Evidence of meeting #75 for Foreign Affairs and International Development in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was att.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Richard Arbeiter  Director General, International Security Policy Bureau, Department of Foreign Affairs, Trade and Development
Wendy Gilmour  Director General, Trade and Export Controls Bureau, Department of Foreign Affairs, Trade and Development
Robert Brookfield  Director General, Trade Law, Department of Foreign Affairs, Trade and Development

11:05 a.m.

Liberal

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

Colleagues, I'd like to bring this meeting to order.

This is meeting number 75 of your committee. We are here pursuant to the order of reference of Tuesday, October 3, 2017, in regard to Bill C-47, an act to amend the export and import permits act and the Criminal Code, regarding amendments permitting the accession to the Arms Trade Treaty and other amendments.

Before us this morning are the departmental officials from Foreign Affairs, Trade and Development, better known as Global Affairs. We have three members from the department on our panel. I understand that Mr. Arbeiter is going to begin the presentation, and I think Ms. Gilmour is also going to follow up with a presentation. Then we'll go to questions.

I'll turn the floor over to you, Richard, to begin the presentation.

11:05 a.m.

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.

11:15 a.m.

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.

11:15 a.m.

Voices

Oh, oh!

11:15 a.m.

Director General, Trade and Export Controls Bureau, Department of Foreign Affairs, Trade and Development

Wendy Gilmour

I am sorry. We also have our challenges.

October 17th, 2017 / 11:15 a.m.

NDP

Hélène Laverdière NDP Laurier—Sainte-Marie, QC

I still have problems with that too.

11:15 a.m.

Director General, Trade and Export Controls Bureau, Department of Foreign Affairs, Trade and Development

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.

11:25 a.m.

Liberal

The Chair Liberal Bob Nault

Thank you very much, Ms. Gilmour, Mr. Arbeiter, and Mr. Brookfield.

Now, we'll go right to questions. We'll start with Mr. O'Toole, please.

11:25 a.m.

Conservative

Erin O'Toole Conservative Durham, ON

Thank you very much, Mr. Chair.

Thank you very much for appearing before us today. My questions will primarily be for Ms. Gilmour.

Ms. Gilmour, under your purview at the department, whatever we call the department these days, is the trade controls bureau part of your mandate?

11:25 a.m.

Director General, Trade and Export Controls Bureau, Department of Foreign Affairs, Trade and Development

Wendy Gilmour

Yes. I am the director general of the trade controls bureau. In order to clarify matters for some of our clients, we now call it the trade and export controls bureau. Typically, when we refer to trade controls, we're referring to the controls imposed further to international trade agreements. For example, like import controls to support supply management. Export—

11:25 a.m.

Conservative

Erin O'Toole Conservative Durham, ON

Are you responsible for the area control list as well?

11:25 a.m.

Director General, Trade and Export Controls Bureau, Department of Foreign Affairs, Trade and Development

Wendy Gilmour

Yes, I am.

11:25 a.m.

Conservative

Erin O'Toole Conservative Durham, ON

Right now, how many countries are on the area control list?

11:25 a.m.

Director General, Trade and Export Controls Bureau, Department of Foreign Affairs, Trade and Development

Wendy Gilmour

There is only one country. That is North Korea.

11:25 a.m.

Conservative

Erin O'Toole Conservative Durham, ON

How many have been on it historically?

11:25 a.m.

Director General, Trade and Export Controls Bureau, Department of Foreign Affairs, Trade and Development

Wendy Gilmour

Over time, I couldn't tell you exactly how many. Myanmar recently came off of it, previously, when things were looking better.

I would turn to my colleague. Where is my colleague?

11:25 a.m.

Conservative

Erin O'Toole Conservative Durham, ON

It could be submitted later. I would be curious about that. It's something that I didn't get from the Library of Parliament.

11:25 a.m.

Director General, Trade and Export Controls Bureau, Department of Foreign Affairs, Trade and Development

Wendy Gilmour

Yes, we can do that.

11:25 a.m.

Conservative

Erin O'Toole Conservative Durham, ON

Would it be fair to say that, since 1947, Canada has the ability to both control the trade of specific goods and restrict countries from trade entirely?

11:25 a.m.

Director General, Trade and Export Controls Bureau, Department of Foreign Affairs, Trade and Development

Wendy Gilmour

The purpose of the area control list is certainly not to prohibit items. The area control list is a very blunt instrument that means that any good or technology item being exported to a particular country must be subject to a permit.

Belarus was the other one that recently came off.

As I say, it's a blunt instrument. Literally, it means somebody taking Christmas presents home to their grandmother would have to apply for an export permit. It is reserved for those countries which are the most egregious examples in the.....

11:25 a.m.

Conservative

Erin O'Toole Conservative Durham, ON

A serious risk.

11:25 a.m.

Director General, Trade and Export Controls Bureau, Department of Foreign Affairs, Trade and Development

11:25 a.m.

Conservative

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.

11:25 a.m.

Director General, Trade and Export Controls Bureau, Department of Foreign Affairs, Trade and Development

Wendy Gilmour

Indeed. The purpose of the area control list is to give the Minister of Foreign Affairs and the Government of Canada the ability to control, but not necessarily restrict, the movement of any items to a country listed on the ACL.

11:25 a.m.

Conservative

Erin O'Toole Conservative Durham, ON

Okay.

What I think a lot of Canadians would find interesting is that, with the Export and Import Permits Act, Canada actually controls groups of goods far beyond traditional arms covered in the trade treaty.

Could you discuss other technologies that are controlled with this legislation?