kordofan, where civilians have been cut off from the world since 2011 while the Sudanese Armed Forces carry out an unrelenting campaign of aerial bombardment, rolling unguided barrel bombs indiscriminately out of the backs of Antonov aircraft, killing and maiming thousands of civilians, forcing hundreds of thousands to flee their homes, and provoking a terrible food crisis, as farmers have been too terrified to plant or harvest their crops.

One elderly woman, describing to me a terrible attack that had killed several members of her family, asked me a simple, heartbreaking, glaringly obvious question, to which, sadly, there was absolutely no reassuring, obvious answer: “Who keeps giving them the bombs, and why?”

That is why we are here today, of course. Amnesty International welcomes this opportunity to appear as part of your deliberations regarding Bill C-47, intended to lay the ground for Canadian accession to the UN Arms Trade Treaty.

Let me state at the outset—I'm sure it's obvious, but it's worth repeating—that Amnesty International is a strong proponent and supporter of Canadian accession to the Arms Trade Treaty, a welcome promise, we note, that Canada repeated before the UN General Assembly's first committee just 10 days ago.

For decades Amnesty International has been documenting massive human rights violations around the world associated with the arms trade, which we have often called the world's most deadly commerce. That is why we and countless other organizations campaigned for years for the adoption of the Arms Trade Treaty: to establish a vital global principle that no state can be permitted to transfer to another state arms that will be used to commit genocide, crimes against humanity, or war crimes.

We enthusiastically welcomed the adoption of the Arms Trade Treaty in 2013 and have pressed governments since then to ratify and accede to this important new international human rights treaty and to adopt laws to fully implement its terms. In four and a half years, 92 states, nearly one-half of the world's nations—and that's pretty fast in UN speed—have become parties to the treaty, including many of our closest allies. Canada's accession matters very much for two key reasons.

First, we have a significant arms industry. I don't think many Canadians realize this. Recent high-profile cases have demonstrated, however, that it includes deals with countries in which concerns about serious human rights violations are very real. Witness the General Dynamics deal to sell 15 billion dollars' worth of light armoured vehicles to Saudi Arabia, and the Streit Group's sales of armoured cars to South Sudan, Libya, and Sudan through its operation offshore in the United Arab Emirates.

Second, Canada's accession is crucial in generally shoring up respect for this important treaty. In situations of armed conflict and mass human rights violations around the world, we continue to document a virtual flood of arms from outside the country concerned, Myanmar's Rohingya crisis, Yemen, South Sudan, Iraq, Syria being some of the most obvious contemporary examples. There is no global arms embargo in place for any of those countries, which is absurd and outrageous. It would require a UN Security Council resolution, and we of course all understand the politics of the Security Council in action.

A well-supported ATT with global reach, therefore, is what we truly need. That is why Canada needs to be on board.

Being on board, however, means enacting legislation that fully complies with the ATT's obligations, and we are concerned that Bill C-47 fails to meet the requirements of the ATT in several crucial respects. We have joined with nine other organizations, including the Rideau Institute, in highlighting 10 areas that urgently need to be addressed before Bill C-47 is adopted and Canada moves to accession. I know that either earlier or soon you will have received copies of this joint brief. I would like to highlight two of the areas of concern in the paper.

First, Canadian arms controls do not apply to transfers to the United States. Second, provisions governing the possibility that arms transfers to any country will be diverted to a third country are weak. In many respects, the two points are interrelated, as Canadian transfers to the United States frequently involve parts, which may be incorporated into weapons that are then fully assembled and transferred to another country.

The fact that the United States is exempted is not of passing concern. The U.S. exemption effectively guts Canadian compliance with the ATT. Consider the following: one, over one half of Canadian arms sales are to the United States; two, while the U.S. has signed the ATT under the previous administration, there is no realistic prospect that the U.S. will take the further step of ratifying the treaty at any foreseeable point, and therefore one half of Canadian arms sales go to a country that is not bound by the treaty; and, three, there are very real concerns about U.S. arms transfers.

Here are just two examples from our work. In May, the United States announced 110 billion dollars' worth of arms sales to Saudi Arabia, including $4.6 billion's worth of guided air-to-ground munitions. In the war in Yemen, where we have documented extensive war crimes, 104,000 of those types of bombs have been used routinely by Saudi forces.

Also in May, we released a report highlighting a U.S. Department of Defense audit which revealed that the United States was not able to account for $1 billion's worth of weapons that had been transferred to Iraq and Kuwait, including tens of thousands of assault rifles, hundreds of mortar rounds, and hundreds of Humvee armoured vehicles. We have documented how, in the face of these lax controls and deficient record-keeping, arms manufactured in the United States regularly wind up in the hands of armed groups, paramilitary militias, and even the Islamic State, throughout Iraq.

The fourth reason we need to be concerned about the United States is in simply considering the numbers. In 2015 Canada exported just over $51 million U.S. in parts and components for small arms and light weapons to the United States This is not pocket change. We have no way of knowing what happened to those parts. Did they remain in U.S. hands or were they re-exported in fully assembled weapons to some other country?

This is a very real concern with arms transfers anywhere in the world, and it's why there's a specific provision in the ATT—article 11—requiring states to take measures to prevent what's known as diversion. Canadian law requires that the possibility of unauthorized transfer or diversion to another country be considered, but does not contain any clear prohibitions, and Bill C-47 does not remedy that shortcoming.

In short, Amnesty International urges this committee to propose amendments that will ensure Canadian arms controls do apply to sales and transfers to the United States, and that Bill C-47 incorporate measures that will fully comply with ATT article 10 dealing with diversion. We also urge amendments to address other concerns highlighted in our joint briefing paper, including the need to ensure Bill C-47 will apply to the Department of National Defence and to the Canadian Commercial Corporation, and that existing provisions giving cabinet broad powers to authorize any arms transfer, regardless of human rights concerns, be strictly limited.

Finally, you will note that many of our concerns relate to vital matters going to the heart of our ability to meet ATT obligations, but which are not addressed in the terms of Bill C-47 and are left for regulations to be adopted at a later stage. That includes the absolutely central matter of what factors will be taken into account when assessing the risk that a particular arms transfer may violate the ATT. Those factors, we would suggest to you, are too important to be left to regulation. They require and deserve your attention and scrutiny as parliamentarians and should be part of the act itself.

Who keeps giving them the bombs?

Canadian accession to the ATT is a step we look forward to celebrating at an early date. It will be welcomed around the world. It must, however, be on the basis of a legal framework that demonstrates full compliance with ATT obligations. We are certainly ready to work with you and with government officials to make the changes that will ensure that is the case.

Thank you very much.

[The Chair, Liberal, Bob Nault]

Colleagues, I want to bring this meeting back to order. This is pursuant to the order of reference of Tuesday, October 3, 2017, Bill C-47, an act to amend the Export and Import Permits Act and the Criminal Code (amendments permitting the accession to the Arms Trade Treaty and other amendments).

This afternoon, we have from the Rideau Institute on International Affairs, Peggy Mason, president, and from Amnesty International Canada, Alex Neve, secretary general.

We welcome both of you. As usual, we'll allow you to make a presentation, and then we'll go straight to questions.

Alex, the floor is yours.

[The Chair, Liberal, Bob Nault]

Thank you, Mr. Sidhu. We're going to have to wrap this up.

I want to thank Mr. Kalninš for his presentation and his answers to the good questions from our colleagues. As you can tell, our relationship with Latvia is very strong, and there's a lot more work to be done. We're looking forward to more encounters like this, both abroad and here in Canada. On behalf of the committee, I give you our thanks.

Colleagues, we're going to take a five-minute break. That will give us a chance to do what we always want to do, which is get our picture taken with foreign dignitaries. Then we'll go to the next hour and presentations on Bill C-47.

Thank you very much, Mr. Kalninš.

[The Chair, Liberal, Bob Nault]

With that, I will conclude today's discussion. I want to thank our witnesses very much for a very robust discussion about Bill C-47. We've just begun our look at Bill C-47 from the obligation of the House and the order. I want to remind our friends from the department that we may call you back if it's necessary as we review Bill C-47.

Colleagues, thank you for the two hours. It was very well done. We'll see you on Thursday for probably the same area of discussion. Have a good day.

The meeting is adjourned.

[Richard Arbeiter]

Okay.

We approved of it at the time.

There is then a process whereby states have to choose to sign the treaty, and then once they've signed the treaty, deposit their instruments of ratification, which is a fancy way of saying that we are demonstrating that we meet all of the obligations that we signed on to. Once a certain threshold of states signs and deposits their ratification, the treaty is considered to be in force. Others, like Canada, which chose not to sign the treaty at the time, then have to accede to the treaty.

Bill C-47 reflects the government's decision to accede to the treaty afterwards.

[Wendy Gilmour]

As I mentioned earlier to your colleague, I cannot speak about any specific Canadian company or specific case. I can speak about the elements of Bill C-47 and the establishment of a brokering regime, which would create the requirement for any Canadian citizen, permanent resident, or organization registered in Canada to apply for a permit in order to arrange or negotiate the movement of a controlled item from a foreign country to another foreign country. The regulations will provide further precision on how we define certain types of transactions if there are certain things that we would wish to exclude.

For example, we very likely will apply general brokering permits to certain types of transactions. The principle being that we can apply the very valuable resources that are afforded to us by government for the administration of the program, we want to focus on the highest-risk transactions and not use the resources to assess transactions that are likely to be of low risk. What will be critical in assessing any particular case is to look at the person or covered organization that is the directing mind: those responsible for the transaction.

Organizations and companies that are not registered in Canada will not be covered by Canadian law. That would be an extraterritorial reach that would be inappropriate, or at least not consistent with how Canadian law is usually applied.

[Jati Sidhu, Liberal, Mission—Matsqui—Fraser Canyon, BC]

Thank you, Mr. Chair.

I'm all about Bill C-47 today. Could you speak a little more about the impact on the Canadian economy of trading with other nations, good or bad? I need to know a little more.

[Wendy Gilmour]

In terms of the industries or sectors that are affected, in Canada all Canadian industries that are in the business of exporting controlled goods are already subject to the Export and Import Permits Act and have been since 1947 or before. They are very familiar with our program. They may want us to issue decisions more quickly, which we try to do, but we have an active and ongoing productive dialogue with Canadian industry over the implementation of export permits.

Brokering permits are something new. Brokering regulations, as outlined in Bill C-47, will cover not just those in Canada but will cover Canadian citizens, permanent residents, and organizations registered in Canada that are resident and operating from overseas. In the course of our consultations on the development of the bill and our engagement on brokering activities, we have tried to engage as many Canadians as possible. This includes going out to all of our posts abroad to engage with their resident Canadian communities to determine who may be covered by the brokering regulations.

We don't have a perfect idea at this point, so part of the intent through the establishment of the regulations is to consult with the affected communities further to make sure that their perspective is taken into account in establishing the regulatory regime to make it as predictable and as transparent as possible.

With respect to the costs of implementing the brokering system, the government in its decision to strengthen our export control regime and to accede to the Arms Trade Treaty identified $13 million over five years in budget 2017, on which Parliament has voted, to Global Affairs Canada.

We will make best use of those resources by implementing the brokering regulations in a way that has minimum impact on legitimate business, but obviously creates a regime in which businesses that are not legitimate could be identified and brought into compliance with the act, as Parliament would adopt it.

Thank you very much.

[Robert Brookfield]

Yes, it's entirely true that the regulations are more flexible because they are established at the executive level. They are, nevertheless, just as binding as a statute. I appreciate, then, that we are talking about a matter of principle as well as flexibility.

I would point out that the name of Bill C-47 refers to “amendments permitting the accession to the Arms Trade Treaty and other amendments”. The regulatory authority, then, will be interpreted from that standpoint. I can't speak to the full extent of that interpretation, but the intent is certainly to have the regulations implement the obligations, indeed, follow through on the obligations. For example, when it comes to brokering—

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Very quickly, is there nothing in Bill C-47 that would take away the ability of the minister to authorize the sale of further military equipment to a country like Azerbaijan?

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Thank you, Mr. Chair.

I'd like to clarify something. My understanding of the way the arms control system is structured—and would still be if C-47 were to pass—is that ultimately it's up to ministerial and cabinet discretion in terms of whether a particular export is allowed to go to a particular country or whether particular countries are listed. Am I correct in that understanding?

[Robert Brookfield]

I'd like to highlight again that Bill C-47 amends the summary conviction maximum to be $250,000. The act will continue to allow for an unlimited amount of funds for indictable convictions. It will be up to the prosecutor and the judge to decide whether they bring it as a summary conviction or indictable offence, and then discretion will be given to the judge to decide the appropriate circumstances and what the fine or other penalties would be.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

Thank you, Chair.

It almost appears that the water is being muddied a little bit, and I'd like clarity. Can you clarify whether Bill C-47 will affect domestic gun ownership in any form?

[Anita Vandenbeld, Liberal, Ottawa West—Nepean, ON]

Right now my understanding from Ms. Gilmour is that we have certain policies around our export controls. This particular bill, though, Bill C-47, is going to make it explicit. We will have to put that in regulation and it will be legally binding.

Given that this requirement to look at acts of gender-based violence for the first time is in the treaty, does that mean that by explicitly requiring that in regulation, we will be able to strengthen our current policies in terms of making sure that any arms we're exporting aren't going to be used against women and children?