Procedure and House Affairs Committee on May 30th, 2023

[Christine Normandin, Bloc, Saint-Jean, QC]

Thank you very much.

My next question is for both witnesses and is based on a premise stated by Ms. McCuaig‑Johnston.

You mentioned that the media have reported some interference cases but that there are probably many more we're unaware of. That incidentally is what an independent public inquiry would help shed light on.

Considering all the revelations regarding Mr. Johnston, do you think the general public has enough trust in him to want to testify? It's he who should continue all the public hearings. Is the fact that his appearance of impartiality has been undermined a deterrent? Will the public want to come and testify and provide further information?

[Margaret McCuaig-Johnston]

I can't comment on his neutrality. I know the points have been made by many politicians. I do know that he's looked at it for two months, and he does not have a deep China experience or a deep security experience to bring to it. He's looked at it for two months, and in those two months he concluded that there should be public hearings of the diaspora. He doesn't understand that the diaspora would never want that, which suggests that he doesn't have that understanding of what's happening, the dynamic that's happening in the communities of Chinese Canadians out there.

[Christine Normandin, Bloc, Saint-Jean, QC]

Mr. German, does the fact that Mr. Johnston still occupies the position undermine people's trust? In other words, will they have enough trust in him to ask to testify before him?

[Dr. Peter German]

Thank you for the question.

I'm really not prepared to comment on Mr. Johnston, or what the public feels about him, but allow me to just comment on this issue of a public inquiry.

We went through a very similar discussion in British Columbia after the “Dirty Money” reports that I authored. The public seemed to want a public inquiry on money laundering, and the question was, do we or don't we? As your previous witnesses indicated, public inquiries are lengthy, and they are also, I would add, costly, but they do provide a mechanism by which the public can interact and hear on a daily basis from witnesses and so forth.

I certainly agree that protection of witnesses will be critical in any public inquiry or hearings, whether it involves China, Iran, Russia, you name it. People who are impacted by interference of one sort or another by a foreign government will need protection. Yes, there are certainly spokespersons who would be happy to appear in public, but many members of the diaspora, as we indicated, would not.

I should also mention the Cullen commission. Justice Cullen was eventually appointed in British Columbia to deal with the issue and actually held public hearings as part of his public inquiry, so he was able to combine both mechanisms. He actually started with public hearings at various forums around British Columbia to hear from the public, anyone who really wanted to talk to him about money laundering. Then he got into the nitty-gritty of his work—reviewing documents, experts, etc.

The big difference here, of course, is this issue of classified documents. There are mechanisms to deal with that, as the previous witnesses have discussed, and there are provisions in our Canada Evidence Act. We do similar things in the Criminal Code. There are ways of dealing with it, but it's not easy.

Thank you.

[The Chair, Liberal, Bardish Chagger]

Excellent. Thank you. Nothing good seems to come easy, so we appreciate that.

Ms. Blaney, go ahead.

[Rachel Blaney, NDP, North Island—Powell River, BC]

Thank you, Chair.

I thank our witnesses for being here today to testify.

This is a very complex issue. I appreciate both witnesses for acknowledging how complex this is, and the fact that there needs to be a lot of addressing of issues, both within this atmosphere and in the general public.

Something that came up earlier in the testimony today was around building literacy for Canadians, around addressing these issues and building that literacy so that as we're going down this path of really understanding what's happening in terms of foreign interference from multiple countries, we're acknowledging that it's an ever-changing and evolving reality that we have to collectively respond to in a meaningful way.

Could you both share your thoughts on the importance of building that literacy for Canadians and how that would support national security in the long term?

I will start with Mr. German, and then go to Ms. McCuaig-Johnston.

[Dr. Peter German]

Thank you for the question.

I would start by saying not to underestimate the literacy of Canadians. It's no different from everybody having a vote or everybody having an opinion. I suspect everybody will have an opinion on national security today in the population, particularly the people living in the particular diasporas we're talking about.

I live in greater Vancouver. We have large Iranian and Chinese diasporas here. I can assure you that people in those communities know full well about the implications of the issues that we're talking about here today, and they have positions one way or the other.

When we talk about education, I think we have to be fairly focused on what exactly we're talking about and what we are trying to accomplish, whether it be by way of an inquiry or hearings. It gets back to this issue of protection. People are already quite familiar with these issues.

Thank you.

[Rachel Blaney, NDP, North Island—Powell River, BC]

Ms. McCuaig-Johnston, go ahead.

[Margaret McCuaig-Johnston]

Thank you.

I support that. I think we've seen that the Canadian public has a lot of interest in and a lot of concern about this. We see it in the public opinion polls. We see it in the fact that 72% of Canadians want a public inquiry. They want these issues aired. They're very concerned that the government is going to completely get on top of this and not leave it to some superficial kind of process.

Further, I think there's a lot of merit to the literacy of cabinet on these issues because we need a national security committee of cabinet to have the Prime Minister and ministers around the table discussing these issues collectively on a regular basis, with regular briefings for all of them on CSIS-related intelligence. This is important because they're going to be dealing in cabinet with all the economic opportunities. There are also risks and we're seeing the risks now in this interference.

I attended cabinet committee meetings for five years every week, and the dynamic you see around the table is really important. It's built over months and years of collaboration on these kinds of issues. I think it's sad that we haven't had one up until now. This is an opportunity to introduce one.

There was a suggestion by Mr. Johnston that it would be a committee instead of the national security and intelligence adviser, and I strongly disagree with that. It's both that we need.

[Rachel Blaney, NDP, North Island—Powell River, BC]

That's really interesting.

One thing that has really impacted me in doing this process, especially knowing that this is a question of privilege, is that Mr. Chong also brought up during his testimony the importance of the diaspora community and what they're facing in their everyday life, depending on their circumstances.

My question is around a couple of things. One is, there's been discussion about the foreign registry, and I think we've also heard from those communities that there's concern about that being done well and not increasing discrimination against particular communities in this country. Also, there's the fact that it seems that people who come forward with concerns because they feel they're being impacted by foreign interference are not able to actually get the support and the help that they need.

I'll leave that to you, Ms. McCuaig-Johnston, to talk about your understanding of that, knowing that you don't speak for all diaspora communities, but just the parts that you have been exposed to.

[Margaret McCuaig-Johnston]

Thank you.

This is a really important issue. I'm very encouraged by the signals that we're hearing from the government that there will be a registry. I think that's important. I've participated in consultations. Personally, I think the registry should just focus on the countries that we think are a problem—China, Iran and Russia—rather than having people from the Netherlands, the U.S. and others having to register. However, I don't believe that's the approach that will be taken, so that's fine. I think it's important that we have one.

I can give an example. In New York City, the police were able to arrest a number of Chinese associated with the police station in New York City, and the reason was that they had a registry. Those individuals were threatening people in the community and they weren't registered, so they could be charged. We don't have that here. I think it would help the diaspora a lot if they knew that these people could be charged.

[The Chair, Liberal, Bardish Chagger]

Thank you.

With that, we'll go to our second round. We will start with Mr. Carrie, followed by Mrs. Romanado.

Mr. Carrie, you have five minutes. The floor is yours.

[Colin Carrie, Conservative, Oshawa, ON]

Thank you, Madam Chair.

Mr. German, I'd like to start with you. You're probably one of Canada's most credible experts on dirty money, so I'd like to talk to you about dirty money. We know Beijing likes to throw their money around. They throw it around for influence. We've heard stories in the past where politicians may accept Beijing cash for access: fundraising, donations to foundations, pet projects, things along those lines.

I think it's important that Canadians know where the money comes from. I was wondering if you could explain how the funnelling of money from Beijing works. I'm reading Sam Cooper's book Wilful Blindness, and I think it should be mandatory reading for anybody who's interested in this particular topic. I was wondering, could you tell the committee about what Sam Cooper coined in his book Wilful Blindness as the “Vancouver model”? Could you explain that to us?

[Dr. Peter German]

The term “Vancouver model” comes from a professor in Australia who observed what was taking place in Vancouver, John Langdale. I used that in the “Dirty Money” reports. It was later accessed, and that's where Mr. Cooper comes up with it.

It speaks to the movement of money out of China avoiding capital controls that exist in China. As an individual, you can only take the U.S. equivalent of $50,000 per year out of China. If people want to move money out, they have to find other ways of doing it. The Vancouver model really was a situation in which underground bankers—and it's a bit complex to answer quickly—facilitated the movement of money out of China without the money physically moving. It was all done by way of electronic communications. When a person shows up in Vancouver, they would receive a sum, minus a service charge, equivalent to what they had deposited with the underground bankers in China.

That is not to say that the state uses that method. That is what individuals were using, because they wanted to move their money into a safe haven, i.e., Canada, or they wanted to use it for casino gambling, for investing or for any number of different reasons. I don't necessarily know that we know how foreign states move their money, but the one thing I was urging the committee in the previous session I spoke at is that following the money is important. In any process that's put in place, we have to keep that in mind.

Enforcement agencies that are looking at a registry have to have the necessary expertise and resources to look at what we can call, very broadly, the money laundering aspect. How did the money get there? Most money can be traced back. It's only cash that's really difficult. Everything else can be traced in one way or another. You have to use other techniques to follow cash.

I don't know if that answers the question, in this short period of time.

[Colin Carrie, Conservative, Oshawa, ON]

Maybe we'll send the book out to everybody who is interested in it.

The book talks about how $20 bills become $100 bills funnelled through casinos very systematically. It doesn't seem that Beijing is really too interested in stopping it, that's for sure.

I have a question for you. How have Beijing and CCP-affiliated organizations leveraged some of these illegal operations to further the goals of foreign interference in Canada? Can you maybe see a hypothesis of that? Moreover, what solid actions could counter that type of activity? What could we do as a government to counter that?

[Dr. Peter German]

On consolidating $20 bills into $100 bills, there's a term for that. It's called “refining”. That's common in the drug world.

In terms of China, I've said before, and I believe it's in my reports, that China is very tough on drug crimes and organized crime within China. It's tough on numerous offences, much tougher than we are, but not so in terms of its citizens or persons of Chinese ethnicity outside the country.

We seem to see a lot of organized crime outside China that has connections back to the home country. We see a lot of legitimate investment outside China that might not be possible within China. It would appear that the Chinese government has not taken exception to what takes place outside its borders. Some might say that's appropriate. Why should it? You really have a real difference between what takes place within and without.

[Colin Carrie, Conservative, Oshawa, ON]

Thank you.

[The Chair, Liberal, Bardish Chagger]

Thank you.

With that, we'll go to Mrs. Romanado.

[Sherry Romanado, Liberal, Longueuil—Charles-LeMoyne, QC]

Thank you very much, Madam Chair.

I'd like to thank the two witnesses for being with us this evening, and also to thank them both for their service to Canada in the various capacities they have both held over the years.

In my first line of questioning, I would like to start with Mr. German.

I want to talk to you a little bit about something we've been hearing over the course of the last couple of meetings with respect to not having a clear understanding by politicians of what intelligence is and, from the point of view of intelligence experts, what politics is like.

When I look through the order in council dated April 28, 2017, there were changes made to the national security adviser title, then held by Daniel Jean, to include “intelligence”. The reason I'm bringing this up is that, in the federal election of 2015, we saw a change in posture with respect to understanding the importance of cybersecurity and the importance of intelligence, and what we were hearing from our partners in the Five Eyes.

I wanted to get a sense from you.... In the special rapporteur report, the Right Honourable David Johnston mentions the need to improve the way information is shared between our security agencies and the government. Would you elaborate a little bit on the importance of the intelligence people understanding what we do for a living, and the importance of us understanding what intelligence community does?

[Dr. Peter German]

Sorry, are you directing that to me?

[Sherry Romanado, Liberal, Longueuil—Charles-LeMoyne, QC]

I am, Mr. German.

[Dr. Peter German]

Thank you.

Thank you for your kind comment at the beginning of your question.

We're surrounded by information—every one of us. It's information overload. Intelligence means something quite different from information. It is something that can be used for a purpose. Oftentimes we refer to “actionable intelligence”.

On the issue of politicians understanding the intelligence community and the intelligence community understanding the politicians, I would expand that to law enforcement understanding politicians.

In my career, although I did work in an intelligence capacity for a while, it was primarily in law enforcement. We had to create those barriers between politics and law enforcement. We had to do our job regardless of whether it ended up favouring one political party or another. I'm thinking here about corruption investigations. I think the police in this country understand that. I don't think that's a big issue. I think politicians, quite frankly, understand that. When there's a law enforcement investigation, we do not see interference by politicians. That's very unusual.

In the other direction, though, I can understand why—and we heard it from the previous speakers, as well as my colleague on the panel right now—it's important that politicians, members of Parliament and so forth, be aware of the intelligence apparatus, of what they can learn from it and of what that intelligence community is intended to do. At the end of the day, the intelligence community is there to serve Canadians. If it's not providing you with the information you need, then I guess we have a problem.

[Sherry Romanado, Liberal, Longueuil—Charles-LeMoyne, QC]

In that vein, I used to sit on the national defence committee. I was parliamentary secretary to the Minister of Veterans Affairs and associate minister of national defence. I have a son who's an intelligence officer with the Canadian Armed Forces. I've been to NORAD's Cheyenne Mountain. I have been to NORAD North. I have received various intelligence briefings, and I fully understand the importance of understanding that we're getting little parts of it. We will not get the full picture, especially if we do not have the necessary clearance.

In that regard, you're asking that politicians learn more about, and understand, intelligence. If the offer is there for leaders of political parties to receive the necessary clearance, to receive these intelligence briefings, and to see for themselves the information that the rapporteur was able to glean from his two-month investigation, would you not recommend that all politicians who are offered this kind of briefing avail themselves of it?

[Dr. Peter German]

That quickly gets you into the issue of NDAs, or non-disclosure agreements. There is a downside to NDAs, which is that you can't talk about what you saw, so provided that you are prepared to recognize that.... I'm not talking about you, personally. I'm talking about a politician who is invited to look at classified information. They have to know that, at the end of the day, if they've signed some sort of NDA, they will not be able to then use that information.

Other than that, yes, if intelligence is going to be of use to you in your work and you're offered the opportunity to access it, one would certainly avail oneself of that intelligence.

[The Chair, Liberal, Bardish Chagger]

Thank you so much.

Go ahead, Ms. Normandin.