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1998 Public Report
Table of Contents
- Foreword
- Part I: Global Security Environment
- Part II: Counter-Terrorism
- Part III: Counter-Intelligence
- Part IV: Security Screening
- Part V: Additional Issues
- Part VI: Resource Implications
Foreword
This is the eighth annual edition of the Canadian Security Intelligence Service's Public Report. Once again, the Service uses this report as a vehicle to provide Canadians with an update on the threat environment and the implications for Canada and Canadian interests. Public safety remains the highest priority for the Service, while national security threats remain a persistent concern. The 15 years since the inception of Canada's security and intelligence service have seen both a great shift in the global threat and tandem shifts in the Service's approach to countering the threat. This past year has seen a heightened focus among world leaders on the international threat posed by terrorism.
A Special Committee of the Senate was appointed in 1998 to review the Canadian intelligence community's preparedness and effectiveness in countering threats to national security. The Committee considered the threats posed by terrorism and the counter-terrorism programs of the Government of Canada. The Service was pleased to participate and assist in the evaluation of Canada's counter terrorism preparedness by the Special Senate Committee.
Most of Canada's security preoccupations originate abroad. However, a small number of domestic concerns also bear watching. In both the areas of public safety and national security, there are traditional and emergent issues that preoccupy the Service. These will be described in the segments of this report on CSIS' Counter-Terrorism and Counter-Intelligence programs. CSIS has a mandate to forewarn and advise Government on such activities, provide threat assessments and help to ensure effective consultation and information sharing with appropriate agencies.
With the new millennium less than a year away, one can anticipate that the coming year will be as turbulent as the previous reporting period. Millennial challenges are having a resource and technological impact on all public and private organizations. The security and intelligence community has been preparing for this year, from a public safety perspective, with consideration for the social, economic, and technological implications. Aware of the growing requirement to work closely to ensure a safe and prosperous world, the foreign ministers of the G-8 countries and representatives of the European Commission met in London in May of 1998. They discussed a number of global and regional issues of common concern. Some of these issues will be discussed in this report.
Readers seeking further open information on public safety and national security issues can visit the CSIS Internet Website, established in June 1996. The site is a cost-effective way to provide the Canadian public with relevant information about the Service's mandate, programs and activities. It can be accessed at www.csis-scrs.gc.ca.
Part I: Global Security Environment
The current threat environment is constantly changing and has become more difficult to predict. Despite forecasts of an eventual settling of the world order, the threat environment has continued to shift, resulting from a wide range of influences such as political and religious strife, human rights abuses and mass migration. Long-brewing political and territorial grievances have resulted in greater intra-border conflicts with global geopolitical ramifications.
A variety of traditional and emerging issues poses a challenge to the security and intelligence community world-wide. Conventional allies and former adversaries cooperate against the shared threat that is terrorism, seeking to prevent the occurrence, or origin of a terrorist act, on their territory. Although there has been a notable reduction in the number of terrorist acts in the past decade, those that have taken place have been horrifyingly large in scale. This past year has again seen the drastic measures that extremist individuals or groups are ready to take to attack a country or system they consider contemptible. Added to such atrocities of this decade as the Sarin gas attack on the Tokyo subway, the bombing in Oklahoma city and the explosion at the World Trade Center, are the bombings of the American embassy buildings in Eastern Africa. The impact of the attacks in Dar es Salaam and Nairobi was felt worldwide; with a death toll of more than 270 people and 5,000 injuries.
On a smaller, but no less significant, scale there are isolated continental and intra-border disputes that have global reverberations. Rebel conflicts in Rwanda and Uganda, ethnic hostilities in the Horn of Africa, and sub-Saharan strife in the region of the democratic Republic of Congo continue to increase the number of deaths that occur when warring factions are bent on gaining power or committing genocide or both. Somalia remains in conflict, marked by a lack of legal authority and the obstruction of humanitarian aid and rehabilitation. The alarming increase in violence and abuses in Kosovo, where contempt for human lives and disregard for international pressure for peaceful negotiation are the norm, has been a major concern for G-8 countries. As an active partner in NATO, and with a seat on the Security Council of the United Nations, Canada and Canadians are called upon to assist in peace-keeping or in supporting offensive measures against leaders who are committing human rights abuses and atrocities. The implications are wide-spread in areas such as the Balkans, as countries seek to understand the nature of a centuries-old conflict and to decide what action, if any, is to be taken. Access to nuclear weapons technology in the Middle-East and Asia trouble world-watchers. Canadians wait to see what will happen next in such hotbeds of dispute as the Middle-East, Africa and South- eastern Europe, and wonder how it will impact on their country. The Canadian intelligence community, in conjunction with allied agencies, works hard to anticipate and plan for the next challenge.
A certain degree of upheaval can be expected at the turn of the millennium. Contemporary advances in scientific, communication and defense technology are exponential. With constant change comes a continuing struggle to adapt. The technological and economic gap between prosperous nations and struggling countries grows daily, and the disparity of human existence widens with it. Poverty, human rights abuses and political instability are behind the growing influx of immigrants and refugees to Western countries. Canada remains a primary recipient of refugees and anticipates an inflow of one million legal immigrants over the next five years. With this steady flow of people from regions of conflict, a few will persist in importing their homeland conflicts or in using Canada as a safe-haven, or as an access point to the United States.
The face of the threat is so different that an emerging issue or trend is not always recognized as problematic until it has escalated. Factors such as communications technology, the ease of travel, the erosion of borders as well as the proliferation of weapons, both simple and sophisticated, have had a significant while insidious impact on the global threat environment. In today's information age, where crime, terrorism and espionage transcend national boundaries, new threats put Canadian sovereignty at risk. The challenge for the Canadian intelligence community, and primarily for the Service in its role as advisor to Government on threats to national security, is to monitor and attempt to anticipate how the constant shifting in the global threat environment will impact on Canada, Canadian citizens and Canadian interests. The Service attempts to be proactive or pre-emptive. This is a difficult task. Canada cannot afford to be perceived as a soft target, nor can the possibility of Canadian citizens becoming victims of terrorists acts be ignored. The bombing of an Air India flight out of Canada, one of the largest losses of life from a single terrorist attack, is a constant reminder.
The unsettled and often dangerous global situation has important implications for Canadian public safety. The Canadian intelligence community is working hard on both the domestic and international fronts to deal with threats to Canada's national security and national interests.
While the threat has metamorphosed, the people and programs in place to counter the threat have also evolved. The Special Senate Committee on Security and Intelligence remarked on the progress of the security and intelligence community in its approach to countering the threat.
Part II: Counter-Terrorism
The global terrorist threat is far more complex, extreme, sophisticated and transnational today than it was in 1984, when CSIS was created. The growing occurrence of regional and ethnic conflict offers greater opportunity for terrorism. Communications technology, unhindered by distance and boundaries, makes the coordination and propagation of an ideology simpler and quicker. Discussions on closing the international net on terrorism took place among G-8 partners and foreign ministers in May of 1998, prior to the G-8 Birmingham Summit. Canada is signatory to the United Nations Convention on the Suppression of Terrorist Bombings, the most recent of 11 United Nations counter-terrorism conventions.
Canada and Canadians are not primary targets of terrorist groups. However, proximity to the United States, a common border, large expatriate communities and a healthy economy draw representatives of virtually every terrorist group in the world to this country. The Counter- Terrorism Branch of CSIS is currently investigating more than 50 organizational targets which embody over 350 individual terrorist targets.
A large part of terrorist activity in Canada is related to on-going conflict abroad. Logistical support for terrorist acts in other parts of the world has been provided on Canadian soil. Funds are raised here to support the purchase and delivery of weapons, enhance combat training and subsidize travel. Ethnic communities are exploited through propaganda, advocacy and disinformation. Canadians with foreign roots are intimidated, coerced and manipulated while people are smuggled, documents forged and crimes committed, all in support of political, geographical and religious conflict abroad. Support networks in Canada have provided terrorists with safe-haven and transit to and from other countries, including the United States.
Recent Incidents
The bombings of American embassy buildings in Nairobi and Dar es Salaam are an indication that terrorists will target a country or system that is perceived to be the least defended. Canada cannot afford to be viewed as such a place. Canada's long border and coastlines appeal to terrorist organizations. Canada's comparative wealth as a source of technology, equipment and funds is attractive to terrorist groups. As with other democracies, Canada's openness and respect for individual rights and freedoms preclude the suppression of terrorism by ruthless methods. While distance and moderation may make Canada a less likely target than other countries, Canada can also be seen as a relatively safe haven for the same reasons. Finally, the open nature of Canadian society makes us particularly vulnerable to terrorist influence and activities within expatriate communities. Canadians are not immune to violent acts driven by political or religious extremism.
The effects of terrorism on Canadians and Canadian interests are felt beyond our borders. Canadians travelling or working abroad risk being mistaken for nationals of countries actively targeted by terrorist groups. The threat to North Americans abroad is exemplified by the February 1998 fatwa signed by Islamic Terrorist group leaders calling for the elimination of all American civilian and military personnel. Canadian citizens also risk being in proximity to an attack aimed at another target. In 1996, a Canadian citizen was among those killed in a Paris subway bombing. Although Americans were the target of the bombings of the American embassies in Nairobi and Dar es Salaam, the majority of the victims were African. All foreigners travelling or working abroad are also at risk of being brought into the middle of regional conflict. In early 1998, a British-Canadian national was among those killed in the cross-fire between Yemeni security forces and kidnappers with reported links to Islamic extremists. A Canadian conservationist barely escaped with his life in the March, 1999 kidnapping of international tourists that saw the brutal death of eight people at the hands of rebel Rwandan soldiers in Uganda.
Disturbing Trends
A new strain of religious or messianic extremism is a particularly disturbing trend in the contemporary terrorist threat environment. Many of these extremists do not have a traditional political agenda. In such cases, the fear of retaliation that may temper the terrorist's actions is gone, as well as the desire for negotiation and the demand for change. The World Trade Center bombing in February of 1993 was designed to cause massive, indiscriminate civilian casualties. This new breed seeks only to cause as much death and destruction as possible to a people or system it considers abhorrent.
The availability of advances in technology, armament and travel to those seeking to cause harm is disturbing as well. The nature of terrorism is shifting, becoming more sophisticated. The wide variety of available telecommunications services, including computer networks and the Internet is a new tool and potential weapon at the terrorist's disposal. Present use of these services by terrorist groups has been restricted to rhetoric and propaganda, as well as planning and coordination; however, the possibility exists for this tool to be used in a destructive manner, ranging from tampering with information infrastructure to a full-fledged attack.
The impact of the 1998 ice storm on Montreal communities is an indication of modern society's dependence on technologically-driven systems. A cyber-attack causing a large scale power outage for a lengthy duration in a city ill-equipped to handle such massive disruption could have devastating results.
The fight against terrorism requires international cooperation, based on international law, established through international agreements. Canada plays a role in the international community's development of a legal framework to counter terrorism and to bring terrorists to justice. The UN Convention on the Suppression of Acts of Nuclear Terrorism and the UN Convention for the Suppression of Terrorist Financing are currently in the draft stages and undergoing further consideration, in addition to the proposed UN Convention on the Suppression of Terrorism. In support of Canada's collaborative efforts to counter terrorist activity, the Service has developed cooperative arrangements within the international security and intelligence community in pursuit of exchanges of intelligence and expertise.
Part III: Counter-Intelligence
The Service's counter-intelligence resources are deployed against a variety of security threats from both traditional and unprecedented intelligence activities. The end of the Cold War has seen little, if any, lessening of espionage activity. Armed with new skills and specialized knowledge, adversaries have presented the Service with new challenges. Threats to national security from espionage and foreign investigative activity continue to be resource-intensive, with new and emerging threats developing in the areas of economic security, information operations, and proliferation. The efforts of foreign governments to appropriate proprietary information and technology covertly is a growing challenge to the Service.
While the threat is changing, traditional espionage and foreign interference continue to take place in Canada. Countries seeking to counter expatriate nationals who support homeland conflicts abroad continue to use their intelligence services to monitor, manipulate and threaten new Canadians, despite warnings from the Canadian government. Traditional intelligence-gathering and the monitoring of dissent are subtle in nature and require resource-intensive investigation.
It is not often that the Canadian government can demonstrate the necessity for a counter- intelligence service with examples that are in the public domain. The Russian illegals case (agents living in a foreign country under false identity) in Toronto in 1996 offered rare public insight into classic espionage in Canada. CSIS continues to monitor this area of threat, while working towards discouraging unacceptable activity by foreign governments.
Economic Security
Canada's economy, as well as its political and social infrastructures, are threatened by countries engaging in activities to enhance their economic competitiveness and technological strength. Foreign governments, including some of Canada's allies and trading partners, conduct economic espionage to acquire valuable, and often sensitive, Canadian proprietary information. The Service defines economic espionage as the clandestine, deceptive, coercive or illegal means used or facilitated by a foreign government to acquire such assets. Canada's leading-edge developments in a wide range of technological fora have attracted the interest of countries that seek to appropriate information and technology they are either unwilling or incapable of purchasing. In certain instances, their goal is to acquire information which would provide a competitive edge in contract negotiations involving Canadian firms, particularly in countries where the state and private industry are closely associated.
Economic espionage has a detrimental impact on Canada's ability to compete in the international marketplace. Job loss, lost investment in research and development and an erosion of Canada's economic infrastructure are the result. In a world driven by competition for economic advantage, an increase in such activities is likely. The Service's role is to investigate the economic espionage activities of foreign governments. The Service also plays a proactive role in increasing the awareness of public and private industry with respect to the threat posed by rival governments.
Proliferation
The proliferation of chemical, biological, radiological and nuclear weapons of mass destruction, as well as their delivery systems, has the potential to undermine international peace and stability. Reports from International Atomic Energy Agency inspectors that told of Saddam Hussein's refusal to fully comply with UN Security Council resolutions and demands were a clear indication that the current global threat from offensive countries developing nuclear weapons capabilities is more prevalent than ever. Nuclear weapons-testing in Pakistan and India are reminders that the situation in Asia remains volatile, and an issue of escalating global concern.
Canada supports the sharing of nuclear technology with the objective of assisting other countries in the development of nuclear energy for peaceful purposes. However, although Canada uses nuclear energy for purely peaceful purposes, the Canadian government is aware of the military agenda of certain foreign countries. Various countries seeking to possess chemical, biological, radiological or nuclear weapons of mass destruction lack the indigenous capability to produce them. So they attempt to acquire the critical components and technologies abroad by illicit means. Canada's advanced high technology industry makes it an attractive target for the governments of foreign countries, such as Iraq, seeking to acquire the technology and expertise necessary to develop or expand their weapons programs. Procurement of advanced weapons technology and expertise has also upgraded the arsenal available to terrorist groups targeting Western interests.
Canadian nuclear non-proliferation policy seeks to ensure that Canadian exports of nuclear products and technology are not used in the production of weapons of mass destruction. As a partner in international fora for the prevention of the proliferation of weapons of mass destruction, Canada is committed to the peaceful and controlled exchange of information and technology. Canada is a member of a number of international tribunals that strive to limit the acquisition of weapons, materials and technology with direct or indirect (dual-use) military applications. With a seat on the UN Security Council and as a member of G-8, as well as other coordinated coalitions determined to impede procurement, Canada supports treaties such as the 1997 Chemical Weapons Convention. Canada also reports annually to the UN on its military goods exports, its military holdings and procurement in an effort to encourage transparency among international partners.
In its determination to counter the domestic and international threat from weapons of mass destruction, the Service has a broad and in-depth information-sharing relationship with other government departments. The Service also uses its exchange relationships with allied government agencies to expand and share its knowledge of the threat.
Information Operations
Canada's success in the international marketplace depends increasingly on the ability of its businesses and of government agencies to capitalize on global communications. Economic and social prosperity require access to new technologies, information infrastructure and multi-media communication. These avenues encourage business growth, job creation and development, greater access to international markets, and relationships within the international community. Global communications advancements also open the door to those seeking to steal economic and political advantage. This past year has seen a heightened interest from Western governments in the use of cryptography for the protection of telecommunications systems and information. Strong encryption is essential for the protection of government institutional information. However, advanced methods of cryptography are also available to individuals or groups who pose a threat to public safety. This has proven to be a challenge for security agencies.
The vulnerability of Canadian cyber-assets is of growing concern. The public and private sectors depend on telecommunication networks for effective and efficient operation. Many of these systems, normally taken for granted, are virtually defenseless against determined hackers. The potential exists that individuals looking for the challenge of "breaking into" the cyber holdings of public institutions, foreign governments seeking classified information, "hacktivists" seeking to cause havoc in protest, or terrorists determined to cause widespread damage could have a serious impact on Canada's information infrastructure.
CSIS advises Government on its assessment of the potential threat to public and private holdings from foreign governments or individuals of a security concern.
Transnational Crime
Governments have had to harness the resources of all institutions capable of providing an active or supportive role in the fight against large scale criminal activity. Transnational crime is the globalization of criminal activity such as drug trafficking, corruption, arms dealing and money laundering, to name but a few. Technological advancement has made borders irrelevant to telecommunications and financial transactions. As a result, there are fewer obstacles in the way of organized criminal activities.
The increasing scope and power of groups involved in transnational crime has unsettled the international community, prompting the United Nations to declare transnational crime as its highest priority and members of the G-8 to affirm that it is one of the major challenges facing the world on the threshold of the 21st century.
The Service processes and disseminates strategic intelligence on transnational organized crime to relevant Canadian departments and tactical information to Canadian law enforcement authorities. Law enforcement agencies have the lead role in the fight against transnational crime in Canada. For this purpose, they collect both strategic and tactical intelligence, leading to arrests and prosecutions. The focus of CSIS is on its liaison relationships with foreign intelligence agencies and the contribution they can make to the overall effort.
Foreign-Influenced Activity
As part of its Counter-Intelligence Program, the Service also investigates threats to national security stemming from foreign-influenced activity. Expatriate communities in wealthy countries such as Canada are often large, well-organized and well-funded, making them attractive to foreign governments and dissident groups. Foreign influenced activities-the manipulation of and attempts to control ethnic communities by representatives of foreign governments-pose serious concerns for Canada's national interests and are a violation of Canadian sovereignty. Certain countries use methods that Canadians would find abusive of basic human rights. The investigation of activities directed at émigré communities remains one of the Service's priorities. The Service, in its exchanges with the agencies of allied and formerly adversarial governments, strives to send the message that the targeting of Canadian citizens is unacceptable and subject to punitive diplomatic measures. CSIS attempts to persuade former adversaries that they have more to gain from cooperating with the Service than from spying on Canada and its citizens. However, there will always be governments that dismiss what they consider to be moderate methods and continue to monitor and coerce expatriate nationals in Canada.
Part IV: Security Screening
CSIS' Security Screening program is an integral part of Canada's front line of defense against threats to public safety and national security. It is also the Service's most publicly visible function. It involves both a Government Screening and an Immigration Screening program. Thousands of security assessments are conducted each year by the Service in its Immigration and Citizenship Screening and Government Screening programs.
Immigration and Citizenship Screening
As noted earlier, with political and ethnic turmoil rating high on the scale of threats to the global security environment, security advice is an important first step in countering the importation of homeland conflict. Since Canada is one of the few remaining countries that accept significant numbers of refugees and immigrants, the Service assists in preventing the admission to Canada of those who would be detrimental to its security interests. CSIS provides advice to the Minister of Citizenship and Immigration regarding prospective visitors, refugees, immigrants and citizenship applicants to Canada.
Government Screening
The Government Screening program assists in countering the potential threat from those seeking to acquire Canadian assets and proprietary information. Under the Government Security Policy, federal employees require security clearances in order to access classified government information in the performance of their duties. Though the government department or agency is responsible for granting such clearances, the Service is responsible for screening investigations and the resulting security assessments. In 1998, the Service took over security screening for the Department of National Defence with the result that CSIS' clients now include all federal government institutions, with the exception of the RCMP.
In addition, the Service provides accreditation checks for the RCMP's Special Events Program and provides security assessments to Transport Canada for its Airport Restricted Area Access Clearance Program. The Service also has reciprocal screening agreements with foreign governments and agencies that have been approved by the Solicitor General and the Minister of Foreign Affairs and International Trade.
Part V: Additional Issues
Environmental Scanning
In an effort to be proactive and pre-emptive in the contemporary threat environment, the Service is studying trends and their potential global and national implications. Resources of the Service's Requirements, Analysis and Productions Branch are tasked to study open information from various sources for issues of potential interest to the Counter Terrorism, the Counter Intelligence and the Security Screening branches of the Service, as well as to Government clients. The Service seeks by these means to identify emerging issues and conflict which may threaten public safety or national security. Unclassified reports which are produced based on information collected in this process are published by the Service.
Technological Challenges
Each year brings exponential growth in technological progress. As noted in the section on Information Operations, technological advances represent not only additional programs and tools for use by Government but also greater challenges for law-enforcement and national security agencies. The Service seeks, through sharing with government institutions and allied agencies, and through internal research and development, to keep pace with technological developments. Throughout this report, references to technology and the challenge it represents for the international intelligence community are predominant. It is imperative that the Service continues to expend valuable resources to maintain the technological capability to target threats to national security.
Part VI: Resource Implications
The Service has been subject to the Government's fiscal restraint program since the early 1990s. Budget reductions have inevitably impacted on both human and financial resource levels. The accompanying charts illustrate the changes to the number of employees in the Service and the overall budget.
Beginning in fiscal year 1998/99, the Service's budget was increased to reflect the transfer of resources from the Department of National Defence to CSIS, to cover the absorption of the DND security screening program.
Construction capital shown in Figure 2 is the declining level of funding related to the construction of the national headquarters building, which was completed during fiscal year 1995/96.
Significant financial and human resources have been devoted to ensuring that the mission critical application systems of the Service are Year 2000 compliant. Projected expenditures are slightly higher for the fiscal year 1998 / 99, reflecting the incremental cost to the service for Y2K preparedness.
The Service is also involved in the security-related groundwork in preparation for five special events to take place in Canada during the fiscal year 1999/2000. These events include the PAN AM Games in Winnipeg during summer 1999, the Francophonie Summit in Moncton as well as the NATO Defence Ministers' Conference in September 1999, and a meeting of Western Trade Ministers and the General Assembly of the Organization of American States in June 1999.
Public Contact
For more information, please contact:
Candian Security Intelligence Service
Communications Branch
P.O. Box 9732
Postal Station T
Ottawa, Ontario
K1G 4G4
613-231-0100 (Communications)
Cat No. JS71-2/1999
ISBN 0-662-641168-X