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1999 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 Summary
Foreword
This is the ninth edition of the annual Public Report of the Canadian Security Intelligence Service. In this report, the Service provides a brief overview of the current global threat environment, with the associated implications for Canada, and outlines the programs developed to address threats to public safety and national security.
In the year leading up to the new millennium, world leaders prepared for Y2K-related technological problems and anticipated actions by millennial opportunists. The international intelligence community worked diligently and cooperatively to provide intelligence and assessments with respect to issues related to the new millennium. In the months following the smooth transition to the year 2000, the world continues to keep a watchful eye on residual fallout while returning its attention to more conventional issues.
Public safety continues to be the highest priority for the Service. While the global security environment remains unpredictable, the use of violence in support of political, religious and territorial agendas is a constant. The challenge for CSIS and government lies in preventing foreign-rooted issues from becoming domestic security problems. As well, it is imperative that Canada does not become the originating country of a terrorist incident abroad. Although most of Canada's security preoccupations originate outside its borders, a small number of domestic concerns also bear watching. Threats to national security which are public safety issues are investigated and assessed by the Counter-Terrorism Branch of the Service.
Threats to national security related to the intelligence activities of foreign governments, as well as threats to Canada's social, political and economic infrastructures, are investigated by the Counter-Intelligence Branch. The intelligence activities of foreign governments targeting Canadian citizens, at home and abroad, threaten Canadian sovereignty and the welfare of our citizens. CSIS is required to advise government about groups, governments, individuals and issues that may represent a threat to Canada. In order to address the needs of government, the Counter-Terrorism, Counter-Intelligence and Security Screening programs of the Service are designed to work in conjunction with the Requirements, Analysis and Production Branch to provide timely and accurate intelligence.
Demand on the resources dedicated by the Service to monitor, analyze and address the threat is constant, requiring continual reassessment of priorities. Resource levels dictate that the Service rely on risk management to a greater extent than ever before, concentrating resources selectively and precisely on the major threats, while responding to emerging issues. As well, effective interdepartmental consultation and information-sharing with appropriate agencies will continue to be essential tools of comprehensive investigation.
Readers seeking further open information on public safety and national security issues can visit the CSIS Internet Web site. The site can be reached at www.csis-scrs.gc.ca and is a cost-effective way of providing the Canadian public with relevant information about the mandate, programs and activities of the Service.
Part I: Global Security Environment
The transition to the new millennium was relatively incident-free, despite forecasts of potential Y2K problems and the anticipation of destructive activities from a variety of sources. The smooth technological transition can be attributed, in part, to a national and international collaboration of institutions in readying critical information systems and social infrastructures. Nevertheless, the growing uncertainty as the year 2000 approached was an indication of the challenges facing the international security intelligence community in the new millennium. The near tripling of the number of world states since 1945 continues to increase the possibility of ethnic, religious, political and economic discord. This past year, the global environment experienced ongoing agitation and some previously unseen conflict. When viewed individually, these issues seem less formidable, have a lesser impact and are less definable as a threat to worldwide stability than was the Cold War. However, when viewed as a whole, such conflicts become a blur of activity and strife: hard to define, but no less a real threat. This discord has generated international resonance.
Intra-continental power struggles affect the global threat environment. For example, concerns about Asia now include a number of military, as well as economic issues. Nuclear and missile testing in India and Pakistan, an intensification of the dispute over Kashmir, and continuing tensions in the Korean peninsula are a reminder that regional rivalries can threaten the universal balance. These considerations, as well as China's ongoing modernization of its military forces and its commitment to use force to recover Taiwan, if necessary, signal to the international community that the political stability of this region should be watched closely in the coming decade.
With no resolution in the Balkans and ongoing activity in Chechnya, Russia and former East Bloc countries, particularly in the South Caucasus, will continue to bear scrutiny. Russia's involvement in Chechnya has presented the international community with yet another conflict between global responsibility for the protection of human rights and a nation's territorial integrity, as have the situations in Pakistan, Indonesia and several African countries.
Long-term security, as well as economic and social problems, persist in Africa and the Middle East. Africa, the world's most troubled continent with its grim history of human rights abuses, has required great investment in international peacekeeping and global humanitarian intervention. Prospects appear more promising for improved security conditions in the Middle East; however, violent opposition and internal divisions on all sides will continue to engage the international community.
The devolution of power to Northern Ireland from Britain in December 1999 came to an end in February 2000 when mainstream Irish republican and loyalist terrorists failed to begin decommissioning their weaponry. While attempts are being made to resolve the issue of decommissioning, mainstream and dissident terrorists may become impatient with the process, which might result in incidents of violence.
Mass migration remains a security concern. As inter-state conflicts rise, the number of displaced peoples as well as political and religious refugees will also grow, bringing with it social, economic, political and, therefore, security challenges. Immigration is the foundation of this country and most arrivals to Canada are legitimate migrants seeking a new life. However, there are a small number who seek to use the system for other purposes, resulting in national and international security implications.
Enormous profits and corruption encourage the smuggling of people, causing political, security and health problems. Illegal migration continues to increase and although the problem has always existed, public awareness of it has grown. The arrival by boat of hundreds of refugees from China has highlighted the importance of legislative changes to the Immigration Act. The West can anticipate increasing numbers of migrants, both legal and illegal, from the East in the foreseeable future. The illegal movement of people, be it small numbers at a time or by the boatload, continues to be an international concern.
Canada is not immune to the effects of global trends and concerns. This past decade has witnessed an increased need for peacekeeping missions and other types of Canadian involvement (humanitarian, diplomatic, non-governmental organizations) in many foreign conflicts, resulting in broad implications for national security. Canadians risk falling victim to international terrorism, intra-state wars, mercenary and politically-motivated kidnappings, among other things, as a result of Canada's role within the Western Alliance and our economic status as a G-7 member. Closer to home, Canada's open society, proximity to the US and prominence in many technological fields make it attractive grounds for coordinating terrorist support activities and acquiring proprietary information and technology.
This serves as a reminder that the geopolitics of the world affect Canadians both at home and abroad, increasing the need for the security intelligence community to focus on the global security environment. The ensuing demand on resources dedicated to monitor, analyze and address the threat to Canada is constant, while the priorities are forever shifting.
CSIS Security Intelligence Interests
Faced with a complex and changing environment, the Service's public safety and national security interests are summarized as follows:
- public safety from the effects of terrorism at home and abroad;
- the clandestine activities of foreign intelligence services;
- the inviolability of expatriate communities;
- the proliferation of weapons of mass destruction, including nuclear, chemical and biological weapons;
- the security of classified or proprietary public or private information;
- the security of critical information systems and of the social infrastructure;
- transnational criminal activity;
- maintaining technical capabilities in a rapidly changing environment;
- effective security screening.
In pursuing these interests, the Service works cooperatively with the appropriate domestic departments and agencies, and with the intelligence services of other governments, to counter threats to public safety and national security.
Part II: Counter-Terrorism
Terrorism Today
Religious, political and territorial imperatives continue to drive international terrorist activity. This past year has seen an escalation of geopolitical conflict abroad, with global implications. The Service continues to be challenged by emerging issues and maintains its efforts to anticipate the threat. Emerging technologies and their availability also present challenges to public safety and national security. New communication technology and encryption methods are increasingly exploited to facilitate or support terrorist activity. Canada participates with G-8 partners in bilateral and multilateral meetings to promote universal conformity with the eleven international counter-terrorism conventions, including the recent one on the suppression of terrorist bombings. The Convention on Terrorist Fundraising, the goal of which is the reduction of terrorist support activity, was approved by the United Nations and signed by Canada. As well, in March 2000, a new convention on nuclear terrorism was in the final negotiation stages at the UN under a Canadian chairman.
Public safety is the highest priority of the Service. Canada remains one of the world leaders in accepting refugees and immigrants and, like many wealthy countries, it will continue to receive a steady flow of immigrants from some regions torn by conflict. Canadians mirror the population of the globe, therefore when conflicts grip these regions, they resonate in Canada. Individuals with links to international terrorist groups use foreign countries, including Canada, as a base to plan terrorist acts and provide logistical support for terrorist activities in their country of origin or against other target nations. In Canada, supporters of terrorism engage in fundraising, the planning of operations and the transfer of money and materiel overseas. Others, particularly those associated with state sponsors of terrorism, coerce and attempt to manipulate members of émigré communities in Canada. As noted earlier, a primary preoccupation of the Service remains preventing a terrorist act in or originating from Canada.
While state-sponsored terrorism continues to pose a significant threat, one of the prime motivators of terrorism today is Islamic religious extremism. In the past few years, Sunni Islamic extremism, exemplified by terrorist financier Osama bin Laden, has emerged as the preeminent international terrorist threat. At the forefront of this extremism is an international ad hoc coalition of terrorists, with no specific national allegiance, who share a willingness to use serious violence to effect political change. As countries tighten security against Islamic terrorist movements, radical groups are increasingly relying upon their international networks to help plan and execute attacks. Representatives of these networks have expressed the intention of causing harm to Americans and their allies; arrests made in various parts of the world at the approach of the new year were frightening reminders of their determination. The December 1999 arrest of Ahmed Ressam and some of the subsequent apprehensions in the US of Canadian residents with suspected links to Islamic terrorists are indications that Sunni extremists have intensified their activities in North America. While previously limited to support activity, efforts by Sunni extremists in Canada and the US appear to have escalated to coordinating attacks on North American soil. Not only do the arrests underline the threat from terrorism to Canada's security but also the impact of shared threats on Canada-US relations. The Service has escalated its already extensive investigation of this threat in order to meet its commitment to public safety in Canada and elsewhere.
The security and intelligence community is increasingly challenged by emerging terrorist threats. These include the potential use of nuclear, chemical, biological or radiological materials by a terrorist group, cult or individual. Although it is widely believed that a mass-casualty attack of this kind is unlikely in Canada, the potential consequences are so significant that the Service must devote resources to the investigation of such threats. In light of the potential consequences of a mass-casualty attack, Canada and its allies continue to explore and develop inter-agency emergency responses to this threat.
Over the past several years, in carrying out its responsibilities under the CSIS Act, the Service has targeted key individuals within terrorist organizations in order to impair their ability to operate here. The Service continues to work in partnership with Citizenship and Immigration Canada, the Department of Justice, the RCMP and the Canada Customs and Revenue Agency to help prevent terrorists from entering Canada and remove those residing here.
Contemporary domestic terrorism of Canadian origin is limited to the potential for violence stemming from Aboriginal extremism, White supremacists, right-wing intolerance, violent extremism on both sides of the sovereignty debate, and single-issue extremism, such as violent activity associated with animal rights and environmental concerns.
Disturbing Trends
The use of communication technology and computers to enhance operational capabilities and encryption constitutes yet another challenge to the defence of national security. The increasing availability of methods to communicate quickly and securely has significantly changed the playing field. As well, society's increasing dependence on information and technological infrastructures has heightened its vulnerability. In light of these, terrorist activities may become more destructive, while being more difficult to detect and prevent.
A particularly disturbing trend affecting Canada is the risk borne by Canadians working or travelling abroad. A record number of Canadian citizens are temporary residents of other countries. This past year alone, Canadians have found themselves at the centre of incidents such as a kidnapping in Ecuador, the Air India airline hijacking, and a hostage-taking incident at the Burmese Embassy in Thailand. Incidents during the past decade include the death of a Canadian woman and the injury of her husband in the December 1996 Paris Metro bombing; the death of a British-Canadian national caught in the crossfire between Yemeni security forces and kidnappers with reported links to Islamic extremists; and finally, a Canadian involved 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. Canada belongs to most international institutions and bodies, participates in peacekeeping missions and hosts major international events, all of which are potential targets for terrorists.
Cooperation
Canada works within international forums such as the G8, the Organization of American States and the United Nations towards erecting a comprehensive international framework of laws designed to combat terrorism. The prevention of terrorist activity depends on the collection, analysis and dissemination of information and intelligence. Effective collection is enhanced by cooperation between governments, law enforcement agencies and the private sector. Canada's national law enforcement and security agencies have processes in place to meet both the operational and strategic requirements for information-sharing. The Service works within this environment, and within the international security and intelligence community, collecting information, encouraging exchanges and providing support. The Service maintains its aggressive counter-terrorism efforts and effective cooperation with international partners to ensure that Canada does not attract terrorists.
Part III: Counter-Intelligence
Intelligence Activities
A significant number of countries continue to use their intelligence services to collect information they consider to be in their national interest. While certain national security threats emanating from the intelligence activities of foreign governments have diminished, some serious ones remain. The focus of intelligence activities has changed and the methods for countering intelligence operations are changing with them. Shifts in the geopolitical environment over the last decade and corresponding emerging threats have dictated that the Service adjust its methods of investigating threats to national security. Although the Service's investigative resources continue to be deployed in great part against traditional intelligence activities, emerging threats to the Canadian economy, information infrastructure, as well as proprietary information and technology, are given increasing attention.
Despite exchange relationships with CSIS, the intelligence services of some countries continue to collect classified economic, political and military information by covert means. Intelligence officers of certain foreign governments have been directed to target, among other things, trade negotiations, military and technological development, and classified NATO exchanges.
Technological advances have provided the means for advanced weapons development and increased their availability. Another important challenge facing the security and intelligence community lies in countering the proliferation of weapons of mass destruction. This, in addition to the theft by foreign governments of proprietary information related to defence, is a complex and far-reaching threat with global ramifications. In addition to the above, the Service supports the investigation of transnational criminal activity. Large-scale organized crime is largely driven by foreign organizations and can threaten our economic and social infrastructure.
Foreign-Influenced Activity
As part of the Counter-Intelligence Program, the Service investigates foreign-influenced activity by foreign nationals operating in Canada. Many countries task representatives of their intelligence services with the monitoring, manipulation and coercion of expatriate communities in Canada to support their political, economic and defence requirements. Despite warnings by the Canadian government that it is deemed unacceptable, certain governments consider it in their best interest to monitor the activities of political opponents living in Canada and coerce expatriate nationals in an attempt to influence Canadian foreign policy through members of émigré communities. The Service will continue to investigate the activities of representatives of intelligence services operating in Canada.
Proliferation
The proliferation of chemical, biological and nuclear weapons of mass destruction, as well as their delivery systems, has the potential to undermine international peace and stability. Canada has signed a number of international treaties forbidding the transfer of weapons of mass destruction. These include the 1970 Nuclear Non-Proliferation Treaty, the 1972 Biological and Toxin Weapons Convention and the Chemical Weapons Convention. Despite these, certain countries lacking the indigenous capability to develop and produce nuclear, biological or chemical weapons and related delivery systems often attempt to procure critical components, technology and expertise from other countries.
Canada supports several international supplier regimes and cooperation agreements designed to control the transfer of technology and materials for weapons of mass destruction to countries of proliferation concern through the strengthening of national export control measures. Nevertheless, some countries will continue to attempt procurement activities in Canada because of our open trading regime, the availability of dual-use items, and the level of technological advancement and expertise in Canadian post-secondary institutions, government and industry.
Cooperation with both Canadian and foreign government agencies is essential in order to identify and prevent or intercept procurement attempts. The Service's counter-proliferation efforts have been enhanced by close cooperation with a number of other government agencies such as the Canada Customs and Revenue Agency, the Department of Foreign Affairs and International Trade, the Department of National Defence, the National Research Council Canada and the Atomic Energy Control Board. The Service also maintains a national liaison and awareness program designed to encourage exchanges between public and private organizations in order to better address this threat. Furthermore, the Service uses its exchange relationships with allied government agencies to expand and share its knowledge of the threat.
Economic Security
The Service investigates clandestine, deceptive and coercive activity carried out or facilitated by foreign governments and aimed at accessing Canadian proprietary information or technology. Nine sectors of the Canadian economy which are considered sensitive and likely targets of foreign interest include: aerospace, biotechnology, chemicals, communications, information technology, mining and metallurgy, nuclear energy, oil and gas, and the environment. Canada's economic interests are vulnerable to visiting foreign students and scientists, exchange personnel, delegations, business personnel and members of émigré communities in Canada, some of whom are used in the clandestine collection of economic intelligence. Foreign governments, including some of Canada's allies and trading partners, direct their departments, state-owned corporations and intelligence services to engage in economic espionage against Canada. The Service works with industry to raise awareness of the potential threats to private and public interests in order to limit transfers of technology detrimental to Canada's foreign policy, defence and economic interests.
Information Operations
The development of computer technology and its astonishingly rapid improvements have heralded an Information Age that affects almost all aspects of Canadian commerce and society. It is imperative that Canadians have the tools and opportunities to compete and succeed in the global information-based economy. However, the reliance of modern countries upon vast interconnected networks of computers and telecommunications equipment has created vulnerabilities serious enough to trigger national security concerns. Our increasing dependence on critical information infrastructures creates new and uncertain vulnerabilities with respect to cyberterrorists, foreign intelligence services or lone, politically-motivated extremists. The Service works with other members of Canada's intelligence community, with law enforcement agencies and allied intelligence services, in order to be able to advise government on the potential threat to public and private information holdings from foreign governments or individuals of a security concern.
Transnational Criminal Activity
According to declarations by the United Nations and the Group of Eight, transnational criminal activity has become a threat to global security. The breadth and scope of organized crime groups continue to grow, with activities ranging from drug trafficking and money laundering to the trafficking of human beings.
Transnational crime emanating from Eastern Europe and Asia is of particular concern due to the large financial resources available to crime groups, as well as their access to their respective political systems. Several groups have an increasing presence in Canada and its economy through Canadian nationals and companies used to launder hundreds of millions of dollars. Another concern is the smuggling of illegal migrants, since this activity undermines the integrity of Canada's immigration system, and thus can be viewed as a threat to national security.
Investigating this threat requires the joint efforts of all institutions capable of providing an active or supportive role in the fight against organized crime. The Service continues to collect information in order to provide the Government of Canada with strategic intelligence about the extent and nature of threats to the security of Canada, and give tactical information to the appropriate law enforcement organizations.
Part IV: Security Screening
The Security Screening Program is the Service's first line of defence against threats to public safety and threats against our national interests. The goals of security screening are to prevent inadmissible applicants from entering Canada and to preclude unwarranted access to Canada's sensitive assets and locations. In order to accomplish this, cooperation with agencies abroad is required. In the prevailing global security environment, the security screening responsibility assigned to the Service becomes even more important and the identification of international and domestic security trends remains crucial to maintain an effective program.
Immigration and Citizenship Screening
Canada admits a greater number of people, in proportion to its population, than any other country in the world. As a result, the provision of security advice in immigration matters is crucial to countering those cases of imported threats to the security of Canada. When regional conflicts arise in various parts of the world, affected populations seek asylum in countries such as Canada. This places extraordinary demands on Canada's humanitarian efforts. Although most applicants to Canada have a legitimate desire for citizenship, as the number of refugees and immigrants increases, so does the possibility that terrorists and individuals involved in atrocities will try to enter Canada so as to evade prosecution or engage in various activities to support their causes. As well, individuals connected to hostile intelligence agencies and organized crime can use chaotic situations abroad to facilitate their entry into Canada. A comprehensive immigration screening program is essential to prevent persons who could be detrimental to Canada's security and national interests from entering Canada or obtaining immigration status.
Government Screening
The Government Screening Program provides essential protection for government assets, including access to sensitive sites. In addition to terrorist-related threats, Canada continues to face threats from several states engaged in espionage and intelligence activities to further their aims and policies. Clandestine activities by or on behalf of terrorist groups or foreign governments are detrimental to Canada's public safety, as well as its political, economic, commercial and defence interests. In the current environment, as the federal government pursues initiatives to reflect the multicultural diversity of Canadian society, the Service is faced with the difficult task of providing assessments about individuals who are relatively recent immigrants to Canada and who may still have strong ties to their country of origin.
Under the Government Security Policy, the Service provides security assessments for all government departments and institutions, with the exception of the RCMP. Security clearances are required in all instances where a person's duties require access to classified information or assets, whether the employee is a federal government employee or a person in the private sector under contract to a government institution. The originating department has exclusive authority to grant or deny security clearances; however, the Service assists the client institution by providing an assessment of an individual's loyalty to Canada and reliability in that regard.
Part V: Additional Issues
Strategic Scanning
CSIS stays abreast of geopolitical events by reviewing information available through open sources. Through the study of world events, the Service analyzes trends and their potential impact on Canada and Canadian interests. In conjunction with classified information collected through investigation and exchanges, open information is used in an effort to be better prepared to meet challenges in the future. Resources 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 the rest of government.
Technological Challenges
Modern technology is a driving factor in the way we do business today. While benefiting many, advances in telecommunications and encryption methods have also opened new avenues for terrorist and intelligence operations, creating new challenges for the security and intelligence community seeking to monitor threat activities. As well, modern telecommunication has brought forth new players to the threat environment, ranging from hackers to lone, politically-motivated extremists. Technological advances have provided the means for innovative weapons development, which has increased the damage potential of the tools available to those seeking to cause harm.
The Service seeks, through sharing with government institutions and allied agencies, and through internal research and development, to keep pace with technological developments. Conducting timely investigations into threats to national security requires effective collection and analysis. The challenges of limited human resources, crucial exchange relationships and shifting threat priorities are met with risk management and flexibility. These techniques cannot be readily applied to technological advance. As the rate of technological change continues its exponential growth, so does the challenge of providing operational solutions to emerging technological developments. In order to assess and address the threat, given the current threat environment, the Service will be making significant investments in technological development to keep pace with changes.
Part VI: Resource Summary
Budget
The charts on page 19 illustrate the number of employees in the Service since its inception as well as the overall budget during the past seven years. The Service's human resources complement has not changed over the past few years. There were increases in operating budget resources for fiscal year 1999/00, due mainly to year 2000 requirements. The decrease in construction capital, shown in Figure 2, reflects the declining level of funding related to the construction of the national headquarters building, which was completed in 1995/96.
In 1998, the Service assumed responsibility for the security screening of employees of the Department of National Defence. Since fiscal year 1998/99, the Service's budget has been augmented by the transfer of resources from DND. The ongoing resource increase covers salary and operating costs for the provision of security screening services.
Significant financial and human resources were devoted to ensuring that the Service's critical application systems were year 2000 compliant. Increased expenditures in fiscal years 1998/99 and 1999/00 reflect the incremental costs associated with this initiative.
Special Events Security
The Service receives incremental resources for its involvement in the security-related groundwork for special events taking place in Canada. In fiscal year 1999/00, these included the Pan Am Games in Winnipeg, the Francophonie Summit in Moncton, the NATO Defence Ministers' Conference in September 1999, as well as various other events related to the Third Summit of the Americas. Additional one-time funding was received to cover the incremental costs related to these special events and the Kosovo Crisis.
Challenges
The Service is increasingly challenged by emerging threats and technological advances and will be making investments to deal with such developments. On the operational side, the capacity to manage demands was stretched during the terrorism-related incidents beginning in December 1999. CSIS depends on risk management to concentrate resources selectively and precisely on the major issues, while assessing emerging threats. The Service has the resources to effectively manage the risks. Nevertheless, the events of late 1999 underscored the continuing requirement to review their adequacy within the context of the existing threat, with particular emphasis placed on the allocation of human resources.
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. JS71-2/2000
ISBN 0-662-641168-X