:
I call this meeting to order.
Welcome to meeting number 28 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.
[Translation]
Pursuant to the motion adopted by the House on January 25, 2021, this meeting is in hybrid format.
I would like to welcome Marc Garneau, Minister of Foreign Affairs.
Thank you for being here this evening, Mr. Garneau.
[English]
I'd also like to welcome your officials from the Department of Foreign Affairs, Trade and Development, or, as we know it, Global Affairs Canada: Marta Morgan, deputy minister; Daniel Costello, assistant deputy minister, international security; and Weldon Epp, director general, North Asia and Oceania bureau.
Thanks to all of you for being here.
Minister Garneau, please proceed with your opening remarks. You have five minutes.
[Translation]
It is a pleasure to be with you today, Mr. Chair.
China’s increasing authoritarianism and coercive diplomacy are challenges for democracies around the world. All countries are reassessing and realigning their engagement with China, and Canada is no exception.
We are all trying to decide how we can reconcile our trade objectives, our security objectives and our human rights objectives. Given the circumstances, our approach to China is constantly evolving. It is firmly guided by our principles, values and interests, while acknowledging the complexity of our relationship.
China is rapidly becoming a global influence with which all countries must learn to coexist. That means that we must recognize situations in which it is necessary to cooperate with China, for example on global problems like climate change. However, it also means that we are competing with China when it comes to trade and to promoting our values.
[English]
It also implies challenging China when human rights are violated or Canadian citizens and interests are jeopardized.
We must continue to work with our partners around the world to protect the rules-based international order and defend human rights and freedoms. Those are fundamental Canadian values that underpin our foreign policy.
Let me be clear. A path to any kind of long-term relationship with China implies the safe return of Michael Kovrig and Michael Spavor to Canada. Mr. Kovrig and Mr. Spavor have been unlawfully detained for more than 900 days. Bringing them home is and must remain our top priority in our dealings with China, period. Both men received regular visits two weeks ago from consular officials, who remarked on their impressive strength and resilience. We continue to call for their release while pressing China to allow consular access to other Canadian citizens held in that country, namely Mr. Huseyin Celil, so that we can confirm his well-being. We also seek clemency for Robert Schellenberg and for all Canadians facing the death penalty.
Alongside international partners, we continue to call out China for its bad behaviour. We have called on China to put an end to the systematic campaign of repression against Uighurs and other Muslim ethnic minorities in light of mounting evidence of forced labour, political re-education, torture and forced sterilization. We announced sanctions against four officials and one entity for their involvement.
We are also working with allies at the G7 Quad and Five Eyes to condemn China's growing militarization in the East China Sea and the South China Sea, where China claims vast areas, which fuels regional tensions.
China's economic might has emboldened its ambitions and interests beyond the Asia-Pacific region, where it has enjoyed enormous clout for centuries, to span the entire globe, including here in Canada. Growing competition with China and the pervasive use of digital technology forces us to work with other governments, businesses and universities to protect intellectual property and digital infrastructure and even to shield our democratic institutions from foreign interference and election meddling.
Hostile activities by state actors pose strategic long-term threats to Canada. They can undermine our nation's economic, industrial, military and technological advantages. Researchers and innovators, for example, are vulnerable to espionage and hacking.
Last September, the launched the new portal called Safeguarding Your Research, which provides tools and advice to Canadians on how best to protect their intellectual property.
In March, the ministers of Public Safety and Innovation, Science and Industry announced the development of specific risk guidelines to integrate national security considerations into the evaluation and funding of research partnerships.
We are also working with other G7 countries to counter foreign interference, notably through the Canadian initiative called “rapid response mechanism”, which strengthens coordination across the G7 in identifying, preventing and responding to threats to G7 democracies through disinformation.
[Translation]
Unfortunately, we are currently seeing a resurgence in anti-Asian hate, since the beginning of the pandemic, in Canada and around the world.
Canadians of Chinese and Asian heritage are our neighbours, our colleagues, our friends and our family members. They should never feel that they are in danger or threatened because of their origin.
:
Thank you, Chair. Thank you, Minister, for appearing.
Recently Australia's ambassador to the United States said that the Biden administration is seeking closer research collaboration with its allies and was watching closely how allies like Canada managed China's interference with Canadian universities. He said that Washington will likely rule out research partnerships with universities and maybe even countries that disregard national security concerns.
The U.S. government provides about $50 billion Canadian a year to the National Institutes of Health. A lot of that funding goes to Canadian researchers, compared to about $3 billion from all of Canada's four granting councils.
said in March that guidelines on research partnerships are forthcoming. When are they going to be released?
:
Thank you very much for the question.
We of course have been very preoccupied with the national security law being imposed in Hong Kong. Alongside our international partners, we've consistently voiced concern about Beijing's imposition of this law, as well as about other assaults on Hong Kong's high degree of freedoms under the Sino-British Joint Declaration. This decision further narrows Hong Kong's autonomy and the space for freedom of expression and public participation in Hong Kong's governance, and we have made this very, very clear.
Of course, we have also taken some steps with respect to, for example, the extradition treaty that we have with China and with Hong Kong. We have modified our travel advisories. The has also made it an easier process for those who may wish to leave Hong Kong to come to Canada.
:
That is very laudable, Minister.
Last Monday night, however, we discussed the issue of the Pratt & Whitney Canada aircraft engines that are awaiting a permit for export to the People's Republic of China.
In light of your previous answer, am I to understand that the reason why this export permit has not been granted for several years, thus jeopardizing the jobs at the Longueuil plant, in particular, is because you have reservations or fears about the potential use of those aircraft engines by the government of the People's Republic of China?
:
Thank you, Chair. Thank you for joining us tonight, Minister Garneau. We're happy to have you here.
This committee presented a report to the House of Commons on February 25, 2021, recommending that the Government of Canada convey to the ambassador of the People's Republic of China to Canada that any interference with the rights and freedoms of people in Canada was unacceptable, will not be tolerated, and will result in serious consequences for those responsible.
Was that message communicated to the ambassador of the People's Republic of China to Canada, and if so, what was the response of the ambassador?
Thank you, Minister.
I would first like to say that I welcomed your opening remarks. I liked what you said, even if it sometimes seemed not to correspond entirely to the response of the or the government. In any event, it is a good start, because what you said is what we are actually seeing at present when it comes to China.
Obviously, the Chinese people, and Asian people in general, are not who we are talking about, since our comments are always directed at the regime.
On that point, the , came to see us a few weeks ago, and there was a comprehension problem regarding the geopolitical situation. I would therefore like to come back to the questions about the security and defence of Canada in geographic terms.
At present, China considers itself to be a near-Arctic region. Officially, is China a territory that is considered to be part of the Arctic region as a whole?
I am very pleased to see you this afternoon at the Special Committee on Canada-China Relations, Minister. I would also like to welcome the officials who are with you and thank them for their services.
Earlier, my colleague Ms. Yip asked you some questions. I would like to come back to two of them in particular.
First, Ms. Yip said that the China of 2016 was not the China of 2021, and that Canada's approach needed to evolve with an evolving China.
Can you tell us more about the approach that Canada has adopted in dealing with China?
:
Thank you very much for the question. I had started to answer, but I did not have enough time.
Yes, China is evolving and has changed since 2016. We have to change the approach we take to China. We have to take what I call the four "Cs" approach.
We have to coexist with China and sometimes cooperate with it, for example when it comes to climate change, which affects us all worldwide. I will take this opportunity to give you an example. Recently, we renegotiated an agreement with China regarding commercial flights between our two countries. That is an area in which we have to cooperate.
There is also the competition aspect. Obviously, we want to sell our products on the international markets, as does China.
On the other hand, we sometimes have to criticize China. That is absolutely essential, and we do it. We have done it on the subject of the treatment of the Uighurs, on what is happening in Hong Kong, and on the arbitrary detention of the two Michaels.
We have also criticized China's aggressive position in the South China Sea and toward Taiwan. We do not hesitate to speak frankly to China when it is necessary.
I would like to mention another important point. Today, we work multilaterally instead of speaking directly with China. We do this on a regular basis. We often take unanimous positions within the Five Eyes, the G7 and other multilateral forums. This makes the positions we take more effective.
I really like the analogy you use for the four Cs concerning China, whose name begins with a C. You are taking action on all fronts, and that's good.
The other question you were asked is about the two Michaels. They have been over there for 900 days. That's nearly three years.
Are you still in touch with the parents of the two Michaels? Do you continue to provide them with consular services? We are really worried, as this arbitrary detention has been extremely long.
:
Thank you for asking this question, which is not asked often.
The answer is yes. I am in regular contact with their families. In Michael Spavor's case, I am in contact with his father, Stan, his brother, Paul, and his two sisters. I am in contact with all four of them. The same goes for Michael Kovrig.
I would say that this is probably my most difficult task. I report to them on the situation. We have consular access, and the families really want to know how things are going. They actually mostly want to know whether progress has been made in terms of our efforts to get them released.
Those conversations can be difficult because, as you know, the two Michaels have been in prison for more than 900 days. Maintaining this contact is absolutely essential. They are suffering a great deal. I would also say that many Canadians are suffering, as we have lost two citizens who are very dear to us.
Minister, I fully appreciate what you said about how difficult it is to talk to the two Michaels' families. As a former Quebec minister of public security, I had to talk to parents and spouses of police officers who died in service a few times. I must say that those are very difficult moments, but they are particularly rewarding.
As my colleague Mr. Paul‑Hus said a few minutes ago, we learned in The Globe and Mail that Global Affairs Canada reportedly issued an opinion that went against the Department of National Defence's decision to cancel joint exercises planned between China's People's Liberation Army and the Canadian Armed Forces on a base in Ontario. We heard the point of view of the and his officials when they appeared.
Why did you issue a contrary opinion when it was logical to cancel those exercises?
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Well, in a general way, as I've said, our policies with respect to China are evolving. I can't speak in detail about specific things that happened prior to my arrival.
I will say, on the Nuctech situation, that we have said very clearly that we have not purchased any equipment from Nuctech and we will not use the Nuctech standing offer. However, we did learn from that. We did learn that we need to identify opportunities for improvement with respect to future procurement of security equipment. We've been public about that. We're taking action to implement improvements to the procurement process that were recommended in the review related to that.
With regard to the visa application centre, we're acutely aware of the risks of operating in any foreign environment. We have a rigorous procurement process, led by PSPC, for our contracts abroad. The role of the visa application centre in the immigration system is limited to logistical and administrative support. IRCC officials closely monitor the activities of the visa application centres to ensure that strict privacy standards, as detailed in the contract, are met. We have a lot of proof to show that we monitor this very carefully, so—
:
Thank you, Mr. Chair, and thank you again, Minister, deputy and officials for being with us.
On that last topic, it might be important to remind the committee that it is established so that the government, whether majority or minority, always has a minority on that committee. Thus, the Liberal government will have only five out of 11 possible members on the committee. This is something we fought for when the Harper government refused any parliamentary oversight on any security issues.
That's just Rob needing to get in there with that lived experience.
Minister, you have said that the China of today is different from five years ago. It is. One thing that has been required of you is to work multilaterally and to work with like-minded and sometimes even unlike-minded countries to find a way to deal with China. When it came to Hong Kong, our government issued many statements with the EU, the U.S., the U.K. and others. Recently you were at the G7 meeting of finance and foreign ministers, and a statement on the Uighurs and the horrendous situation in Xinjiang came out. You are also working on arbitrary detention. I'm kind of giving you a bit of a smorgasbord. Those are just examples of the leadership roles and the collegial roles you are taking on with respect to arbitrary detention.
I would like your thoughts on this way of working.
:
Thank you very much for the question and for the precision on the NSICOP composition as well.
We believe that if we are to transmit a message to China, that message, broadly speaking, is that we all operate on this planet according to international rules-based law and that it is not acceptable to practice coercive diplomacy between countries. Fortunately, our like-minded partners, such as members of the G7 and in particular our closest ally, the United States, feel the same way.
It is certainly not acceptable to arbitrarily detain innocent civilians from another country because you have a difference of opinion on a particular issue with that country. Sure, we can have differences of opinion with China, but you don't resolve those by imprisoning citizens from the other country. China is not the only country that is guilty of that, but it is an example.
We believe that if we act together multilaterally, we send a stronger message. That's essentially it. There was a very big section in the communiqué from the foreign ministers of the G7 when we met in London. You will probably see a similar important section when the leaders meet in Cornwall next week.
I would like to use this time now to move the motion that I had provided notice of. That motion has been distributed to all committee members. The motion is the following:
That, in relation to the documents ordered by the Committee, on Monday, March 31, 2021, and Monday, May 10, 2021, to be produced by the Public Health Agency of Canada, the Committee publish on its website all the documents received from the Agency in their current redacted form, while underlining its insistence that the Public Health Agency fully comply with the orders for the production of unredacted documents.
Mr. Chair, this motion reflects the fact that, unfortunately, we have not received the unredacted documents. However, we have been given redacted documents. We've been asked by journalists to share those documents. There's a public interest in this information being made public. I think we have an obligation to do that.
We've received these documents. We've had plenty of time to review them. I think members will agree with me that there's nothing in these documents that can't be made public. The Public Health Agency of Canada—inappropriately, in my view, but it was still done—redacted information that they didn't want made public.
Given that these redactions shouldn't have taken place but did, we have no reason at this point not to make the redacted versions of the documents public. I think we have an obligation to do that.
I put forward this motion. I hope it can be dealt with quickly and that we can return to questions. I wanted to make sure that we got this done; hence, I moved the motion.
Thank you.
I'm not opposed to the motion, but I also want to walk through it and think about it a bit with the committee and get the wisdom from members of the committee to understand what the value is of doing this in terms of a public good.
I have supported this kind of motion at other committees, but I wonder what the value is and why we should entertain this motion at this point when we still have a set of activities going on. We have a motion that has been passed by our committee with respect to the submission of documents to our committee. That motion then got somewhat doubled up and superseded by an opposition motion in the House, which was confusing for me as well, because it seemed that we didn't allow our committee work to continue while the House had another order at the request of the Conservatives. Now we're getting something that is again leapfrogging over a process that I don't think is finished yet.
I am looking for wisdom from members of the committee to find out how it is that we are adding to the public dialogue and discourse on this topic, what it is that we want to accomplish, and how it is perhaps going to be, if not necessarily in conflict with, but out of order with the number of steps that the House has asked to take place. I don't think we've resolved either the committee motions from May—when we made two motions that dovetailed, one into the other—or the House motion, and now we have this motion.
As I said, I'm not on principle opposed to this motion, but I also want to make sure that we're doing things in an order that is discernible in terms of our motivations.
I found it interesting when I read an interview with former member of Parliament Derek Lee, who has this as his fascination and his interest. He has written a book on the issues of parliamentary privilege. He talked very guardedly in that interview about wanting to make sure that all the things we do as a committee are for the work of the committee and the public good and are not simply motivated by partisan political activity.
I just want to dig into this a bit. I'm a little disappointed that it's happening when we have witnesses, who are taking time from their schedule to be with us this evening—and on my birthday, even, I would say.
:
Well, I'm glad to hear that.
I have some sympathy for what Mr. Oliphant is saying, in that we are in the process of undertaking a study on what happened through PHAC at the lab in Winnipeg and we need these documents and this information to be able to do our work. I wanted to congratulate the enthusiasm of Mr. Genuis and others on the committee in pursuing that information. We all joined in that pursuit and in the motion before the House.
I'm a little bit concerned that it would be difficult for the public to follow what we're doing if we're calling for these papers, as in the title of Derek Lee's book, and we're not getting them. Then I guess the pursuit is to follow through on that in the House of Commons.
I wasn't there—I was busy at another committee doing a report—but I gather the Law Clerk and Parliamentary Counsel has actually written to them since the question was raised by you, Mr. Genuis, in the House this afternoon, saying that we did not get the unredacted papers, and there's now a motion of privilege before the House. All of this seems to be perhaps piling on one procedure after another.
As to the release of these documents in a redacted form while we're asking for the unredacted ones, I'm wondering whether there is a value in that right now. Will it stop us from pursuing our work, or is it just giving other people an opportunity to comment on them while we're trying to pursue the other documents?
I'd like a little clarification on that, because I think the narrative to the public may just be confusion about various parliamentary procedures going on, as opposed to the substance of what is being sought by the committee with respect to these documents and papers. I wonder if you could explain that a little better.
:
Our approach to China is evolving to meet the challenges of threats to our national security, to democratic values and to human rights. We have recognized that we need to challenge China on many of those issues.
I think a good example of that, when it comes to working with allies, is the work that we've done on arbitrary detention. As mentioned, 63 countries have now signed on to our statement on arbitrary detention, which is practised by a number of states globally and goes against the rules that govern the international system.
We work very closely with international allies through the G7, for example. You saw an extensive statement coming out of the G7 foreign ministers meeting at the beginning of May condemning the human rights violations against the Uighurs. We work at the United Nations with allies at the United Nations Human Rights Committee, for example, to decry the human rights abuses being committed against the Uighurs and to seek unfettered access for the UN special rapporteur on human rights. There are many examples, whether it's with our G7 partners or with our Five Eyes partners. Sometimes we will work bilaterally, for example, with the United Kingdom on an issue.
I think one of the main messages I would pass is just the importance of building those alliances and working with allies. We are so much stronger when we work together. That's a critical part of our strategy and our approach going forward.
The protection of freedom of expression, the promotion of democracy and the protection of human rights are critical values that guide Canada's foreign policy around the world. They are a key pillar of our foreign policy, and we work very closely with our allies on these issues.
Hong Kong is another good example. In March, Canada and our G7 partners issued a statement expressing grave concerns over the decision by the National People's Congress to overhaul Hong Kong's electoral system.
We worked together in early January, joining Australia, the United Kingdom and the U.S. in a joint statement around reiterating our serious concerns over mass arrests. This is not only vis-à-vis Hong Kong or only vis-à-vis China, but these are positions and views that Canada expresses in multiple fora when we see the need to stand up with our partners and promote human rights, democracy and freedom of speech.
I thank the witnesses for still being with us at such a late hour this evening.
Deputy Minister, you are probably expecting me to get back to my question, which you could not answer because I ran out of time.
According to The Globe and Mail, the opinion was published by Global Affairs Canada against the decision of the Canadian Armed Forces to cancel the joint exercise planned between the troops of China's People's Liberation Army and the Canadian Armed Forces on a military base in Ontario.
What is the justification for that contrary opinion from Global Affairs Canada when, logically, everything was pointing toward that exercise being cancelled?
My colleague Mr. Paul‑Hus was saying he really appreciated what the minister said in his opening remarks. I will tell you that I also greatly appreciated some parts of his opening remarks, especially concerning the Uighur situation. I thought I detected in the minister's remarks a recognition of certain facts concerning, for instance, the forced sterilization of Uighur women.
When I listened to the minister, I thought I heard the various parameters defined in the declaration on genocide. In light of the minister's statement today, what is still preventing Canada from recognizing that a genocide is indeed taking place in Xinjiang?
:
Thank you, Madam Morgan.
This is the whole problem here. It is not a committee of Parliament. In fact, subsection 4(3) of the act that governs this committee states, “The Committee is not a committee of either House of Parliament or of both Houses.” In other words, NSICOP is not a parliamentary committee. It is not a committee of the House of Commons. It is not a committee of the Senate of Canada. It is not a joint committee of both bodies. It is a committee of the executive branch of government. Its secretariat sits on the Government of Canada's websites.
In fact, the website and the departmental plans are very misleading, and I would like to see that changed, because it does a great disservice to the public and to the integrity of our constitutional structures.
The title of the—
:
Yes, and I would also humbly remind the chair that if he doesn't have control of the meeting, he has the right to adjourn the meeting, should there be an outburst from a member while someone has the floor. It is in the Standing Orders.
As I was saying, I have two issues. One, we have officials here on a very specific study. We are doing a study that relates to our work and we have invited them to come from Global Affairs Canada, from the foreign affairs area. We have the deputy minister of foreign affairs. It is not within her purview or her mandate to understand, to know or to relate to us what NSICOP is about.
The second issue I have is with the parliamentary tone, which I think is absolutely essential for us to maintain. It is decorum. The word is specifically in the Standing Orders when it comes to how a committee needs to operate and how committee members should operate.
The title of the secretariat's core responsibility was changed in the 2021-22 departmental plans from “assists the National Security and Intelligence Committee of Parliamentarians in fulfilling its...mandate” to “Parliamentary review of national security and intelligence activities”.
Whoever is responsible for this change needs to undo this change. The secretariat and NSICOP are not engaged in a parliamentary review. We on this committee and in the other standing committees of the House of Commons and in the joint committees of the Senate and the House and the committees of the Senate engage in parliamentary review. NSICOP is not a parliamentary committee. It's right in subsection 4(3) of the act. I would like the Government of Canada to ensure that the wording is changed as soon as possible in order to ensure that the information is accurate and consistent with the act.
I will move on to a quick question concerning the Winnipeg lab.
Global Affairs is involved with the granting of visas to those citizens who are arriving in Canada from countries that require visas. A scientist from the People's Liberation Army Academy of Military Medical Sciences, Feihu Yan, worked for a period of time at the Public Health Agency of Canada's National Microbiology Laboratory. When and under what circumstances did GAC issue a visa to Feihu Yan?
:
Thank you very much, Mr. Chair.
Since I am taking the floor for the first time this evening, I just want to say to all the committee members and certainly the witnesses that my thoughts and prayers are with the London community, which was today the target of a hateful and completely unjustifiable crime in Canada. Our thoughts and prayers are with the London community and with every Muslim community in Canada, which should not have to suffer that kind of an attack in a country like ours.
My first question is about the Declaration Against Arbitrary Detention in State–to–State Relations, launched by Canada in February. Mr. Oliphant and the minister discussed it a little bit. So far, unless I am mistaken, 63 countries have endorsed the declaration.
Ms. Morgan, could you give us an update on the progress made in that respect?
Are any steps currently being taken to obtain the support of more signatories for that declaration, which I deem very important?
:
Thank you for the question.
Canada has really shown international leadership when it comes to ending that unacceptable practice of using arbitrary arrests and detentions to apply diplomatic pressure. The 63 countries that have endorsed the Declaration Against Arbitrary Detention in State–to–State Relations account for one-third of the countries in the world. So we are very proud of the work we have done at the department.
Recently, on May 5, we released the partnership action plan with full G7 support, to turn words into action and put an end to that practice worldwide. We continue to talk to other countries, and I hope we could come back before this committee at some point to tell you that more countries have shown their support for the declaration.
[English]
It's something that I raise regularly in my bilateral conversations with colleagues, as does Minister Garneau.
:
Thank you, Deputy Minister.
My second question is about the Uighur situation. Along with a number of its international allies, Canada has imposed—as you of course know—sanctions on Chinese officials involved in the persecution of the Uighur population. We have seen China retaliate against one of our parliamentarians and, thereby, against our democratic institutions.
Is that kind of retaliation seen abroad?
What impact does that have on supporting stronger and necessary criticism of the Chinese regime?
As a signatory to the Convention on the Prevention and Punishment of the Crime of Genocide, Canada has obligations under the convention. Article II of the convention reads as follows:
In the present Convention, genocide means any of the following acts committed with intent to destroy, in whole or in part, a national, ethnical, racial or religious group, as such:
(a) Killing members of the group;
(b) Causing serious bodily or mental harm to members of the group;
(c) Deliberately inflicting on the group conditions of life calculated to bring about its physical destruction in whole or in part;
(d) Imposing measures intended to prevent births within the group;
(e) Forcibly transferring children of the group to another group.
Just one of those acts constitutes genocide. The convention goes on to state the following in articles III and IV:
The following acts shall be punishable:
(a) Genocide; (b) Conspiracy to commit genocide; (c) Direct and public incitement to commit genocide; (d) Attempt to commit genocide; (e) Complicity in genocide.
Persons committing genocide or any of the other acts enumerated in article III shall be punished, whether they are constitutionally responsible rulers, public officials or private individuals.
In his opening statement, the minister recognized that some of the acts listed in the convention are taking place. Why, then, does the Government of Canada still refuse to recognize that a genocide is under way in Xinjiang?
:
Thank you very much, Mr. Harris.
I appreciate it when members manage the time they have. Of course it's up to members to do that, although I try to assist with signals about how much time is left.
I think we have enough time for Mr. Paul-Hus and Mr. Oliphant.
[Translation]
Mr. Paul‑Hus, we now go to you for five minutes.
Actually, you have four minutes. I have to be stricter in managing the time we have left.
Ms. Morgan, we regularly discuss our meetings with members of the G7, as well as those with our Five Eyes partners. In my first few years in politics, I attended a number of North Atlantic Treaty Organization, or NATO, meetings. I, personally, had the opportunity in Bucharest to ask the Secretary General of NATO, Mr. Stoltenberg, a question about defence.
NATO focuses mainly on Europe, but in 2018, we received threats from North Korea, and I asked Mr. Stoltenberg whether NATO was going to intervene on behalf of the western side of the alliance. He was taken aback by my question because Canada had never been one of the countries that could come under threat.
On the cybersecurity front, we rely heavily on our American counterparts. Internationally, when you speak with NATO members, do you discuss the respective capacity of members to assist Canada in defending against attacks from China?
Russia is another concern, but we are here today to focus on China.
Is Canada truly interconnected with the United States?
:
Thank you, deputy minister.
That's a good question, Mr. Paul‑Hus.
Indeed, NATO talks a lot about that issue. While NATO is an alliance of European and North American countries, the rise of China and its conduct around the world right now are raising a number of questions about the repercussions for the Euro-Atlantic region.
NATO is trying to better understand the repercussions of China's much more aggressive posture. The alliance wants to understand what it means. NATO is also interested in China's technologies, systems and intentions globally. That has been the subject of recent discussions and reports. Although NATO focuses mainly on the Euro-Atlantic region, it still has to have an overall understanding of the situation.
:
Good evening, Chairman and members of the committee.
Last week I received an invitation to appear before this committee, and I'm pleased to do so. I appreciate that you're working late in the evening and I also appreciate the interest that you're taking in this most important topic.
I was asked to appear primarily as a result of reports that I completed at the request of British Columbia's attorney general, David Eby, in 2018 and 2019. The first, “Dirty Money”, related to allegations of money laundering in B.C.'s casinos. The second, “Dirty Money - Part 2”, related to allegations of money laundering in other sectors, including luxury cars and real estate. Both reports are freely available on the Internet.
I should also indicate that I am currently president of the International Centre for Criminal Law Reform, a UN-affiliated NGO located at the University of British Columbia. ICCLR, as it is known, was heavily engaged in an exchange with Chinese universities and government during the 1990s and well into the first decade of this century. lt was a robust program that involved lectures in China by our associates on matters related to criminal law and the rule of law, and hosting visiting dignitaries and scholars from China. We remain in contact with a fellow UN affiliate at the Beijing Normal University. If there is anything that ICCLR can do to further Canada-China relations, as we have in the past, one need only ask.
On a personal note, in 1996 I visited China with ICCLR and lectured at universities and at the procuratorate, the equivalent to our prosecution service, on the topic of money laundering. On other occasions, I visited Hong Kong and Macau. lt is an amazing country and people. I am strong in my opinion that the Canada-China relationship is of critical importance to our country. Canada is much better for its large Chinese diaspora, which has not only fuelled the economy but is hard-working, engaged in the community and proud to be Canadian. We need immigration from China and we need capital from China.
I'm also a retired deputy commissioner of the RCMP, having spent many years working on financial crime and heading that work in the force. As such, I visited numerous Asian countries and liaised with their national police services. The topic of interest to you, however, stems from my work on organized crime and money laundering, which resulted in the “Dirty Money” reports. ln the first report, I outlined and provided graphs that depict how underground bankers in Canada and China were able to euphemistically “clip their ticket at both ends” by both facilitating capital outflow from China in violation of Chinese currency controls and launder the proceeds of crime in Canada. High-worth individuals would deposit money with an underground banker in China, fly to Vancouver and be given a bag of cash on arrival. They could do with it as they wished, and many chose to gamble at casinos. The source of wealth of the Chinese individuals was, in most cases, unknown, but quite possibly legitimate. Their goal was to invest or use their money overseas. The money they were given upon arrival was primarily the proceeds of domestic and international drug trafficking. This process became known as the “Vancouver model”.
I will end by saying that China is known to be very tough on domestic drug trafficking. The issue is Chinese organized crime groups that operate around the world outside China, including the Big Circle Boys and the triads, which utilize familial connections and networks to distribute drugs manufactured in Guangdong province and elsewhere to the world. Let me be very clear, however: Canadians consume those drugs and buy the illegal commodities, so blame should not be unidirectional. Furthermore, it is important to realize that organized crime today is global in its reach, forms alliances as required, is not confined to one ethnicity and is not commodity specific.
Thank you for the opportunity to appear before you, and I am happy to answer any questions that you may have.
Good evening, Mr. German. Thank you for being here.
As you said, organized crime has a global reach, with criminal groups all over the world. Today, we are focusing on Chinese organized crime, which as we know, is firmly established in Canada. I'm curious as to whether you know much about the mechanism organized crime groups use to transfer money. One of my fellow members previously put forward legislation on foreign funding—what is known as the tunnel fund—a method that criminal organizations use to transfer money in the country.
Can you talk a bit about that?
:
As I mentioned in my opening statement, the issue is that because of currency controls, it is difficult to move money out of China unless you have approval. It's my understanding things have tightened up in that regard over the last few years.
What you find internationally—and this is not just between China and Canada but in the world generally—is that there are underground bankers. Underground bankers are money service businesses, but they are simply unregistered money service businesses. That's the easiest way of looking at it. They're not registered with FINTRAC in Canada. They are individuals who have a connection one way or another. They may have a family connection, or colleagues, or they may be members of a drug trafficking ring. All they really have to do is send a message from one to the other, between continents, and say, “I've got money. I'm holding money. You can give the money to Mr. A.” No money actually flows back and forth. There are no wire transfers. There is a settling of accounts among the underground bankers at some time in the future, or the money they have received from a client is then sent to a third party, possibly to purchase drugs or whatever.
In answer to your question, what is most likely happening, and most common, is the use of these informal remittance providers known as underground bankers.
:
Thank you, Mr. Paul‑Hus.
[English]
I have a question about single-event sport betting. As you know, single-event sport betting is big business in Europe and Asia, where it's long been legal. In Europe, I've seen figures that it's worth about $40 billion Canadian a year. Bill is making its way through the Senate, and it will decriminalize single-event sport betting.
What is your view on decriminalizing single-event sport betting without putting in place any additional protections, keeping the current system we have in place for regulating gambling?
:
I'll deal with the second part of it first.
In terms of beneficial ownership, we always have to keep in mind that there are two aspects to it. There's beneficial ownership of corporations and there's beneficial ownership of land. Land being a provincial responsibility, it falls to the provinces to deal with that. British Columbia now is the first province to create a beneficial ownership registry for land. We will hopefully find the ultimate beneficial owner of all the land in our province.
Unfortunately, or fortunately, if we are looking at beneficial ownership of corporations, that has to come from the federal government. We know the federal government has made an announcement that it's looking at a federal beneficial ownership registry for corporations, I believe, in 2025, simply because you can incorporate both provincially and nationally.
Somehow you have to bring this together. I certainly favour beneficial ownership registries for both land and corporations. The important thing, however, is.... There are a number of factors, but without belabouring it, there are two important factors that I see. The first is “garbage in, garbage out”. You have to make sure there is some verification of what is going in or else it's worthless. There has to be a bit of a checking process—
The Cullen commission currently under way in British Columbia is attempting to do that, I think, so it will be interesting to see what their report says. Many people have tried. I'm not an economist and I'm not accountant, so I don't try. For one thing, there are so many different factors involved. It's not as if all of this data is transparent. Drug-trafficking organizations don't tell you. They don't supply financial statements.
We generally rely on the IMF and the World Bank, which estimates the percentage of GNP that is related to illegality, to criminal activity. I believe the figure is somewhere in the area of 3% to 5%. You also have to consider that we have not the grey market, and it quickly gets meshed in with criminal money, so it's an underground economy.
:
Yes. Thank you, sir. I appreciate that.
I think people looked at money laundering as an abstract concept for quite some time. I'll speak about British Columbia. I think the “Dirty Money” report, the work the attorney general did here, and now the Cullen commission have made people realize that money laundering is the back office of organized crime. Organized crime exists to make money, and money laundering is the process by which they cleanse their money and get to use it.
If money laundering is the back office of organized crime, what does organized crime do? What commodities do they deal in? Illegal drugs.... If you look at downtown Vancouver, you see fentanyl. We are losing more people as a result of fentanyl deaths than we are from COVID—five a day here in Vancouver—and I know that we are losing people elsewhere in the country as well. That's the connection there. This is about organized crime. This is about making money from illegality of one sort or another, including drug trafficking, and people die as a result.
:
Right. Every community.... I'll refer to “Caucasian” as an ethnic diaspora, because I am Caucasian. Every diaspora tends to have its own organized crime. It's a percentage. No country is without crime. Let's put it that way.
I look at the Caucasian community, and I look at outlaw motorcycle gangs, which are predominantly Caucasian. Who do they prey on? They tend to prey on people within their own community. If you were to translate that to the Vietnamese community, Vietnamese organized crime will primarily target residents of the Vietnamese community. Why? It's language, culture and those sorts of things—it's easier.
What we find with organized crime these days is that alliances are taking place all the time. As I mentioned in my opening statement, we now find that you will have gangs from different backgrounds that work together. The outlaw motorcycle gangs will work with Iranian organized crime and with Asian organized crime and so forth. This is not about one ethnicity. I think it's very important to point that out. That's why I always talk about outlaw motorcycle gangs as the example I prefer.
:
Mr. German, thank you for being with us so late in the evening. You mentioned that we were working late, but so are you, and I thank you.
You said in your opening statement that the People's Republic of China does not go easy on domestic organized crime. In the first “Dirty Money” report, you talk mainly about Mexican organized crime groups and little about Chinese organized crime groups such as the Big Circle Boys, 14K and Sun Yee On.
Given the extensive control wielded by the Government of the People's Republic of China in just about every sphere of Chinese life, how is it possible that these organized crime groups operating abroad, for instance, in Canada, are beyond the reach of the Chinese government?
In other words, do you think it's possible that the People's Republic of China is using these groups to destabilize western democracies?
:
Thank you for the questions, sir.
I suppose anything is possible. We're really talking about their state-sponsored or state-supported organized crime. I don't have evidence of that, so I can't say if that occurs or doesn't occur.
I should also point out that my reports were not fault-finding exercises. They weren't intended to point the finger at a particular individual. That is more the role of the Cullen commission, which is under way right now. I was asked to find out what is going in our casinos.
Clearly, the Big Circle Boys have played a role for some time, as have the triads. Yes, there's a long history in China of triads and there's the issue of the extent to which they have been allowed to exist. What their role is internationally and what relationship they may have with the Chinese government, I cannot say. It would be total conjecture on my part.
There's no question that organized crime has been in the casinos in British Columbia. Primarily, the persons involved were of Asian ethnicity. I can't answer whether they are Canadian citizens, permanent residents or visitors.
In terms of a lot of the “whale gamblers”—a term used to refer to those with a lot of money—there's no reason to believe that those who did come over were themselves actually involved in criminality. They just wanted to get money out of China.
We do know that we've had loansharking going on in, I'll say, the Asian community in Richmond and near the casinos for many years. Loan sharks have been murdered. It's an example of that issue I spoke about earlier. We do know that certain things were happening in various diasporas.
Organized crime has definitely been at work in the casinos.
Thank you for joining us today and sharing your knowledge about organized crime, Dr. German.
In part 2 of “Dirty Money”, you refer to the Chinese crime groups allied with the Mexican and Middle Eastern crime groups and talk about their creating partnerships for different illegal enterprises and commodities, but then you go on to say—with emphasis:
In addition, there have been multiple reports of state actors operating in Greater Vancouver.
Then, in the footnote, it talks about “hybrid warfare”, describing “states working in concert with organized crime to achieve...objectives”, including “economic subversion and threat finance, in which a nation state conducts offensive actions through financial vehicles.”
Can you tell us what this is about? You just indicated that you didn't have much evidence of state action, but this clearly refers to multiple reports of state actors operating in Greater Vancouver. Could you tell us a little more about that?
:
Yes, I would assume it's prosecution.
Also, I think you'll find that it's pretty well documented publicly that China has made it very clear that it is looking abroad for those people who have been involved in illegal activity. However, again, that's illegal activity in China, so it is seeking these individuals who have essentially escaped its grasp. There's been a lot of controversy over whether these persons are really criminal offenders or are at odds with the political establishment.
Those comments are made in that context, involving those individuals and the criminality that they're alleged to have committed in China.
:
I would tend to agree with that, sir.
The RCMP made a conscious decision to abolish the proceeds of crime unit in 2013, as well as the commercial crime unit and the drug squad—a number of commodity-based units that had been around for many years—in favour of a new organized crime model. No sooner was that established than they also had to deal with the terrorism issue. On top of that, there's the issue of resourcing, of federal resources. That's more pronounced in the eight contract provinces, as opposed to Ontario and Quebec, where the RCMP are simply the federal police. I think these various factors contributed.
The RCMP, as I understand it now, has been given additional money in recent budgets to start the program up again. They're essentially redeveloping their financial crime program. There's no question that there was a gap. I've spoken about that numerous times. I've also mentioned it in “Dirty Money - Part Two”, and it has been a matter of public discussion.
:
Thank you very much, Mr. Harris.
Mr. German, thank you so much. We very much appreciate your appearance here this evening.
Colleagues, that concludes the public portion of the meeting. I'll ask all colleagues now to log off this Zoom and log on to the in camera meeting, which will take a couple of minutes to set up. We'll see you shortly.
Thank you again, Mr. German.