Foreign Affairs Committee on June 14th, 2018

[The Chair (Hon. Robert Nault (Kenora, Lib.)), Liberal, Bob Nault]

I'd like to bring this meeting to order. Pursuant to Standing Order 108(2), the committee is commencing its study of Canada's sovereignty in the Arctic.

Appearing before us this afternoon to get us started on a positive note, from the Department of Foreign Affairs, Trade and Development is Alan Kessel, Assistant Deputy Minister, Legal Affairs and Legal Adviser. We also have Alison LeClaire, Senior Arctic Official—it seems like I've met Alison many times before—and, of course, Shawn Steil, whom who we all know from our travels to Kazakhstan.

You now have a different position, Shawn, so I have to stop saying that, because it puts you in a box of something you're not. He's now the executive director of greater China, which is a bit different.

Welcome to the committee. I understand that we've got it all sorted out with the clerk. Mr. Kessel will start, and we'll work our way across.

Mr. Kessel, the floor is yours.

[Alan H. Kessel, Assistant Deputy Minister, Legal Affairs and Legal Adviser, Department of Foreign Affairs, Trade and Development]

Thank you very much, Chair.

Thank you for inviting me and my colleagues to address the committee today. We are indeed pleased to be here to discuss Canada's Arctic sovereignty.

As activities in Canada's Arctic increases, including in relation to vessel traffic, concerns about pollution, safety, and security are often perceived as threats to Canadian sovereignty. The reality, however, is that increased vessel traffic, if conducted properly and in accordance with Canadian law and policy, actually serves to reinforce Canada's Arctic sovereignty.

Mr. Chair, no one disputes Canada's sovereignty over the lands of the Canadian archipelago, covering in excess of 1.4 million square kilometres and containing more than 36,500 islands. The only exception is the 1.3 square kilometre Hans Island between Ellesmere Island and Greenland, which is also claimed by Denmark.

Canada has two maritime boundary disputes in the Arctic. One is with the U.S. regarding a portion of the Beaufort Sea, and a second is with Denmark regarding two small zones in the Lincoln Sea. Each disagreement is well managed, and will be resolved peacefully and in due course, in accordance with international law. Indeed, just three weeks ago, Canada and the Kingdom of Denmark announced the establishment of a joint task force on boundary issues to explore options and provide recommendations on how to resolve outstanding boundary issues between the two nations.

Let me turn now to Canada's sovereignty in relation to the Northwest Passage. All waters of Canada's Arctic archipelago, including the various waterways commonly known as the Northwest Passage, are internal waters of Canada by virtue of historic title. For greater clarity, Canada drew straight baselines around its Arctic islands in 1986. All waters landward of the baselines are internal waters, and Canada has an unfettered right to regulate them as it would for land.

There have been some recent transits through Canada's Arctic waters by foreign ships that have attracted the attention of the media, with some commentators arguing that these transits somehow threaten Canadian sovereignty. These arguments appear to be based on a misunderstanding of the legal situation.

My colleague, Shawn Steil, will tell you about the passage of the Chinese research vessel last summer. I would just stress that navigation conducted in compliance with Canadian requirements, like the Chinese research vessel's transit, does not challenge Canadian Arctic sovereignty.

In May, Canada and our Arctic neighbours marked the 10th anniversary of the Ilulissat Declaration by the five coastal states of the Arctic Ocean. Those states are Canada, the United States, Russia, Norway, and Denmark.

That declaration recalled that an extensive international legal framework applies to the Arctic Ocean. It emphasized that the law of the sea provides for important rights and obligations concerning the delineation of the outer limits of the continental shelf, the protection of the maritime environment, including ice-covered areas, freedom of navigation, marine scientific research, and other uses of the sea.

Canada remains committed to this legal framework and to the orderly settlement of any possible overlapping Arctic claims.

Mr. Chair, let me conclude by providing you with an update about Canada's work on defining the outer limits of the continental shelf beyond 200 nautical miles in the Arctic Ocean. Canada is currently in the final stages of the preparation of its Arctic Ocean submission to the Commission on the Limits of the Continental Shelf, the scientific body established by the United Nations Convention on the Law of the Sea, to review coastal state continental shelf submissions. All of the scientific data required from the ocean floor and the geology beneath it, which is needed to establish our outer limits pursuant to the provisions of the convention, has been obtained. We are now analyzing the data and drafting the submission. The submission could be ready to file probably early in 2019.

Once the commission has reviewed our submission, it will make recommendations based on the convention's scientific and legal definitions. When this process has played out for all five Arctic Ocean coastal states, overlaps will become known. Maritime boundary delimitations can then be settled, in due course, by those involved. The end result of this project will be international recognition for the area over which Canada will exercise its sovereign rights over the seabed and subsoil in the Arctic Ocean, thereby establishing the last line on the map of Canada.

Thank you again for this opportunity to address the committee.

I look forward to taking your questions once my colleagues have also offered their remarks.

Thank you, Mr. Chair.

[The Chair, Liberal, Bob Nault]

Thank you.

Madame LeClaire, please.

[Alison LeClaire, Senior Arctic Official and Director General, Circumpolar Affairs and Eastern Europe & Eurasia Relations, Department of Foreign Affairs, Trade and Development]

Thank you, Mr. Chair and committee members, for inviting us here today.

My colleague Mr. Kessel has spoken to some of the legal elements of Arctic sovereignty. What I would like to do is share an overview of some policy approaches that we take internationally to bolster our leadership position and to advance Canadian interests with respect to the Arctic. I'd like to speak on the Arctic Council and our engagement there as well as on Canada's bilateral Arctic relations, with some focus on our relationship with Russia in the Arctic.

I'll turn first to the Arctic Council.

Canada has played a leading role in the council's agenda in many areas since its establishment here on Parliament Hill in 1996, including by chairing the council twice in its 22-year history. The Arctic Council's high-quality science, both social and physical, has provided northern people and communities with additional tools to enable them to meet the opportunities and challenges of living and working in the north at a time of extraordinary change driven by climate change.

Some of the council's accomplishments that Canada has contributed to and benefited from include the following: first, groundbreaking assessments on economic development, on ice and cryosphere, on climate change, and on shipping; second, legally binding agreements that serve as platforms for practical co-operation on issues such as search and rescue, oil pollution preparedness and response, and scientific co-operation, the last of which just entered into force late last month; and finally, frameworks on key environmental issues and most recently an aspirational target to reduce black carbon and methane as well as to prevent oil pollution.

Turning to our Arctic bilateral relations, I'll start by saying that it is in Canada's interest to build on the bilateral relations we have with all our Arctic neighbour states, as we often have shared interests and face similar challenges. It's also increasingly important for Canada to engage with those far from the Arctic who wish to work with us in areas of common interest, leveraging capacity, resources, and technology. Science co-operation is one such area.

With respect to co-operation with Russia, one need only look at a map of the circumpolar north to understand why working with them is in our interest. Together we share 75% of the Arctic area. I'm pleased to say that Russia's contributions to the work of the Arctic Council are important and worthwhile, and that co-operation is positive. At the same time, it's important for me to note that Russia's illegal actions in Ukraine and involvement in other global events not related to the Arctic are preventing more robust bilateral engagement with Canada on Arctic issues. For example, we have suspended work at the Arctic and North Working Group of the Canada-Russia Intergovernmental Economic Commission.

It is generally known that Russia is modernizing its military capabilities, including in the Arctic. Indeed, Russia has increased Arctic military drills, opened or reopened military bases, made investments to its northern fleet, and enhanced its surveillance capabilities in recent years. However, Russia's military presence in the Arctic is still much more modest than it was in the 1980s.

Canada sees no immediate military threat in the Arctic, but we remain vigilant and are working with our allies and partners to keep the Arctic as a zone of peace and co-operation, a goal we share with Russia.

Building on our co-operative success at the Arctic Council, we are confident that, over the medium to longer term, bilateral co-operation with Russia on the Arctic will improve, benefiting both Canada and the circumpolar region as a whole.

I'll conclude with that, noting that my colleague Shawn Steil will focus more on China's emerging interest in the Arctic. Of course, I'm happy to go into more detail through questions later.

Thank you.

[The Chair, Liberal, Bob Nault]

Thank you.

Mr. Steil, go ahead, please.

[Shawn Steil, Executive Director, Greater China, Department of Foreign Affairs, Trade and Development]

Mr. Chair and honourable members, I'm delighted to have the opportunity to appear before you once again, and thank you for the invitation.

In my capacity as Executive Director for Global Affairs' Canada's Greater China division, I am pleased to provide a perspective on China's growing interest in the Arctic and what it means for Canada.

As many of you are probably aware, in recent years, China has explicitly vocalised their interest in participating in governance, multilateral fora, scientific research and investment in the Arctic.

Further signalling their ambitions, the Chinese State Council Information Office released China's Arctic policy white paper on January 26, 2018. This document is largely a compendium of previously discussed interests, such as increasing scientific research collaboration, expanding commercial investments, and playing a larger role in Arctic governance.

The white paper describes China as a “Near-Arctic State” that seeks “to understand, protect, develop and participate in the governance of the Arctic”, and cites mutual respect with incumbent Arctic states as the key basis for their engagement.

Most notably, the white paper reveals the polar Silk Road concept, which looks to connect China's belt and road initiative to the Arctic, including through the use of the Northwest Passage. This project clearly demonstrates China's interest in the commercial potential of the Arctic as a transportation corridor and a source of natural resources. The belt and road initiative also expands China's geopolitical reach, and provides Beijing with the opportunity to create international hub-and-spoke commercial relationships centred on China.

This past summer, as my colleague mentioned, the Chinese research vessel, the Xue Long, or Snow Dragon, made a high-profile transit through Canadian waters in the Arctic for the purposes of conducting marine scientific research. China obtained Canada's consent to navigate Canadian Arctic waters, after satisfying Canadian officials that the vessel would comply with all relevant legislation and regulations.

In keeping with standard marine scientific research practice, the Polar Research Institute of China extended an invitation to Canadian scientists to join the Chinese researchers aboard the Xue Long during the Canadian portion of their expedition. Afterwards, the Chinese media promoted the passage as a successful test of a new trading route through the Northwest Passage.

As China seeks to position itself as an integral stakeholder in the economic development of the Arctic, it has shown considerable interest in infrastructure development and resource utilization in Canada's north. As the Canadian Arctic continues to draw interest as an economically strategic region, we can expect to see further requests for commercial and scientific collaboration from China.

In recognizing the opportunities and the importance of developing infrastructure in the Arctic, we must work diligently to ensure that any foreign investments coming into Canada will be consistent with the sustainable development of local communities and contribute to Canada's national interests. While we welcome China's objective to work constructively and make positive contributions to the Arctic region, concerns regarding foreign investment and sustainable development of infrastructure remain. As we look to develop Arctic infrastructure, we need to consider the interests of parties who are investing, as well as the risks.

As China takes a more active role in global affairs, including in the Arctic region, Global Affairs Canada will continue to seek a comprehensive relationship with China built on trust and mutual benefit, within which common interests and respective concerns, including climate change and environmental stewardship, can be addressed.

Once again, I thank you for the opportunity to speak with you today.

We would be pleased to answer your questions.

[The Chair, Liberal, Bob Nault]

Thank you, to all three of you.

Colleagues, we'll get straight into questions, and start with Mr. O'Toole, please.

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

Thank you very much for appearing before us today. We're looking forward to embarking on this important study.

Mr. Kessel, I'm going to start with your remarks.

I was a little surprised. The two maritime boundary disputes in this are said to be quite minor; you know, a small claims dispute with the U.S. over the Beaufort Sea. However, is it not true to say that the United States views the Northwest Passage as an international waterway and area of navigation, whereas we view the Northwest Passage as an internal waterway and route?¸

Isn't it more than just a portion of the Beaufort Sea in terms of our being in conflict with the U.S.?

[Alan H. Kessel]

There are a couple of questions that you've raised, and they're parallel to each other. The Beaufort Sea issue is one that we have under constant discussion with our American friends. The reason we aren't further ahead right now is that they've asked us to hold off until they've done some more seabed mapping. We've also done seabed mapping, and that's to help us understand how we would eventually look at that piece of property. In the meantime, both of us have continued to issue gas or hydrocarbon licences, but we have a moratorium on exploration until such time as the dispute is resolved. It's being handled quite carefully, and both of us have an interest in resolving it amicably.

The issue with the Northwest Passage is one that I think has confounded people, mainly because of misinterpretation by the press and others. I defy you to find the Northwest Passage on the map. There is no language that says “Northwest Passage”. It's just a combination of channels within the Arctic Archipelago that together create this concept of east or west. Our view is that, under international law, an international strait must have been used as an international strait for navigation. We've had that area icebound for 10,000 years. It has not been used as a common way of getting from one end to the other. Our view is that you can't just simply change it into an international strait as the ice melts.

Having said that, both Canada and the U.S. have agreed to disagree. In 1988, we entered into an agreement whereby we agreed that we would put this issue on ice, and the U.S. essentially asks us for authority to pass through the passage. We grant authority to the U.S. and to other vessels to go through the passage. Granting of authority to go through our waters is indication that we own those waters.

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

Could I stop you there? When we grant authority, is that blanket authority or is it per voyage?

[Alan H. Kessel]

It's per voyage.

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

Now we have a precedent set that, per voyage, notifications will be given to Canada. Is there strict application of this? What I mean is, our best friend is one thing—the United States is our best friend, despite some challenges of late—but with China's passage and the talks Mr. Steil brings up about the polar Silk Road, is there not a troubling potential for a precedent that, with the waterways open and more regular for crossing, a courtesy advisory to Canada is sufficient for passage?

[Alan H. Kessel]

Particularly with the Xue Long, they asked us way in advance by diplomatic note for authority to enter our waters. We granted them authority on certain conditions, which included having a pilot and some other Canadian officials on the vessel, and they agreed to all of our conditions. They did their scientific activity, and they went on. We encourage—

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

I'm going to stop you there, because I don't have much time.

Would you be able to supply the committee with the diplomatic notes, not today, but at some point? Our study is just commencing.

Would there be any difference between a state research vessel and a commercial vessel owned by a state-owned enterprise of China? Is that how they would go about traversing the route commercially?

[Alan H. Kessel]

I would have to give you a little more detail on that, and I'll have to get some research for you. As an example, I think it was a year ago that we gave authority for a Danish vessel to be the first vessel to carry coal, I think it was, from the west coast of the United States through the various channels of the Northwest Passage as an experiment to see what the timing would be. We worked very closely with those vessels, because, as I should mention to you, we not only insist that we know that they're coming, but also that they're going to comply with the Arctic Waters Pollution Prevention Act, which is legislation of the federal government to cover those areas.

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

How do we monitor that?

[Alan H. Kessel]

I'm not the science guy here; I'm the lawyer guy here. I'd have to get you the details on how we monitor them individually, because they are required to advise us when they come in of where they are. It's not just about their being there; it's about search and rescue should they run into trouble.

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

Absolutely. I know we have regular Aurora maritime patrol aircraft flying over. When I worked at the rescue coordination centre in Trenton, we would follow the progress of some people trying to paddle their way through the Northwest Passage, which always drove me crazy.

I'm wondering, as the routes are traversed more often, do we have the capability to monitor for pollution, search and rescue, and sovereignty?

[Alan H. Kessel]

That clearly expands greatly on the question you originally had, and I'm not really the person to give you the answer on that. I can answer some of the legal questions. For questions on the pollution stuff, we'd have to get one of our colleagues from Environment Canada or elsewhere to answer.

For the questions you have asked, my terrific colleague behind me is taking notes, and we will be able to provide the committee with the documentation.

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

Thank you very much.

[The Chair, Liberal, Bob Nault]

Thank you, Mr. Kessel.

Mr. O'Toole, we will make arrangements to get those scientists to come to talk to us, just to make life a little easier on Mr. Kessel. That's not his shtick.

Mr. Saini, you're next.

[Raj Saini, Liberal, Kitchener Centre, ON]

Good afternoon, everybody. Thank you very much for coming.

My question is for my good friend, Ambassador Steil.

You mentioned the Chinese Arctic white paper released in January 2018. There are four things in that white paper that are interesting, at least to me. One was that they wanted to build the polar Silk Road, as you said, and they wanted to encourage state-owned enterprises to contribute to that through infrastructure building. They wanted to encourage more exploration of oil and gas, and they also wanted to explore more fishing options. As well, they included a note about Arctic tourism.

When we look at the Arctic Council, its working groups, and the things it is involved in, none of these four things are in any communications or discussions it has had, even though it has said there should be a voluntary ban on fishing.

With its six member countries and five observer countries, how do the Arctic Council and Canada manage the ambitions of China when they are not congruent with what the Arctic Council says or has said in the past?

[Shawn Steil]

I'll ask Alison to talk about the specifics of the Arctic Council. I'll tell you what they're doing with the white paper, from a Chinese perspective.

As I said in my initial remarks, there's nothing extremely new that hasn't been said somewhere before, or expressed in some way, by the Chinese. This was in some ways the clearest articulation of their interests in the Arctic.

It is important to know that they're not the only non-Arctic state to have an Arctic white paper policy. I think Japan, Korea, and others have already done the same. China, Japan, and Korea have also launched trilateral discussions on the Arctic.

We have to look at this in terms of their articulation of what their goals and objectives of Arctic collaboration might be. That would be done by considering the starting point of where they're coming from. How does that figure into multilateral negotiations? At least now we have a clear idea of what the Chinese want and expect from Arctic collaboration, and I imagine this would be carried into bilateral discussions.

I'll ask Alison to comment on how that would work.

[Alison LeClaire]

I would say that of the four things you mentioned, there are related themes in Arctic Council co-operation. That co-operation on social development, economic development, and science is framed by a set of criteria that all observers have to commit and adhere to when they become observers. China is one of 40 observers to the Arctic Council. Observers are not always governments. They can be governments, civil society organizations, or intergovernmental organizations.

To become an observer, as criteria they have to “recognize Arctic States' sovereignty, sovereign rights and jurisdiction”, and the extensive legal framework that applies to the Arctic Ocean. Critically to us, they need to “respect the values, interests, culture and traditions of Arctic indigenous peoples and other Arctic inhabitants”. There are other criteria, but I mention those because I think it's important to understand the context in which China and other governments and organizations become observers.

China is already deeply engaged economically with Russia on liquid natural gas, on transportation, on Arctic tourism and, more generally, on sustainable economic development. This is actually a key theme in the Arctic Council.

[Raj Saini, Liberal, Kitchener Centre, ON]

I'm glad you mentioned that. I want to bring up that point because another thing that China is doing is having more bilateral discussions with other countries. One of the countries they've had initial bilateral discussions with is Russia, and it seems there's a renewed interest, given the fact there have been joint military exercises. Negotiations and deals have been signed between Gazprom and Rosneft for heavy drilling and deep drilling. It seems to me that this renewed partnership in that area will change in many ways the geopolitical analysis that's happening.

Going forward, how much is this relationship deepening, and what should we be aware of? You even mentioned the Xue Long, the Snow Dragon. That ship was purchased from Ukraine in 1993; that's how far back those relations go.

If this is the way two superpowers are now emerging together in that area, obviously the geopolitical strategy is going to change. What's your analysis or commentary on that? What should we be aware of?