Parliamentary Committee Notes: Economic Security
PROC – Foreign Interference
Date: February 26, 2023
Classification: Unclassified
Fully releasable (ATIP)? Yes
Branch / Agency: NCSB
Proposed Response:
- As a technologically advanced, open economy and with a world-class research community, Canada is an attractive target for hostile foreign actors.
- These hostile actors have become increasingly aggressive and sophisticated in their efforts to acquire Canadian assets that can advance their strategic agendas and potentially put at risk Canada's national security and economic competitiveness.
- These can include non-tangible assets like intellectual property and the sensitive personal information of Canadians, as well as those more tangible dual-use goods and technologies, and access to Canada's critical infrastructure.
- The issue of Critical Infrastructure intersects with national, cyber, and economic security. From an economic security perspective, the NS community is most interested in those CI sectors that are most vulnerable to foreign state disruption, surveillance, or control, all of which can be harmful to Canada's national security.
- As economic-based threats to our national security evolve in sophistication and complexity we need to ensure that our approach to addressing them evolves too.
- Recent initiatives include amendments tabled by the Government in December to strengthen foreign investment screening through the Investment Canada Act, in addition to the announcement by Minister Champagne in February restricting federal grant funding from being used to fund research in sensitive areas that includes a partner linked to the military or state security services of a country of concern.
- The Government's cyber security legislation will also help to secure Canada's telecommunications system from risks presented by products and services made by high-risk suppliers.
Background:
Increased global trade together with rapid technological innovation have provided Canada with immense opportunities for economic growth and increased prosperity. Important emerging fields of technology have become key drivers of economic growth and development. However, these advancements have also given rise to new and serious national security vulnerabilities which are emanating through a range of entry points into Canada's economy. Sensitive technologies with military or dual-use applications, sensitive personal data of Canadians, and critical infrastructure are the key assets that drive our economy and are most targeted by hostile actors.
These threats may come from:
- foreign investments from hostile actors in strategic sectors and industries important to Canada's national security;
- the access to or acquisition of sensitive goods, technology, and expertise; or
- funding partnerships with our universities and research institutions to gain access to cutting edge technology and IP.
The Government of Canada has a suite of tools at its disposal that were established to protect the Canadian economy and, more broadly, Canadian strategic interests from harm. These include:
- the Controlled Goods Program (CGP), administered by Public Services and Procurement Canada (PSPC);
- the Export and Import Permits Act (EIPA), administered by Global Affairs Canada (GAC); and
- the Investment Canada Act (ICA), administered by Innovation, Science and Economic Development (ISED), with Public Safety Canada leading the ICA-national security review of proposed foreign investments that threaten Canada's national security.
Several of Canada's security partners, including Australia, the United States, and the United Kingdom have upgraded their capabilities to more readily identify and mitigate economic-based national security risks. Canada is seeking to build on the current regime protecting our most valuable assets while maintaining the openness and innovation crucial to the Canadian economy.
Sensitive Technology
There are many sectors of the Canadian economy that are of particular interest to foreign adversaries due to Canada's expertise and advanced industrial and technological capabilities.
In his remarks to the Centre for International Governance Innovation in February 2021, CSIS Director David Vigneault named Canada's biopharmaceutical and health sector, artificial intelligence, quantum computing, ocean technology and aerospace sectors as facing particularly severe threat activity.
The national security guidelines for foreign investment as well as those for research partnerships also contain additional information on sensitive sectors which would likely warrant additional national security scrutiny.
Contacts:
Prepared by: NCSB-NSOD
Approved by: Sébastien Aubertin-Giguère, Acting Senior Assistant Deputy Minister, NCSB, 613-614-4715
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