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.

[Wendy Gilmour]

I don't, off the top of my head, know what the inflationary change between $25,000 in 1991 and today would be, but it would be considerable.

What is important with respect to the provision in Bill C-47, and the change to the penalty for a summary conviction, is that the intent is to ensure that Canadians and those who are subject to the provisions of the Export and Import Permits Act are understanding the fact that its offences are serious, and that an offence under the act is serious.

Indeed, there are changes to the Criminal Code, which perhaps Robert can speak to, in Bill C-47 that embeds the offences under the Export and Import Permits Act.

From a perspective as the administrator of the Export and Import Permits Act and the program, I'm being told there are other examples of summary conviction penalties in other statutes, which we also took a look at. The United Nations Act has, as its summary conviction penalty, up to $100,000. The Canadian Environmental Protection Act has up to $300,000, so this ensures consistency.

My point would be that it is very important for Canadian exporters, who are subject to the Export and Import Permits Act—and soon, should Parliament adopt Bill C-47, Canadian brokers—to understand the seriousness of complying with the act, and their responsibility to apply for an export permit or a brokering permit, and then to abide by the terms of those permits.

It simply modernizes this provision in the existing EIPA, and we believe sends an important signal to encourage compliance with the act and all of its provisions.

[Richard Arbeiter]

I'll just again reiterate what was articulated in my opening statement with regard to article 12. Article 12 requires a state party to have a national domestic record-keeping system in place. There is no requirement to share these records with the ATT secretariat or with other states parties. General record-keeping for compliance, as you've noted and Ms. Gilmour noted, has been on the books since 1947. These requirements are not new, and they will not change with Bill C-47.

[Wendy Gilmour]

The ATT does not create any reporting requirement that Canada currently does not do. Richard spoke to that, and maybe he can clarify in a moment. As I outlined during my remarks, the data that is collected and kept by the export permit programs is specific to the administration of the Export and Import Permits Act and allows us to ensure compliance with the act and to provide information in the event of a determination or suspicion of non-compliance—a violation of the act. There is nothing in Bill C-47 that would change our current practice—six years' retention of data—which is consistent across other Canadian statutes as well.

[Wendy Gilmour]

When I speak French, I start in French, but, then, I always switch to English to refer to specific terms. My apologies.

At the moment, Canada produces a number of different reports based on our export permit data. We report to Parliament on military exports under group two of the export control list. This is the report that will become a statutory requirement under Bill C-47 if adopted by Parliament, with a statutory tabling date to make it more transparent and predictable for those who are interested in these statistics.

As Richard has said, we also report to the UN Register of Conventional Arms on specific exports of categories of items as defined by the UN on an annual basis. Reports to Parliament and UNCAR do not include our exports to the United States because as a result of our expedited permitting process we don't capture the data in the same way for exports to the United States. Instead, our exports to the United States are reported under the harmonized tariff and reported by Customs Canada to Statistics, so the two reports don't line up.

Again, the practice by many other states parties who have now had the Arms Trade Treaty in effect since 2014 has also been—where they have these types of expedited permitting—to not include those types of statistics in their reporting.

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

How will Bill C-47 impact the reduction of terrorism around the world in the context of import and export? How do we monitor it? You did touch on that issue a little. Can you explore a little more whether it's going to help reduce terrorism around the world?

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

Okay. I have a question on a different issue, land mines.

As Canada is already a signatory to treaties such as the Ottawa treaty on land mines, how does Canada ratify the ATT through Bill C-47 within those existing frameworks?

[Wendy Gilmour]

From an export and import permits program perspective, there is no change for Canadian firearms owners to the existing process to export or import their firearms in and out of Canada. The record-keeping that is attached to the Export and Import Permits Act is specific to the administrative practice for us to indeed verify compliance with the Export and Import Permits Act. It is also used by Canada Border Services Agency under the Customs Act, so it is the normal record-keeping required for administrative practice for export and import permits, and there are no changes in Bill C-47 to anything that is currently the case right now.

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

Thank you, Mr. Chair.

Thank you for appearing in front of the committee this morning.

Coming from a rural riding, when we talk about guns, my people start raising their backs. It's “What now?” The opposition parties always have concern.

This is strictly with Bill C-47. What kind of effect is it going to have on the domestic gun owners? Is there any implication with Bill C-47 to private gun owners at all?

[Erin O'Toole, Conservative, Durham, ON]

Would it be fair for me to say—because I see the aspirational elements that you've outlined to this—that Canada has been a leader in this area and that the fundamental change brought with Bill C-47 amounts to an extension of the definition of broker?

Is that really the only substantive change? I know there is our being a leader in a group of nations, those sorts of things. Is that the substantive legal change we're talking about?

[Wendy Gilmour]

There are no specific items listed in Bill C-47. The Arms Trade Treaty lists specific whole system conventional arms. Again, the purpose of the treaty is to bring other countries up to the standard that most of the western countries already have as members of the existing multilateral arms control regime.

[Erin O'Toole, Conservative, Durham, ON]

Is it fair to say that we already regulate and control trade far beyond the items listed in Bill C-47?

[Erin O'Toole, Conservative, Durham, ON]

In fact, the blunt instrument goes much further than Bill C-47 would to restrict anything going to specific state actors.

[Wendy Gilmour]

I would also like to introduce Robert Brookfield, who is here with us. He is the director general of the trade law bureau. He, with his team, has been integral in helping us to prepare Bill C-47 and to provide advice on Canada's Export and Import Permits Act.

Richard has provided a helpful overview of the Arms Trade Treaty and its positive impact on the development of international norms around effective export controls. I will speak to Bill C-47 and how it will support Canada's accession to the Arms Trade Treaty and strengthen Canada's existing export control program for military, dual-use, and strategic goods and technology.

From a trade controls perspective, Canada's accession to the ATT will cement our leadership role in the global effort to universalize best practices for effective export controls. Canada has played a consistent role in the establishment of international norms to support the effective control of conventional weapons and related goods and technology since the establishment of the Wassenaar arrangement in the aftermath of the Cold War, as well as the subsequent establishment of other key multilateral export control and non-proliferation regimes.

Joining the Arms Trade Treaty community will provide Canada with new opportunities to continue this important work alongside our closest allies and partners, including the U.S. as a signatory to the treaty, and all our other NATO partners who are already states parties.

Turning to specific provisions of Bill C-47, I'd like to highlight two key provisions that are key to our accession to the Arms Trade Treaty.

At present, Canada meets 26 of 28 specific commitments contained in the treaty. The two elements of Bill C-47 address these last two commitments that we do not meet: first, to formalize and make explicit Canada's export permit considerations to ensure that they are consistent with article 7 of the treaty; and second, to regulate arms brokering in accordance with article 10 of the treaty.

Let me first speak to the ATT assessment considerations.

Article 7 of the ATT requires each state party to consider a number of specific risks with respect to the items proposed for export, before authorizing the export to take place. Canada's current export permit considerations are consistent with all these elements as outlined in the ATT, but are established as a matter of policy, not law. In drafting Bill C-47, existing Canadian law and practices were examined, including with respect to other Canadian regulatory programs, as well as the approach taken by our allies who are already members of the ATT. The critical element was the need to create a legally binding obligation for the minister to take the ATT assessment considerations into account in deciding whether to issue an export permit.

The conclusion was that this obligation would be most effectively implemented through regulation. This is consistent with the practices of our common law allies regarding ATT implementation. It is also consistent with Canadian domestic practice. Most notably, Canadian economic sanctions are implemented via regulation established under specific statutes, a design that allows new sanctions to be put in place more efficiently than would be possible through legislative change.

That is a key point, as the advantage of regulation is the ability to accommodate evolving threats and new international norms more quickly than would be possible through changes to legislation. This was a lesson learned in the years following 9/11, when the nexus of terrorism and organized crime were clearly identified as tangible threats to both Canadian and international security. Parliament incorporated these elements into Canada's Export and Import Permits Act, but it took four years to do so.

As Richard pointed out, one of the benefits of the Arms Trade Treaty is that it has advanced international norms regarding our understanding of the link between conflict and serious acts of violence towards women and girls. We should anticipate that our understanding of conflict and instability will continue to evolve, as will the use of technology with respect to conventional weapons and weapons of mass destruction. Establishing export permit considerations in regulation will ensure that Canada's assessment of the risks related to military exports will also continue to evolve.

The new regulation will be consistent with the specific risks identified in article 7 of the treaty. It's critical to Canada's full implementation of the treaty, which in turn is key to Canada's leadership in the effective implementation of a multilateral, rules-based system. Canada's practice with respect to international treaty law is to fully implement all obligations before we accede, and we fully expect and encourage other states to follow this example.

Should Parliament pass this bill, the Minister of Foreign Affairs will move expeditiously with the regulatory process, beginning with prepublication of all new regulations associated with Bill C-47, including the export permit assessment considerations.

Canadians will have an opportunity to provide input into the regulation, as will parliamentarians. Parliament will also have an opportunity to provide oversight via the Standing Joint Committee for the Scrutiny of Regulations.

Let me turn quickly to brokering controls, which is the second element that we are required to change in order to become compliant with the treaty's obligations.

Article 10 of the ATT requires each state to “regulate brokering taking place under its jurisdiction”. Bill C-47 will establish new Canadian brokering regulations, first by defining arms “brokering” as arranging or negotiating the movement of listed goods or technology from one foreign country to another foreign country.

The bill will also establish that Canada's brokering regulations will cover any person in Canada, as well as Canadian citizens, permanent residents, and Canadian-registered organizations abroad. These provisions are consistent with the practices of Canada's allies and close partners and will support the full implementation of the ATT's brokering controls.

A number of provisions in the bill are also included simply to add the word “organizations” to the existing provisions in the Export and Import Permits Act. This is because arms brokering activities typically may be carried out by a wider variety of entities than were covered by the existing definition of “person” in the EIPA. Brokering transactions will be subject to the same considerations as our export applications.

Brokering regulations will strengthen Canada's export control system by controlling the movement of listed items outside of Canada, thereby reducing the risk associated with illicit trafficking of arms and military equipment by unscrupulous actors who might seek to operate in jurisdictions with limited domestic oversight. Establishing arms brokering controls places Canada in good company with like-minded nations.

Additional provisions in Bill C-47 will also support strengthening Canada's export controls: notably, modernizing the penalty for a summary conviction of an offence under the EIPA by increasing the fine of $25,000, which was established in 1991, to $250,000.

Additionally, the bill will create a statutory requirement and a statutory tabling date for the annual report to Parliament on military exports. Canada led the international community in 1991 in establishing public reporting of military exports, and we will continue to set an effective international example by formalizing the delivery of this report through Bill C-47.

Before I conclude, I would like to take a moment to address an issue that was raised during the debate in the House of Commons, specifically, the permit-free transfer of most controlled goods to the United States.

Canada's defence relationship with the United States is our most important bilateral relationship. Both of our countries have benefited from a shared North American defence industrial base for decades. This was formally established through the defence production sharing agreement in 1957.

This DPSA and other bilateral agreements continue to serve Canadian interests, supporting a robust defence industry of over 63,000 jobs and contributing upwards of $6.7 billion annually to GDP. The defence manufacturing base supports wages that are approximately 60% above that of the rest of the manufacturing sector, and innovation-relevant occupations account for over 30% of the defence industry's direct employment. These valuable jobs are spread all across Canada.

This industrial activity is directly supported by the ease of access to the U.S. market by Canadian industry. Increasingly, and just as in other sectors, cross-border supply chains require the efficient movement of parts and components in both directions. This is particularly important for small and medium-sized enterprises, which make up the majority of Canadian defence and security firms. Canada is currently the only country that is afforded a licence exemption under the U.S. international traffic in arms regulations, and Canadian regulations reciprocally allow for permit-free movement of most controlled items to the United States.

Accession to the Arms Trade Treaty does not require Canada to amend this practice. This reciprocal permit, or licence-free movement, is entirely consistent with the provisions of the treaty, which does not specify how states parties should organize their export control systems, nor does it rule out expedited processes to assess and authorize exports to certain countries.

Most of our allies and partners have similar systems in place to support their defence relationships while also meeting their ATT obligations. As one example, the Benelux countries—Belgium, the Netherlands, and Luxembourg—all of whom are ATT states parties, have permit-free movement of controlled items between them.

The Arms Trade Treaty is designed to ensure that states parties are able to establish and maintain tailored export control systems that meet their individual defence needs, while also supporting international efforts to combat the illicit trade in conventional arms.

Again, thank you very much for the opportunity to appear today. My colleagues and I would be pleased to answer your questions.

[Wendy Gilmour, Director General, Trade and Export Controls Bureau, Department of Foreign Affairs, Trade and Development]

Thank you very much, Richard.

Thank you, Chair and committee members, for the opportunity to be here today to speak to you about Bill C-47.

My name is Wendy Gilmour. I'm director general of the trade and export controls bureau at the Department of Foreign Affairs...at Global Affairs Canada.

[Richard Arbeiter, Director General, International Security Policy Bureau, Department of Foreign Affairs, Trade and Development]

Good morning.

My name is Richard Arbeiter. I am the director general of the international security policy bureau at Global Affairs Canada.

It is my pleasure to speak to you today. My colleague, Wendy Gilmour, will speak shortly to the details of Bill C-47, which would make amendments permitting Canada's accession to the Arms Trade Treaty, or ATT.

I will address the Arms Trade Treaty, itself—its origins, objectives, advantages, and contributions to an effective rules-based international system.

The proliferation of conventional weapons through illicit or unregulated arms trade represents a significant challenge to international peace and security. Vulnerable populations, including women and girls, are particularly at risk.

Either through a lack of regulation or illicit trade, conventional weapons proliferation can have the following effects: intensify and prolong conflict, leading to regional instability; contribute to violations of international humanitarian law and human rights abuses; hinder social and economic development; and benefit criminals and terrorists.

Canada has long recognized this threat. Indeed, Canada has been at the forefront of promoting export controls as a means to reduce the risks posed by illicit, unregulated trade.

Others too, including our closest allies and like-minded partners, alongside members of civil society, shared Canada's concerns about this challenge.

They determined that there was a need for a clear, internationally agreed-upon set of rules to regulate legitimate arms and thereby reduce the potential for the destabilizing proliferation of conventional weapons. The ATT has its origins in this understanding.

Intensive international negotiations, under the auspices of the United Nations, took place in 2012-13, leading to the development of the Arms Trade Treaty.

The ATT was successfully adopted by the UN General assembly in 2013 by a vote of 153 to three. Only Syria, North Korea, and Iran voted against it. A total of 130 states signed the ATT, and, at this point, 92 have deposited their instruments of ratification or acceded and are now states parties.

For exporting states, including Canada and our allies, one of the primary objectives for the ATT was the desire to see stronger export control standards applied globally, as a measure to combat the many dangers that come from unregulated or illicit conventional arms trade. As well, promoting systematic, considered, and effective decision-making on arms exports ensures that legitimate arms trade can continue in a transparent and responsible manner. Setting clear standards also creates a level playing field for legitimate members of the defence industry.

States affected by armed conflict and instability valued the opportunities afforded by the ATT to improve their national security and the safety of their communities by reducing illicit arms transfers into their territory.

This was also an opportunity to ensure strong humanitarian outcomes through the ATT. Indeed, a primary focus of the ATT is the need to protect innocent victims in conflict situations.

I would now like to turn to the advantages of the Arms Trade Treaty. Fundamentally, the ATT aims to reduce the widespread availability and misuse of weapons due to illicit, unregulated, or poorly regulated arms trade. To do so, the ATT requires states to have, or to put in place, an effective arms control system to regulate legitimate arms trade.

According to article 1 of the treaty, it sets “the highest possible common international standards” for regulating international arms trade. These standards include provisions in article 6 and article 7 of the ATT, which obligate states to undertake an assessment of how the potential exports will be used.

Article 6 sets out prohibitions where arms must never be exported, for example in cases where they could be used to commit or facilitate genocide or would violate UN arms embargos.

Article 7 lays out assessment factors that a state must take into account when considering individual exports. Article 7 also requires states to not export arms if there is an overriding risk of serious violations of, for example, international human rights law or international humanitarian law. For the first time in an international treaty, this includes an assessment of the potential impact on women and children, including gender-based violence.

Overall, Canada already meets most of the obligations of the ATT, although we must make certain important changes to fully comply with two of its provisions.

As Minister Freeland noted in her speech to Parliament on June 6 that outlined Canada's foreign policy objectives, “Canada has been deeply engaged in, and greatly enjoyed the benefits of, a global order based on rules.” The ATT is part of this effective rules-based international system. Canada's accession provides us an invaluable opportunity to further engage in and strengthen that system. By undertaking legislative changes to join the ATT, Canada will be taking a stronger role in joining our allies to ensure that states have strong and rigorous export controls.

We are lending our voice, alongside the vast majority of our allies, to international efforts to better control the flow of conventional weapons. Our accession to the ATT provides Canada with an additional forum to work with international partners to further improve the practice of export controls globally.

While our existing standards do meet the majority of ATT obligations, for Canada and our allies, accession to the ATT is about reinforcing and promoting our commitment to responsible arms trade.

For many other states, meeting the common standard of the ATT will represent a significant step toward better controlling the conventional weapons that flow through their territories. It is working. A number of states are now working actively to improve national legislation and export control regulation to allow them to join the ATT and meet its obligations. In this way the ATT helps to prevent the export of arms into conflict zones from states that have weak or no export control regimes. It can also make it more difficult for weapons to be acquired through diversion or other illicit means.

Canada is concretely supporting this objective, including through a $1-million contribution to the UN Trust Facility Supporting Cooperation on Arms Regulation. This flexible mechanism has an impressive track record of supporting states pursuing ATT accession. Canada's contribution will support implementation of the treaty in regions affected by illicit and irresponsible trade in conventional arms. As an example, in 2006 this UN facility contributed to efforts by Ghana, Namibia, and Zambia to prepare legislation and regulations on brokering controls. This facility has also been active in funding projects across the Pacific island states to promote the inclusion of ATT standards in regional frameworks and national systems.

While we are confident the ATT will make a contribution to improving export controls globally, questions have been raised about its effectiveness, given that a number of major exporting states have chosen to remain outside it. First, while this is true, a significant number of other major exporters of arms, including all members of the European Union, are state parties. Second, the effectiveness of an international treaty cannot only be measured by how many member states it has but by the current and downstream impact it has on the behaviour of those both inside and outside the treaty.

Treaties like the ATT establish international norms that can influence even those who choose to remain outside. The Ottawa convention, or anti-personnel landmines convention, is a prime example of this. Twenty years on, it has set a clear standard against the use of these weapons. This norm has affected the behaviour not only of state parties but of those outside the treaty, many of whom have significantly reduced their use of landmines.

It is fair to say that the full effects of the ATT on international norms will not be experienced overnight. This is typical of international conventions. Over time, as more states undertake the changes necessary to join the treaty, the ATT will continue to contribute to the establishment of a universal standard, setting the bar for what represents responsible trade in arms.

Having outlined the ATT's advantages and contributions, I would also like to clearly address what the treaty does not cover.

The ATT does not place restrictions on the types or quantities of arms that may be bought, sold, or possessed by states. Instead it seeks a global standard on how the impacts of those arms should factor into where they are exported.

The ATT also does not impact, and I would like to underline this, domestic gun control laws or other firearm ownership policies. The sovereign right of states to regulate and control conventional arms in their territory is clearly recognized in the treaty. As the ATT was being negotiated in 2012, additional preambular language proposed by Canada was agreed that recognizes “the legitimate trade and lawful ownership, and use of certain conventional arms for recreational, cultural, historical, and sporting activities”.

The ATT also does not impose new reporting requirements on Canada. It does not require that Canada create a registry of individuals who legally own conventional arms. The reporting obligations in the ATT in article 13 expressly state that the data that is reported to the Arms Trade Treaty secretariat can be identical to what was listed in annual reports to the United Nations Register of Conventional Arms for the specific items covered by the Arms Trade Treaty. Canada has been filing these reports for nearly 25 years, since 1993. The treaty entails no new reporting requirements for Canada.

Article 12, which requires that each state party maintain national records of exports, is also not a new obligation for Canada. Canadian exporters are currently required to keep relevant records to demonstrate that they are in compliance with the Export and Import Permits Act. They have been required to do so for decades. These obligations for exporters will not change.

These records, which are specific to the administration of export and import permits, are only retained in Canada. There is no requirement in the ATT to share national records with other members or with the ATT secretariat. This ensures that personal and business confidential information will remain protected. The Arms Trade Treaty is the first international treaty that seeks to address the problems caused by the illicit trade in conventional arms. By acceding to it, Canada will be joining many of our allies, and we will be serving as a role model for the rest of the world.

With this broad introduction to the ATT and its origins, objectives, advantages, and contributions to an effective, rules-based international order, I will now turn the floor over to my colleague Ms. Wendy Gilmour. She will speak to the specific changes proposed in Bill C-47 and how they will be implemented.

Thank you.