Espionage and Foreign Interference
National Security and Intelligence Committee of Parliamentarians Annual Report 2020
Overview
42. In 2018, the Committee identified espionage and foreign interference as growing threats that will likely require a more significant response in the years ahead. Espionage and foreign interference threaten Canada's sovereignty, prosperity and national interests. These threats target communities, governments, businesses, universities and technology. In 2019, the Committee reviewed the government's response to foreign interference and found that foreign interference activities pose a significant risk to national security, principally by undermining Canada's fundamental institutions and eroding the rights and freedoms of Canadians. In 2020, CSIS stated that hostile state actors pose the greatest danger to Canada's national security. Media reports, speeches from officiais and information on criminal cases all demonstrate that the threat continues to grow not just in Canada, but among its allies as well.
Description of the threat
43. Espionage has long been a substantive threat to the security of Canada and other nations. While espionage played a critical raie in the Cold War, the threat from it has evolved. In particular, the growth of the Internet and an increasingly interconnected society and economy have led to the proliferation of cyber activities as a vector of espionage, and an increase in the risk posed by 'non-traditional collectors' such as students and researchers. Footnote 52 Espionage activities primarily involve foreign states trying to obtain political, economic and military information, or proprietary business information, through clandestine means.
44. Foreign interference continues to be a significant threat to the security of Canada. Foreign states use direct and indirect contact to influence democratic and electoral institutions and processes by manipulating ethnocultural communities, persans in positions of authority or influence, and the media. In a speech to the Economie Club of Canada in late 2018, CSIS Director David Vigneault identified foreign interference and espionage as the greatest threats to Canada's national prosperity and national interests. State-sponsored espionage in Canada can be categorized as bath cyber and traditional human espionage, independently and in combination. Footnote 53 Several recent examples of espionage in Canada show that the threat remains pervasive. Between July 2018 and September 2020, the RCMP conducted *** priority investigation(s) related to espionage and foreign interference. Footnote 54 In the same period, CSIS conducted warranted investigation(s) related to espionage and foreign interference against *** target(s) and *** organization(s). Footnote 55
Espionage
45. Foreign states are increasingly targeting Canada's science and technology sector, in which Canada is recognized as a world leader. CSIS assesses that foreign threat actors represent a significant threat to Canada's long-term economic and national security interests. These actors use a combination of traditional and non-traditional intelligence collection methods to access expertise, data and organizations. As a result of this growing concern, the government established the Deputy Minister Tiger Team on Science and National Security in October 2019 to assess and address security vulnerabilities in the government's science sector. Footnote 56
46. CSIS assesses that while countries such as the Russian Federation, *** have targeted Canadian science and technology, the *** threat from China *** In many cases, these actors are targeting the same types of science and technology in which the Government of Canada is investing. China uses "talent programs" and academic exchanges to exploit Canadian expertise. Its Thousand Talents Program, established in 2008 to encourage Chinese scientists abroad to bring their research to China, is currently under investigation by the U.S. Justice Department. Footnote 57 [*** This sentence was revised to remove injurious or privileged information. The sentence describes circumstances in Canada.***] The result of this program is that intellectual property is often transferred to China,*** [*** This sentence was revised to remove injurious or privileged information. The sentence describes a CSIS assessment. ***] Footnote 58
47. New technologies are increasingly targeted by foreign states. CSIS notes that fields essential to Canada's knowledge based-economy, such as artificial intelligence, quantum technology, 5G and biopharma, are actively targeted. Footnote 59 CSIS's 2018 public report also characterized economic espionage as a threat of importance that has serious consequences for Canada's economy, including lost jobs, lost tax revenues and diminished competitive advantage. Footnote 60
Insider threats
48. Insider threats are another form of espionage that involves an individual with knowledge or access to an organization who intentionally or unwittingly misuses their access to harm that organization, including its personnel, assets, interests or reputation. Footnote 61 In Canada, two recent examples of alleged insider activities have resulted in criminai charges: Cameron Ortis and Qing Quentin Huang.
49. Cameron Ortis, a director general of intelligence at the RCMP, was arrested on September 12, 2019. He was initially charged under three sections of the Security of Information Act and two sections of the Criminal Code, but three additional charges under the Security of Information Act were laid in January 2020. Footnote 62 He has been accused of sharing special operational information with a foreign entity and preparing to share sensitive information with a foreign entity. The charges relate to incidents that occurred between 2015 and 2019. The RCMP publicly acknowledged that Ortis had access to both domestic and allied intelligence. Footnote 63
50. Qing Quentin Huang was initially charged in 2013 with attempting to communicate secrets to a foreign entity. Specifically, Huang, at the time an employee of Lloyd's Register, Footnote 64 was accused of conspiring to sell military (naval) secrets to China. Footnote 65 In November 2019, the Attorney General of Canada issued a certificate blocking the disclosure of information and overruling a federal court judge's decision that would have revealed sensitive information stemming from CSIS collection operations against the Chinese embassy in 2013. Such a certificate has never before been issued. Footnote 66 In September 2020, two charges against Huang were stayed to protect intelligence. At the time of writing, Huang was out on bail and remained charged with two criminal offences. Footnote 67
51. [*** This paragraph was revised to remove injurious or privileged information. The paragraph describes RCMP and CSIS investigations. ***] Footnote 68
Foreign interference
52. In 2019, the Committee conducted a review of the government's response to foreign interference. In that review, the Committee found that some foreign states conduct sophisticated and pervasive foreign interference activities against Canada. Those activities pose a significant risk to national security, principally by undermining Canada's fundamental institutions and eroding the rights and freedoms of Canadians. The Committee recommended that the government develop a comprehensive strategy to counter foreign interference and build institutional and public resiliency, and support this comprehensive strategy through sustained central leadership and coordination.
53. The Committee noted that states target Canada and seek to exploit the openness of our society and penetrate our fundamental institutions to meet their objectives. They target ethnocultural communities, corrupt the political process, manipulate the media and attempt to curate debate on postsecondary campuses. Each of these activities poses a significant risk to the rights and freedoms of Canadians and to the country's sovereignty, and the Committee concluded that they are a clear threat to the security of Canada.
54. Since the Committee conducted its review in the 2019 annual report, the threat persists. China *** [*** Two sentences were revised to remove injurious or privileged information. The sentences describe a CSIS investigation. ***] Footnote 69 Domestically, following the federal election in 2019, [*** Three sentences were revised to remove injurious or privileged information. The sentences describe a CSIS assessment. ***] Footnote 70
55. The Russian Federation also continues to exploit Russian diaspora and compatriot organizations in Canada. [*** Two sentences were revised to remove injurious or privileged information. The sentences describe Russian methods and objectives. ***] Footnote 71
56. Other states continue to actively engage in foreign interference in Canada. [*** Three sentences were revised to remove injurious or privileged information. The sentences describe a CSIS assessment of one state's methods and objectives. ***] Footnote 72
COVID-19 pandemic
57. Espionage related to science and technology and, specifically, to vaccine development for COVID-19, has increased during the pandemic. Research networks in the United States, Canada and the United Kingdom have been targeted by intelligence collection efforts of China, Russia and Iran. The New York Times notes that the pandemic "has prompted one of the fastest peacetime mission shifts in recent times for the world's intelligence agencies, pitting them against one another in a new grand game of spy versus spy." Footnote 73 3 The Communications Security Establishment (CSE) notes that Russia is primarily responsible for this espionage, using clandestine cyber operations to steal proprietary data. Footnote 74
58. In Canada, CSIS has assessed that *** is globally exploiting the pandemic to gain economic and technological advantage. [*** This paragraph was revised to remove injurious or privileged information. The paragraph describes CSIS's assessment of a country's methods and objectives, and notes the increased vulnerability of Canadian small businesses and Canada's biopharma and healthcare sectors to that country's efforts. ***] Footnote 75 *** Footnote 76
Key conclusions
59. The threat from espionage and foreign interference is significant and continues to grow. Several states are responsible for conducting such activities in Canada, but intelligence shows that China and Russia remain the primary culprits. Though the effects of espionage and foreign interference are not as readily apparent as those of terrorism, they are the most significant long-term threats to Canada's sovereignty and prosperity. The pandemic, meanwhile, has provided a new impetus for foreign states to conduct espionage activities against the Canadian health sector and Canadian organizations working in science and technology.