I call this meeting to order.
Welcome to meeting number 23 of the Special Committee on Canada-China Relations.
Pursuant to the order of reference of Wednesday, September 23, 2020, the committee is meeting on its study of Canada-China relations.
Today's meeting is in hybrid format, pursuant to the motion adopted in the House on January 25, 2021.
For our first panel today, I'd like to welcome Carolyn Bartholomew, chairman of the United States-China Economic and Security Review Commission.
Thank you very much for accepting our invitation to be here tonight.
Please proceed with your opening remarks. You have five minutes.
Thank you for the opportunity to speak today.
For those of you who don't know, the U.S.-China commission was established by Congress when it voted essentially to pave the way for China to join the WTO, out of lingering concerns about what that would mean. We do a report, 575 pages with recommendations to Congress, which I'm happy to send copies of. I think it's important to acknowledge that we are bipartisan, sometimes one of the only bipartisan institutions functioning here in Washington, D.C.
Our countries, of course, share not only a border, but also values: belief in democracy, human rights and the rule of law; respect for freedom of speech, religion, association; and a free press. We stand with you in opposition to the unjust imprisonment of the two Michaels and urge their immediate release.
Our shared values are increasingly in conflict with and under assault by the Chinese Communist Party. Last Wednesday, FBI director Chris Wray, testifying before the Senate intelligence committee, said:
I don't think there is any country that presents a more severe threat to our innovation, our economic security and our democratic ideas. And the tools in their toolbox to influence our businesses, our academic institutions, our governments at all levels are deep and wide and persistent.
He noted that the agency is opening an investigation into various Chinese government actions here in the United States every 10 hours and currently has over 2,000 investigations that tie back to the Chinese government.
A major tool for CCP influence is the United Front Work Department, which seeks to co-opt and neutralize sources of potential opposition to the policies and authority of the Chinese Communist Party. The United Front's efforts take place both within and outside China.
The United Front has played an increasing role in China’s foreign policy since Xi Jinping’s leadership began. In 2019 alone, China’s national and regional United Front systems spent more than $2.6 billion U.S., more than the budget of China's Ministry of Foreign Affairs.
The mission of the United Front's work includes the goal of “guiding” overseas Chinese to ensure they support the CCP. There is also a strong focus on co-opting and influencing non-ethnic Chinese foreign elites. United Front activities are tricky to discuss in light of increasing xenophobia and violence against Asian Americans. We must be careful always to draw a distinction between the CCP and the Chinese people.
One major target of the United Front is Chinese-language media in non-Chinese countries, which they seek to co-opt or outright control, ensuring the CCP controls the flow of information available to Chinese speakers. For example, the China News Service, an official Chinese government Chinese-language news platform, which also covertly runs other overseas media agencies, is officially part of the Overseas Chinese Affairs Office, which is controlled by the United Front.
To address concerns about CCP influence in media, the U.S.-China commission has recommended, among other things, that the U.S. Congress strengthen the Foreign Agents Registration Act to require the registration of all staff of Chinese state-run media entities, given that Chinese intelligence-gathering and information warfare efforts are known to involve staff of Chinese state-run media organizations. We've also recommended that Congress modify communications regulations to require greater transparency regarding Chinese government ownership of media outlets and the clear labelling of media content sponsored by the Chinese government.
The United Front-affiliated organizations include Chinese students and scholars associations, Confucius Institutes and professional organizations, which offer benefits and support for Chinese students on university and college campuses. This support includes social networking, assistance finding housing and professional advancement. In return, students are expected to rebut any criticism of the CCP and to encourage support for CCP’s global rise. Other sources of leverage exist for pressuring students and others who are uncooperative, including Uighurs, such as threatening family members back in China.
The U.S. Department of Justice late last year charged multiple individuals for their alleged attempts to threaten, coerce or harass certain residents of the United States to repatriate to China. Eight individuals were charged with conspiring to act in the U.S. as illegal agents of the PRC, with six also facing charges for conspiring to commit interstate and international stalking.
Attacks on freedom of speech on campuses are rising, such as attacks on students who support the Hong Kong pro-democracy movement, and challenges inside classrooms to teachings that question the CCP's narrative. At the same time, there is pressure to self-censor, which of course is a less visible response to the United Front's tactics. This trend is a direct threat to academic freedom.
The United Front leverages transnational professional organizations, such as the China Association for Science and Technology and returned scholars associations, to pull in Chinese students and scholars as a labour pool for national priorities and technology development. Some of these organizations appear to be independent but are actually subordinate to the official United Front Work Department. These efforts incentivize the transfer of research to entities within China. The sheer scale at which these transfers occur makes the effort strategically significant and potentially harmful.
The United Front's strategy also seeks to gain support of foreign corporations and business interests by weaponizing China's economy, leveraging the promise of continued or expanded access to Chinese markets to persuade these corporations to pressure their governments to adopt policies friendly to the CCP's interest. This strategy also includes extensive use of traditional lobbying.
Policy responses should include a focus on increased transparency, which would also create increased awareness of funding sources and affiliations with foreign principals.
The U.S. and Canada are not alone in facing increasing Chinese influence operations. Countries around the world are experiencing the push and pull of the CCP's desire for power, influence and primacy. Australia, of course, has been a testing ground for much United Front Work activity, as has Estonia.
In February, Estonia's foreign intelligence service issued an annual report that highlighted Beijing's strong ability to conduct influence operations in the west through economic leverage, surveillance of Chinese nationals abroad and the cultivating of local elites.
We share the challenge of facing the CCP's influence operations and must all work together on effective responses.
Okay, here's the point at which I'm going to say that some of the views I'm expressing are my own, and the positions are not necessarily the positions of the commission itself.
The Chinese government, the CCP, is really using the belt and road initiative both to create markets for its own products and to increase its influence. They talk about how what they desire, of course, is a community of common human destiny.
Last year, the commission did one hearing on China in Africa, and you could see the impact of Chinese investment in Africa in a lot of different ways. This year, we're going to be doing one next month on China in Latin America.
A tool that they use within BRI is of course the lending that they do. By the way, Montenegro, which got, I think, $1 billion for highway building from China, has just actually told the EU that they need help repaying it. One concern about all the lending they're doing is debt-trap diplomacy, of course. They're using vaccines now, vaccine diplomacy, to try to increase their influence.
The AIIB, I think, was a real effort to try to create a new international institution that would be Chinese-designed and basically Chinese-controlled. They're struggling within the multilateral institutions. They're working hard to influence what's happening in the multilateral institutions, but it was their way to basically start one from scratch.
We should all acknowledge that there are huge infrastructure investment needs in countries around the world. That, I think, is one challenge that all of our countries working together need to address, but some of it is insidious.
The response to that.... I'm trying to think of the phrasing that President Biden—I was going to say President Obama—has said. There are areas where we are going to compete; there are areas that are going to be confrontational; and we have to figure out areas where we could work together, also.
It's not always easy to define those. I think the Chinese government is excellent at trying to pit one country against another, one industry against another, and one issue against another. Some of us here are watching with a little bit of concern the discussions that are going on about climate change, to make sure that the criticism of what's happening in Xinjiang is not put aside in order to get a climate deal.
The reality is that we have to figure out ways to work together where we can, to disagree where we can't and try to make sure that it doesn't become openly confrontational, which is, of course, the concern about the South China Sea, Taiwan and all of those issues. The reality is that they're here to stay, so are we and so are you, so we have to figure this out.
Thank you, Mrs. Bartholomew, for being with us. Your comments are most helpful and relevant to this committee's study. You mentioned President Biden's words about working with China on some issues and confront China on others.
The more we hear from witnesses, the more it sounds like China is using every opportunity it gets to position itself for what's next, especially on trade. Your testimony seems to go directly in that direction. It's well known that Chinese companies have to comply with the Chinese state's security obligations and that some of them, including Huawei, share information with Chinese authorities that they have gathered in the countries where they do business.
How can we think about working with the People's Republic of China and its companies, knowing that they are looking for every opportunity to use this collaboration for long-term political purposes?
What precautions should we take to avoid getting into a situation where, by trying to co-operate, we would ultimately just be giving them more tools to act against us?
That's a good and complicated question. If I had the answer, we would all be in much better shape, but I'll try.
The reality is that we have to figure out ways to engage with China. The question is about the terms of the engagement that is taking place. China is so embedded in the global economy now. I just don't see that we could cut off relations completely, partly because there would be concern in other countries. I'm watching, with concern, what is happening with Germany and France right now. They're putting all their eggs in the economics and trade basket.
There are a number of places where we could work on these issues. There are the national security concerns, of course, about what Chinese companies are doing, but there's also the whole system of subsidies and protective tariffs that the Chinese government is imposing.
In addition to reforming the WHO, we also need to reform the World Trade Organization, because we have to get to the heart of what is creating this unfair competition. I used to serve on the board of an American manufacturing company, which actually has a plant in London, Ontario. I know that American and Canadian workers can be the best in the world, but they are working in an unfair field. We need to make sure that we address all of these subsidies.
There's growing awareness and concern around the world about China's rise, and the way it's rising. China is being, in some ways, its own worst enemy with this stomping around, insulting people, and what people are calling “wolf warrior diplomacy”.
There's opportunity, but we live in a world where we're not going to be able to cut them off completely. China has 1.4 billion people. The reality is that we're going to have to figure out a way to work together with them in places where we can, and continue to push in the places where we can't.
Let me get my timer on, Chair. My machine has just gone blank on me. I have to let it see me to turn it on.
Thank you, Ms. Bartholomew, for joining us. It's been most interesting testimony so far.
In 2012, Canada entered into a foreign investment promotion and protection agreement with China; we call it FIPA. It's been criticized as being, in key respects, non-reciprocal in favour of China. For example, there's a general right of market access by Chinese investors in Canada, but not the other way around in China, and it allows wider scope for investment screening by China than Canada. Also, it omits a long-standing Canadian reservation for performance requirements that favour indigenous peoples, and it dilutes Canada's established position on transparency in investor-state arbitration.
Your commission recently did a study, in 2020, last year, on this whole issue in the United States. Could you tell us, first of all, what you think of this kind of one-sided agreement, part of it based on historical realities in Canada-China trade prior to then? What's your view on that? What recommendations have you made and how successful have they been in getting policy changes?
I'm not familiar with that particular aspect of it, so I'll move to another question, if you don't mind.
One thing our committee has talked about quite a bit over the past year, because we've been operating since then, was on concerns about China's not wanting to follow the rules-based international order. How do we get it to do that? That's with a lot of things, not just the arbitrary detention of individuals like Mr. Spavor and Mr. Kovrig, which is part of it, but in general terms not following the rules, whether on trade and investment or the other things we were just talking about.
I'd like your advice on this. What I hear you say is that they're trying to create new norms, whether that be human rights being watered down, different ways of engaging with other nations and that sort of thing. Is this something we can actually influence in some way with the help and coordination of other nations, or are we in a gridlock on that as well?
I think we have to try. To give up would be to cede the field completely to the Chinese government and their authoritarianism—the ideology they are trying to spread.
I'll note a couple of places of concern. One, of course, is the national security law they passed that has destroyed Hong Kong as one country, two systems. It includes a provision that they believe allows them to basically reach into any country at any time if any of us has violated what they think is their law. As I just saw yesterday, there is a new push whereby they intend to promote Chinese rule of law around the world and make all of us comply with Chinese laws.
I think we need to engage in the judiciary, in the legal system, to make sure that people are clear and engaged in it. Again, we need to figure out which countries are going to be the most concerned about that and figure out ways to have our own united front, frankly. I'll use that phrase.
It is, I believe, a clash of ideologies that is happening, and I don't think we can give up. I'm not always sure how to handle it, but if we give up we have lost completely.
Thank you, Chairman Bartholomew. It's a pleasure to have you here.
Your government, across two administrations, has recognized the Uighur genocide. Our Parliament has also recognized the Uighur genocide, although our government has yet to. There's been, I know, much debate in the U.S. about strengthening supply chain measures.
In Canada, our system for preventing supply chain slavery—the use of forced labour in our supply chains—is essentially complaints-based. Our Border Services Agency adjudicates complaints when it receives them, but the mechanisms by which any investigation would be undertaken are still being worked out. It would be virtually impossible to conduct a meaningful investigation inside of China, and the new measures haven't led to any shipments being stopped.
By contrast, in the United States you have the Uyghur forced labor prevention act proposed by Representative McGovern, which was supported by a vote of 406 to 3 in the lower house and is now in the Senate. This bill would, as I'm sure you know, create a presumption that forced labour is involved in products coming out of Xinjiang, unless it can be proved otherwise.
What is your view on the Uyghur forced labor prevention act? Could you share a bit about why it has such strong bipartisan support and reflect on whether other countries should consider a similar model, recognizing the realities of a complaints-based system and the impossibility of it working effectively?
Good evening, everyone.
I'd like to thank the witnesses for being with us this evening. Their comments are very enlightening to all committee members.
Mrs. Bartholomew, you mentioned the $1 billion loan to Montenegro, if I'm not mistaken. You also mentioned China's economic coercion of Australia. What is China's most common modus operandi when it exerts its economic and monetary influence not only on western democracies, but on the entire planet?
What principles and practices should our democracies preserve to guide themselves and guard against this kind of economic coercion?
Finally, I'm going to pick up a bit on what Mr. Genuis was asking. Should a concerted international approach be a priority? As western democracies, should we work better together to guard against this influence?
I will start with the last one first.
Absolutely, we need to work together with concerted efforts, and be attuned to the fact that the Chinese government is really good at divide and conquer. I'm not sure that Montenegro was actually $1 billion. I'm going to have to check the facts on that one. I don't want to get that number wrong.
The tools of coercion that the Chinese are using are in some ways the business interests in all our countries. Before the pandemic, I participated in a conference in Australia where the defence and intelligence establishments were really trying to work at how to raise concerns and deal with the economic interests that they have, the economic interests in the United States and Canada and all of that. The important thing for politicians is to recognize that although they represent some of those interests, they also have a national obligation to national security.
It's a difficult message to deliver, but when I think of Chinese economic coercion, the first example that I think of—and it might not be the first—was when the Chinese cut off its imports of Norwegian salmon because of the Nobel Prize going to Liu Xiaobo. In some ways, it's like a test case. That's what I think the Chinese do a lot. Now the Chinese are doing this with Australia. It's a test case, with Taiwan and pineapples. It's a test case to see how the world will respond. We respond by increasing our consumption of Taiwanese pineapples, Australian wines, and all of that.
Some of it is really educating the business community that continues to believe that things are going to go well for them inside China, and they aren't necessarily going to go well. If it's resources, that's a different story. You're going to have to make the case that there are national security interests and that selling these products has a cost, right? They have a cost beyond any financial cost that's taking place.
I think some of it is educating, again. On this issue of U.S. investment in China, some of it is the major investment banks. They're going to figure out a way to make money, no matter what. When you look at things, you see that we haven't mentioned the military-civil fusion that China is doing, using civilian companies and technologies to acquire developed technology, technology that they need for their military purposes. It's sticky. It's very difficult for some people, for some companies, to be able to figure out exactly who it is they're investing in.
That said, I think some of them don't care. Ray Dalio had this piece in the Financial Times relatively recently, and I was just frankly appalled at what he said, which was basically that money is money and we don't know who is going to win this competition, and so he's investing in China as much as he can. I just think that's appalling. We have to come up with ways to hold companies accountable when they are investing in something that is actually going to be a threat to us, not economically, in that sense, but militarily.
We're also very concerned about pension funds. People who have those pensions don't know where their money is being invested and they don't know how risky some of those investments are. It's twofold. It's risk, as in financial risk, and it's also risk as in what we are investing in and what we are getting out of it and what kind of a threat it is for us.
There are always going to be people, again, who—
Thank you very much, Chairman.
Chairwoman Bartholomew, it's nice that you could join us. This has been very, very interesting.
You had an interesting exchange with MP Lightbound a few minutes ago about the review of investments into mainland China and the impact on your security, as well as the risk. What about the other way around in terms of any kind of investigation on investments into the U.S. stock exchange, the bond market and equity markets?
I read an interesting paper recently that looked at how one of the challenges the Soviet Union had during the Cold War was in having very little access to western capital, whereas in today's world, China has great access to capital—to American capital in particular, but also to western in general. It is helping them immensely. We don't even know how these investments are being made and how they're helping China often use our own technologies against us or, if not against us, against minorities in mainland China.
You know, of course, that when you take on the moneyed interests, you're taking on big giants who don't want anybody to get in the way of what they are doing—again, sort of the Ray Dalio view of the world.
I'm just trying to think of the number of years that we at the commission have been talking about and raising concerns about Chinese companies on the U.S. stock exchanges, on things like the accounting standards. We can't get access to the work product, to papers, to the account of audits in Chinese companies, to the risks that take place. There are all sorts of mechanisms that are happening for the flow of money.
I think the CFIUS reform we did under FIRRMA was an effort to try to address some of these concerns about the acquisition by Chinese companies of American assets, including even real estate. If they're buying land for a “warehouse” near a sensitive military installation, somebody needs to be making sure that we're paying attention to that.
The concerns about the stock market have been there. I think Congress is really aware of that and is paying a whole lot more attention to it and to the concerns about what Chinese companies, through a number of mechanisms, are buying in the United States. I'm even going to put money laundering on the table. There was a story that just came out about a delicatessen owned by a coach in New Jersey that made $100 million. There was a very complicated shell corporation system that tied in to Macau. There's a money-laundering aspect to all of this too.
Thank you very much, Mr. Chair.
My thanks also go to all the members of the committee.
Thank you very much. I will try to present in both official languages, which is very much the Canadian way, I suspect. My apologies also to the team of translators. Unfortunately I had difficulties with my technology today, and I was unable to deliver my text ahead of time.
Tonight I would like to speak about national security issues. My concern comes from three decades of observation as a member of the Canadian Security Intelligence Service, being able to monitor, study, and even teach about the activities of the Chinese intelligence services in Canada.
The imbalance in the relationship between Canada and China is a serious concern. We are not on a level playing field. Neither side is playing by the same rules—at least, not the rules that Canada would like. Those rules are probably the norm on the international stage. Unfortunately, as several of the witnesses who appeared before this committee mentioned, China often chooses to ignore the way things are done.
What I've been able to observe as the chief of Asia-Pacific for CSIS is the great disbalance that exists on various fronts in the activities that have been conducted by the Chinese intelligence services in Canada.
To understand how they operate, we need to understand also that their methodology comes from a different set of operational standards that we don't have in the western world. In the western world, there's often the analogy that is used that if, for example, the Russian intelligence service wants to steal some information here, very often the analogy was used with grains of sand on the beach. The Russian intelligence service will go, in the cover of the night with a bucket and a shovel, try to fill up their bucket as much as possible and run away before the sun goes up.
The Chinese intelligence services and the Chinese government use what we call a mass collection process. In the mass collection process, basically they will be sending 1,000 people to sunbathe all day, and when they come back at the end of the day, they shake their towels in the same spot, and the amount of information they collect is absolutely phenomenal.
We talk about disbalance because there are many institutions and people who have been employed by the Chinese intelligence services, and among them, their greatest asset is what we call the agent of influence. The agent of influence in Canada has been capable of penetrating at various levels. Although the Canadian Security Intelligence Service does not share as much information publicly as it should and does not give briefings as much as they should to elected officials, we find these people all over the place, from the federal to the provincial to the municipal.
Mr. Dick Fadden, who was the director of CSIS many years ago, tried to warn the general public, and unfortunately he was severely reprimanded by the government at that time. At the end of the day, when we talk about the disbalance, we just need to look at, for example, the number of Chinese diplomats who are in place in Ottawa versus the number of American diplomats. America is our greatest business partner and we are in a trade deficit with China, yet they have almost double the number of diplomats in Canada. Why? It is because of the spy activities and the foreign interference that they do here.
Thank you very much.
Warm Pacific greetings from Tahuna, the traditional land of Ngai Tahu.
I'm going to give you a very short overview of the geopolitical context to China's political interference activities, which get called “united front work“. They can also be known as “grey zone” or “political warfare”.
I'm encouraging you to start calling them China's active measures, because when we talked about the Soviet Union's active measures, we understood that they included intelligence operations. They included united front work, which is a basic Soviet technique; it's not just unique to China. They included disinformation. They targeted the elite and they targeted diaspora dissident groups. Often when we talk about united front work, we can't really make sense of it, because we don't have an equivalent, but if we understand that what is going on is China's active measures, I think it will be very helpful.
Also, we're used to talking about the party-state system in China. I urge you to think about the party-state-military-market nexus to better understand those intertwined relationships, such as those with Huawei or in the ways that universities are doing the work of the PLA to access sensitive technology.
I'll go on to the backdrop. I have sent my PowerPoint presentation that I wanted to talk to. You are going to look at it later, and I understand it can't be seen because of your broadcasting.
I understand. I'm in a hotel room with very limited facilities. My apologies.
On the geopolitical backdrop, I've sent you some maps to look at. One of them is the new official map, the vertical world map. It's a China-centred world. It is a literal reorientation, the thinking behind China's very aggressive foreign policy, which Xi Jinping has inherited. He didn't invent it. The thinking behind it started in the 1980s and could even go back to 1949, but the change in direction came in the 1980s, and there will be some names you might be familiar with. Alfred Mahan talked about what a rising power needs to become influential. One is developing a blue-water navy and protecting sea lanes of communication, because China is obsessed about choke points.
Another is Halford Mackinder, the founding figure of modern geopolitics.
U.S. Secretaries of State Dean Acheson and John Foster Dulles are third influence. They talked about two concepts that are very important to what's happening now. One of them is the idea of the island chain—the first, second and third island chains—which form the basis of theories of hub-and-spoke defence pacts that link the United States with allies like New Zealand, Korea and Japan. The second concept is peaceful evolution. This is the idea that Communism would be undermined in the eastern bloc by greater contact with the outside world, with the western world, through culture, education and so on. The CCP has been very influenced by that thinking, and under Xi Jinping we're seeing not just a defensive response but a very aggressive response, because China believes the west is weak and divided.
These are the four vectors of CCP active measures, as I've preferred to use this term, that you can look for and find in Canada as elsewhere. One is efforts to control the overseas Chinese communities and their media in our society and use them as agents of Chinese foreign policy, and also sometimes for espionage. Number two is “elite catcher”, targeting our political and economic elites; three is a global information strategy to try to control the international narrative about topics China is interested in; four is the belt and road Initiative, which is a military-political-economic block.
You can see how political interference fits within China's much more aggressive foreign policy as a tool of that foreign policy. It's a means to achieve China's goals without military force; to weaken opposition to China's objectives; to establish client or asset relationships with the elite, and even to establish collaborators within our elite; to access sensitive information and technology—in other words, espionage; to control the diaspora discourse; and to control the international discourse on issues of interest to China.
If you wish, I can talk later about a resilient strategy, but that's enough for an overview.
Thank you very much for your attention.
Good evening to the two witnesses.
Mr. Juneau-Katsuya, you have recently commented on the ties between the leadership of CanSino Biologics and the Chinese government with respect to the thousand talents plan.
I asked Dr. Halperin from Dalhousie University about this and he expressed no concerns about those ties.
I also asked Iain Stewart, president of the National Research Council of Canada. He responded that CanSino Biologics was a private company listed on the Hong Kong stock exchange and that he did not really see a problem.
In your opinion, are the senior officials of our agencies wilfully blind? Are they not rather misinformed by the national security agencies about the relationships with CanSino Biologics?
I totally agree that we are in a disbalanced situation. We are not fighting equally.
One of the reasons for this situation is that we must return to the ballot every five years, while there is a perennity with the Chinese government. They know that they don't have to change their course of action. The next government will not necessarily have different priorities; they will simply continue.
Their planning, when it comes to strategic planning, as has been said in the past by their own officials, is not planned over years; it's planned on generations. They are planting seeds today that they will be capable of harvesting later on because of this capacity to go on forever.
What can we do in that perspective? Ask for reciprocity. Ask for more balance between what they offer to us and what we offer to them.
I will give you an example. A few years ago we sold the Nexen company to a Chinese government-led company for $15 billion. Try to buy a corner store in China if you can. I challenge you to be capable to even do such a thing. We won't be able to do it.
When you have an energy company led by government officials who are capable of setting foot in a province like Alberta, if they need to call the premier, they will do it directly. I am a Canadian; if I call the premier in Alberta, I'll probably be put on hold forever.
In that perspective, it's that disbalance we are talking about that exists, which we must correct ourselves.
Before I turn to Ms. Brady, I think it's also encouraging that under this government, at least, we've seen investment in federal policing specifically in the area of national security capabilities, but your points, Mr. Juneau-Katsuya, are very well taken.
Professor Brady, thank you again, for participating all the way from New Zealand. That's very kind of you to take part in tonight's meeting.
I want to ask you a very straightforward and blunt question. In terms of lessons learned from New Zealand's experience with respect to Chinese efforts at social, political and economic influence, what are one or two that you would point to that Canada can look to and seek to implement here?
I have recently written a paper assessing, over the last four years, changes that New Zealand has made since this topic of China's political interference has come into our public conversation.
What we have seen that has been effective is the public conversation, a series of of inquiries into our Parliament having these conversations, and that led to passing new legislation looking at the weak spots within our society.
I'd really highlight the legislation, because in some sectors there is a real tendency to say that we can fix it and that we don't want legislation because we don't want to offend China.
I will highlight that typically the universities don't want to have some kind of foreign FARA legislation, like the U.S. has, but we need these kinds of things. We need both legislation and the conversation about that sunlight being the best disinfectant, as they say, and we also need public awareness. If the public knows what is going on, they can also make good choices in their interactions.
The problem we have had is that our Minister for National Security has barely talked about the issues at all. That is our Prime Minister. You have to take the lead from the very top.
We also saw what happened to Australia, about how they started the debate first of all, and the bluntness with which it was raised perhaps was difficult.
What I would say is that you have the public conversation in Parliament, which is really important, because you have Hansard to protect people. Parliamentary privilege protects people in saying things that could be difficult outside Parliament. Then there's the media understanding the seriousness of the issue and legislation that will properly deal with the weak spots that China is exploiting.
Thank you again to the witnesses for their fascinating and extremely relevant insight.
Mr. Juneau-Katsuya, in my many years in Canada's Parliament, I have seen the Canadian way at work: francophone witnesses speak in both official languages, while anglophone witnesses speak in English. You have proven the rule this evening. Thank you for your insight.
In your book, Nest of Spies: The Startling Truth About Foreign Agents at Work Within Canada's Borders, you talk about the creation of front companies, businesses whose sole purpose is to gather information for the Chinese government.
Can you give us any examples of these companies in Canada?
Many companies were created, especially in the 1990s, before Hong Kong's handover to mainland China in 1997. Many of them were front companies that came here to gather information. They expressed a desire to work with Canadian companies, but once they had obtained the information they were looking for, they would disappear.
Similarly, another witness talked about the Confucius Institute and its branches, which are doing exactly the same thing right now. They are essentially spy satellites sent out by China. In fact, the head of the Confucius Institute in New Brunswick was asked to leave Canada after engaging in activities that looked a lot more like espionage.
I, myself, recall investigating a case where, once again in New Brunswick, a previous director had asked a provincial government employee for an official email address for himself, so he could access provincial government information. That would have been a gateway to all of the provincial government's information, and that's not the only example I could give you.
Numerous incidents around the world are raising doubts about organizations like the Confucius Institute and companies that come to steal technology and information. In some cases, they also work with Chinese organized crime. When we see incidents where the Chinese government is to some extent colluding with organized criminals to carry out certain activities, it's especially disturbing.
The phenomenon is currently being studied in British Columbia in relation to casinos. The situation was exposed by a defector in the 1990s. The defector told the Australian intelligence service that, in the early 1980s, when he worked for the Chinese intelligence service, his job was to go to Hong Kong to recruit triads to ensure the 1997 handover went off without a hitch. That's another example of the collusion going on right now between Chinese organized crime and the Chinese intelligence service.
Thank you for your question.
I think New Zealand, Canada and Australia have many similarities in our parliamentary systems and laws, and I think we would benefit from exchanging information on what works and what mistakes we want to avoid.
I do think that we need the system of registering of foreign agents. We need transparency, greater transparency, to enable the public and companies to make good decisions about who they're partnering with in China, but we also have to be careful that we don't damage our democracy in the process.
I would recommend exchanges between Canada and Australia, which has already set up such a system, and the United States, which already has a well-established system in place.
For each national election and also each local government election, the New Zealand Parliament does an assessment afterwards to see how it went and if there were any concerns about it.
My government held two separate inquiries into foreign interference, with an overall review of those elections in 2017 and then local body elections in the years that followed. We found that CCP proxy groups or individuals had given donations to our local and central government politicians.
This is why the public conversation is very important. You can be sure that our MPs and our mayors were not willingly receiving money from the CCP. They did not understand who their partners were. They do understand it better now. In our report to the electoral commission this year, we did not see any donations like that for the central government elections.
We saw inappropriate donations, and there are several investigations in our Serious Fraud Office at the moment into particular cases of this. The process of doing these cases has led to better education. We also saw in the Chinese-language media in New Zealand that in previous years there was an attempt to get the Chinese public to bloc-vote for a certain party that had a candidate who was very much a CCP proxy. We also saw some disinformation within the Chinese-language media about the elections. We also saw disguised political advertising, which breaks our electoral law.
The problem is that we have very weak measures to deal with these problems. We need to go back and look at our electoral legislation. We need to put Chinese-language speakers into our electoral commission.
We need to change our press laws too. One of the hardest things to fix in New Zealand, which we haven't yet worked out how to fix, is how our New Zealand Chinese diaspora are being targeted by the CCP, which regards them as a resource and a tool for their foreign policy. They are mostly the victims of these activities. Also, their media must now follow the same censorship guidelines as domestic Chinese language media.
Our government hasn't yet worked out how to remedy this problem, although I would highlight that yesterday our foreign minister did something very good: She praised a non-CCP, non-united front ethnic Chinese community group in her important speech on New Zealand-China relations. We need to provide better support for our local Chinese communities and show that they're diverse and not all as much under the control of the CCP as they would wish.
Yes. Before I go, I would like to support what Ms. Brady has said. Exactly as she described, we observed it from the Chinese government right here in Canada in previous elections as well.
As for prosecution and the problem of investigating, first, it has increased. We see much more interference taking place. Many more agents of influence have gained very strategic positions at all three levels of government: municipal, provincial and federal.
When it comes to prosecution, one problem that exists is within our own system. Prosecution lies within the responsibilities of the RCMP. CSIS cannot prosecute, and unfortunately CSIS does not play well with the other kids in the schoolyard. They don't share information that well. They don't share information as they should be sharing information, and the RCMP has lost the ability to investigate spy activities because they have been out of the game since 1984 with the creation of CSIS.
We have to readjust this. The parliamentary committee on security and intelligence that was created is one way. The problem and the weakness is that every five years we have a new bunch of people on the committee, with a new bunch of analysts joining them.
You are really testing me today.
We are still having this difficult conversation on it within our government. Also, the problem that New Zealand has is that we only have three years for our Parliaments. In 2017, suddenly the conversation of Chinese political interference became something within the public eye as a result of my paper going public, and it confirmed what our SIS was saying. When our new government was formed, it took six weeks for them to form a coalition government. They had to do their own assessments. That took six months, and it was difficult, because it completely challenged our existing thinking about China, which had been seeing China as this economic partner, and there was also a kind of hopeless sense that there was a problem we couldn't do anything about.
What my country decided finally was that national security trumps economic security. In other words, without national security you have no economic security, and everybody needs to learn this lesson, from our businesses to our universities.
Then it took another year to start this inquiry into foreign interference, and there was a big battle to make it a public conversation.
It's a slow journey. At the end of the first inquiry, which lasted over one year, our Minister of Justice said we will be passing more legislation. I think you know from your own process in Canada that, exactly because the problem as Monsieur Juneau-Katsuya has talked about is so bad in our society and so endemic, it takes a long time to address. However, we are addressing it and we are slowly passing legislation on, for example, looking at overseas investment in New Zealand. Now there's a national security requirement.
I can forward a paper I've written recently that shows the legislative change. Because we are democracies, we have to have this public conversation about it. We don't just arbitrarily change our policies. It's our strength and also our weakness and vulnerability, which the CCP will play on.
I think it's about time we called a cat a cat and a dog a dog.
Probably in modern history China represents, for Canada, the most formidable opponent and threat to our democracy, to our economy, and to our Canadian citizens of Chinese descent or from other origins.
The Chinese government perceives the relationship with others doing business not as we understand it. For the Chinese government, they are basically at war, and everything goes when at war. They are ready to do what they need to do, which is to bribe, to cheat, to lie and to bully, because the name of the game is to win—that's it, that's all.
At the end of the day, if you really want to understand how the Chinese government works, learn the game of Go, because the game of Go is basically a question of acquiring territory and having influence on the board. It has nothing to do with luck; it has to do with strategy. They are the most formidable strategists, and the use of influence is greatly important.
The change of policy and the change of direction from the director of CSIS in finally naming China for what it stands for should also be a guidance or a sign for the government and elected officials that we need to stand up to China. Unfortunately, internationally, there is dissension. Internationally, we do not necessarily work together. For us, we just see the Huawei cases. When we started to weaken, some other people came from behind and tried to fill up the emptiness that we left behind. We need to be capable of co-operating internationally and definitely of trying to start working together in Canada as well.
One of the great problems that I've seen within the public service, for example, was in our conflict with Huawei. Shortly after the trouble started, with court procedures and everything, we saw the Global Affairs department consider a Chinese company, Nuctech, which is equally as problematic as Huawei, to secure our embassies and our consulates for several million dollars. It's like the right hand is not talking to the left hand. We do certain things in government, but we lack the support of our public servants. I'm talking about Global Affairs. If one department should have had knowledge of what was going on, it was these guys. I think a kick in the butt was missed here somewhere.
Thank you for your question. Actually, we haven't seen anything like the awful incidents that have been occurring in the United States, for example. We have a history of racism against our New Zealand Chinese population, a very similar one to Australia's. There was an idea of yellow peril and excluding particularly women from migration to New Zealand in the gold rush days. More broadly, we are a post-colonial society, and so we have a history of racism here as well. So far, we have not had any extreme cases.
I want to go back to the question of Mr. Fragiskatos about how we can deal with the CCP political interference activities in our countries, which for New Zealand is the top priority of our SIS. Their top job is dealing with foreign interference, which for New Zealand means China, and yet protect our New Zealand Chinese community and signal that we see them and understand that they are the victims of the CCP's efforts to control their communities and control their media.
My government, as I said, for the last four years has been trying to work out, first of all, whether we can afford to deal with the problem, and then talk about what we're going to do. I have been repeatedly saying to my government that first of all, when we talk about this issue, we say, “CCP”, “CCP government”, “the Peoples Republic of China”. Don't just say, “They're Chinese”, because it's dehumanizing. We have to be careful with our language.
Mr. Juneau-Katsuya, what you've said more or less confirms what we've been observing for a few weeks now.
No matter which party is in power, when it comes to the federal government, the right hand doesn't really seem to know what the left hand is doing, and that can certainly be an advantage to countries like China.
We recently heard about a case where some sort of agency backed by a Chinese fund was hired by the Canadian government to manage the visa application process in China. The agency subcontracts for a Chinese company. It's all interconnected. The Chinese are involved from beginning to end.
When we asked Canadian intelligence authorities who had looked into the company, there was a long pause. Clearly, no one in the Canadian government had done the necessary checks.
Was that sort of thing happening during your time in the federal bureaucracy?
Unfortunately, yes, it was.
The level of understanding of the China file, specifically, is quite poor across the Canadian government, even within CSIS at times. Unfortunately, the threat is not properly recognized or understood. The Chinese operate and think differently. Their operational capability is much different; their methods are over our heads.
We must take a more rigorous approach, without necessarily being exclusionary or racist. We certainly need to be a lot more rigorous if we want to understand the ins and outs of how they operate.
Understanding the game of power and influence is crucial. The Chinese use influence as leverage, whether it's investing money or cozying up to elected officials. The idea is to alter the course of events in their favour.
Whenever I brought up the issue at CSIS or within the government, all too often, I was told that we had to give China an opportunity because of our capitalist system. The Chinese, however, are the ones who invented capitalism. They are much smarter than we are at exploiting capitalism. They know exactly which levers to pull to exert the influence they want.
There is a lack of awareness and a failure to listen on the government's part. Innovation, Science and Economic Development Canada, for instance, can, at a certain point in the process, consult intelligence services on issues of national security. If the intelligence service flags a risk, the department can refuse to let a foreign company set up shop in Canada without having to disclose certain information. In this case, that would mean a Chinese company. However, that mechanism is hardly used, and the concerns of intelligence services tend to fall on deaf ears.
Thanks for that question.
You have to be very clear-eyed about the CCP. You are not going to catch every aspect of the CCP's or China's active measures. It's going to come at you like a wave, endlessly.
I think we need to learn from the experience of Lithuania, Estonia, Finland and Latvia, which have been dealing with Russian political interference for a long time. What they do to make their society resilient, apart from having excellent laws on political interference—and I recommend that you look at Lithuania's law on this—is that they educate their population. In Finland, for example, they have regular courses on disinformation for the wider public. They inform them. They don't necessarily say who is the source of the disinformation.
We have to be realistic in realizing that we're not going to catch every aspect of it, but we have the legislation and we have a good public campaign in place that will help to educate our population and help to keep ourselves resilient and strong. We can expect that we're going to be getting this political interference from China under the leadership of Xi Jinping indefinitely, and that's why we have to be clear-eyed about the challenge.
Good evening, ladies and gentlemen.
It is a pleasure to be here to share my views on certain concerns I—and my fellow Canadians—have regarding the security of personal information and modern online business practices vis-à-vis the presence of Chinese companies in our society.
I can summarize the situation this way. Members of the public, businesses of every size and governments at every level in the country are, without exception, equal in the face of cyber-risks and cyber-attacks.
Over the past 20 years, we have suffered tremendous economic setbacks because of cyber operations targeting businesses and governments.
During that time, our researchers and developers have come up with cutting-edge technology breakthroughs that make—or, rather, made—us the envy of the world. China's intelligence service, the Ministry of State Security, or MSS, and Chinese hacker groups who support, and are condoned by, the Chinese Communist Party of the People's Republic of China have had a gay old time doing harm to our institutions and businesses.
The Canadian Centre for Cyber Security, as evidenced in its “Canadian National Cyber Threat Assessment 2020” report, and the Office of the Director of National Intelligence in the United States are unanimous: China's pursuit of strategic objectives, such as its Made in China 2025 plan and events marking the centennial of Chinese communism in 2049, pose a major cyber-risk.
During the current public health emergency, Canada's health researchers have noted that internal and external threat actors are hindering the development and deployment of measures to prevent and mitigate the risks of COVID-19.
In the past, threats targeted economic development, government institutions and our way of life—basically, critical infrastructure.
During the past 20 years, China has worked hard to catch up to the west in the areas of innovation and development.
The most striking example for Canadians is no doubt the theft of manufacturing patents, strategic plans and other intellectual property from Nortel between 2000 and 2009.
The strategic information was passed from the MSS to engineers at Huawei, as Nortel executives in Canada ignored RCMP and CSIS warnings.
Unit 61398 of the People's Liberation Army was responsible for what happened at Nortel and went on to do the same elsewhere in the world, including in Calgary; in 2012, the unit breached Telvent's networks and stole the industrial control system manufacturer's source code. The company's software is used to control electricity grids, water systems, subway and other public transit systems, and most of North America's oil and gas pipelines. Now, more than ever, our critical infrastructure is at risk.
I should also mention the spectacular data breach at the National Research Council's Ottawa and London offices in 2014. The agency's IT network was hacked and basic research on quantum cybersecurity was stolen.
The National Counterintelligence and Security Center in the United States is now warning against the unwarranted and abusive collection of DNA data by Chinese pharmaceutical companies.
What can we do?
Unlike some of its friends and allies, Canada has yet to make the strategic decision to rule out Huawei as a business partner and competitor in building the country's 5G network. The current government has put off saying whether it sides with its allies or Huawei.
On Friday, April 16, Quebec government officials expressed their desire to do business with Chinese companies like Huawei, without conducting a threat and risk assessment.
A statement like that clearly shows just how unaware our leaders are of the cybersecurity risks, as economic considerations seem to be all that matter. A major telecommunications company in the Netherlands learned the hard way that it wasn't as informed as it should have been on the subject. In fact, thanks to the company's networks, China was able to eavesdrop on the Dutch prime minister's conversations beginning in 2010.
In its dispute with India, China also recently demonstrated its ability to hack into an electricity grid in the Himalayan region.
Do Canada and its neighbour to the south have the capacity to detect and stop a similar breach, before Chinese hackers gain control of electricity grids to launch a cyber-attack along the lines of the 2003 blackout?
We are in a cyberwar. This is information warfare.
We need to improve what is not working and support initiatives that will help the various stakeholders contribute to a better quality of life, in both the physical and digital realms. We can then regain our position as the global economic leaders we inherently are.
I would be happy to answer your questions in both official languages.
Thank you for inviting me to appear before the committee. It will be my pleasure to answer questions in both official languages, but I will make my presentation in English.
I think China poses the greatest threats to Canadian western foreign policy in decades. You can see its military strength and how it compensates for some of its weaknesses there, with its economic weight and its global ambitions. I think the basic line here is that Canadians need to start seeing the world for what it is rather than what we would like it to be. It is a highly competitive, highly contested world of geopolitical conflict, of permanent conflict below the threshold of conventional war or nuclear attack. What we see here is just part of this broad spectrum wherein we're being pressed hard on many fronts. This has been the case since 2008.
I think the relationship with China is best described as “competitive interdependence”. Alaska is a good example. We had an hour of grandstanding on both sides, and then we had eight hours of strategic dialogue on key issues of common interest. We need to understand that while there are many issues in terms of competitive interdependence in which we are fundamentally interlinked—economically, for instance—there are also many issues and interests on which we have fundamentally irreconcilable differences. I think the takeaway is that Canada can't impose its will on China, but Canada also must not accept a subordinate role in that relationship. We have to get ready for long-term, systemic competition.
The competition is fundamentally about how we unlock the potential of our people and how we achieve our national ambitions. This is ultimately more about competition than about confrontation per se. Sometimes you just need to co-operate with your competitors. This is not a monochromatic relationship, and this is why, I think, we're here tonight. To the committee's credit, you're wrestling with this extremely challenging and complex relationship in which we also have inescapable interdependence on everything from knowledge economies to issues such as Iran and North Korea.
What can Canada do? We need to realize what we can and can’t do. We won’t decide China’s regime type, and we can’t determine the size of China’s economy. We can, for instance, realize that the four attributes—which I can't go into for reasons of time—in the formula that has gotten China to this point over the last 40 years no longer apply. What lies ahead is not going to be a linear trajectory of the kind we've seen in the past. China's judgment here is that it is no longer in a stable relationship with the U.S., so it needs to strengthen itself for strategic competition. I think Canada needs to do likewise. It needs to fortify itself with its friends.
One of the things we need to do is to counter the Chinese narrative that the east is rising and the west is in decline. Chinese media are great purveyors of narratives, and authoritarian systems always excel at showcasing their strengths and concealing their weaknesses. We need to learn to distinguish between image and reality and not inadvertently buy in. Let's have some self-confidence. Let's not inflate the threat or weaponize it for political purposes.
Let's also realize that China is not 10 feet tall, that alarmism doesn't help us here, and that China has lots of vulnerabilities. Canada is much better positioned than China to meet the challenges of the 21st century in terms of per capita GDP, energy and food security, demographics, education, social harmony, immigration, allocation of capital, transparent geopolitical systems and so forth.
Instead of focusing on how we can degrade China's strengths, we need to focus on how we can bolster our own. By doing that, it's going to be easier to unite our allies. The key aspect about influence is that we need to make the choices. We need to choose the issues that are important to us and on which we want to make a difference. On those issues, we need to shrink the gap with our allies. We need to boost our domestic dynamism and we need to capitalize on our global network and our alliances and partnerships.
In the previous session, there were many mentions of the Five Eyes. Of course, the Five Eyes is no longer just a signals intelligence community. There are law enforcement components, border components, human intelligence components and financial intelligence components. There's a lot that we are doing and a lot more that can be done. We need to shore up our global prestige, because that's something that China doesn't control. It's something that we control.
We need to ask ourselves questions. What is of national interest to Canada? Pick the example, for instance, of Xinjiang, or pick any other case studies. We need to lead by example. We need to speak out clearly and consistently. We need to make it clear to China that there is not going to be a normal relationship as long as that long shadow is cast over the relationship. We need to be attentive to the goods and items that are being produced with forced labour, as has already been pointed out.
We need to—
Several years ago, you sounded the alarm about the importance of doing a better job of raising awareness among our university researchers and our research networks about potential infiltrations by foreign actors who, for example, have direct ties to the Chinese People's Liberation Army. Those people are on Canadian university campuses and are infiltrating research networks.
According to the “CSIS Public Report 2020”, activities have increased significantly during the COVID-19 pandemic. The report of the National Security and Intelligence Committee of Parliamentarians, or NSICOP, also mentions that Canada has been the target of sustained and increased efforts by foreign actors, including China, Russia and Iran, over the past year.
How aware do you think networks of university researchers are of that threat posed by China, for instance?
Mr. Waterhouse, Mr. Leuprecht, thank you for joining us this evening.
Mr. Leuprecht, we had an opportunity to engage in a discussion just a few days ago.
Mr. Waterhouse, as a former Quebec minister of public security, I thought it was very interesting to hear you say that Quebec claims to be able to do things on its own. Once the situation improves and we can meet for a coffee, I would like us to discuss this.
Gentlemen, I am completely fascinated by the apprehensions expressed about a power like China in terms of cybersecurity. According to Greg Austin, who leads the Cyber, Space and Future Conflict Programme at the International Institute for Strategic Studies, China's cyber defence capacities are clearly inferior to those of most western powers, including Canada. According to him, Canada ranks ninth out of the 155 countries evaluated, while China ranks 27th.
Why is China such a threat to Canada?
In light of this very interesting information, I am wondering why Canada and other western powers are not an equivalent or higher cybersecurity threat to China.
My question is for both witnesses.
Mr. Bergeron, I accept your invitation to have a coffee. It would be nice to meet with you at any time.
I haven't seen Mr. Austin's assessment points. I don't know how he figured out where China stood and where Canada stood. However, I can tell you that a key element is the power of each country. China has a team of about 100,000 cyber soldiers, if I may use that unit of measurement. In the United States, between 5,000 and 6,000 cyber soldiers work at the National Security Agency at Fort Meade. In Canada, only 200 or 300 people are mandated to carry out cyber defence. Conducting cyber-attacks is even a recent mandate.
In terms of the balance of power, we need to know whether we have full command of the technology, in comparison with China. China can absorb losses, but we can't. This would have a greater impact on us.
I would need to study this issue further to gain a better understanding of Mr. Austin's position.
It's a different landscape than what it was 20 or 30 years ago, when the economy was favourable to bringing business back to China, and they were very favourable to that idea. People were working over there. We had very cheap pricing, and this is how the economy was rolling big time for us here, but the game has changed, and now we have clear paths that are just set by China, just like “Made in China 2025”, in which their main goal is to bring everything to be manufactured in China, and they'll become the world's manufacturer.
If we keep that in mind, we can see it means they don't care where they they get the information, and especially in the case of manufacturing, they will bring it over to China, and when it's all over, we're going to be left standing without anything. The only thing we'll be able to do is call China to buy things at a very high price.
That said, we have to acknowledge that the same economy that was driving us to go to China to manufacture everything has changed. Big manufacturers, especially of semiconductors, are changing their game plans and are now planning to make smart phones, tablets and electronics back in the U.S. or in Vietnam, as an example, or other places in Asia, because there is a real risk that at some point there won't be the flexibility to go back to China to do this.
On a second front, the big chip manufacturers in Taiwan are considering a plan B, because if overnight China wants to take over the island, as they have threatened to do, it will have a big impact on the electronic market.
I'll give you a quick overview of a few matters.
Looking at demographic change, China is going to hit peak labour by 2025. It has already maxed out in its productivity gains. Currently there are eight working Chinese per retiree; by 2050 there will be two. China has a real challenge with growing old before it grows wealthy.
It has rising debt levels—300% of GDP in 2019—and so China can't buy its way up the ladder in the way, for instance, that South Korea or Taiwan did. China is running out of runway to catch up, which is why President Xi is doubling down. He knows he has only so much time to catch up.
At the same time, there is the sclerotic political system, this Leninist rigidity. There is shrinking room for innovation and top-down decision-making. Bad news is never tolerated at the top. This is why we saw the challenges coming out of Wuhan in reporting on the virus.
We see the rising negative views of China, which are at historic highs across a diverse set of partner and allied countries, including Canada. There are budgetary constraints with a cooling economy. There are rising demands from its population and an aging society. There are serious risks of default on some of the loans from the belt and road Initiative, which would have serious legitimacy implications for the Chinese leadership, which has really sold this idea as the future of China. They're also vulnerable on food and energy security: China can't grow enough food for its population, and it imports half its oil from the Middle East.
I can go on, if you'd like.
Look at the countries that were in a very good position in terms of their intelligence services, including Taiwan, Australia and even Vietnam. They responded very quickly, not only because of their intelligence services, but also because of their assessment capabilities.
They have a strategic assessment capability. The U.S., Australia and the U.K. each have a strategic assessment capability. In Canada we don't have one. We don't have the capacity to
provide strategic advice and information to our government. We don't have a biosafety plan either. We have spent
roughly $400 billion,
and an intelligence service would cost us about $500 million a year.
It's a premium of one-tenth of one per cent of what we spend on the pandemic. I think that's a premium worth paying.
Good evening, Mr. Leuprecht and Mr. Waterhouse. Thank you for contributing to our study.
First, Mr. Leuprecht, I'm pleased to hear from you. I think that this is one of the first times that a witness is talking about the vulnerability of China, for example, and about how to adapt, even though you're saying that we must adjust certain federal policy priorities.
Mr. Waterhouse, at the start of your presentation, when you were talking about metros, pipelines and all that, I was a little concerned.
As a former information systems officer, do you find that, in 2021, Canada's security infrastructure has declined?