OTTAWA—Canada faces “growing threats” to its economic security from a small group of hostile actors bent on stealing trade secrets and technology, according to a 2018 briefing by the Canadian Security Intelligence Service.
In a briefing to unnamed “stakeholders” in Ontario last year, CSIS said that in addition to traditional spying and cyber security threats, an increasingly complex global environment has increased the threats to Canadian “economic and strategic interests.”
“The majority of foreign trade and foreign investment is beneficial to the economy. However, a small number of actors seek to advance their own economic, intelligence and military interests at Canada’s expense,” stated the unclassified briefing, obtained by the Star under access to information law.
The document continued that “several key sectors” of the Canadian economy have been “of particular interest to foreign intelligence agencies” — although those specific sectors have been censored from the document.
But the rest of the briefing makes clear that high tech, defence and military goods, advanced technology firms, academic and government research, and banking or telecom licenses are of particular concern for Canada’s intelligence agencies.
The briefing came a year after Canada’s electronic espionage agency, the Communications Security Establishment, warned Defence Minister Harjit Sajjan in a top secret report that hostile foreign actors are coming up with more sophisticated ways of hiding their involvement with — or control over — private business in Canada.
The CSIS briefing reiterated that concern, noting foreign states have “increasingly turned away from pursuing the acquisition” or Canadian companies — such as the $15.1-billion takeover of Calgary-based Nexen Inc. by a Chinese state-owned oil company in 2011.
Instead, the spy agency outlined four main “pathways” for threats to Canada’s economic security:
- Exports, such as the purchase of high-tech, sensitive, or military goods.
- Investments in advanced technology firms to pry away knowledge and techniques.
- Cyber attacks, or using insiders to pursue “academic, commercial and government research.”
- Acquiring rights and licenses, such as in the banking or telecom sectors, or intellectual property.
Jessica Davis, a former CSIS analyst who now runs a private security consulting firm, said those methods can be much more difficult to investigate than the relatively straightforward attempt to acquire a company.
Davis said there are more sophisticated ways for states to mask their presence in Canadian companies or research outfits — such as using private investors as middle men, for instance, or using venture capital funds as a proxy in order to gain access to a company without setting off national security agencies’ alarm bells.
“There are a lot of different ways actors can go about acquiring not necessarily a majority stake (in a company) …but enough of a stake to have influence, to be able to extract the information that they want from those companies,” Davis, the president of Insight Threat Intelligence, said in an interview Monday.
“When it starts to be more covert like that, it really becomes more of a traditional counter-intelligence investigation … It really comes down to CSIS being able to find the information to identify that foreign ownership piece. But that becomes a much more involved investigation.”
But Davis questioned whether CSIS had the capacity, in terms of resources, to devote to economic espionage investigations, given the wide array of threats the agency is already expected to keep tabs on — including Islamist-inspired violent extremism, the rise of white nationalism, and the integrity of the upcoming federal election.
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The briefing documents acknowledge that the agency must concentrate its efforts on what CSIS perceives as the biggest national security threats.
“CSIS must focus … resources on those threats which would have the greatest impact should they occur,” the document stated, adding that the agency works closely with partnered intelligence and law enforcement agencies.
CSIS spokesperson Tahera Mufti said that foreign states use a “range of traditional and non-traditional intelligence collection” methods to glean Canadian technology and expertise.
“Canadian industry and academic institutions are world leaders in various economic, technological and research sectors that are of interest to foreign states,” Mufti wrote in a statement.
“The covert exploitation of these sectors by foreign states, in order to advance their own economic and strategic objectives, may come at the expense of Canada’s national interests, including lost jobs and revenues, and a diminished competitive global advantage.”
Alex Boutilier is an Ottawa-based reporter covering national politics. Follow him on Twitter: @alexboutilier