Evidence of meeting #23 for Canada-China Relations in the 43rd Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was need.
A video is available from Parliament.
Liberal
Jean Yip Liberal Scarborough—Agincourt, ON
Thank you.
I will now turn to Ms. Brady.
You mentioned in an earlier response that the New Zealand government needs to do more to support those in the Chinese community who are victims of the CCP interference. Has there been an increase in anti-Asian racism?
Professor, University of Canterbury, As an Individual
Thank you for your question. Actually, we haven't seen anything like the awful incidents that have been occurring in the United States, for example. We have a history of racism against our New Zealand Chinese population, a very similar one to Australia's. There was an idea of yellow peril and excluding particularly women from migration to New Zealand in the gold rush days. More broadly, we are a post-colonial society, and so we have a history of racism here as well. So far, we have not had any extreme cases.
I want to go back to the question of Mr. Fragiskatos about how we can deal with the CCP political interference activities in our countries, which for New Zealand is the top priority of our SIS. Their top job is dealing with foreign interference, which for New Zealand means China, and yet protect our New Zealand Chinese community and signal that we see them and understand that they are the victims of the CCP's efforts to control their communities and control their media.
My government, as I said, for the last four years has been trying to work out, first of all, whether we can afford to deal with the problem, and then talk about what we're going to do. I have been repeatedly saying to my government that first of all, when we talk about this issue, we say, “CCP”, “CCP government”, “the Peoples Republic of China”. Don't just say, “They're Chinese”, because it's dehumanizing. We have to be careful with our language.
Liberal
The Chair Liberal Geoff Regan
Thank you, Ms. Brady.
Thank you, Ms. Yip.
Mr. Bergeron, we now go to you for two and a half minutes.
Bloc
Stéphane Bergeron Bloc Montarville, QC
Mr. Juneau-Katsuya, what you've said more or less confirms what we've been observing for a few weeks now.
No matter which party is in power, when it comes to the federal government, the right hand doesn't really seem to know what the left hand is doing, and that can certainly be an advantage to countries like China.
We recently heard about a case where some sort of agency backed by a Chinese fund was hired by the Canadian government to manage the visa application process in China. The agency subcontracts for a Chinese company. It's all interconnected. The Chinese are involved from beginning to end.
When we asked Canadian intelligence authorities who had looked into the company, there was a long pause. Clearly, no one in the Canadian government had done the necessary checks.
Was that sort of thing happening during your time in the federal bureaucracy?
Expert in National Security and Intelligence, As an Individual
Unfortunately, yes, it was.
The level of understanding of the China file, specifically, is quite poor across the Canadian government, even within CSIS at times. Unfortunately, the threat is not properly recognized or understood. The Chinese operate and think differently. Their operational capability is much different; their methods are over our heads.
We must take a more rigorous approach, without necessarily being exclusionary or racist. We certainly need to be a lot more rigorous if we want to understand the ins and outs of how they operate.
Understanding the game of power and influence is crucial. The Chinese use influence as leverage, whether it's investing money or cozying up to elected officials. The idea is to alter the course of events in their favour.
Whenever I brought up the issue at CSIS or within the government, all too often, I was told that we had to give China an opportunity because of our capitalist system. The Chinese, however, are the ones who invented capitalism. They are much smarter than we are at exploiting capitalism. They know exactly which levers to pull to exert the influence they want.
There is a lack of awareness and a failure to listen on the government's part. Innovation, Science and Economic Development Canada, for instance, can, at a certain point in the process, consult intelligence services on issues of national security. If the intelligence service flags a risk, the department can refuse to let a foreign company set up shop in Canada without having to disclose certain information. In this case, that would mean a Chinese company. However, that mechanism is hardly used, and the concerns of intelligence services tend to fall on deaf ears.
Liberal
NDP
Jack Harris NDP St. John's East, NL
I think you said my name, Chair, but your voice is not coming through again for some reason. Thank you, though.
First of all, Professor Brady, I have a simplistic question. What would you say to someone who asked whether it would be effective to tell people who may not play by the rules that they should register as a foreign agent? Would such legislation be effective in the situation you're talking about? Could you explain how that might work?
Professor, University of Canterbury, As an Individual
Thanks for that question.
You have to be very clear-eyed about the CCP. You are not going to catch every aspect of the CCP's or China's active measures. It's going to come at you like a wave, endlessly.
I think we need to learn from the experience of Lithuania, Estonia, Finland and Latvia, which have been dealing with Russian political interference for a long time. What they do to make their society resilient, apart from having excellent laws on political interference—and I recommend that you look at Lithuania's law on this—is that they educate their population. In Finland, for example, they have regular courses on disinformation for the wider public. They inform them. They don't necessarily say who is the source of the disinformation.
We have to be realistic in realizing that we're not going to catch every aspect of it, but we have the legislation and we have a good public campaign in place that will help to educate our population and help to keep ourselves resilient and strong. We can expect that we're going to be getting this political interference from China under the leadership of Xi Jinping indefinitely, and that's why we have to be clear-eyed about the challenge.
NDP
Jack Harris NDP St. John's East, NL
I'm asking you how it's effective, though. What would it provide, for example, if you experience some sort of interference that appeared to be on behalf of the Chinese government? Would it in itself give rise to a charge without your having to prove anything other than the fact that this person appeared to be an agent of the Chinese government and was not registered? Is that one way it would be effective? You're talking about education more than anything else.
Professor, University of Canterbury, As an Individual
What we see with the American experience is that Chinese government-associated companies or actors and state media have to register as what they are. It helps to curb behaviour. It's only one tool to deal with this. We have to have a range of tools.
Liberal
The Chair Liberal Geoff Regan
Thank you, Mr. Harris.
Thank you, Ms. Brady.
Colleagues, noting the time and that we have another panel to come, I propose that we thank our two witnesses.
Thank you so much for appearing today. It's much appreciated.
We will suspend for five minutes for a health break and for the new witnesses to have sound checks.
Conservative
Garnett Genuis Conservative Sherwood Park—Fort Saskatchewan, AB
Mr. Chair, I have a a quick point of order.
I think one of the witnesses had a longer written opening statement. Do the witnesses know that if they have longer versions of their comments they can submit those in writing? We would appreciate seeing them.
Liberal
The Chair Liberal Geoff Regan
That is a very helpful point of order. Thank you, Mr. Genuis. I'm sure the witnesses heard that.
We will now take a five-minute break.
Liberal
The Chair Liberal Geoff Regan
Joining us now is our third panel. We have Steve Waterhouse, a retired captain and former information systems security officer at the Department of National Defence, and a cybersecurity specialist.
I would also like to welcome Christian Leuprecht, professor, Department of Political Science and Economics, Royal Military College of Canada. Thank you both for being here tonight.
Mr. Waterhouse, we will start with your opening statement. You have five minutes. Go ahead.
Steve Waterhouse Captain (ret'd), Former Information Systems Security Officer, Department of National Defence and Cybersecurity Specialist, As an Individual
Thank you, Mr. Chair.
Good evening, ladies and gentlemen.
It is a pleasure to be here to share my views on certain concerns I—and my fellow Canadians—have regarding the security of personal information and modern online business practices vis-à-vis the presence of Chinese companies in our society.
I can summarize the situation this way. Members of the public, businesses of every size and governments at every level in the country are, without exception, equal in the face of cyber-risks and cyber-attacks.
Over the past 20 years, we have suffered tremendous economic setbacks because of cyber operations targeting businesses and governments.
During that time, our researchers and developers have come up with cutting-edge technology breakthroughs that make—or, rather, made—us the envy of the world. China's intelligence service, the Ministry of State Security, or MSS, and Chinese hacker groups who support, and are condoned by, the Chinese Communist Party of the People's Republic of China have had a gay old time doing harm to our institutions and businesses.
The Canadian Centre for Cyber Security, as evidenced in its “Canadian National Cyber Threat Assessment 2020” report, and the Office of the Director of National Intelligence in the United States are unanimous: China's pursuit of strategic objectives, such as its Made in China 2025 plan and events marking the centennial of Chinese communism in 2049, pose a major cyber-risk.
During the current public health emergency, Canada's health researchers have noted that internal and external threat actors are hindering the development and deployment of measures to prevent and mitigate the risks of COVID-19.
In the past, threats targeted economic development, government institutions and our way of life—basically, critical infrastructure.
During the past 20 years, China has worked hard to catch up to the west in the areas of innovation and development.
Captain (ret'd), Former Information Systems Security Officer, Department of National Defence and Cybersecurity Specialist, As an Individual
Yes, Mr. Chair?
Liberal
The Chair Liberal Geoff Regan
The interpreters are having trouble because you're speaking too fast. Please slow down a bit, if you wouldn't mind.
Captain (ret'd), Former Information Systems Security Officer, Department of National Defence and Cybersecurity Specialist, As an Individual
All right, Mr. Chair.
The most striking example for Canadians is no doubt the theft of manufacturing patents, strategic plans and other intellectual property from Nortel between 2000 and 2009.
The strategic information was passed from the MSS to engineers at Huawei, as Nortel executives in Canada ignored RCMP and CSIS warnings.
Unit 61398 of the People's Liberation Army was responsible for what happened at Nortel and went on to do the same elsewhere in the world, including in Calgary; in 2012, the unit breached Telvent's networks and stole the industrial control system manufacturer's source code. The company's software is used to control electricity grids, water systems, subway and other public transit systems, and most of North America's oil and gas pipelines. Now, more than ever, our critical infrastructure is at risk.
I should also mention the spectacular data breach at the National Research Council's Ottawa and London offices in 2014. The agency's IT network was hacked and basic research on quantum cybersecurity was stolen.
The National Counterintelligence and Security Center in the United States is now warning against the unwarranted and abusive collection of DNA data by Chinese pharmaceutical companies.
What can we do?
Unlike some of its friends and allies, Canada has yet to make the strategic decision to rule out Huawei as a business partner and competitor in building the country's 5G network. The current government has put off saying whether it sides with its allies or Huawei.
On Friday, April 16, Quebec government officials expressed their desire to do business with Chinese companies like Huawei, without conducting a threat and risk assessment.
A statement like that clearly shows just how unaware our leaders are of the cybersecurity risks, as economic considerations seem to be all that matter. A major telecommunications company in the Netherlands learned the hard way that it wasn't as informed as it should have been on the subject. In fact, thanks to the company's networks, China was able to eavesdrop on the Dutch prime minister's conversations beginning in 2010.
In its dispute with India, China also recently demonstrated its ability to hack into an electricity grid in the Himalayan region.
Do Canada and its neighbour to the south have the capacity to detect and stop a similar breach, before Chinese hackers gain control of electricity grids to launch a cyber-attack along the lines of the 2003 blackout?
We are in a cyberwar. This is information warfare.
We need to improve what is not working and support initiatives that will help the various stakeholders contribute to a better quality of life, in both the physical and digital realms. We can then regain our position as the global economic leaders we inherently are.
I would be happy to answer your questions in both official languages.
Liberal
The Chair Liberal Geoff Regan
Thank you, Mr. Waterhouse.
We'll now turn to Mr. Leuprecht for his opening remarks. Please proceed. You have five minutes.
Dr. Christian Leuprecht Professor, Department of Political Science, Royal Military College of Canada, As an Individual
Thank you, Mr. Chair.
Thank you for inviting me to appear before the committee. It will be my pleasure to answer questions in both official languages, but I will make my presentation in English.
I think China poses the greatest threats to Canadian western foreign policy in decades. You can see its military strength and how it compensates for some of its weaknesses there, with its economic weight and its global ambitions. I think the basic line here is that Canadians need to start seeing the world for what it is rather than what we would like it to be. It is a highly competitive, highly contested world of geopolitical conflict, of permanent conflict below the threshold of conventional war or nuclear attack. What we see here is just part of this broad spectrum wherein we're being pressed hard on many fronts. This has been the case since 2008.
I think the relationship with China is best described as “competitive interdependence”. Alaska is a good example. We had an hour of grandstanding on both sides, and then we had eight hours of strategic dialogue on key issues of common interest. We need to understand that while there are many issues in terms of competitive interdependence in which we are fundamentally interlinked—economically, for instance—there are also many issues and interests on which we have fundamentally irreconcilable differences. I think the takeaway is that Canada can't impose its will on China, but Canada also must not accept a subordinate role in that relationship. We have to get ready for long-term, systemic competition.
The competition is fundamentally about how we unlock the potential of our people and how we achieve our national ambitions. This is ultimately more about competition than about confrontation per se. Sometimes you just need to co-operate with your competitors. This is not a monochromatic relationship, and this is why, I think, we're here tonight. To the committee's credit, you're wrestling with this extremely challenging and complex relationship in which we also have inescapable interdependence on everything from knowledge economies to issues such as Iran and North Korea.
What can Canada do? We need to realize what we can and can’t do. We won’t decide China’s regime type, and we can’t determine the size of China’s economy. We can, for instance, realize that the four attributes—which I can't go into for reasons of time—in the formula that has gotten China to this point over the last 40 years no longer apply. What lies ahead is not going to be a linear trajectory of the kind we've seen in the past. China's judgment here is that it is no longer in a stable relationship with the U.S., so it needs to strengthen itself for strategic competition. I think Canada needs to do likewise. It needs to fortify itself with its friends.
One of the things we need to do is to counter the Chinese narrative that the east is rising and the west is in decline. Chinese media are great purveyors of narratives, and authoritarian systems always excel at showcasing their strengths and concealing their weaknesses. We need to learn to distinguish between image and reality and not inadvertently buy in. Let's have some self-confidence. Let's not inflate the threat or weaponize it for political purposes.
Let's also realize that China is not 10 feet tall, that alarmism doesn't help us here, and that China has lots of vulnerabilities. Canada is much better positioned than China to meet the challenges of the 21st century in terms of per capita GDP, energy and food security, demographics, education, social harmony, immigration, allocation of capital, transparent geopolitical systems and so forth.
Instead of focusing on how we can degrade China's strengths, we need to focus on how we can bolster our own. By doing that, it's going to be easier to unite our allies. The key aspect about influence is that we need to make the choices. We need to choose the issues that are important to us and on which we want to make a difference. On those issues, we need to shrink the gap with our allies. We need to boost our domestic dynamism and we need to capitalize on our global network and our alliances and partnerships.
In the previous session, there were many mentions of the Five Eyes. Of course, the Five Eyes is no longer just a signals intelligence community. There are law enforcement components, border components, human intelligence components and financial intelligence components. There's a lot that we are doing and a lot more that can be done. We need to shore up our global prestige, because that's something that China doesn't control. It's something that we control.
We need to ask ourselves questions. What is of national interest to Canada? Pick the example, for instance, of Xinjiang, or pick any other case studies. We need to lead by example. We need to speak out clearly and consistently. We need to make it clear to China that there is not going to be a normal relationship as long as that long shadow is cast over the relationship. We need to be attentive to the goods and items that are being produced with forced labour, as has already been pointed out.
We need to—
Liberal
The Chair Liberal Geoff Regan
Professor Leuprecht, I'm sorry to interrupt, but your five minutes are up.
I'm sure there will be many questions for both of our witnesses. We'll have some more time for you to speak, of course.
We will now begin the first round of questions and answers.
Mr. Paul-Hus, go ahead for six minutes.
Conservative
Pierre Paul-Hus Conservative Charlesbourg—Haute-Saint-Charles, QC
Thank you, Mr. Chair.
Thank you for joining us today, gentlemen. My first question is for each of you. I would ask that you provide a short answer.
I would like to know whether you agree with Christopher Parsons, from Citizen Lab, who said that there was a constant inconsistency in the way Canada has developed its cybersecurity strategy and that the federal cybersecurity policy was somewhat outdated.
Mr. Leuprecht, do you agree?
Professor, Department of Political Science, Royal Military College of Canada, As an Individual
The problem with the current policy is that it approaches cybersecurity as a policy area among others, instead of considering that anything to do with policy in this country is related to cybersecurity. So the policy should be overhauled.