Evidence of meeting #147 for Public Safety and National Security in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was vulnerabilities.

A video is available from Parliament.

On the agenda

MPs speaking

Also speaking

Deborah Chang  Vice-President, Policy, HackerOne
Steve Waterhouse  Former Information Systems Security Officer, Department of National Defence, As an Individual
Jobert Abma  Founder, HackerOne
Ruby Sahota  Brampton North, Lib.

3:30 p.m.

Liberal

The Chair Liberal John McKay

I call the meeting to order.

We have with us Jobert Abma, founder of HackerOne; Deborah Chang, also from HackerOne; and as an individual, Steve Waterhouse.

I'm sure that you have been briefed by the committee as to the process. It's 10 minutes for the initial presentation, and then we'll go to Mr. Waterhouse for his 10-minute presentation, and thereafter to questions by members.

Our second hour has collapsed, so I intend to run over our time, assuming that our guests will continue to be available.

With that, I will turn to HackerOne.

3:30 p.m.

Deborah Chang Vice-President, Policy, HackerOne

Members of the House of Commons Standing Committee on Public Safety and National Security, thank you for inviting us to speak today. I look forward to providing you with our perspective on cybersecurity and bug bounty programs.

I am vice-president of business development and policy of San Francisco-based HackerOne, the world's leading provider of hacker-powered security. I'm here with Jobert Abma, the founder of HackerOne. He founded the company when he was 23 years old and has been hacking since he was 13.

HackerOne operates bug bounty programs that connect companies and governments with the best white hat hackers in the world to find and fix vulnerabilities before malicious actors exploit them. As of January 2019, over 300,000 white hat hackers have registered with HackerOne to defend customers,—among them, the United States Department of Defense—removing over 80,000 vulnerabilities and preventing an untold number of breaches in the process.

Today's cybersecurity practices are severely outdated, in contrast to the cyber threats that society faces. When exploited for criminal purposes, even just a single and relatively unremarkable security vulnerability can create havoc, as the Equifax data breach grossly reminded us in 2017. In 2018 many other breaches have made the press, including the WannaCry ransomware attack.

For financial institutions, fraud incidents both online and offline increased by more than 130% in 2018, resulting in significant monetary and reputational losses. In the U.K., the number of cyber-attacks against U.K. financial services reported to the U.K.'s Financial Conduct Authority has risen by more than 80% in the last year. It is an unfortunate fact that in the digital realm, society is currently failing to provide its citizens with what societies were established for: safety and security.

I would like to talk now about hacker-powered security—a scalable model that can be used to prevent cyber-attacks in society as a whole, especially in the financial industry and national security. Whatever protections and defences we build into our digital assets—and we should build a lot of them—there's one practice that covers every possible cause of cyber breach. There is an immune system that will approach the digital assets from the same direction as adversaries and criminals, from the outside. There is a mechanism that, at scale, has the opportunity to ultimately detect every hole, every weakness and every security vulnerability in a system or product built by humans.

This practice is often called hacker-powered security. Hacker-powered security covers any cybersecurity-enhancing services and automations that are partially or wholly produced by independently operating security experts outside the company or organization in question. It is a model that invites external and independent security researchers and ethical hackers to hunt for vulnerabilities in computerized systems. These are individual experts who have signed up to help corporations and organizations detect and fix their security weaknesses.

The most fundamental function of hacker-powered security is a vulnerability disclosure program, also called responsible disclosure or coordinated vulnerability disclosure. A vulnerability disclosure program is essentially a neighbourhood watch for software. The motto is “If you see something, say something.” Concretely, if and when an ethical hacker finds a security vulnerability in a company or government organization's website, mobile app, or other computer system, this person will be invited to disclose to the system's owner the vulnerability that was found.

Most human beings are ready to help their neighbour, so the impetus for vulnerability disclosure is enormous. Issues of legality and trust, however, make vulnerability disclosure more complicated than a regular neighbourhood watch. To solve this issue, leading companies have created their own policy frameworks for the disclosure of vulnerabilities to them, and others turn to companies such as HackerOne to organize and coordinate such programs.

When an entity decides to offer financial rewards to finders of vulnerabilities, the vulnerability disclosure program is called a bug bounty program. Bug bounty programs have existed since at least 1983. The practice was perfected by Google, Facebook and Microsoft over the past half-dozen years.

Hacker-powered security programs have demonstrated their effectiveness compared with other methods of vulnerability detection. Hiring full-time employees or external service or product vendors to test for vulnerabilities is more expensive. No other method for validating software or manufactured products in use by consumers has been shown to produce similar results at such a favourable economic unit price.

Hacker-powered security is a scaled model. Today, there are over 300,000 registered ethical hackers on our platform alone, and over the coming years, we hope that this number will grow to over one million. The army of hackers will be able to take on the work of the entire digital realm of our society.

Thanks to the diversity and scale of the hacker community, hacker-powered security finds vulnerabilities that automated scanners or permanent penetration testing teams do not. Existing models are good at finding predictable security vulnerabilities, but even more important is to find the unpredictable ones: the unknown unknowns. Given a large enough hacker community and enough time, such vulnerabilities will be identified.

Entities that operate such vulnerability disclosure or bug bounty programs include Adobe, AT&T, the U.S. Department of Defense, Dropbox, Facebook, General Motors, Google, Microsoft, Nintendo, Starbucks, Shopify, Twitter and United Airlines. Specifically in the financial industry, American Express, Citigroup, JPMorgan Chase, ING and TD Ameritrade have public VDPs.

The U.S. Department of Defense and HackerOne pioneered the first federal government bug bounty program. Since the program's inception, more than 5,000 security vulnerabilities have been safely resolved in DOD critical assets with hacker-powered security. While the majority of the vulnerabilities reported through the DOD were without financial compensation, hackers have been awarded hundreds of thousands of dollars in bug bounty payments by the DOD.

A question I get a lot is, who are these hackers? Security experts may be described using a variety of titles, including ethical hacker, white hat, security researcher, bug hunter and finder. One title is conspicuously absent: criminal. Hackers are not criminals. Specifically, bug bounty programs offer no benefit to someone with criminal intent. On the contrary, HackerOne will record data about every hacker on the platform and only reward action that followed the rules. For these reasons, criminals go elsewhere.

Hackers are driven by a variety of motivations, many of which are altruistic. The security advocacy organization I Am The Cavalry summarizes these motivations as to protect—make the world a safer place; puzzle—tinker out of curiosity; prestige—seek pride and notability; profit—to earn money; and protest or patriotism—ideological and principled. A 2016 study by the U.S. National Telecommunications and Information Administration within the Department of Commerce found that only 15% of security researchers expect financial compensation in response to vulnerability disclosure.

Hacker-powered security not only improves security, but the model democratizes opportunity and offers meaningful work to anyone with the inclination and drive to be a useful, ethical hacker. Many hackers are young adults. They can do their work from anywhere. The money hackers make is used to support families, pay for education and catapult them into successful professional careers.

Hacking brings meaning and mandate to enterprising people irrespective of their location. Hacking brings positive societal impact across the nation.

In conclusion, we need hackers. Our goal must be an Internet that enables privacy and protects consumers. This is not achievable without ethical hackers taking an active role in safeguarding our collective security. Hackers are truly the immune system of the Internet. They are a positive power in society. We must enable them to encourage contribution. This requires a safe legal environment, encouraging all individuals to come forward with vulnerability information, no matter what the circumstance.

To close, I will repeat the words of numerous experts that a ubiquitous “see something, say something” practice for vulnerabilities is a vital and critical step towards improving cybersecurity for consumers. The absence of a formal channel to receive vulnerability reports reduces a vendor's security posture and introduces unnecessary risk. Corporations and the government should welcome input from external parties regarding potential security vulnerability. The Canadian government should encourage, if not require, that behaviour.

Thank you for the opportunity to testify on this important issue.

3:40 p.m.

Liberal

The Chair Liberal John McKay

Thank you very much.

With that, we'll turn to Mr. Waterhouse.

February 4th, 2019 / 3:40 p.m.

Steve Waterhouse Former Information Systems Security Officer, Department of National Defence, As an Individual

Thank you to the committee for the invitation to share insights on some of the problematics perceived by fellow citizens with their access and/or security of their earnings or savings versus computer technologies.

First, I will give you a brief introduction of where I come from. After serving with the Canadian Armed Forces and DND for 23 years, I was privileged to be among the first cyber-soldiers in the country to manage networked information systems, from a LAN size of about 250 users to a MAN size of about 5,000 users on multi-sites at a base level in its early stages of integration. This was in order to provide the right information to the command structure in what was previously a paper-based process, from normal day-to-day office tasks to the academic activities I was doing at CMR Saint-Jean as well as in operations. More recently, my job has been educating and training professionals and the public on how to apply best practices in information technology and to explain, in plain language—as we will do today—what is happening in the cyber space that affects everyone and everything on almost a daily basis with the news media. I shall present these insights to you now.

The situation is that it is a quarter past midnight.

This is the 21st century, as you all know. We are more connected than ever and our lives are more and more automated. In large part, the country's economy depends on the use of technology, by small and medium-sized companies and by big business. Even government services have turned a technological corner. The reality, however, is catching up with us more and more.

The few examples listed in the document I submitted to the committee demonstrate that the problems will continue as time goes on, but they are still of concern now. For example, the smartest programmers and IT experts are designing improper configurations in order to give themselves an unfair advantage in their stock market transactions.

Anyone who takes the time to learn about using, or even hacking, technology can find on the Internet techniques to find loopholes and to get around security, The latest techniques can be used to exploit the flaws, most of the time in order to get one's hands on information that will lead to financial gain.

In recent years, especially in 2017 and 2018, we have heard that ransomware is pervasive and virulent. It can attack not only individuals, but also any organization at all without exception. This type of scam still affects us because people are poorly informed and unable to identify the threats. The wrongdoers, moreover, have refined their methods, so that it is more and more difficult to identify the malware in a real email message.

Today, financial institutions are asking, not to say demanding, that their clients conduct their financial transactions only from their personal computers, their mobile phones, or by some other connected means. They expect everyone, employees and customers alike, to know how to work Windows 10, or the most recent version of Microsoft Office.

People do not have the training or the knowledge to use the basic tools used in those transactions. Most of the time, the transactions are conducted when security measures are not the best and the connectivity is dubious. Public Wi-Fi connections in hotels or Internet cafés are not secure at all. Cell phones, while they are hacked into less, are just as lacking in security.

The delay in deploying the promised high-speed connectivity to our regions reinforces the cynicism that come from the lack of access to a speed decent enough to allow financial transactions. The cynicism come from the fact that businesses and residence in Port-au-Prince, Haiti, have or, in the coming years will have, access to fibreoptics, well before those only 50 kilometres from Montreal.

What should we do, or what can be done? Well, I say take the lead and lead by example. It was with much enthusiasm that I heard about the set-up of the Canadian Centre for Cyber Security last October. This distinction of “cyber” as a separate component of “security” needed to be on its own to underline its importance. Too often I have encountered in large enterprises, as well as SMBs, “computer security” being considered as under the responsibility of the first appointed volunteer in the room. It's a necessary evil to many, but by having the federal government proceeding this way, few reasons can be found by any enterprises to set aside matters of cybersecurity and, hence, put the matters front and centre.

The CCC's recent changes in resources devoted to cybersecurity were long overdue. Canada used to be the nation of telecommunications firsts. Now we are dragging behind the rest of the world; we are trying to keep up with a technological wave of innovations. We used to have the best telecommunications equipment maker in the world called Nortel. It was taken away from us. Canada was one of the first nations to stand up as a leader in quantum security for computer networks. Most of that research was taken from us recently.

Strengthening the government's information systems has helped greatly to ensure their availability. Everyone can consult their information at any given time. As you have come to know, the prime target in computer exploitation is the weakest link, which to this day is the human component, particularly for the average citizen, whether at home or on the road.

The emphasis is on having a strong economy while using IT. This can be achieved by using information technology and by taking a live rather than a computer-based approach to educating those who use that technology. That means pretty much everyone nowadays. This approach reassures and gives the citizen or user immediate feedback.

Every day, Mr. and Mrs. Everyone are using incomplete software and hardware brought to this market without any guarantees that it will work—or that it won't fail. When cars are sold in this country, they come with all sorts of seals of approval, and Transport Canada oversees their safety. You can buy a set of Christmas lights anywhere in the country and they will come with a seal of approval from the CSA. Industry Canada oversees their application and safety. Who applies the same controls and validation to computer code or electronic hardware?

These devices on which we depend each day—also known as IoTs—are roaming freely all around us, without any form of safety certification. Insulin pumps are an example. Although the importation and sale of such devices seems to be regulated by Health Canada, who oversees the code used by these devices to keep people alive? Are they doing the right thing? Are pacemakers in the same situation? I believe they are.

Who certifies the computer code for ATMs to ensure that Canadian citizens have access to their money when needed, or smart dolls? We hear that they are being sold in North America even though they have been declared illegal spying devices in Germany due to privacy issues with kids. Who is supposed to protect our children's privacy from these immoral devices, if not the Privacy Commissioner?

Hardware and software code should be overseen by an independent government agency like CSA, as an example. Ideally, this agency would have a say about what's distributed for life-critical devices and would impose stiff penalties for non-conforming products—or simply ban them from the market.

In that matter, we are now confronted with a new dynamic in today's economy, the use of biometrics to do business. In July last year, the Chinook Centre in Calgary was caught embedding facial recognition cameras in the mall's interactive panels. It was documenting the clientele without their knowledge, with no warning whatsoever.

Complaints were made to the privacy commissioners of Canada and Alberta. To this date, none of the reports from these investigations, started in August 2018, have been published. I just came from the Promenades Gatineau, where I documented the presence of these panels, though not from the same company. They embed cameras on the panels without warning people they are being documented at that place.

We are now confronted with a similar situation at Place Laurier, where four stores are openly using facial recognition with the goal of documenting clients' feedback through their biometric characteristics. This kind of tracking is already happening with cellphones, of course, and the fidélité cards that consumers use in stores.

It would certainly be beneficial to everyone if the OPC were to grant authorizations, after a proper accreditation process, to organizations and businesses for the use of biometric technology. This would minimize the cost overruns of inquiries and also reassure citizens that the government has their backs with respect to privacy matters.

Is it too late? No, I believe that there is still time to do things right.

As for any tool, we must take the time to read the manual before we use it. Who among you has used or read the manual for Windows 10, Windows 7 or Windows XP? My feeling is that none of you did. They are very large documents. People are afraid of them and run a mile. At that point, third-party assistance becomes necessary. The human beings using the machines still need other human beings to train and guide them.

Your enlightened study of this issue will certainly be appreciated and will allow for improvements to what is not working well. That will create the impetus we need for the various participants to contribute to a better economy and it will help us once more to become the leaders that, fundamentally, we are.

I am now available to answer questions in both official languages.

Thank you.

3:50 p.m.

Liberal

The Chair Liberal John McKay

Thank you, Mr. Waterhouse, Ms. Chang and Mr. Abma.

Our first questioner is Ms. Dabrusin.

Take seven minutes, please.

3:50 p.m.

Liberal

Julie Dabrusin Liberal Toronto—Danforth, ON

Thank you.

There is a repeating theme from last week. I was really struck by the evidence we heard last week. The financial institution was described as the armoured vehicle delivering between two cardboard boxes, which are the humans at either end. I believe the number we heard was that something like 60% of cybersecurity issues are human-created by the end-users. That's something that really stuck out.

You asked whether we are reading the manuals. I don't think we are reading all of the manuals, and I don't know that it's reasonable to expect that we should.

You've mentioned government certification for end-users as one part, but another big piece is education.

HackerOne, I was looking at one of your newsletters. You had something about phishing, a phishing quiz. It was really hard.

My question is, if you had three things, say, that you would suggest, if we were trying to properly educate people—because that seems to be one of our biggest issues—what would they be?

Let me start with you, Mr. Waterhouse.

3:50 p.m.

Former Information Systems Security Officer, Department of National Defence, As an Individual

Steve Waterhouse

Throughout the country I've done some training. I do many conferences on cybersecurity. As I teach professionally, I can tell you, the utmost necessity is to have people stop and take the time to read about whatever they're doing.

We're laughing about the fact that we never read any manuals. That's true, but they're often superseded by statements of legal liabilities and obligations that discourage anyone from reading beyond that point. People will just figure it out. The graphical user interface has been so successful that people just intuitively make their way through and use maybe five or ten per cent of the full capacity of software.

I saw that transition when secretaries moved from WordPerfect 5.2 to Microsoft Word. They had to take courses, because those were two separate kinds of software. They were masters at WordPerfect, while nobody was afterwards in Word.

3:50 p.m.

Liberal

Julie Dabrusin Liberal Toronto—Danforth, ON

You're telling us, then, to read the manuals.

3:50 p.m.

Former Information Systems Security Officer, Department of National Defence, As an Individual

Steve Waterhouse

They could not read the manual, because it was so complicated. It was such a complete package, it would have been a week-long course. They went to those week-long courses, but they were divided into three different levels of difficulty: beginner, advanced, and then expert level. These were secretaries who were at the expert level on one software. Now the new software comes around, and they are at the beginner level. That reduces the efficiency of the workforce and slows down the effectiveness of the economy, I say.

Let's say that Windows version 15 is around the corner next year. How many people will be able to know how it works? The adaptation curve has been very steep.

3:50 p.m.

Liberal

Julie Dabrusin Liberal Toronto—Danforth, ON

I'm going to go to HackerOne quickly. The phishing quiz there was a Google-something quiz, but it was hard.

Do you have any idea—simple things...? People don't want to be a cardboard box.

3:50 p.m.

Jobert Abma Founder, HackerOne

I would like to point out that in recent years the behaviour of consumers has changed radically. Up until five years ago, our data used to be at large organizations who would have large teams who would help us consumers protect against data breaches and protect our privacy. I think consumer behaviour has changed such that we have become responsible for our own privacy, and as Mr. Waterhouse pointed out, we do not take responsibility to the point that is necessary today.

What I would like to add is that I don't believe it is up to the consumer to guarantee their own privacy. I believe that the organizations should help consumers and help organizations to protect consumers and their own users from these data breaches.

As I said earlier, however, with those users now being responsible themselves, it is important that we do quizzes such as the phishing test you were referring to, to make people aware of some of the risks that happen when they store their data either in a certain system or with a certain organization. That is a problem that we need to address from both the consumer side as well as the standpoint of the organizations that have a copy of that data.

3:55 p.m.

Liberal

Julie Dabrusin Liberal Toronto—Danforth, ON

Let me stay with your group. One thing you talked about was the importance of being able to report vulnerabilities, of a hacker who finds a vulnerability being able to report it. You mentioned that there was an issue with the legality of this.

Is the legal challenge that they will be charged criminally? What would we need as legal protection for the hackers doing good?

3:55 p.m.

Vice-President, Policy, HackerOne

Deborah Chang

That's a great question. In the U.S., there is the Computer Fraud and Abuse Act, passed in the 1980s, that says something to the effect that you can't hack and enter into a company's digital assets in an unauthorized manner. It has not been updated since. I believe Canada has a version of that law as well.

We would encourage Canada to pass a law to encourage all organizations with a digital asset to adapt some form of policy to invite the public—and you don't even need to call them hackers—to report any bugs and vulnerabilities they happen to find. That is just inviting them in, saying what's in scope and what is permitted and what isn't, as well as what you might specifically be looking for. Then, importantly, the organizations should offer a communication channel within it and set up a process in which to receive that information, as well as the resources to fix it.

That's what we would generally encourage the government to do, to pass a law to encourage that type of behaviour.

3:55 p.m.

Liberal

Julie Dabrusin Liberal Toronto—Danforth, ON

I have 20 seconds.

You tell this one company, you found a bug, a deficiency or vulnerability. Then you might have a whole bunch of companies using exactly the same type of software or whatever. They have the same vulnerability. What do we need to do to be able to share that vulnerability information across different businesses or organizations?

3:55 p.m.

Liberal

The Chair Liberal John McKay

Be very brief, please.

3:55 p.m.

Founder, HackerOne

Jobert Abma

There's a process called vulnerability coordination, where you would work together with the vendors themselves to coordinate that vulnerability, to disclose it to other organizations using the same vulnerability.

3:55 p.m.

Liberal

The Chair Liberal John McKay

Thank you, Ms. Dabrusin.

Mr. Paul-Hus, the floor is yours for seven minutes.

3:55 p.m.

Conservative

Pierre Paul-Hus Conservative Charlesbourg—Haute-Saint-Charles, QC

Thank you, Mr. Chair.

Good afternoon, everyone. My first question goes to Mr. Abma.

Last September, Scott Jones, the director designate of the Canadian Centre for Cyber Security, told our committee that he was convinced that Canada had sufficient guarantees to allow us to address the dangers of Chinese hacking or espionage of our telecommunications. In his statement, Mr. Jones concluded that it was not necessary to follow our allies in the Five Eyes to keep one company out of our 5G networks.

Can you talk to us about the strength of our cyberspace in Canada?

3:55 p.m.

Founder, HackerOne

Jobert Abma

There has yet to be a government that is immune to cybersecurity threats. The U.S. has some of the most developed cyber-practices in the world, as does Canada, as Mr. Waterhouse pointed out. It is also home to the companies with the most mature security practices in the world. Even so, hacks may still happen. So we're up against a race.

The Internet is a very complex system with a lot of people contributing to it. Everything is tied together. Systems and networks change or contain hundreds of thousands of individual hardware and software components and thousands of lines of code. Every time code is updated, which may happen multiple times a day, new vulnerabilities may be introduced. There will always be unknown unknowns and the only way to uncover these unknown unknowns is to invite good hackers to test the system. Even with systems that have been proven to be very secure, changes may happen overnight either because of an internal or external change, and vulnerabilities may arise.

4 p.m.

Conservative

Pierre Paul-Hus Conservative Charlesbourg—Haute-Saint-Charles, QC

Could you tell me whether, in America, your teams and your hackers are ready to handle the dangers besetting the 5G networks?

4 p.m.

Founder, HackerOne

Jobert Abma

Good hackers come across new technology every day. They will have to familiarize themselves with new technology to be able to find security vulnerabilities in it or in the components that are built on top of technologies like 5G. With our diverse customer base, there are a lot of opportunities and incentives for the hacker community to dive into these new technologies. As 5G becomes mainstream, we believe that more people will be capable of auditing the security of such components.

At this time, multiple customers of HackerOne are launching components on top of 5G and are exposing that technology to some in the hacker community, which we believe is the right way to uncover some of these security vulnerabilities that are currently unknown to us or the United States.

4 p.m.

Conservative

Pierre Paul-Hus Conservative Charlesbourg—Haute-Saint-Charles, QC

Your company, HackerOne, has established relationships with clients like the Pentagon and the American Department of State. How have you managed to establish a relationship of trust with those clients, and how could we do the same? Is this a practice that Canada should adopt?

4 p.m.

Founder, HackerOne

Jobert Abma

All the hackers who have participated in the DOD-related programs were hand-selected by the DOD and HackerOne because of our expertise and track record. We complement what our customers and government are already doing. We have a proven track record in hacker-powered security, and having coverage in both the government and private sectors strengthens our mission, which is to empower the world to build a safer Internet.

To this day, over 5,000 vulnerabilities have been uncovered in the U.S. DOD systems, the majority of which have been reported to the DOD without any monetary incentives. We believe that a vulnerability disclosure program, or establishing a process to do so, is our recommendation to every government on this planet to ensure that they can work with the hacker community according to the “see something, say something” principle.

4 p.m.

Conservative

Pierre Paul-Hus Conservative Charlesbourg—Haute-Saint-Charles, QC

Thank you. If the committee is interested, I have a photo of your brochure showing hackers working for the Department of Defence. They do not want to put on a uniform, but they are the best.

Now I have a question for you, Mr. Waterhouse. Are financial institutions currently doing enough to protect people on a daily basis?

4 p.m.

Former Information Systems Security Officer, Department of National Defence, As an Individual

Steve Waterhouse

The financial institutions say yes. From my point of view as a customer of a financial institution, I say no. Often, customers go to their financial institutions, where they are given tools that the institutions guarantee are secure. The clients go home or to work with a tool, an application, to access the system, but they really do not know how it works. All the risk then falls on their shoulders. If they make a mistake, it's their fault, not the fault of the financial institution, which has no problem proving it.

That is the shame. I was somewhat preaching the need to know one's operating system. Will the next Andoid phone be up to the task? People will not know how to use it any better. The training will focus on one application only and people will have to adapt when the application changes its look and its feel. This is what the market has been forcing on us for 30 or so years. As soon as the look and feel of an application changes, you have to work at adapting to it. There is no update, and no one holds our hand to help us become familiar with the new application.