Public Accounts Committee on May 26th, 2009

[The Chair, Liberal, Shawn Murphy]

I'd like at this point in time to call the meeting to order.

On behalf of all committee members, welcome to all witnesses and guests in the room. We extend to everyone a very warm welcome.

This meeting is called pursuant to our Standing Orders, and today we're dealing with chapter 1, “National Security: Intelligence and Information Sharing”, of the 2009 status report of the Auditor General of Canada.

The committee is very pleased to have with us today, first, from the Office of the Auditor General, Sheila Fraser, the Auditor General. She is accompanied this afternoon by the assistant auditor general, Hugh McRoberts; and principal, Gordon Stock.

From the Privy Council Office, we have Marie-Lucie Morin, national security advisor to the Prime Minister and associate secretary to the cabinet.

From the Department of Public Safety and Emergency Preparedness, we have the accounting officer and deputy minister, Suzanne Hurtubise.

From the Department of Transport, we again have the accounting officer and deputy minister, Louis Ranger. He's accompanied by Marc Grégoire, the assistant deputy minister.

From the Royal Canadian Mounted Police, we have Mr. Tim Killam, deputy commissioner, policing support services. He's accompanied by Madame Guylaine Dansereau, director of Canadian Criminal Real Time Identification Services.

Again, welcome everyone.

We do have a large crowd today, so I'd ask that you keep any opening comments to five minutes.

We're going to start with the Office of the Auditor General.

Ms. Fraser.

[Sheila Fraser, Auditor General of Canada, Office of the Auditor General of Canada]

Thank you, Mr. Chair. We thank you for inviting us to discuss chapter 1 of our 2009 status report, entitled “National Security: Intelligence and Information Sharing”.

As you mentioned, I'm accompanied today by Hugh McRoberts, assistant auditor general; and Gordon Stock, the principal responsible for our audits of national security.

The audit examined progress the government has made since the audit observations made in chapter 10, “Other Audit Observations—Independent Reviews of Security and Intelligence Agencies”, of our November 2003 report; and certain of our recommendations from chapter 3, “National Security in Canada—The 2001 Anti-Terrorism Initiative”, of our March 2004 report.

I would like to start by saying that we were encouraged by the government's progress in addressing the deficiencies noted in our original audits. Overall, we found that the federal government had made satisfactory progress in 8 of the original 12 recommendations.

In 2003, we recommended that the government assess the level of review and reporting to Parliament for security and intelligence agencies to ensure that agencies exercising intrusive powers are subject to levels of external review and disclosure proportionate to the level of intrusion. At the time of our follow-up audit, the government had completed its assessment and considerable preparatory work had been done. However, no decisions had been made on whether or when changes would be introduced.

We also found progress had been made in a number of other areas: organizing and coordinating priorities among federal departments and agencies involved in security; reducing the fingerprint backlog and progressing in its development of a computerized system to analyze digitized fingerprints, and improving the reliability of watch lists of individuals considered to be of interest to intelligence organizations.

In 2004 we noted that a barrier to information sharing was the lack of a government-wide system that would allow communication at the “secret” level among departments and agencies. While progress on this complex project was slow to start, better progress had been made in the latter period under examination; therefore, the government received a satisfactory rating for progress against this recommendation. However at the time of our audit, the project was still in the limited implementation stage and its success was contingent upon its receiving additional funding and user acceptance.

An area where we found little progress was in the balancing of privacy concerns with information sharing. The Department of Justice Canada had been tasked by the Deputy Minister Committee on National Security, which includes representatives from the Privy Council Office, the Treasury Board of Canada Secretariat, and Public Safety Canada, to prepare an inventory of legal problems related to the sharing of national security data. The Treasury Board of Canada Secretariat collected 16 instances where departments and agencies reported legal barriers to information sharing. However, resolution of these barriers has not been achieved and the Department of Justice Canada and the Treasury Board of Canada Secretariat have provided little direction to government departments and agencies.

We also found that Transport Canada and the Royal Canadian Mounted Police were not sharing criminal intelligence information effectively. Transport Canada had implemented additional procedures for screening applicants for access to secure areas of airports; however, the process did not include looking at all information contained in the RCMP data systems. In addition, there were indications that Transport Canada and the RCMP did not give full information to each other. As a result, Transport Canada may be granting clearance to high-risk individuals for work in secure areas of Canada's airports. As noted in our report, Transport Canada does not see its role as preventing criminal organizations from infiltrating airports. If it does prevent unlawful activity at airports as a result of its screening process for airport workers, this is seen as a side benefit.

In the world of security intelligence, information sharing is critical; therefore it is important that the government find a way of resolving legal constraints, where appropriate. And for Canadians to have confidence in their security and intelligence organizations, they need to know that government agencies and departments maintain a balance between protecting the privacy of individuals and ensuring national security.

Since the 31^st of March 2009, the date we tabled our report, I understand that the RCMP and Transport Canada have signed a memorandum of agreement on information sharing, but we have not reviewed this document. For the other new recommendations contained in the chapter, the committee may wish to request from departments and agencies an action plan that addresses our recommendations.

Mr. Chair, thank you. That concludes my opening statement. We would be happy to respond to the committee's questions.

[The Chair, Liberal, Shawn Murphy]

Thank you very much, Ms. Fraser.

We'll now turn to Marie-Lucie Morin, the national security advisor to the Prime Minister and associate secretary to the cabinet, for her opening remarks.

[Marie-Lucie Morin, National Security Advisor to the Prime Minister and Associate Secretary to the Cabinet, Privy Council Office]

Mr. Chairman, members, I appreciate the opportunity to share some of the accomplishments of the government in the area of security and intelligence.

I will not introduce my colleagues again given that Mr. Murphy has already done so.

Today therefore, I would like to briefly bring you up-to-date on our achievements within the context of the Auditor General's status report of March 31 and to present you with a description of our priorities for the way ahead.

The departments and agencies have made great headway on many issues identified in the original audits of 2003 and 2004. Specifically, the overall coordination of the security and intelligence community has improved. But some challenges remain, and those are challenges shared by all western democracies. We must strive to find the necessary balance between protecting the collective rights of Canadians to live in a secure environment under the umbrella provided by our security agencies, and respecting individual rights of Canadians.

As members of the committee can appreciate, there are some limitations to what can be said in this forum due to on-going investigations, sensitive operations, investigative methods, and cabinet confidence. But, as the Auditor General's report demonstrates, there's much that can be said about the work we do.

Allow me to first say a few words about the threats to the global environment. Terrorism and extremism remain global security challenges highlighted by brazen attacks in Mumbai, Islamabad and Lahore most recently. Canada cannot be complacent and act as if it is immune to the threats from both established and emerging terrorist groups.

Al-Quaida has evolved and its satellite affiliates in the Maghreb, North-East Africa and South Asia are actively engaging in terrorism. The recent kidnapping of Robert Fowler and Louis Guay demonstrated, too harshly, the impact these regional groups can have.

Canada and its allies are also working to confront an increasingly sophisticated cyber threat. Not only are our own communications threatened, but the Internet itself, upon which we are all so dependent, is used to plan and execute terrorist attacks. Another continually evolving threat is the proliferation of weapons of mass destruction.

As you may recall, the position of national security advisor to the Prime Minister was created in 2003, very much as a reflection of the new security environment following the attacks of 2001. Three elements of my work are particularly relevant to the Auditor General's report.

First, my role is to support an integrated approach to intelligence. The collaboration and coordination among agencies within the security and intelligence community has improved significantly since 2004, a fact echoed by the Auditor General in her report. Intelligence priorities for the community are established annually by cabinet as required in the National Defence Act.

The community is working together in the implementation of priorities, which, in turn, has resulted in significant improvements in the use of our collection assets and the production of coordinated intelligence assessments on a range of threats and issues. While there has been progress, a number of community-wide challenges remain, particularly in the area of information-sharing between agencies. Information-sharing issues vary widely, reflecting the laws, mandates, and statutory requirements of individual departments, and there is no single solution that will address all of them.

Second, coordination among departments and agencies is also an essential component of my work. The Privy Council Office plays a key role in ensuring that the demands of the security environment are met in a coherent manner. We are fortunate, in fact, that in Canada we can achieve coordination in a single room. Our American partners have 17 agencies to work with. A robust committee structure exists up to the level of deputy minister to manage issues and tackle challenges.

Finally, Canada's international security and intelligence relationships are an important part of addressing the range of global interconnected threats we face. Canada provides high-quality intelligence to our partners and receives it in return. The benefits of these relationships are clear, and my recent travels have only confirmed that Canada is a respected contributor to the international security and intelligence community.

In this context, strengthening the Canada-U.S. relationship, particularly in the area of security and defence, remains a key priority. As with any relationship, there are irritants, but it goes without saying that the Canada-U.S. security and defence relationship is fundamentally important. This winter, during the visit of President Obama, the Prime Minister said “a threat to the US is a threat to Canada”.

I conclude by saying that we are pleased with the findings of the Auditor General's report, which found that the government has made overall satisfactory progress in managing security intelligence. We collectively continue to address those areas where further progress is required.

Thank you.

[The Chair, Liberal, Shawn Murphy]

Merci, madame Morin.

We're now going to hear from Suzanne Hurtubise.

[Suzanne Hurtubise, Deputy Minister, Department of Public Safety and Emergency Preparedness]

Thank you Mr. Chairman.

Mr. Chairman, members of the committee, I am pleased to be here today to discuss the progress made on the various recommendations stemming from the Auditor General's status report and ongoing challenges.

As mentioned by Ms. Morin, the government has made significant strides since 2004 towards a more integrated approach among agencies within the security and intelligence community.

In addition to the elements Madam Morin mentioned, the creation of the Government Operations Centre has improved the level of coordination. It allows for more effective and coordinated responses across all departments and agencies of the federal government, and as well enhances coordination with provinces and municipalities for issues as they arrive, including issues as diverse as natural disasters, such as recent flooding in Manitoba, pandemics, such as the recent outbreak of H1N1, or indeed any acts rooted in terrorism and extremism.

The security and intelligence community has worked collectively over the past two years to address all of the issues raised in the Auditor General's report. For example, through the committee structure established by the Privy Council Office, we now share and review post-exercise reports and recommendations with interested departments and agencies. We also now together review lessons learned from major events to help us better manage future events.

In terms of our approach to interoperability, we have shifted our focus to a more pragmatic, project-based approach aimed at enhancing information-sharing across the public safety and security community. Examples of such projects include the secret communications interoperability project and working with Canada's first-responder community in support of advancing interoperable radio and voice communications.

There remain very significant challenges as our risk environment evolves. While we are pleased with the progress made to date, we recognize that there is a need for further work in some areas.

Thank you, Mr. Chairman. I would pleased to respond to the questions of committee members.

[David Christopherson, NDP, Hamilton Centre, ON]

I have a point of order, Mr. Chair.

[The Chair, Liberal, Shawn Murphy]

Go ahead, Mr. Christopherson.

[David Christopherson, NDP, Hamilton Centre, ON]

Mr. Chair, would you please ask the clerk to get a copy of that immediately, and give us copies of that statement?

[The Chair, Liberal, Shawn Murphy]

I should point out to Madame Hurtubise, and I believe to Mr. Ranger too, that normally in this committee we would expect to receive a copy of your opening statement. I believe you've been before this committee before, Madame Hurtubise.

We don't have copies, Mr. Christopherson. We did of the Auditor General's remarks.

[David Christopherson, NDP, Hamilton Centre, ON]

I realize that, Chair. I was asking if you could direct the clerk to get a copy and circulate it now.

[The Chair, Liberal, Shawn Murphy]

Do they have it in both official languages? We can't circulate it if....

Is it available in both French and English? Mr. Ranger, do you have a copy of your statement in both French and English?

[Louis Ranger, Deputy Minister, Department of Transport]

I do. We provided copies. We do have extra copies.

[The Chair, Liberal, Shawn Murphy]

You did provide us copies?

[Louis Ranger]

I understand we did.

[The Chair, Liberal, Shawn Murphy]

We understand that the opening comments from Madame Hurtubise are available in both official languages. They are being copied now and will be made available and circulated very shortly. I understand that the opening remarks of Mr. Ranger are only in English, so we'll just ask you to present now.

[Louis Ranger]

My apologies.

Mr. Chair, members of the committee, thank you for the opportunity to address the comments in the Auditor General's follow-up status report. At the outset, I would like to say that I welcome the opportunity to describe the concrete steps Transport Canada has taken to improve intelligence and information sharing. I also welcome the opportunity to answer any questions the committee may have.

Transport Canada is the lead department, as you know, for transportation security in Canada. Our job is to prevent unlawful interference with civil aviation and marine and surface transportation, as well as to provide oversight to ensure compliance with regulatory requirements.

Overall security at our airports and ports is a shared responsibility among departments and agencies that work closely with Transport Canada, including the RCMP, Canada Border Service Agency, the Canadian Air Transportation Security Authority, Canadian Security Intelligence Service, police of jurisdiction and local airport and port authorities.

Our transportation security clearance program was created in 1986, in the aftermath of Air India, to prevent unlawful interference with civil aviation. The program accomplishes this by assessing the risk posed by individuals who by the nature of their work require access to a restricted area of an airport. Since the program's inception, Transport Canada has processed over 600,000 applications. On average, we receive 40,000 to 45,000 applications annually. Currently there are 115,000 active transportation security clearances at airports and ports in Canada.

Transport Canada verifies the suitability of each transportation security clearance applicant with the RCMP, CSIS, and, if necessary, Citizenship and Immigration Canada. If Transport Canada obtains credible information that an applicant or an existing pass holder posses a transportation security risk, the department responds immediately by refusing, suspending or cancelling the clearance.

As recognized by the Auditor General, we continually strive to improve the program by implementing additional procedures. For example, following the Auditor General's recommendation of 2004, Transport Canada and the RCMP negotiated an inaugural MOU for background checks and subsequently did a review of all existing transportation security clearances. As well, we began requesting applicants who live outside the country for a significant period of time to provide five years of verifiable information.

In addition, we introduced the marine transportation security clearance program for workers at the marine ports and facilities. An action plan has been developed to address the issues raised by the recent Auditor General's report, and progress is ongoing. Here are some of the concrete measures included in that plan.

First, on April 8, Transport Canada and the RCMP entered into a new information-sharing agreement to provide expanded criminal background checks on individuals working in restricted areas of Canada's transportation system. Transport Canada will share more complete data with the RCMP, and the RCMP, in turn, will perform expanded background checks using multiple criminal databases available to the RCMP.

Second, we are developing strengthened guidelines and criteria against which applicants will be assessed.

Third, we are amending the transport security clearance application form to address new consent and new criteria requirements.

Fourth, Transport Canada will review all current security clearance holders--all of them--based on these improved procedures to identify any previously unknown adverse information that could suggest that an individual may pose a risk to civil aviation.

All the while, we have been working closely with the Department of Justice to address privacy issues and these efforts are reflected in enhanced information sharing provisions in the new memorandum of understanding. Our action plan is ambitious. We are convinced, however, that it is attainable with the assistance of our many partners, and we remain committed to working with them to enhance intelligence information sharing and to improve security in all modes of transportation, consistent with the recommendations of the Auditor General.

Finally, I'd like to take this opportunity to recognize the level of cooperation that has prevailed throughout this audit between Transport Canada, the RCMP, and the Office of the Auditor General. I and my team believe that our security screening process will be improved as a result of this audit.

Thank you, Mr. Chair.

[The Chair, Liberal, Shawn Murphy]

Thank you, Mr. Ranger.

Deputy Commissioner Killam, you have opening comments. I'll turn the floor over to you now.

[D/Commr Tim Killam, Deputy Commissioner, Policing Support Services, Royal Canadian Mounted Police]

Thank you Mr. Chairman.

I'm pleased to appear today on behalf of the RCMP and Commissioner Elliott.

The commissioner has asked me to express his appreciation for the opportunity for the RCMP to participate today and to convey his regrets for not being here.

The manner in which the RCMP conducts national security criminal investigations and manages criminal intelligence has evolved considerably over recent years. We continue to adapt to our ever-changing operating environment, as we build on opportunities for improvement and greater accountability in how we investigate criminal threats to national security and share criminal intelligence.

The recommendations of Justice O'Connor, as well as reports from the Auditor General and the Privacy Commissioner, have been instrumental in helping plan the way forward. In fact, the recommendations in part one of Justice O'Connor's report are today at the very heart of the RCMP's redesigned approach to national security criminal investigations.

We continue to strengthen our good relations with law enforcement and government partners. The new memorandum of understanding with Transport Canada will provide greater safety to all Canadians by enhancing security at our airports and marine ports. Let me stress that maintaining the trust and support of Canadians is fundamental to the transformation under way in our national security and criminal intelligence programs. We have enjoyed a number of high-profile operational successes, but we do need Canadians behind us to perform at our best.

In closing, Mr. Chair, we are all well aware that there is no single agency uniquely positioned to tackle all threats to our national security. Mitigating the perils of organized crime and terrorism requires a collaborative and coordinated effort among domestic and foreign enforcement, intelligence, and government partners.

Key to this collaboration is gathering, sharing, and managing information effectively to protect Canadians while respecting individual rights and freedoms. The RCMP is fully committed to both principles.

We thank the committee for its ongoing review of criminal intelligence-sharing in Canada, and we appreciate your support in improving national security for all Canadians.

Thank you. I would be pleased to respond to the questions of committee members.

[The Chair, Liberal, Shawn Murphy]

Thank you, Deputy Commissioner Killam.

Ms. Ratansi.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Thank you all for being here.

I do not know where to begin, but I'm going to begin with the Auditor General. Ms. Fraser, you stated that the need for effective security is important, that Canadians are sophisticated enough to know the events in the world and their interplay, and that local events have made it imperative that we have solid security systems. However, you also stated that for Canadians to have confidence in their security intelligence system they need to know that the government agencies and departments maintain a balance between protecting the privacy of citizens and national security. You go on to say that you would have wanted an external, independent review. You suggest a system of external review and disclosure proportionate to the level of intrusion. There is preparatory work done, but it is not complete.

What are the risks this proportionality poses for Canadians? What comes to mind is Maher Arar, whose case has been our biggest albatross. It has been a shame on Canadians that we did it. Could you help me to understand what the risks will be? How would this independent review help alleviate the problems? I will ask all the agencies to answer. What lessons have you learned from the Air India inquiry, from the Maher Arar case and the other inquiries? If you have learned any lessons, why do we still have Canadian citizens sitting in jail in China and in Sudan?

[Sheila Fraser]

The report notes in exhibit 1.1 the various departments and agencies that are involved in intelligence activities. As we point out in this report and in previous reports, the level of external review or oversight varies significantly. There are some such as CSIS that have the Security Intelligence Review Committee and an Inspector General, but there are other departments, like the Department of National Defence, that have no external review. As to the RCMP, the Commission for Public Complaints is quite limited in the work it can do. It can only accept complaints, and the Commissioner of the RCMP determines what information the commission can have. As we point out, the degree of oversight varies significantly.

Many of these agencies and departments have received additional powers under new legislation, anti-terrorism legislation. We believe we need an ongoing review to ensure that there is external oversight over potential intrusion into private information and that the agencies are carrying out their mandates within the legal authorities given to them.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Fair enough.

Who would like to tackle the question of lessons learned? Perhaps the RCMP would like to go with lessons learned from the Maher Arar inquiry and the Air India inquiry. What are the steps forward, and how can we ensure that we are not supplying information that will put Canadian citizens in jail in China and in Sudan?

[D/Commr Tim Killam]

The RCMP has implemented all the recommendations of the O'Connor inquiry. Changes to the national security criminal investigations program have focused on monitoring all national security criminal investigations through centralized control in Ottawa. We have enhanced our relationships with CSIS, DFAIT, and law enforcement partners. We've expanded and improved training, and we've made improvements to information-sharing practices. Some of these policy changes have served to ensure that information is properly shared and assessed for reliability and accuracy. We have written caveats attached to every piece of information in national security investigations. DFAIT is properly consulted, and the national security criminal investigations are centrally monitored and controlled for quality.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Would you like to take a go at it, Monsieur?