Date: 20130826 Docket: T-153-13 Citation: 2013 FC 900 HUPACASATH FIRST NATION Applicant and THE MINISTER OF FOREIGN AFFAIRS CANADA AND THE ATTORNEY GENERAL OF CANADA Respondents

Date: 20130826
Docket: T-153-13
Citation: 2013 FC 900
Ottawa, Ontario, August 26, 2013
PRESENT: THE CHIEF JUSTICE
BETWEEN:
HUPACASATH FIRST NATION
Applicant
and
THE MINISTER OF FOREIGN AFFAIRS
CANADA AND THE ATTORNEY GENERAL
OF CANADA
Respondents
REASONS FOR JUDGMENT AND JUDGMENT
[1] This is an application for judicial review regarding the pending ratification of the Agreement
between the Government of Canada and the Government of the People’s Republic of China for the
Promotion and Reciprocal Protection of Investments [CCFIPPA].
[2] The Applicant, Hupacasath First Nation [HFN], seeks a declaration that Canada is required
to engage in a process of consultation and accommodation with First Nations, including HFN, prior
to ratifying or taking other steps that will bind Canada under the CCFIPPA.
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[3] For the reasons that follow, I have concluded that:
(i) The potential adverse impacts that HFN submits the CCFIPPA may have on its
asserted Aboriginal rights, due to changes that the CCFIPPA may bring about to the
legal framework applicable to land and resource regulation in Canada, are nonappreciable
and speculative in nature. I also find that HFN has not established the
requisite causal link between those alleged potential adverse impacts and the
CCFIPPA.
(ii) The same is true with respect to the potential adverse impacts that HFN submits
the CCFIPPA may have on the scope of self government which it can achieve.
(iii) Therefore, the ratification of the CCFIPPA by the Government of Canada
[Canada] without engaging in consultations with HFN would not contravene the
principle of the honour of the Crown or Canada’s duty to consult HFN before taking
any action that may adversely impact upon its asserted Aboriginal rights.
[4] This application will therefore be dismissed.
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I. The CCFIPPA
[5] The CCFIPPA was signed at Vladivostok, Russia, on September 9, 2012.
[6] Pursuant to Article 35, Canada and the Government of the People’s Republic of China [the
“Contracting Parties”] are required to notify each other through diplomatic channels that they have
completed the internal legal procedures for the entry into force of their agreement. The CCFIPPA
will enter into force on the first day of the month following the month in which the second of the
two notifications is received and shall remain in force for a period of at least 15 years.
[7] After the expiration of the initial 15-year period, either party may terminate the CCFIPPA.
Such termination will be effective one year after its receipt by the other Contracting Party.
However, the agreement will continue to be effective for an additional 15-year period with respect
to investments made prior to its termination.
[8] It appears to be common ground between the parties to this proceeding [Parties] that the
substantive provisions in the CCFIPPA are highly similar to those in the North American Free
Trade Agreement Between the Government of Canada, the Government of Mexico and the
Government of the United States, 17 December 1992, Can TS 1994 No 2, 32 ILM 289 (entered into
force 1 January 1994) [NAFTA] and closely resemble the provisions in Canada’s 2004 Model
Foreign Investment Protection Agreement [2004 Model FIPA]. Indeed, HFN acknowledged that the
provisions in the CCFIPPA that were the focus of this proceeding “are the same as those set out in
NAFTA” (Reply of the Applicant [Reply] at para 33).
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[9] According to the Explanatory Memorandum on the [CCFIPPA] [Explanatory
Memorandum], the CCFIPPA:
[…] is a bilateral treaty
designed to protect and promote
investment between Canada
and the People’s Republic of
China (the “Parties”) by
assigning legally binding rights
and obligations to both Parties
in foreign investment matters.
The Agreement provides
Canadian investors operating in
the People’s Republic of China
with additional legal protection,
setting out the manner in which
Canadian investors should be
treated and procedures through
which they may pursue alleged
breaches of the Agreement. Key
provisions include: national
treatment, most-favoured nation
treatment, minimum standard of
treatment, protection against
expropriation, obligations for
the free transfer of funds and an
investor-State dispute
settlement mechanism.
[…] est un traité bilatéral conçu
pour protéger et promouvoir les
investissements entre le Canada
et la République populaire de
Chine (les « Parties »), qui
définit des droits et des
obligations juridiquement
contraignants pour les deux
parties en matière
d’investissements étrangers.
L’Accord prévoit une
protection juridique
additionnelle pour les
investisseurs canadiens faisant
des affaires en République
populaire de Chine, établit la
manière dont doivent être traités
les investisseurs canadiens et
énonce les procédures visant les
mesures que peuvent prendre
ces investisseurs relativement
aux violations alléguées de
l’Accord. Les principales
dispositions de l’Accord
comprennent : le traitement
national, le traitement de la
nation la plus favorisée, la
norme minimale de traitement,
la protection contre
l’expropriation, les obligations
relatives au libre transfert de
fonds et un mécanisme de
règlement des différends
opposant un investisseur et un
État.
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[10] The CCFIPPA provides the same protections described above to investors of the People’s
Republic of China [China].
[11] The Explanatory Memorandum also notes that “[c]onsultations on the [CCFIPPA] took
place under the ongoing consultation process by the Department of Foreign Affairs and
International Trade with stakeholders.”
[12] It is common ground between the Parties that such consultations did not include the HFN or
other First Nations, notwithstanding that Canada released an initial Environmental Assessment of
the CCFIPPA for public comment in February 2008.
[13] Shortly following the announcement of the signing of the CCFIPPA, HFN wrote to Prime
Minister Harper to request that the ratification of the agreement be postponed “until there has been
full and proper consultation between the Crown and the founding First Nations, including [HFN].”
Representatives of other First Nations have made similar requests. To date, HFN’s request has not
been granted. It appears that the same is true with respect to the requests that have been made on
behalf of other First Nations.
[14] No legislative amendments are required to implement the CCFIPPA.
[15] The CCFIPPA is similar in many respects to 24 other foreign investment protection
agreements [FIPAs] that Canada has entered into since 1989, particularly those entered into since
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1995 (Affidavit of Vernon MacKay, [MacKay Affidavit], Respondent’s Record, Volume I, Tab 1,
at paras 20 - 31 and 39 - 44).
II. The HFN
[16] The HFN, formerly known as the Opetchesaht Indian Band, is a “band” within the meaning
of that term as defined in the Indian Act, RSC, 1985, c I-5 [Indian Act]. The Hupacasath Chief and
Council represent approximately 285 band members, all of whom are Indians as defined in the
Indian Act.
[17] According to an affidavit sworn by Carolyne Sayers [Sayers Affidavit], a Council member
of the HFN, the HFN’s band members live on two reserves near Port Alberni on Vancouver Island.
It appears that those reserves are located on the banks of the Alberni Inlet, and are approximately
53.4 and 2.6 hectares, respectively, in size. The HFN has three additional reserves in that territory
which are not occupied, due to the lack of infrastructure. In total, the HFN asserts Aboriginal rights
and title with respect to approximately 232,000 hectares of land in central Vancouver Island, as
reflected on the map set forth in Appendix 1 to these reasons.
[18] In her affidavit, which was authorized by, and sworn on behalf of, the HFN’s Chief and
Council, Ms. Sayers stated that she is concerned that if the CCFIPPA is ratified and implemented
the HFN will be negatively affected in a number of ways, including:
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a. HFN may be prevented from exercising its rights to conserve, manage and
protect lands, resources and habitats in accordance with traditional Hupacasath
laws, customs and practices, and in the best interest of its members;
b. HFN may be prevented from negotiating a treaty which protects its rights to
exercise its authority in the best interest of the Hupacasath people, including to
conserve, manage and protect lands, resources and habitats and to engage in
other governance activities, in accordance with traditional Hupacasath law,
customs and practices, and in the best interest of its members;
c. disputes over resource use between HFN and companies with Chinese investors
will be resolved by the application of international trade and investment law,
which Ms. Sayers believes does not provide the same protections for Aboriginal
rights and title as Canadian constitutional law;
d. because measures aimed at protecting HFN’s rights and title may give rise to
significant damage claims, the federal and provincial governments will be less
likely to take steps to protect those rights, including engaging in adequate
consultation and reasonable accommodation; and
e. the rights of Chinese investors, and the impact of any potential claim under the
CCFIPPA on Canada may be taken into account by the government and courts in
determining whether a specific measure HFN seeks to protect its rights and title
would constitute reasonable accommodation.
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III. Issue
[19] In its Application, HFN sought:
a. A declaration that Canada is required to engage in a process of consultation and
accommodation with First Nations, including HFN, prior to taking steps that will
bind Canada under the CCFIPPA;
b. An order restraining the Minister of Foreign Affaires or any other official or
representative of Canada from sending a letter to the People’s Republic of China
[China] stating that Canada has completed the internal legal procedures for the
entry into force of the CCPIFFA, until the appropriate consultation and
accommodation has been carried out; and
c. An interlocutory injunction restraining the Minister of Foreign Affairs or any
other official or representative of Canada from sending a letter to China stating
that Canada has completed the internal legal procedures for the entry into force
of the CCFIPPA, until this application has been heard and determined by the
Court.
[20] In their written submissions, the Respondents stated that if this Court finds that a duty to
consult with HFN has been triggered and breached, it would not be necessary for the Court to go
beyond making a declaration that a such a duty is owed to HFN, “as it can be assumed that the
government will comply with the law as stated by the courts.”
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[21] Based on that statement, HFN withdrew its request for the relief described in subparagraphs
19(b) and (c) above.
[22] The Respondents also submitted that any declaration that this Court may issue should be
confined to addressing the asserted duty to consult with HFN, and should not address whether a
duty to consult is owed to other First Nations. I agree.
[23] As the Respondents noted, HFN did not commence a class action or bring a representative
action on behalf of other First Nations. It also did not serve notice on all First Nations so that they
could be added as parties. No other First Nations sought to be added as a party to this proceeding.
[24] In these circumstances, I agree that it would not be appropriate for this Court to address, in
any declaration that may be made in this proceeding, the issue of whether a duty to consult is owed
to other First Nations, even if the formidable practical impediments to workable and meaningful
consultations with the over 600 First Nations bands that exist across the country could be overcome.
My conclusion in this regard is reinforced by the fact that Aboriginal rights are both band and factspecific
(R v Gladstone, [1996] 2 SCR 723, at para 65 and R v Van der Peet, [1996] 2 SCR 507, at
para 69); and representatives of Aboriginal groups need to be authorized to speak or to bring claims
on behalf of their groups (Sechelt Nation v Bell Pole, 2013 BCSC 892 (QL), at para 17).
Moreover, with one exception, no evidence has been led on behalf of other First Nations regarding
the potential impact of the CCFIPPA on their Aboriginal interests.
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[25] In its initial written submissions, HFN raised a threshold issue of whether the act of ratifying
the CCFIPPA is something that could be subject to judicial review. HFN maintains that ratification
of the CCFIPPA is subject to review on the basis that Canada’s failure to consult HFN prior to
ratification is a breach of its constitutional duty to consult with HFN in respect of a measure that
may affect HFN’s Aboriginal rights. That said, during the hearing, HFN underscored that it was not
suggesting that the Court can review either Canada’s prerogative to enter into the CCFIPPA or the
content of the CCFIPPA. HFN acknowledges that these are matters of “high policy” that are not
amenable to judicial review (Black v Canada (Prime Minister) (2001), 54 OR (3d) 215, at para 52).
The Respondents have not contested this threshold issue. Indeed, it is clear that the exercise of the
prerogative power of the Crown can be reviewed for constitutionality (Canada (Prime Minister) v
Khadr, 2010 SCC 3, at paras 36-37; Black, above, at para 50).
[26] Accordingly, the only issue to be determined in this application is whether, prior to ratifying
the CCFIPPA in accordance with Article 33 of the CCFIPPA, Canada has a duty to consult with
HFN.
IV. Standard of Review
[27] The ratification the CCFIPPA is an exercise of a prerogative power. It is common ground
between the Parties that the exercise of this power is subject to review on constitutional grounds. In
this proceeding, HFN submits that Canada’s failure to consult with HFN prior to ratifying the
CCFIPPA would constitute a breach of Canada’s constitutional obligation to engage in
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consultations with HFN before taking any action which may adversely affect HFN. It also asserts
that such action would be contrary to Canada’s constitutional obligation to act honourably in all its
dealings with Aboriginal peoples (Tzeachten First Nation v Canada (Attorney General) 2007
BCCA 133, at paras 47-49; Nlaka’pamux Nation Tribunal Council v British Columbia (Project
Assessment Director, Environmental Assessment Office), 2011 BCCA 78, at para 68).
[28] Given the constitutional nature of this issue, it is subject to review on a standard of
correctness (Dunsmuir v New Brunswick, 2008 SCC 9, at para 58; Alberta (Information and Privacy
Commissioner) v Alberta Teachers’ Association 2011 SCC 61, at para 30).
V. Preliminary Issues
[29] In their written submissions, the Respondents requested the Court to strike four affidavits
sworn on behalf of the Applicant by individuals who are not members of HFN. In the alternative,
the Respondents requested that portions of those affidavits be struck. The Respondents maintain that
those affidavits or portions thereof, are clearly irrelevant.
[30] The affidavits in question were sworn by Grand Chief Stewart Phillip, Chief James
Ahnassay, Chief Bryce Williams and Chief Isadore Day.
[31] The first three of those affidavits focus primarily upon consultations that were requested in
respect of the CCFIPPA, and the affiants’ concerns regarding the potential implications of the
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CCFIPPA on (i) their bands’ Aboriginal interests, treaty rights and ability to protect the
environment in their territories or (ii) First Nations more generally. Grand Chief Phillip’s affidavit
also briefly discusses the history behind the establishment of the Union of British Columbia Indian
Chiefs and that organization’s principal objectives.
[32] Chief Day’s affidavit, written on behalf of the Serpent River First Nation and the Chiefs of
Ontario Organization [COO], also focuses upon the potential implications of the CCFIPPA on First
Nations’ treaty and other rights. In addition, it provides an overview of the history of relations
between First Nations and the Crown and a more detailed treatment of the concerns of First Nations
than is provided in the other three affidavits mentioned immediately above.
[33] Notwithstanding that Grand Chief Phillip, Chief Ahnassay, Chief Williams and Chief Day
are not authorized to represent HFN, and have focused on the potential impact of the CCFIPPA on
their respective First Nations groups, or on First Nations in general, I have decided to exercise my
discretion in favour of allowing their affidavits to remain on the Court record. My decision in this
regard is based on my conclusion that those affidavits may potentially assist my understanding of
the potential impact of the CCFIPPA on HFN. In the case of Chief Day’s affidavit, I consider the
history that he provides to be helpful in assisting me to understand the important context in which
the Crown’s legal duty to consult First Nations arose, particularly as that duty relates to the honour
of the Crown and the objective of reconciliation.
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VI. Experts
A. Mr. Gus Van Harten
[34] HFN’s expert evidence was provided by Mr. Gus Van Harten, in a letter dated February 13,
2013 [Van Harten Opinion] to HFN’s counsel.
[35] Mr. Van Harten is an Associate Professor at Osgoode Hall Law School, at York University.
He obtained his PhD in 2006 and has since published a number of articles, primarily on investment
treaty arbitration. He has also written a book on that topic.
[36] Mr. Van Harten was retained to provide his expert opinion with respect to various aspects of
the CCFIPPA. These include the obligations that it imposes upon Canada, the manner in which it
differs from other international treaties to which Canada is a party, how it will apply to federal and
provincial government action and legislation, how it will apply to domestic judicial decisions which
affect land and resources subject to Aboriginal or treaty rights claims, whether principles of
domestic law will be taken into account by international arbitrators who are appointed to adjudicate
under the CCFIPPA, and whether measures or actions taken by First Nations governments could
potentially put Canada out of compliance with the CCFIPPA.
[37] The Respondents submitted that Mr. Van Harten’s evidence should be accorded reduced
weight because he has been a vocal critic of the type of investor state arbitration provisions that are
included in the CCFIPPA and because he has frequently and publicly voiced his opposition to
ratification of the CCFIPPA.
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[38] Given that HFN acknowledged and did not dispute these allegations, I am inclined to agree
with the Respondents’ position, primarily on the basis that Mr. Van Harten’s ability “to assist the
Court impartially,” as required by the Court’s Code of Conduct for Expert Witnesses, SOR/2010-
176, would appear to be somewhat compromised.
B. Mr. J. Christopher Thomas, Q.C.
[39] The Respondents’ expert evidence was provided by Mr. Chris Thomas, Q.C. in a letter dated
March 13, 2013 [Thomas Opinion] to counsel to the Respondents.
[40] Mr. Thomas is a Senior Principal Research Fellow at the National University of Singapore’s
Center for International Law. He has also practiced in the field of international economic law for
over 25 years, taught at two Canadian universities, and worked for the Federal Minister for
International Trade during the launch of the Uruguay Round of Multilateral Trade Negotiations and
the Canada-United States Free Trade Agreement negotiations. In addition, he acted for the
Government of Mexico in relation to the negotiation of the NAFTA and two related agreements on
Labour and Environmental Co-operation. He has also practised as an international trade dispute
panellist and an international arbitrator.
[41] Mr. Thomas was retained to provide his views on the Van Harten Opinion, including its
criticism of international investor-state arbitration; the extent to which the CCFIPPA differs from
Canada’s past agreements on investment protection; the extent to which the CCFIPPA may prevent
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a government from determining an appropriate level of environmental protection, from managing its
international resources, or from making changes to its laws; the interaction between the CCFIPPA
and Canadian domestic law; remedies that may be granted by an arbitral panel constituted under the
CCFIPPA; the extent to which Canada can be held internationally responsible under the CCFIPPA
for legislative or judicial decisions with respect to HFN; and the scope of the Aboriginal affairs’
exception in the CCFIPPA.
C. General Observations
[42] Given Mr. Van Harten’s acknowledged partiality, and given that I generally found Mr.
Thomas to be more neutral, factually rigorous and persuasive, I generally accepted his evidence
over Mr. Van Harten’s when they did not agree. In any event, I found that Mr. Van Harten’s
evidence did not materially assist HFN to demonstrate that the potential impact of the CCFIPPA on
its Aboriginal interests is appreciable and non-speculative, as required to trigger a duty to consult.
To a large extent, this was due to the fact that his assertions on key issues were baldly stated and
unsubstantiated.
VII. Analysis
A. Duty to Consult – General Principles
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[43] The Government of Canada’s duty to consult with Aboriginal peoples, including HFN, and
to accommodate their interests in certain circumstances is grounded in the honour of the Crown
(Haida Nation v British Columbia (Minister of Forests), 2004 SCC 73, at paras 16 and 20 [Haida]).
In brief, “in all its dealings with Aboriginal peoples, from the assertion of sovereignty to the
resolution of claims and the implementation of treaties, the Crown must act honourably.” This is
necessary to achieve the important goal of “the reconciliation of the pre-existence of aboriginal
societies with the sovereignty of the Crown.” In turn, to achieve that goal, the principle of the
honour of the Crown must be viewed generously (Haida, above, at para 17). Likewise, the duty to
consult must be approached in a “generous” and “purposive” manner (Rio Tinto Alcan Inc v Carrier
Sekani Tribal Council, 2010 SCC 43, at para 43 [Rio Tinto].
[44] The honour of the Crown gives rise to different duties in different circumstances. Where, as
in the present circumstances with HFN, a treaty with a particular Aboriginal group remains to be
concluded, the honour of the Crown implies a duty to consult when the conditions described below
are met. Moreover, when those conditions are met, the honour of the Crown further requires that the
Aboriginal group’s relevant interests be reasonably accommodated, if appropriate (Haida, above, at
paras 18, 20, 27 and 33).
[45] The Aboriginal interests that are relevant for this purpose are those interests that are
protected by s. 35(1) of the Constitution Act, 1982, which recognizes and affirms “the existing
aboriginal and treaty rights of the aboriginal peoples of Canada” (Hiawatha First Nation v Ontario
(Minister of Environment), [2007] OJ No 406, at para 50). For greater certainty, subsection 35(3)
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clarifies that, for this purpose, “treaty rights” includes “rights that now exist by way of land claims
agreements or may be so acquired.”
[46] Given the constitutional dimension of the honour of the Crown, the duty to consult is a
“constitutional imperative” (Nlaka’pamux Nation Tribal Council v British Columbia (Project
Assessment Director, Environmental Assessment Office), 2011 BCCA 78, at para 68). It seeks to
provide protection to Aboriginal and treaty rights while furthering the goals of reconciliation
between Aboriginal peoples and the Crown (Rio Tinto, above, at para 34; Manitoba Metis
Federation Inc v Canada (Attorney General), 2013 SCC 14, at para 66).
[47] Once triggered, the content of the duty to consult and accommodate varies with the
circumstances. The jurisprudence in this area continues to evolve. However, in general terms “the
scope of the duty is proportionate to a preliminary assessment of the strength of the case supporting
the existence of the right or title, and the seriousness of the potentially adverse effect upon the right
or title claimed” (Haida, above, at para 39).
[48] The present case solely concerns whether the preconditions that must be met to trigger a
duty to consult were met. It does not concern the content of that duty, if the duty exists in respect of
the ratification of the CCFIPPA.
[49] In Haida, above, at paragraph 34, the Supreme Court stated that the duty to consult “arises
when the Crown has knowledge, real or constructive, of the potential existence of the Aboriginal
right or title and contemplates conduct that might adversely affect it.”
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[50] In Rio Tinto, above, at para 31, the Court elaborated on this test as follows:
[31] … This test can be broken down into three elements: (1) the
Crown’s knowledge, actual or constructive, of a potential Aboriginal
claim or right; (2) contemplated Crown conduct; and (3) the potential
that the contemplated conduct may adversely affect an Aboriginal
claim or right.
[51] I will address each of these three elements of the test separately below. Although HFN also
briefly stated in its Application that Canada’s duty to consult also arises from the Crown’s fiduciary
obligations towards First Nations Peoples and the United Nations Declaration on the Rights of
Indigenous Peoples, Resolution 61/295, 13 September 2007, I agree with the Respondents that the
question of whether the alleged duty to consult is owed to HFN must be determined solely by
application of the test set forth immediately above. I would add in passing that HFN did not pursue
these assertions in either written or oral argument, and that, in a press release issued by Aboriginal
Affairs and Northern Development Canada, entitled Canada’s Statement of Support on the United
Nations Declaration on the Rights of Indigenous Peoples, that Declaration is described as “an
aspirational document” and as “a non-legally binding document that does not reflect customary
international law nor change Canadian laws.” HFN did not make submissions or lead evidence to
the contrary.
B. The Crown’s Knowledge of HFN’s Claims or Rights
[52] It is common ground between the Parties that this element of the test is satisfied.
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[53] In her affidavit, Ms. Sayers characterized HFN’s asserted Aboriginal rights as including the
following:
a. The right to harvest, manage, protect and use fish, wildlife, and
other resources in HFN’s traditional territory in priority to all
other users, subject only to conservation;
b. Rights to the commercial sale of fish, wildlife and other resources
to earn a livelihood;
c. The right to have access to exclusive and preferred areas to
harvest or use fish, wildlife and other resources in their traditional
territory;
d. The right to protect the habitats that sustain fish, wildlife and
other resources which the Hupacasath have a right to harvest;
e. The right to harvest, use and conserve fish, wildlife and other
resources and to protect and manage the habitat of fish, wildlife
and other resources in accordance with traditional Hupacasath
laws, customs, and practices both in their traditional and their
modern form; and
f. The right to build, maintain and occupy structures incidental to
harvesting, using, managing or conserving fish, wildlife and other
resources in HFN’s territory.
[54] The Respondents confirmed that they are aware that the foregoing Aboriginal rights have
been advanced by HFN, both in treaty negotiations and in litigation. As is immediately apparent,
those rights essentially relate to the use, management and conservation of land and resources within
HFN’s claimed territory. The Respondents acknowledge that those rights are rooted in section 35 of
the Constitution. It is those rights, and those rights alone, that are relevant for the analysis below.
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C. The Contemplated Crown Conduct
[55] It is common ground between the parties that the contemplated Crown conduct in question
is the ratification of the CCFIPPA.
D. The Potential That The Contemplated Conduct May Adversely Affect HFN’s
Asserted Aboriginal Rights
[56] In assessing whether this third element of the duty to consult test is met, it is critical to
determine “the degree to which the conduct contemplated by the Crown would adversely affect” the
asserted Aboriginal rights (Mikisew Cree First Nation v Canada (Minister of Canadian Heritage),
2005 SCC 69, at para 34 [Mikisew]). While a generous and purposive approach to this element is
required, “[m]ere speculative impacts” will not suffice. There must be “an appreciable adverse
effect on the First Nations’ ability to exercise their aboriginal right” (Rio Tinto, above, at para 46).
Moreover, the claimant “must show a causal relationship between the proposed government conduct
or decision and a potential for adverse impacts on pending Aboriginal claims or rights” (Rio Tinto,
above, at para 45).
[57] In this regard, adverse impacts extend to any effect that may prejudice a pending Aboriginal
claim or right. This includes high-level management decisions or structural changes to the
management of a resource that may adversely affect Aboriginal claims or rights, even if such
decisions have no immediate impact on the resource or the land upon which it is situated (Rio Tinto,
above, at para 47), and even if later opportunities for consultations exist in respect of specific
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actions that may be taken pursuant to such high level decisions or structural changes (Dene Tha’
First Nation v British Columbia (Minister of Energy and Mines), 2013 BCSC 977, at para 114).
[58] HFN submits that the ratification of the CCFIPPA is such a high-level management decision
or structural change and has a non-speculative potential to adversely affect its asserted Aboriginal
rights in an appreciable way, even if it will have no immediate impact on its lands or the resources
situated thereon. In this regard, HFN adds that Canada’s agreement to be bound by the CCFIPPA
“may set the stage for further decisions that will have a direct adverse impact on land and resources”
(Rio Tinto, above, at para 47), by granting Chinese investors enforceable rights which must be taken
into account when any level of government in Canada makes any kind of resource management
decision.
[59] For the reasons set forth below, I respectfully disagree. In my view, the evidence adduced
during this proceeding does not demonstrate that any adverse impacts that the CCFIPPA may have
upon HFN’s asserted Aboriginal interests will be appreciable and non-speculative. On the contrary,
I am satisfied that the adverse impacts which HFN has identified are speculative, remote and nonappreciable.
In addition, HFN has not demonstrated the required causal link between the CCFIPPA
and those claimed potential adverse impacts.
[60] HFN submitted that the ratification of the CCFIPPA is likely to give rise to the following
two general categories of adverse effects:
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a. The CCFIPPA will result in a significant change in the legal framework
applicable to land and resource regulation in Canada, and that various potential
adverse effects on its Aboriginal rights will flow from that change.
b. The rights granted to Chinese investors under the CCFIPPA will directly and
adversely impact the scope of self-government which HFN can achieve, either
through the exercise of its Aboriginal rights, through the treaty making process,
or through the exercise of delegated authority from Canada or the Government of
British Columbia.
[61] I will address these two broad categories of claimed adverse effects separately below.
However, I will first address a threshold issue raised by the Respondents.
(i) Can it be said that the CCFIPPA cannot, as a matter of law, trigger a duty to
consult?
[62] The Respondents submit that the ratification of the CCFIPPA cannot, as a matter of law,
trigger a duty to consult with HFN. This position is based primarily on its assertions that (i) the
ratification of the CCFIPPA will not alter Canadian domestic law or require existing laws or
regulations to be changed, and (ii) the authority of arbitral tribunals established under the CCFIPPA
will not extend into the domestic sphere. In this latter regard, the Respondents note that the remedial
powers of such tribunals will be restricted by the CCFIPPA to awarding monetary damages or
restitution of property, solely against Canada and China. As a result, in the event a measure passed
by HFN were found by an arbitral tribunal to be in breach of Canada’s obligations under the
CCFIPPA, the tribunal would have no power to enjoin the measure and it would be Canada, not
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HFN, that would be responsible for paying damages or providing restitution. Put differently, any
awards issued by arbitral panels under the CCFIPPA will have no binding effect upon HFN.
[63] In support of their position, the Respondents rely upon Council of Canadians v Canada
(Attorney General) [2005] OJ No 3422 [Council of Canadians – OSCJ]; aff’d [2006] OJ No 4751
[Council of Canadians – ONCA]. There, the Ontario Court of Appeal upheld a finding of first
instance that the fact that the arbitral tribunals set up under Chapter 11 of the NAFTA have not been
incorporated into Canada’s domestic law negated one possible basis for applying section 96 of the
Constitution to those tribunals (Council of Canadians – ONCA, above, at para 25). However, the
Court then declined to address the broader question of whether a tribunal established pursuant to an
international treaty is per se exempt from section 96, because it was satisfied that the NAFTA
tribunals do not violate section 96.
[64] Section 96 of the Constitution states:
The Governor General shall
appoint the Judges of the
Superior, District, and
County Courts in each
Province, except those of the
Courts of Probate in Nova
Scotia and New Brunswick.
Le gouverneur-général
nommera les juges des cours
supérieures, de district et de
comté dans chaque
province, sauf ceux des
cours de vérification dans la
Nouvelle-Écosse et le
Nouveau-Brunswick.
[65] In the course of its reasons, the Court of Appeal observed that although this provision is
“framed as an appointing power accorded to the federal government, it is now well established that
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section 96 was designed to ensure the independence of the judiciary and to provide some uniformity
to the judicial system throughout the country” (Council of Canadians – ONCA, above, at para 31).
[66] In reaching the conclusion that Chapter 11 of the NAFTA had not been incorporated into
Canada’s domestic law, the applications judge observed that international law, which governs
NAFTA tribunals, and domestic law, operate in different spheres (Council of Canadians – OSCJ,
above, at para 41). She then proceeded to conclude that the establishment of tribunals under
NAFTA cannot breach the Canadian Charter of Rights and Freedoms, Part I of the Constitution
Act, 1982, being Schedule B to the Canada Act 1982 (UK), 1982, c 11 [Charter], because (i) those
tribunals have no authority to change Canada’s domestic laws or practices, (ii) their jurisdiction is
limited to the international law issues before them and the remedies are also circumscribed, (iii)
nothing in the NAFTA compels Canada to amend its laws and practices, and (iv) the arbitration of
claims that Canada has failed to honour its treaty obligations does not affect or determine the rights
of Canadians (Council of Canadians – OSCJ, above, at para 65).
[67] The Respondents rely on the foregoing reasoning to assert that the CCFIPPA cannot, as a
matter of law, trigger the constitutional duty to consult.
[68] In my view, the fact that the arbitration provisions in the NAFTA, or similar provisions in
other FIPAs, may not attract section 96 of the Constitution or breach the Charter does not preclude
the possibility that the ratification of such agreements may trigger the application of the
constitutional principle of the honour of the Crown and a duty to consult with First Nations prior to
such ratification. One reason why this is so is that the duty to consult is triggered where there is
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simply a non-speculative possibility of appreciable impacts on asserted Aboriginal rights, whereas
Charter rights are only triggered when there is a more serious risk that the alleged violation will
occur (Phillips v Nova Scotia (Westray Mine Inquiry), [1995] 2 SCR 97, at para 108; Council of
Canadians – OSCJ, above, at para 62). Absent other legal considerations that have not been
addressed in this proceeding, the question may need to be determined on the basis of the facts and
evidence in each case, namely, whether they establish the three elements required to trigger the duty
to consult. In any event, given the conclusions that I have reached below regarding the facts and
evidence in this case, it is not necessary to make a definitive determination on the Respondents’
position that the CCFIPPA cannot, as a matter of law, trigger the duty to consult.
[69] However, I will note in passing that the Respondents’ position on this point is inconsistent
with provisions that are included in a number of final agreements that Canada has entered into with
First Nations, which require it to consult with those First Nations prior to consenting to be bound by
a new international treaty which would give rise to new international legal obligations that may
adversely affect a right of the First Nations. (See for example Maa-nulth First Nations Final
Agreement, December 9, 2006, at para 1.7.1; Lheidli Final Agreement, October 29, 2006, at para 11;
Tla’amin Final Agreement, at para 24; Yale First Nation Final Agreement, at para 2.8.1; and
Tsawwassen Final Agreement, clauses 30 and 31 in Chapter 2; see also Land Claims and Self
Government Agreement Among The Tlicho and The Government of the Northwest Territories and
The Government of Canada, at para 7.13.2).
(ii) Effects flowing from a change in the legal framework applicable to land and
resource regulation
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[70] HFN submits that the ratification of the CCFIPPA triggers the duty to consult because it
grants Chinese investors new, substantive, and enforceable rights with respect to any investments
they may hold, or maintain, in areas over which HFN asserts Aboriginal or treaty rights. HFN
maintains that this constitutes a significant change in the legal landscape pertaining to its lands and
resources because, among other things, those rights necessarily involve a restriction of the options
open to the Crown to address HFN’s asserted Aboriginal and treaty claims, and to protect the
resources which are the subject of those claims.
[71] It is common ground between the Parties that there does not appear to have been a previous
case in which the Courts in Canada have been called upon to assess whether a duty to consult exists
in respect of any other investment treaty or similar international agreement.
a. Duty to consult jurisprudence relied upon by HFN
[72] In support of its assertion that ratification of the CCFIPPA would constitute a high-level
management decision or structural change that has an appreciable and non-speculative potential to
adversely affect its asserted Aboriginal rights, HFN relies on a line of cases in which a duty to
consult was found to exist in respect of conduct that was found to meet this test.
[73] I agree with the Respondents that those cases are all distinguishable on the basis that the
high-level decisions or structural changes in each of those cases all directly related to land or
resources in respect of which Aboriginal peoples have asserted or established Aboriginal rights. By
contrast, the CCFIPPA is a broad, national framework investment treaty that does not directly relate
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to any particular lands or resources. Rather than being directly or even broadly related to land or
resources, it is designed to protect and promote investment between Canada and China by ensuring
basic legally binding rights and obligations to investors of both Contracting Parties.
[74] In Hupacasath First Nation v British Columbia (Minister of Forests), 2005 BCSC 1712
[Hupacasath], the Crown conduct which gave rise to the duty to consult was the removal of certain
lands from a tree farm license [TFL] within claimed HFN territory. It was determined that the
removal of those lands from the TFL had the potential to result in a lower level of possible
government intervention in the activities on the land than existed under the TFL regime. Justice
Lynn Smith elaborated as follows at paragraph 223:
There is a reduced level of forestry management and a lesser degree
of environmental over-sight. Access to the land by the Hupacasath
becomes, in practical terms, less secure because of the withdrawal of
the Crown from the picture. There will possibly be increased
pressure on the resources on the Crown land in the TFL as a result of
the withdrawal of the Removed Lands. The lands may now be
developed and resold.
[75] Justice Smith added, among other things, that by agreeing to the removal of the lands in
question from the TFL, “the Crown decided to relinquish control over the activities on the land,
control that permitted a degree of protection of potential aboriginal rights over and above that which
flows from the continued application of federal and provincial legislation” (Hupacasath, above, at
para 225). As further explained in the reasons below, no similar relinquishment of control or nonspeculative
attenuation of the Crown’s ability to protect HFN’s asserted Aboriginal rights will occur
as a result of the ratification of the CCFIPPA.
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[76] In Gitxsan First Nation v British Columbia (Minister of Forests), 2002 BCSC 1701, Justice
Tysoe found that the Minister of Forests’ consent to a change in corporate control of a company
which held a TFL gave rise to a duty to consult. In reaching that conclusion, Justice Tysoe found
that the change in the controlling mind of the company, as well as the fact that the effect of the
change in control was to protect the company from bankruptcy, gave rise to a non-speculative
potential for an adverse effect on the First Nation applicant’s Aboriginal rights and title. This was in
part due to the fact that the philosophy of the persons making the decisions associated with the
licenses may have changed. In addition, any sale by a trustee in bankruptcy (in the absence of such a
change in control) would have required the Minister’s consent, and he would have been required to
consult with the applicants before giving such consent. Once again, ratification of the CCFIPPA has
no similar non-speculative potential to adversely impact upon any of the lands or resources over
which HFN has asserted Aboriginal rights.
[77] Likewise, the Crown conduct at issue in the other duty to consult cases relied upon by HFN
also directly concerned the applicant First Nations’ claimed lands or specific resources on those
lands. For example:
 In Huu-Ay-Aht First Nation v The Minister of Forests, 2005 BCSC 697, the Crown
conduct was a forest and range revitalization policy which, among other things, took
back 20% of the annual allowable cut from major replaceable forest licenses and tree
farm licenses throughout the province, and allocated back to First Nations some of what
was taken, based upon a formula that was rejected by the applicants. The Crown
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unsuccessfully argued that a duty to consult did not arise until a future point in time at
which decisions to grant or renew specific licenses on specific parcels of land occurred.
 In Dene Tha’ First Nation v Canada (Minister of Environment), 2006 FC 1354, the
Crown conduct at issue was the design of an oversight mechanism, or blueprint, for the
construction of the Mackenzie Gas Pipeline [MGP], from which all ensuing
environmental and review processes would flow. That mechanism, or Cooperation Plan,
conferred no rights, but established the means by which future activities in relation to the
MGP, which ran through the applicant’s territory, would be managed.
 In Kwicksutaineuk Ah-Kwa-Mish First Nation v Canada (Attorney General), 2012 FC
517, the Crown conduct at issue was the re-issuance of finfish aquaculture licenses in the
applicant’s territories by the federal government following the assumption of this
jurisdiction from the provincial government. The applicant sought consultation because
it was concerned that the licences authorizing aquaculture at particular farm sites posed
significant risks to the health of nearby wild fisheries, upon which the exercise of their
Aboriginal fishing rights depended.
 In Squamish Indian Band v British Columbia (Minister of Sustainable Resource
Management), 2004 BCSC 1320 [Squamish], the Crown conduct at issue was a decision
to allow a change in the control and expansion of a proposed ski and golf resort, on
lands over which the applicant claimed Aboriginal rights and title. In the course of
finding that a duty to consult existed, the Court characterized the practical implications
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of the decision to allow a change in control as having been “dramatic” (Squamish,
above, at para 78).
[78] The foregoing cases all involved Crown conduct which directly concerned the applicant
First Nation’s claimed territories or the resources situated upon those territories. They are all
distinguishable from the ratification of the CCFIPPA, because the CCFIPPA does not address any
specific lands, potential projects involving specific lands, or specific resources. It is simply a broad,
national, framework agreement that provides additional legal protections to Chinese investors in
Canada, and Canadian investors in China, which parallel the rights provided in several existing
investment protection and trade agreements to which Canada is already a party.
b. Potential adverse effects identified by HFN
[79] Nevertheless, it remains important to consider each of the principal adverse impacts on its
Aboriginal rights that HFN alleges may result from the ratification of the CCFIPPA. For the reasons
set forth below, I have concluded that each of those claimed impacts are speculative and nonappreciable.
In the absence of more specific asserted interests that may be adversely impacted and
more specific measures that may be found to contravene the CCFIPPA, it is also difficult to
ascertain the required causal link between the CCFIPPA and a potential adverse impact on HFN’s
asserted Aboriginal interests.
[80] It is common ground between the Parties that the jurisprudence on what is or is not a
speculative or non-appreciable impact is not well developed.
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[81] HFN’s principal concern appears to be the possibility that the rights conferred upon Chinese
investors under the CCFIPPA may be used to challenge or discourage measures which would have
the effect of preserving lands and resources that are the subject of its asserted Aboriginal claims.
Stated differently, HFN submits that the CCFIPPA may oblige or lead Canada to refrain from
taking certain types of measures which would otherwise have been open to it to address conflicts
that may develop between Chinese investors and HFN, for example, if HFN takes action to protect
its lands and resources for the future.
[82] With respect to the potential “chilling effect” of the CCFIPPA on the government, HFN
asserts that even the spectre of potentially substantial awards that may be issued by arbitral panels in
favour of Chinese investors may well factor into Canada’s analysis of whether to proceed with a
proposed measure to protect HFN’s asserted Aboriginal rights. In this regard, HFN placed
significant weight on evidence provided by Mr. MacKay, Acting Director, Investment Trade Policy
Division, Department of Foreign Affairs and International Trade [DFAIT]. In cross-examination,
Mr. MacKay confirmed that, when developing regulatory or other policy initiatives, including
measures that may be taken to accommodate Aboriginal peoples, the responsible government
department is strongly advised to consult with the government’s Trade Law Bureau to ensure that
the obligations or measures in question are consistent with Canada’s international trade and
investment obligations (Cross-Examination on Affidavit of Vernon John MacKay, April 3, 2013
[MacKay Cross], Applicant’s Record, Volume II, at pp 482-83 and 537).
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[83] Given the foregoing, HFN further maintains that ratification of the CCFIPPA will
significantly change the equation for the balancing exercise that the Crown is required to conduct
where accommodation is required in making decisions that may adversely affect HFN’s asserted
Aboriginal interests. As a result, HFN states that those interests will be less likely to receive the
protection which is currently required in order to maintain the honour of the Crown. For example, if
HFN’s preferred form of accommodation would expose Canada to significant potential liability to
one or more Chinese investors, this may be a factor in Canada’s determination of whether such a
measure is reasonable.
[84] In support of its positions, HFN relied primarily upon the experience to date under the
NAFTA, the international experience with agreements providing for investor-state arbitration, and
the ongoing uncertainty regarding how arbitral panels are likely to assess claims under the
CCFIPPA. However, HFN also encouraged the Court to look beyond the experience to date under
NAFTA and other international trade and investment agreements, because that experience has been
limited and continues to evolve. HFN also dismissed Canada’s experience under the approximately
24 bilateral investment protection treaties that are currently in force, on the basis that, in most cases,
the other party to the treaty has little investment in Canada. In contrast, HFN noted that Chinese
investment in Canada increased from approximately $228 million in 2003 to over $12 billion in
2009, prior to the acquisition earlier this year of Nexen Inc. by CNOOC Ltd., a Chinese stateowned
oil company, in a transaction valued at approximately $15 billion. HFN attaches further
significance to the fact that much of the investment in Canada by Chinese entities to date has been
by enterprises having links to the Chinese government, which HFN contends has been reported to
have a strong, centralized interest in securing natural resources in Canada and elsewhere.
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[85] With respect to the NAFTA, HFN notes that it is the only other international trade or
investment agreement with investor-state arbitration provisions, under which Canada hosts a
significant level of foreign investment. HFN observes that most of the obligations in the CCFIPPA
are the same as those set out in the NAFTA, and that as a result of its experience under the NAFTA,
Canada ranks sixth on a list of 90 countries published by the United Nations Conference on Trade
and Development in 2012, in terms of claims made by foreign investors against governments. HFN
further observes that whereas the NAFTA can be terminated at any time by any of its three
signatories with one year’s notice, the CCFIPPA has a minimum period of 15 years and its
protection for investments existing at the end of that period will extend for a further 15 years.
[86] With respect to legal uncertainty, HFN makes two general points. First, it notes that the
arbitrators who will be appointed to adjudicated claims brought under the CCFIPPA are not judges
and are not provided with the hallmarks of judicial independence, such as security of tenure and
financial security. It notes that Mr. Van Harten provided evidence, which does not appear to be
disputed, that many arbitrators work as counsel while also working as arbitrators. Second, it notes
that there is a significant level of uncertainty regarding how important provisions in the CCFIPPA
will be applied. This will be discussed further below. In general, it states that arbitrators’ decisions
under the CCFIPPA will be subject to judicial review on a very limited basis, and that to date,
judicial reviews of decisions by tribunals constituted under the NAFTA have been dismissed in their
entirety, with one exception (Metalclad Corporation v The United Mexican States, (August 30,
2000), ICSID Case No. ARB (AF)/97/1), where a portion of the award was set aside.
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[87] HFN acknowledges that arbitral awards under the CCFIPPA can only be made against, and
bind, the parties to the CCFIPPA, i.e., China and Canada, pursuant to Article 32 of the CCFIPPA.
Specifically, it acknowledges that an arbitral panel would have no power to invalidate a measure
that may be adopted by HFN or Canada to protect HFN’s asserted interests. It also acknowledges
the possibility that the parties to the CCFIPPA may choose to simply pay damage awards and
maintain regulations or other measures that have been found to contravene the CCFIPPA. However,
based on terms that are contained in various Final Agreements that the Government of Canada has
entered into with First Nations, it asserts that it is likely that HFN will be required to remedy any
measures that it may implement (assuming that it eventually enters into a Final Agreement
containing similar terms), if those measures are found to contravene the CCFIPPA. HFN maintains
that Canada is not likely to maintain any such measures in the face of such a finding.
[88] In addition to the foregoing general submissions, HFN makes various specific submissions
with respect to Articles 4 and 10 of the CCFIPPA, which deal with the minimum standard of
treatment to be accorded to Chinese investors, and expropriation, respectively. It appears to be
common ground between the Parties that, based on past experience internationally, if any challenges
are brought by Chinese investors under the CCFIPPA, they are more likely to be based on one or
both of these two provisions than on other provisions. HFN adds that these are the two provisions
that have been most likely to lead to significant awards under other investment treaties.
[89] HFN also made submissions with respect to the scope of certain of the exceptions in the
CCFIPPA, including (i) measures that Canada has reserved the right to adopt pursuant to Annex
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B.8, which includes measures denying Chinese investors any rights or preferences provided to
Aboriginal peoples, and (ii) environmental measures.
[90] The Parties’ submissions with respect to the provisions in the CCFIPPA pertaining to
minimum standard of treatment [MST], expropriation and exceptions are discussed separately
below.
[91] However, before addressing those submissions, I pause to note that, in the absence of a
modern treaty, it appears to be common ground between the Parties that the HFN’s existing law
making powers are limited to the authority provided under sections 81 and 83 of the Indian Act,
above. Section 81 authorizes band councils to make by-laws that are not inconsistent with that
legislation or any regulation made by the Governor in Council or the Minister, regarding various
purposes, including health, traffic, zoning and land use planning, construction and maintenance of
buildings and infrastructure, the protection of wildlife and gaming. Section 83 provides the authority
for band councils to make by-laws, subject to the Minister’s approval, pertaining to matters such as
local taxation, the licensing of businesses, the appointment of local officials, the payment of local
officials and the raising of money from band members to support band projects. HFN laws passed
pursuant to sections 81 and 83 apply only on HFN reserves (R v Alfred, [1993] BCJ No 2277, at
para 18).
[92] HFN also has a Land Use Plan that Ms. Sayers acknowledged is consultative in nature
(Cross-Examination on Affidavit of Carolyne Brenda Sayers [Sayers Cross], Respondent’s Record,
Volume III, at pp. 919 – 921). An important component of that plan is HFN’s Cedar Access
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Strategy, which, like the Land Use Plan, HFN seeks to implement with the consent and cooperation
of third parties (Sayers Cross, at p. 922). It appears to be common ground between the Parties that,
as consultation documents (rather than legal instruments), the Land Use Plan and the Cedar Access
Strategy are not instruments that fall within the potential scope of the CCFIPPA.
1. Minimum standard of treatment
[93] The provisions with respect to MST are set forth in Article 4 of the CCFIPPA. Pursuant to
Article 4(1), the Contracting Parties are required to “accord to covered investments fair and
equitable treatment and full protection and security, in accordance with international law.” Pursuant
to Article 4(2), the concepts of “fair and equitable treatment” and “full protection and security” do
not require treatment in addition to or beyond that which is required by the international MST of
aliens, as evidenced by general state practices accepted as law. It is common ground between the
Parties that this latter provision, which is virtually identical to the language in the Note of
Interpretation issued by the NAFTA Free Trade Commission in 2001 [2001 Interpretation Note]
regarding the MST provisions in Article 1105 of the NAFTA (Thomas Opinion, at para 102),
contemplates the minimum standard of treatment required by customary international law.
[94] Apparently relying largely upon decisions that pre-date the 2001 Interpretation Note, HFN
asserts that “fair and equitable treatment” includes a wide range of procedural and substantive
protections, including a requirement for states to satisfy legitimate expectations of foreign investors
and to maintain a stable legal or regulatory framework for foreign investors. It adds that this
standard would not allow Canada to defend a challenge based on an argument that the measure in
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question was required to fulfill Canada’s constitutional responsibilities under section 35 of the
Constitution. Citing the recent Notice of Intent filed by Eli Lilly and Company, HFN states that it
would even be open to a Chinese investor to challenge judicial doctrines developed to give effect to
section 35, on the ground that those doctrines give rise to an unstable regulatory framework for
investment. In its Notice of Intent, Eli Lilly challenges the “promise of the patent” doctrine
developed in this Court, and in the Federal Court of Appeal (Eli Lilly and Company v Canada,
NAFTA Ch 11 Panel, Notice of Intent, 7 November 2012).
[95] By contrast, the Respondents took the position that the MST obligation simply provides for
a very low procedural “baseline” below which the treatment of Chinese investors may not fall. This
position was supported by Mr. Thomas, whose evidence on this point I accept. In this regard, he
observed that the MST obligation in Article 4 “is considered to be a basic standard of treatment that
all members of the international community are capable of meeting” (Thomas Opinion, at para 119).
Citing the recent arbitral panel ruling in Glamis Gold Corporation v United States of America,
NAFTA Ch 11 Panel, Award, 8 June 2009 [Glamis Gold], at para 627, the Respondents described
this standard as:
[…] sufficiently egregious and shocking – a gross denial of justice,
manifest arbitrariness, blatant unfairness, a complete lack of due
process, evident discrimination, or a manifest lack of reasons – so as
to fall below accepted international standards […]
[96] Based on Mobil Investments Canada Inc & Murphy Oil Corporation v Canada, NAFTA Ch
11 Panel, Decision on Liability and on Principles of Quantum, 22 May 2012, at para 153 [Mobil],
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the Respondents maintain that this standard does not prohibit regulatory changes even if they have a
negative effect on an investor. In that case, an arbitral panel stated:
Article 1105 [of the NAFTA] may protect an investor from changes
that give rise to an unstable legal and business environment, but only
if those changes may be characterized as arbitrary or grossly unfair
or discriminatory, or otherwise inconsistent with the customary
international law standard. In a complex international and domestic
environment, there is nothing in Article 1105 to prevent a public
authority from changing the regulatory environment to take account
of new policies and needs, even if some of those changes may have
far-reaching consequences and effects and even if they impose
significant additional burdens on an investor.
[97] According to Mr. Thomas, whose evidence I once again accept, the fact that a regulatory
measure may adversely affect an investment, increase the investor’s cost of doing business, or result
in reduced profitability does not, in and of itself, constitute indirect expropriation (Thomas Opinion,
at paras 32 and 131).
[98] In support of its position that Chinese investors may rely on the MST provisions in Article 4
to challenge measures that may be adopted to protect or accommodate HFN’s asserted interests, and
to seek substantial damages claims, HFN refers to several claims or notices of intent to file claims
which have been made against Canada under NAFTA (e.g., SD Myers, Inc v Government of
Canada, NAFTA Ch 11 Panel, Partial Award, 13 November 2000 [SD Myers]; Windstream Energy
LLC v Government of Canada, NAFTA Ch 11 Panel, Notice of Intent, 17 October 2012; Lone Pine
Resources Inc v Government of Canada, NAFTA Ch 11 Panel, Notice of Intent, 8 November 2012;
Pope & Talbot Inc v Government of Canada, NAFTA Ch 11 Panel, Award in Respect of Damages,
31 May 2002 [Pope & Talbot] as well as claims that have been made against other countries (e.g.,
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Tecnicas Medioambientales TECMED SA v United Mexican States, ICSID Case No. ARB
(AF)/00/2; Occidental Exploration and Production Company v Republic of Ecuador, (Final Award,
1 July 2004) LCIA Case No. UN 3467).
[99] HFN acknowledges that the above-mentioned 2001 Interpretation Note was issued in
response to the expansive interpretation given to that provision in prior decisions, particularly Pope
& Talbot, above. HFN also acknowledges that the interpretation of the MST obligation in NAFTA
has been incorporated into the language of Article 4 of the CCFIPPA, as quoted above. However,
HFN maintains that the most-favoured nation [MFN] obligations in Article 5 of the CCFIPPA may
lead an arbitral panel to interpret the MST obligation in the same “expansive” manner as in Pope &
Talbot and other cases that were decided prior to the adoption of the 2001 Interpretation Note. HFN
further notes that, in the more recent decision of Merrill & Ring Forestry LP v Canada, ICSID
Administrated, Award, 31 March 2010 [Merrill & Ring], the arbitral panel adopted an interpretation
of the MST obligations in NAFTA that was broader than the interpretation advanced by Canada,
and found that the MST established in customary international law continues to evolve in
accordance with the realities of the international community (Merrill & Ring, above, at para 193).
The arbitral panel proceeded to find that this standard “provides for the fair and equitable treatment
of alien investors within the confines of reasonableness” (Merrill & Ring, above, at para 213).
Nevertheless, as noted by the Respondents, the arbitral panel then concluded that regardless of
whether the lower standard advocated by the investor or the higher standard advocated by Canada
were adopted, damages had not been established (Merrill & Ring, above at para 266).
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[100] Professor Van Harten stated in his affidavit that the MFN provisions in Article 5 of the
CCFIPPA would likely be found by an arbitral tribunal to have the effect of negating the language
in Article 4 that incorporates the “customary international law” standard that was articulated in the
above-mentioned 2001 Interpretation Note (Applicants’ Record, at p.85). He appears to base this
belief on the view that there are some bilateral investment treaties that entered into force subsequent
to January 1, 1994 which do not contain that language, and the limitations that it imports into the
MST standard. (Pursuant to Article 8(1) of the CCFIPPA, the MFN provisions in Article 5 do not
apply to treatment afforded under any bilateral or multilateral agreement in force prior to January 1,
1994.) However, Mr. Van Harten did not identify any post-1993 trade agreements or FIPAs that
contain broader protections for investors than those set forth in Article 4 of the CCFIPPA.
[101] In cross-examination, Mr. MacKay acknowledged the possibility that the MFN provision in
Article 5 could potentially negate the language in Article 4 that was incorporated from the 2001
FTC Interpretation Note. However, he maintained that the 2001 Interpretation Note simply clarifies
the standard that has been in the NAFTA from the outset, and that is embodied in each of the other
post-1993 international trade agreements and FIPAs to which Canada is a party (Applicants’
Record, at pp 509-510).
[102] Mr. Thomas did not address this specific issue, although he testified on cross-examination,
in the context of discussing the interpretative note on expropriation in Annex B.10 of the CCFIPPA,
that the specific language of the substantive provisions in a treaty would likely be given very serious
consideration by an arbitral tribunal, and perhaps ultimately given priority to the MFN clause
(Applicants’ Record, at pp. 769 – 772).
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[103] In my view, the evidence on this point is inconclusive. I accept HFN’s position that there is
some uncertainty as to whether a Chinese investor may be able to persuade an arbitral tribunal
constituted under the CCFIPPA to give it the benefit of any MST obligation negotiated in another,
post-1993 investment protection treaty, which does not contain the limiting language set forth in
Article 4. However, HFN led no evidence to demonstrate that there is any more favourable language
in the MST provisions of other agreements that are within the scope of Article 5. As a result, I am
left speculating as to whether this may in fact be the case.
[104] I also accept HFN’s position that, even without considering the MFN provisions in Article
5, there is some ongoing uncertainty regarding the scope of the MST obligation enshrined in Article
4. (See also Margaret Clare Ryan, “Glamis Gold, Ltd v The United States and the Fair and
Equitable Treatment Standard”, (2011) 56:4 McGill LJ 919 at 957). However, once again, HFN did
not lead any material evidence to demonstrate how, as a practical matter, it would face a nonspeculative
possibility of an appreciable adverse impact on its asserted Aboriginal interests, if an
arbitral panel were to give a Chinese investor the benefit of a standard that is different from the one
contemplated by the quotes above from Glamis Gold and Mobil. Indeed, Mr. Thomas’
uncontradicted evidence is that only one of eleven cases that post-date the 2001 Interpretation Note
and that have raised a challenge under the MST obligation in Article 1105 of the NAFTA have
succeeded (Cross Examination on Affidavit of John Christopher Thomas [Thomas Cross],
Applicant’s Record, at p 785). That said, I recognize that the tribunal in Pope & Talbot, above,
concluded that the measure challenged under Article 1105 in that case would have contravened even
the more limited interpretation of MST reflected in the 2001 Interpretation Note. However, I also
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note that the total number of cases in which Canada has been found to have violated the MST
obligations set forth in the NAFTA and the other 24 FIPAs to which Canada is a party is extremely
small.
[105] Considering the foregoing, together with the fact that the current aggregate level of
investment from Chinese investors into Canada is only a small fraction of the aggregate level of
U.S. investment in Canada in each year over the last two decades, I am satisfied that the potential
for HFN’s asserted Aboriginal rights to be adversely impacted as a result of the MST obligations in
the CCFIPPA is speculative and non-appreciable.
2. Expropriation
[106] Among other things, Article 10(1) of the CCFIPPA provides as follows:
Covered investments or returns of investors of either Contracting
Party shall not be expropriated, nationalized or subjected to measures
having an effect equivalent to expropriation or nationalization in the
territory of the other Contracting Party … except for a public
purpose, under domestic due procedures of law, in a nondiscriminatory
manner and against compensation.
[107] It is common ground between the Parties that this obligation protects investors against both
direct and indirect expropriation.
[108] HFN maintains that the prohibition on direct and indirect expropriation without
compensation is specifically designed to ensure that Chinese investors will be compensated in
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circumstances where they would not be compensated under domestic law. Stated differently, HFN
asserts that once the CCFIPPA is ratified, it will no longer be open to any Canadian legislative body
to expropriate investments of Chinese investors without full compensation. As a result, HFN
submits that Canada will have given up a significant degree of flexibility in its ability to protect
lands and resources that are within the scope of its asserted Aboriginal interests.
[109] In response, the Respondents state that Canada has a longstanding policy of not
expropriating third party interests in order to settle land claims, and that lands held by third parties
are only ever acquired on a “willing seller, willing buyer” basis. This was supported by
documentation from the Department of Aboriginal Affairs and Northern Development Canada. As a
result, the Respondents maintain that, as a practical matter, there will be no change in the range of
potential options that would be realistically considered and available to Canada to protect or
accommodate HFN’s asserted Aboriginal interests. Citing Toronto Area Transit Operating
Authority v Dell Holdings Ltd, [1997] 1 SCR 32, at paras 20-23, the Respondents note that there is a
strong presumption in Canadian law that whenever land is expropriated, compensation will be paid,
unless the words of the statute authorizing expropriation clearly state otherwise.
[110] In the absence of any evidence to suggest the existence of a non-speculative possibility that
Canada or the Province of British Columbia may, in the absence of the CCFIPPA, have otherwise
entertained the possibility of expropriating without compensation, I am left to conclude that the loss
of this theoretical possibility is not likely to have the non-speculative potential to result in adverse
impacts on HFN’s asserted Aboriginal rights.
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[111] HFN also submits that the prohibition on indirect expropriation will reduce the scope of
potential measures that may be taken to preserve its land and resources. As with the MST obligation
in Article 4, HFN states that there is a significant level of uncertainty regarding the extent to which
measures may be found to constitute indirect expropriation. It adds that it is clear that legitimate
government measures enacted in the public interest can constitute expropriation, even in the absence
of discrimination. In addition, citing the decision of the NAFTA panel in Metalclad, above, it states
that the investment-backed legitimate expectations of an investor will be taken into account in
assessing whether there has been an indirect expropriation. Furthermore, it maintains that a measure
which has a substantial adverse impact on the value of an investment may be found to constitute
indirect expropriation.
[112] In support of its position that the expropriation provisions in Article 10 may lead Canada to
refrain from adopting a measure that would otherwise likely be embraced to protect or
accommodate HFN’s asserted Aboriginal interests, HFN noted that Canada has paid a total of
approximately $160 million to settled claims based on expropriation under the NAFTA. Those
claims were brought by Ethyl Corporation, in respect of a ban on the import and interprovincial
trade of MMT, a suspected neurotoxin; and by Abitibi Bowater, in respect of legislation passed by
the Government of Newfoundland to expropriate certain of the company’s lands and assets,
including resource rights, after it announced that it intended to close a pulp & paper mill located in
that province.
[113] In response, the Respondents note that Annex B.10 of the CCFIPPA defines indirect
expropriation in terms of “a measure or series of measures of a Contracting Party that has an effect
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equivalent to direct expropriation without formal transfer of title or outright seizure.” In addition,
the Respondents note that Annex B.10 clarifies that “the sole fact that a measure or series of
measures of a Contracting Party has an adverse effect on the economic value of an investment does
not establish that an indirect expropriation has occurred.” Moreover, they assert that the following
provision in paragraph 3 of Annex B.10 makes it clear that the circumstances in which bona fide
regulation may constitute indirect expropriation are rare:
Except in rare circumstances, such as if a measure or series of
measures is so severe in light of its purpose that it cannot be
reasonably viewed as having been adopted and applied in good faith,
a non-discriminatory measure or series of measures of a Contracting
Party that is designed and applied to protect the legitimate public
objectives for the well-being of citizens, such as health, safety and
the environment, does not constitute indirect expropriation.
[114] In Reply, HFN noted that Mr. Thomas agreed on cross-examination that bona fide
regulation with a public purpose may constitute expropriation under the CCFIPPA, and that the
form of a measure and the intent of a state are not determinative. HFN observed that Mr. Thomas
further agreed that the question of when regulation crosses the line and constitutes a measure
“tantamount to expropriation” is a contentious issue, and that there is no bright line which identifies
when compensation will be required, because each case is very fact dependent (Thomas Cross,
Applicant’s Record, at pp 754 – 760).
[115] In addition, HFN noted that Annex B.10 does not provide any protection for measures
whose purpose is to protect Aboriginal rights and title, or to otherwise fulfill Canada’s obligations
under section 35 of the Constitution. In this regard, it underscored that Mr. MacKay acknowledged
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that no attempt was made to negotiate specific protection for such measures, because Canada did
not want “to enter that trading game” (MacKay Cross, Applicant’s Record, at p 535). It concludes
from this that a measure aimed at protecting the rights of Aboriginal peoples would not benefit from
Annex B.10.
[116] As with the MST provision in Article 4 of the CCFIPPA, discussed above, HFN submits
that the MFN provision in Article 5 would effectively negate the limitations in Annex B.10, which
Canada and the U.S. added to their respective model foreign protection agreements in 2004, to
clarify the framework for determining whether an indirect expropriation has occurred. The evidence
relied upon by HFN in this regard closely tracks that which was discussed at paragraphs 100-102
above, in respect of the interplay between the MFN and MST provisions in Articles 5 and 4 of the
CCFIPPA, respectively.
[117] For essentially the same reasons set forth at paragraph 103 above, I have been left to
speculate as to whether the MFN provision would be applied so as to negate all or some of the
limitations set forth in Annex B.10, notwithstanding the fact that Article 35(4) specifically states
that the Annexes and footnotes to the CCFIPPA constitute integral parts of that agreement.
[118] Indeed, I am satisfied that even without considering the MFN provisions in Article 5, it is
not entirely clear how the language in Annex B.10 and Article 10 may be applied to measures that
may be alleged to constitute indirect expropriation. This was conceded by Mr. Thomas (Thomas
Cross, Applicant’s Record, at pp. 754-755).
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[119] However, I accept Mr. Thomas’ evidence that the circumstances in which a nondiscriminatory
measure that is designed and applied to protect the legitimate public objectives, as
contemplated in Annex B.10, might be found to constitute indirect expropriation are likely to be rare
(Thomas Opinion, at para 33). I also accept his uncontested evidence that, apart from one notice of
intent to file a claim, which did not proceed to the establishment of a tribunal, there have been no
other claims, let alone a tribunal finding, against Canada, for any federal, provincial or territorial
measures taken in relation to Aboriginal rights or interests, or for allegedly unlawful measures taken
by First Nations themselves (Thomas Opinion, at paras 29-30 and 127). Likewise, I accept Mr.
Thomas’ evidence that there has only been one such claim brought against the United States
(Glamis Gold, above), to challenge regulatory measures taken to protect Aboriginal interests, and
that this claim not only was rejected, but provides a good example of how such interests would be
taken into consideration by an arbitral panel applying the standards set out in the CCFIPPA
(Thomas Opinion, at paras 31 and 199-204).
[120] Given the foregoing, and in the absence of any evidence to the contrary, I have not been
persuaded that there is an appreciable and non-speculative potential for either (i) an arbitral tribunal
to find that measures designed to protect or accommodate HFN’s asserted Aboriginal interests
contravene the expropriation provisions in Article 10 of the CCFIPPA, or (ii) Canada to refrain
from implementing a measure that would otherwise be implemented for that purpose, due to a fear
of being found liable to pay significant damages to one or more Chinese investors.
3. The Exceptions in the CCFIPPA
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[121] In support of its position that Canada continues to have ample policy flexibility to protect
and accommodate HFN’s asserted Aboriginal interests, the Respondents note that, as with each of
the other FIPAs that Canada has entered into, the CCFIPPA contains general exceptions to ensure
that the federal government and sub-national governments retain policy flexibility in key areas. In
this regard, they note that “specific exemptions,” sometimes called “reservations,” are used to
exempt specific matters from the application of some or all of a FIPA’s obligations; whereas
“general exemptions” are typically used to carve out broad subject-matter areas from a FIPA’s
application.
[122] With respect to specific exceptions, the Respondents assert that, pursuant to Article 8,
existing non-conforming measures are grandfathered against the application of the MFN provisions
in Article 5, the national treatment provisions in Article 6, and the provisions relating to senior
management and boards of directors in Article 7. In addition, the Respondents note that, pursuant to
Article 8, Canada has also reserved policy flexibility with respect to measures that may be adopted
in the future pursuant to certain programs or in sensitive sectors, by exempting such measures from
the application of Articles 5, 6 and 7. For example, the Respondents note that, pursuant to Article 8,
procurement and subsidies are exempted from these obligations in the CCFIPPA. Moreover,
through the application of Annex B.8, Article 8 also provides that Articles 5, 6 and 7 do not apply to
measures relating to, among other things, social services that are established or so maintained for a
public purpose, and, most importantly for present purposes, any rights and privileges accorded to
Aboriginal peoples [the “Aboriginal Reservation”].
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[123] The Respondents submit that the Aboriginal Reservation allows all levels of domestic
governments, including Aboriginal governments with legislative and regulatory powers, to provide
rights and preferences to Aboriginal people that may otherwise be inconsistent with the obligations
set forth in the CCFIPPA. The Respondents observe that Canada has ensured that policy flexibility
is retained to provide preferences for Aboriginal interests, in each of the other FIPAs that it has
entered into.
[124] It appears to be common ground between the parties that the Aboriginal Reservation does
not apply to the MST provisions in Article 4, the expropriation provisions in Article 10 or the
performance requirements provisions in Article 9 (which apparently reiterate obligations already
covered by the separate Agreement on Trade Related Investment Measures, to which all WTO
Members are a party and against which reservations may not be taken). According to Mr. MacKay’s
uncontradicted evidence, the various FIPAs to which Canada is a party, including the CCFIPPA, do
not extend reservations with respect to MST and expropriation because such reservations “would
defeat the purpose of the treaty, which is to create reciprocal legal stability for foreign investors in
the host state.” Mr. MacKay added that the MST and expropriation obligations are simply “basic
protections against lack of due process, denial of justice and confiscatory conduct” (MacKay
Affidavit, at para 58).
[125] With respect to the general exceptions in the CCFIPPA, the Respondents noted that Canada
has exempted various types of measures from the application of the CCFIPPA’s obligations
generally. This includes, pursuant to Article 33(2), environmental measures that are (i) necessary to
ensure compliance with laws and regulations that are not inconsistent with the provisions of the
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CCFIPPA, (ii) necessary to protect human, animal or plant life or health, or (iii) relate to the
conservation of living or nonliving exhaustible natural resources, if such measures are made
effective in conjunction with restrictions on domestic production or consumption.
[126] HFN maintains that the foregoing exceptions and the Aboriginal Reservation do not
preserve sufficient policy flexibility for Canada to protect and accommodate its asserted Aboriginal
interests. With respect to the environmental exception in Article 33(2) in particular, it notes that the
first two of three types of measures described therein are confined to measures that are necessary to
achieve the stated objectives, and that the burden to demonstrate such necessity would be upon
Canada. Relying upon Andrew Newcombe and Lluis Paradell, Law and Practice of Investment
Treaties (Austin, Tex.: Wolters Kluwer, 2009), pp 500-506, HFN suggests that the meaning of
“necessary” can be situated on a continuum ranging from indispensable or of absolute necessity, to
a contribution to achieving the stated objectives. Newcombe and Paradell also note, more broadly,
that general exceptions such as those discussed above raise many interpretive issues that have not
yet been clarified in the jurisprudence.
[127] I accept that there is some uncertainty regarding the scope of the general and specific
exemptions discussed above. However, it remains far from clear how this uncertainty assists HFN to
establish that the potential adverse effects on its asserted Aboriginal rights are appreciable and nonspeculative.
[128] When pressed during the hearing on this point, and more broadly on how the CCFIPPA in
general gives rise to the potential for such effects, HFN struggled. At one point, it stated that “it is
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not unreasonable to imagine a scenario where taking steps to protect aboriginal rights might result in
the cancellation of the permit, which in turn, then … [might be claimed to result in a] substantial
reduction in the value of [a Chinese investor’s] investment” (Transcript, at p 178). This is similar to
its written submission that an arbitral panel might find a contravention of the CCFIPPA, and impose
substantial damages on Canada, in respect of the quashing of a resource extraction permit by the
Courts, on the ground that either (i) Canada failed to adequately consult or accommodate asserted
Aboriginal rights, or (ii) the permit authorizes development which unjustifiably infringes Aboriginal
or treaty rights. In the absence of any evidence to demonstrate that there is a non-speculative and
appreciable risk that an arbitral panel might not only make such a finding in respect of an
identifiable permit, but also that such a finding would adversely impact upon HFN’s asserted
Aboriginal interests, I am unable to agree with HFN that the ratification of the CCFIPPA gives rise
to such a non-speculative and appreciable risk.
[129] HFN also stated that the ratification of the CCFIPPA gives rise to an appreciable and nonspeculative
risk that its asserted Aboriginal interests will be adversely impacted by virtue of the fact
that Canada will take into account the risk of an adverse arbitral panel ruling, in deciding how to
accommodate those interests. This is discussed in greater detail at paragraphs 82 and 83 above.
However, HFN has not adduced any evidence to persuasively demonstrate that as a result of the fact
that Canada will take such risk into account when developing measures to protect or accommodate
HFN’s asserted Aboriginal interests, there is an appreciable and non-speculative possibility that
Canada’s scope of action will be constrained, fettered or influenced in a way that will leave HFN
worse off, in terms of those interests, than if the CCFIPPA is not implemented. In the absence of
such evidence, and considering the very basic nature of the MST and expropriation obligations, as
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well as the fact that the general and specific exemptions discussed above will afford policy
flexibility to Canada, I find that this assertion is entirely speculative in nature. My conclusion in this
regard is reinforced by Mr. MacKay’s evidence that he is “unaware of any decision of a Canadian
court finding that either the minimum standard of treatment or expropriation provision interferes
with or are incompatible with Aboriginals’ claims or rights” (MacKay Affidavit, at para 59).
[130] Another example HFN provided as to how, as a practical matter, ratification of the
CCFIPPA might adversely impact upon its asserted Aboriginal interests was the possibility that
HFN might want to place a moratorium on land development until regulations governing a land use
plan on its reserves or broader territory have been enacted. HFN observed that the Tlicho
Government [Tlicho] did something similar and then was unable, in proceedings before the
Supreme Court of the Northwest Territories, to prevent an environmental assessment from
proceeding. This occurred notwithstanding that the assessment included within its scope potential
access roads that the Tlicho did not want included in the assessment (Tlicho Government v
MacKenzie Valley Impact Review Board, 2011 NWTSC 31). Extrapolating from this case, HFN
submitted that it is not difficult to envision a scenario in which a similar moratorium could give rise
to an adverse arbitral ruling against Canada, if it were found to violate the MST or expropriation
provisions in the CCFIPPA. In such a case, HFN submitted that it could be pressured by Canada to
either abandon the moratorium or pay any damages levied against Canada (Transcript, at pp 212-
218). In the latter regard, HFN noted that Tlicho has a Land Claims and Self Government
Agreement with Canada and the Government of the Northwest Territories, and that paragraph
7.13.6 of that agreement requires Tlicho, at the request of Canada, and in the event of an adverse
ruling by an international arbitral panel in respect of any law or other exercise of Tlicho’s powers, to
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remedy such law or other measure, to enable Canada to perform its international obligations. HFN
suggested that it was not unreasonable to expect that it will be required to agree to a similar
provision in any similar agreement that it ultimately may negotiate with Canada and the
Government of British Columbia.
[131] Once again, I have not been persuaded that there is an appreciable and non-speculative
possibility of this scenario occurring, particularly given the absence of any evidence that (i) HFN is
considering such a moratorium, (ii) such a moratorium might somehow adversely impact upon a
potential Chinese investment in HFN territory, (iii) there would be a non-speculative possibility of
such moratorium being found to contravene the CCFIPPA, and (iv) Canada would not retain
sufficient policy flexibility to deal with this in a way that would avoid any adverse impact upon the
HFN’s asserted Aboriginal interests.
c. Conclusions regarding the potential effects that HFN claims will result from
a change in the legal framework applicable to land and resource regulation
[132] For the reasons given above, HFN has not demonstrated that the ratification of the
CCFIPPA has the non-speculative and appreciable potential to adversely impact HFN’s asserted
Aboriginal interests, as a result of any changes that the CCFIPPA will make to the legal framework
applicable to land and resource regulation in Canada.
[133] My conclusion in this regard is reinforced by the following:
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a. Canada’s experience under NAFTA and the 24 FIPAs that it has entered into
with other countries is perhaps the best available evidence that is relevant to an
assessment of the potential for the CCFIPPA to have the effects identified by
HFN. Indeed, that experience is more relevant than the international experience
under agreements to which Canada is not a party, and in respect of which HFN
identified only a very small number of arbitral decisions in the course of this
proceeding.
- As discussed at paragraph 104 above, Mr. Thomas’ uncontradicted evidence
is that only one of eleven cases that post-date the 2001 Interpretation Note
and that have raised a challenge under the MST obligation in Article 1105 of
the NAFTA have succeeded. In any event, the total number of cases in which
Canada has been found to have violated that obligation is extremely small.
- Likewise, as discussed at paragraph 119, above, Mr. Thomas also provided
uncontested evidence that, apart from one notice to file a claim, which did
not proceed to the establishment of a tribunal, there have been no other
claims, let alone a tribunal finding against Canada, in respect of any federal,
provincial or territorial measures taken in relation to Aboriginal rights or
interests, or in respect of allegedly unlawful measures taken by First Nations
themselves; and there has only been one such claim filed against the United
States, which was rejected.
- Only two judgments for damages have ever been rendered against Canada
(Pope & Talbot and SD Myers, above), in an aggregate amount of less than
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$7 million, although there has been an adverse finding of liability against
Canada in a third case (Mobil, above), in which damages remain to be
determined; and there are approximately six others in which claims have
been filed but not resolved, and a further two in which a notice of intent has
been filed but no formal claim has been made.
- As discussed at paragraph 112 above, only two claims against Canada under
the NAFTA have ever been settled with compensation, for an aggregate
amount of approximately $160 million (Transcript, at pp 343-348).
- Mr. MacKay, whose evidence on this point does not appear to have been
contradicted, stated in his affidavit that he is not aware of any evidence
suggesting that any of the aforementioned losses or monetary settlements
have implicated or impaired Canada’s ability to regulate in the public interest
in a non-discriminatory manner, and none of the claims that have ever been
brought against Canada have involved Aboriginal rights (MacKay Affidavit,
at para 69). He also provided uncontested evidence that, to his knowledge, no
Canadian court has ever found that either the MST or expropriation
provisions in international agreements to which Canada is a party interferes
with or are incompatible with Aboriginals’ claims or rights; and, indeed, no
litigation has ever been initiated in Canada by Aboriginal groups regarding
an alleged impact on Aboriginal rights of any FIPA or other investment
treaty, including the NAFTA, since 1989 (MacKay Affidavit, at paras 59 and
69).
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- It appears to be common ground between the parties that, to date, there have
been no claims filed against Canada under any of the 24 FIPAs that it has
entered into.
b. The aggregate existing level of investment in Canada by Chinese investors is a
small fraction of the level of aggregate level of investment in Canada by U.S.
investors in each year since the NAFTA came into force on January 1, 1994.
According to Mr. MacKay’s uncontested evidence, in 2011, the latest year for
which data is available, Chinese investors had an aggregate of approximately
$10.9 billion in investment in Canada, versus approximately $326 billion from
U.S. investors – almost 30 times the level of aggregate investment from China.
Although CNOOC Ltd. subsequently purchased Nexen, Inc. in a transaction
valued at approximately $15 billion, Mr. MacKay’s uncontested evidence is that
most of Nexen’s assets are located outside Canada (MacKay Cross, Applicant’s
Record, at p 485). According to data included at Exhibit H to Mr. MacKay’s
affidavit, the level of aggregate investment in Canada from U.S. investors was
approximately $103 billion in 1994 and has steadily increased since that time.
c. No evidence was led to demonstrate or to even suggest that the experience under
the CCFIPPA is likely to be any different than the experience to date under the
NAFTA or the 24 FIPAs to which Canada currently is a party.
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d. There is no evidence that any sub-national governments in Canada have been
fettered or “chilled” by NAFTA or the 24 FIPAs in force, from legislating in the
public interest. Indeed, the moratoriums imposed by the Government of Quebec
against natural (shale) gas fracking (in respect of which a Notice of Intent was
filed in 2012 by Lone Pine Resources Inc) and by Ontario against offshore wind
farms (in respect of which Windstream Energy LLC filed a claim in 2013)
suggest that they have not been so fettered or “chilled.”
e. Apart from Ms. Sayers’ hearsay evidence obtained from the Wall Street Journal,
which reported that China Investment Corp. was close to purchasing a 12.5%
stake in some timber assets held by Island Timberlands LP for approximately
$100 million, there is no evidence regarding actual or potential future investment
in HFN’s claimed territory, let alone on its reserves, by Chinese investors.
f. No evidence was led to demonstrate or even to suggest that any existing federal
or sub-national measures, including any measures established by HFN, might
contravene or be in conflict with any of the provisions in the CCFIPPA.
g. There is very little, if any, evidence of a causal link between the CCFIPPA and
potential investment in Canada by Chinese investors, and there is no such
evidence of such a link to any potential investment in HFN territory. The only
evidence that was adduced in this case was in a document entitled Final
Environmental Assessment of the China Foreign Investment Protection
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Agreement (FIPA), included at Exhibit BB to Mr. MacKay’s affidavit. At page 2
of that document, the following statement is made:
In the initial [Environmental Assessment], it was found that
significant changes to investment in Canada were not expected to
occur as a result of the Canada-China FIPA … In this Final
[Environmental Assessment], the claim that no significant
environmental impacts are expected based on the introduction of a
Canada-China FIPA are upheld; however, over time, Chinese
investors have shown greater interest in investing in Canada, and
this trend is likely to continue, if not increase with the introduction
of a FIPA.
h. Even if the only reasonable accommodation of an Aboriginal right asserted by
HFN would require action such as the expropriation of lands or a moratorium, an
arbitral panel would have no power to enjoin such action, and any award that
may be made on behalf of a Chinese investor would be made solely against
Canada. HFN will never be a respondent in any action initiated by a Chinese
investor under the CCFIPPA.
i. HFN’s existing law making powers are those conferred under the Indian Act to
over 600 bands, and are confined to zoning and land use planning, the
preservation, protection and management of animals and fish, and business
licensing and regulation (sections 81 to 83 of the Indian Act).
j. HFN’s existing Land Use Plan and Cedar Access Strategy can not be challenged
by a Chinese investor.
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k. The boundaries of HFN’s claimed traditional territory remain uncertain. There
are at least nine First Nations whose claimed traditional territory overlaps with
HFN’s claimed traditional territory (Affidavit of Jim Barkwell, Respondents’
Record, Volume II, Tab 34, at para 16).
[134] I agree with the Respondents that HFN’s submissions ultimately may be reduced to the
assertions that, irrespective of Canada’s experience to date under the NAFTA and the 24 other
FIPAs to which it is a party, and with Chinese investment in Canada in general, (i) such investment
in its territory may occur in the future, (ii) a measure may one day be adopted in relation to that
investment, (iii) a claim may be brought against Canada by the hypothetical investor, (iv) an award
will be made against Canada in respect of the measure in question, notwithstanding the basic nature
of the obligations in the CCFIPPA, the Aboriginal Reservation, and the other exceptions therein,
and (v) Canada’s ability to protect and accommodate HFN’s asserted Aboriginal interests will be
diminished, either as a result of that award, because Canada would be chilled by the prospect of
such an award. HFN has failed to demonstrate that this scenario is anything other than speculative
and remote.
(iii) Adverse impacts on the scope of self-government that HFN may be able to achieve
[135] HFN submits that the legal rights granted to Chinese investors under the CCFIPPA will
have a direct adverse impact on the scope of self-government which it can achieve either through (i)
the exercise of its Aboriginal rights, (ii) the treaty-making process, or (iii) the exercise of delegated
authority from the federal or provincial governments. HFN maintains that no matter what type of
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governance structure it utilizes, its authority will be limited or constrained by disciplines in the
CCFIPPA, including the rights that it grants to Chinese investors. It asserts that this adverse impact
is sufficient to trigger Canada’s duty to consult with it prior to ratification of the CCFIPPA. I
respectfully disagree.
[136] In support of its submissions on this point, HFN notes that, pursuant to Article 2(2) of the
CCFIPPA, the treaty will apply to any entity whenever that entity exercises any regulatory,
administrative or other governmental authority delegated to it by a Contracting Party. Accordingly,
it states that it will be subject to the CCFIPPA, whether it exercises law making or governance
powers pursuant to an aboriginal right, through a delegation agreement with a province and/or the
federal government, or through a treaty protected by s. 35 of the Constitution.
[137] It is common ground between the parties that HFN has never signed a treaty or “land claim
agreement” with the Crown in right of Canada or British Columbia. However, HFN is a party,
together with Canada and the Government of British Columbia, to a non-legally binding agreement
entitled Framework Agreement to Negotiate a Treaty [Framework Agreement], dated July 27, 2007.
According to Mr. Barkwell’s uncontested affidavit evidence, that agreement was entered into within
the framework of the British Columbia Treaty Process [BC Treaty Process]. By 2009, HFN had
advanced to Stage 4 of that process, which has six stages and is not structured to require any
assessment or proof of Aboriginal rights or title. While there have been no active negotiations since
2009, the uncontested evidence of Ms. Sayers is that HFN remains committed to that process
(Sayers Cross, Respondents’ Record, Volume III, pp. 915-916). The substantive matters under
negotiation, and reflected in the Framework Agreement, include the following:
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a. Land, including title, law-making authority, selection and access;
b. Water and water resources;
c. Forestry and forest resources;
d. Fisheries and marine resources;
e. Language, heritage and culture;
f. Mining and subsurface resources;
g. Wildlife and migratory birds;
h. Governance;
i. Financial matters including, but not limited to, fiscal arrangements and sharing
of resource revenues and royalties;
j. Environmental management;
k. General provisions, including, but not limited to, certainty, eligibility and
enrollment, ratification, amendment, implementation and dispute resolution; and
l. The settlement of HFN’s claims of aboriginal rights and title, including but not
limited to, the related financial component and certainty issues referred to above.
[138] In addition to the foregoing, HFN notes that it already engages in some land use regulation
through its Land Use Plan and the associated Cedar Access Strategy.
[139] HFN asserts that because of Canada’s agreement to be bound by the CCFIPPA, the HFN
may be prevented from negotiating an agreement or treaty which protects its rights to exercise its
authority in the best interests of the Hupacasath people, including to conserve, manage and protect
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lands, resources and habitats and to engage in other governance activities, in accordance with
traditional Hupacasath laws, customs and practices.
[140] It is important to distinguish between potential adverse effects on asserted Aboriginal rights
and potential adverse effects on a First Nation’s future negotiating position. The duty to consult
applies solely to the former, where they are demonstrated to be non-speculative, appreciable and
causally linked to particular conduct contemplated by the Crown. Stated alternatively, that duty does
not apply to contemplated conduct that may simply have potential adverse effects on HFN’s future
negotiating position (Rio Tinto, above, at paras 46 and 50). It also does not apply to other interests
of HFN that do not specifically concern HFN’s asserted Aboriginal rights, as listed at paragraph 53
above.
[141] Accordingly, to the extent that any of the potential adverse impacts identified by HFN
concern matters that may, as a result of the CCFIPPA, be more or less likely to be addressed in any
future treaty that HFN may negotiate with Canada, and that do not directly concern HFN’s asserted
Aboriginal rights themselves, those potential impacts cannot give rise to a duty to consult. This
includes adverse impacts on those dimensions of “the best interests of the Hupacasath people” and
“other governance activities” which do not directly concern HFN’s asserted Aboriginal rights
(Ahousaht Indian Band v Canada (Minister of Fisheries and Oceans), 2007 FC 567, at paras 31-32;
aff’d 2008 FCA 212 [Ahousat FCA], at para 37).
[142] HFN expressed a specific concern that any governance rights to be included in any treaty
that may be negotiated as part of the BC Treaty Process, or otherwise, will have to conform to
Page: 63
Canada’s international legal obligations, including those under the CCFIPPA. In this regard, it
identified a number of agreements concluded between First Nations and the federal, provincial or
territorial governments which make this clear. These include the Yekooche First Nation Agreement
in Principle (at paragraph 24(b)) and the K’ómoks Agreement in Principle (at paragraph 35), which
require that any Final Agreement provide for the consistency of the First Nations’ laws and other
exercises of power with Canada’s international legal obligations. Similarly, the Westbank First
Nation Self-Government Agreement (paragraph 36) requires that First Nation take all necessary
steps to “ensure compliance of its laws and actions with Canada’s international legal obligations”
and requires it to “remedy any Westbank Law or action found to be inconsistent with Canada’s
international legal obligations by an international treaty body or other competent tribunal.” A
number of other agreements identified by HFN contain similar provisions.
[143] If HFN’s position is that the CCFIPPA increases, to a non-trivial degree, the probability that
these types of provisions will be required to be included in any Final Agreement or other treaty that
it may ultimately negotiate with Canada, this was not supported by any evidence. The same is true if
HFN’s position is that the ratification of the CCFIPPA will reduce the scope for HFN to avoid
having to agree to these types of provisions, or to negotiate alternative provisions that may impose
lesser constraints on its ability to protect its asserted Aboriginal rights. Indeed, HFN repeatedly
asserted during its oral submissions that it is already highly probable, if not virtually certain, that
Canada will insist on the inclusion of these types of provisions in any Final Agreement or other
treaty that it may ultimately negotiate with HFN (Transcript, at pp. 23 and 153 – 157). The
presence of those provisions in the above-mentioned agreements, and others appended to Ms.
Sayers’ Affidavit, lends support to this view.
Page: 64
[144] Given the existence of those provisions in those agreements, and in the absence of evidence
to suggest that, but for the ratification of the CCFIPPA, HFN may have been able to negotiate
different provisions that provide greater scope for HFN to protect its asserted Aboriginal rights, I am
satisfied that HFN has not established the required causal link between the ratification of the
CCFIPPA and the potential adverse impacts that it has identified. Stated differently, I am satisfied
that HFN has not established a causal link between the ratification of the CCFIPPA and the types of
treaty provisions that it has identified, and that it may have to agree to include in any future treaty
that it ultimately negotiates with Canada. The evidence suggests that Canada is likely to require
HFN to exercise its treaty rights in a manner consistent with the types of obligations that are in the
CCFIPPA, in any event.
[145] In its written and oral submissions, HFN placed great significance on the fact that the
ratification of the CCFIPPA would extend the benefit of the provisions described above to Chinese
investors. For example, HFN maintained that the CCFIPPA will require HFN to refrain from
regulating in a manner which has the effect of substantially diminishing the value of an investment
owned by a Chinese national without paying compensation. It further maintained that the CCFIPPA
will require HFN to ensure that it provides Chinese investors with “fair and equitable treatment,” as
that term has been interpreted by arbitrators; and that HFN will not be able to impose performance
requirements which require the use of local products. While it acknowledges that it will still be able
to provide preferential treatment to First Nations, it stated that it will be constrained from making
distinctions between other companies if some of them have Chinese investors.
Page: 65
[146] However, once again, HFN did not adduce any evidence to suggest that there is a nonspeculative
and appreciable prospect that, in the absence of the CCFIPPA, HFN may have somehow
legislated or acted in a manner that (i) is inconsistent with one or more of the obligations
contemplated in the CCFIPPA, but (ii) nevertheless respects Canada’s existing obligations to
investors from NAFTA countries and the 24 countries with which Canada has entered into a FIPA
(Ahousaht FCA, above).
VIII. Conclusion
[147] The potential adverse impacts that HFN claims the ratification of the CCFIPPA would have
on its asserted Aboriginal rights, due to changes that the CCFIPPA may bring about to the legal
framework applicable to land and resource regulation in Canada, are non-appreciable and entirely
speculative in nature. Moreover, HFN has not established the requisite causal link between those
potential adverse impacts and the CCFIPPA.
[148] The same is true with respect to HFN’s assertions that the rights granted to Chinese
investors under the CCFIPPA will directly and adversely impact the scope of self-government
which HFN can achieve, either through exercising its Aboriginal rights, through the treaty making
process, or through the exercise of delegated authority from Canada or the Government of British
Columbia.
[149] Accordingly, the ratification of the CCFIPPA by Canada without engaging in consultations
with HFN would not breach either (i) Canada’s constitutional obligation to act honourably with
Page: 66
HFN in all of its dealings with HFN, and particularly in respect of HFN’s asserted Aboriginal rights,
or (ii) Canada’s duty to consult with HFN before taking any action that may adversely impact upon
those rights.
[150] This application will therefore be dismissed.
Page: 67
JUDGMENT
THIS COURT DECLARES, ADJUDGES AND ORDERS that this Application
is dismissed with costs.
"Paul S. Crampton"
Chief Justice

FEDERAL COURT
SOLICITORS OF RECORD
DOCKET: T-153-13
STYLE OF CAUSE: HUPACASATH FIRST NATION v THE MINISTER
OF FOREIGN AFFAIRS AND THE ATTORNEY
GENERAL OF CANADA
PLACE OF HEARING: VANCOUVER, BRITISH-COLUMBIA
DATE OF HEARING: JUNE 5, 6, and 7, 2013
REASONS FOR JUDGMENT
AND JUDGMENT: CRAMPTON C.J.
DATED: August 26, 2013
APPEARANCES:
Mark Underhill
Catherine Boies Parker
FOR THE APPLICANT
Tim Timberg, Judith Hoffman
Mara Tessier, Shane Spelliscy
Pierre-Olivier Savoie
FOR THE RESPONDENTS
SOLICITORS OF RECORD:
Underhill, Boies Parker
1320 – 355 Burrard Street
Vancouver, BC V6C 2G8
FOR THE APPLICANT
William F. Pentney
Deputy Attorney General of Canada
Vancouver, BC
FOR THE RESPONDENTS

Pauline Marois will not allow multiculturalism in Quebec... ignorant bitch

This is a copy of an email I sent in late August to the Parti Quebecois explaining how racist I think the party and their leader is if they implement this Provincial government policy. For my international visitors, this is the same party that wants to separate the province of Quebec from the rest of Canada which they have attempted by vote twice before and failed. Personally, I don't think Quebec will ever choose to separate from the rest of Canada however, this particular party has strong racist tendencies toward anyone who is not French-Canadian or anyone who does not know how to speak French-Canadian dialect, in other words, 90% of Canada who speak either English or another language. Of any of the 10 provinces and 3 territories in Canada, Quebec is the least multicultural. In my opinion, the party leader Pauline Marois is an ignorant bitch.


In the first year of her premiership, she went to Scotland on a trade mission. The head of the Scottish Independence Movement wanted to have a meeting with her to discuss the similarities between Quebec wanting independence from Canada and how the experiences of her party might give the Scottish leader more of an insight on how to make his movement more successful. She did not agree to the meeting as she felt that the 2 movements had nothing in common which was very strange because they do. She will usually tell the world that Quebec should be independent from Canada but snubbed the Scottish leader... I don't know, maybe because he didn't speak French?????? That's the Pauling Marois show for you.


Here is the email.



Hello




It has been widely reported that the PQ/Quebec government plans to

enact a Charter of Values and a law banning most forms of religious

symbols in public institutions. There is one interesting exception

which is Christian religious symbols. If you truly want public

institutions to be a secular part of society, ALL religious symbols

must be removed. No exceptions. Including the cross which is located

in the Quebec National Assembly. If the exception stays, the

PQ/Quebec government and Premier Marois are technically racist. The

Quebec courts will probably throw the law out and the PQ will be more

of a laughing stock than it already is and your leader will be

perceived as a white bigot which would be too bad. The rest of Canada

will also view this situation as completely moronic. I would remind

you that Quebec is still part of Canada and you are a minority

government. Focus on being a government for the people and drop

identity politics.

Court rejects First Nation case against Canada-China investment

The Federal Court has dismissed an application by an aboriginal band in British Columbia to stay the Canada-China investment treaty until First Nations have been consulted.


The court ruled Tuesday that the Hupacasath First Nation, which has about 300 members located near Port Alberni, B.C., has not demonstrated how the agreement signed last September will result in real damages to Aboriginal rights.


In its ruling, the court said any potential adverse impacts are non-appreciable and speculative in nature, adding that the Hupacasath had not demonstrated a causal link between the Foreign Investment Promotion and Protection treaty with China and the alleged impacts.


As well, the court said it had the same view on any potential impacts the treaty may have on the band’s self-government rights.


“Therefore, the ratification of the (FIPA) by the Government of Canada without engaging in consultations… would not contravene the principle of the honour of the Crown or Canada’s duty to consult… before taking any action that may adversely impact upon its asserted Aboriginal rights,” said the ruling.


.

Sweden has come first in a ranking of the world's most sustainable countries,

Sweden has come first in a ranking of the world's most sustainable countries, with the report praising Sweden's environmental strengths including the use of renewable energy sources and low CO2 emissions.



he report, carried out by Swiss investment group RobecoSAM, measured 59 countries, including 38 from emerging markets and 21 developed nations, on a wide range of factors including environmental, social, and governance.




Australia ranked second in the report, with Sweden's neighbours Denmark, Norway, and Finland all placing inside the top ten.




The ratings, according to RobecoSAM, offer insights into the investment risks and opportunities associated with each country, and allow investors to compare countries to each other.




Sweden earned high scores across almost all criteria, scoring particularly well on environmental factors such as the use of renewable energy sources and low CO2 emissions.




Sweden also rated highly in labour participation, education and income inequality, with further strengths in the governance dimension, including the top score for its institutional framework.




RobecoSAM is an investment specialist focused exclusively on sustainability investing, and is based in Zurich, Switzerland.




The top ten sustainable countries




1. Sweden

2. Australia

3. Switzerland

4. Denmark

5. Norway

6. UK

7. Canada

8. Finland

9. US

10. Netherlands




External link: Full report (PDF) »

Communications Security Establishment Commissioner A n n u a l R e p o rt 2 O12-2 O13 Office of the Communications Security Establishment Commissioner

Communications
Security
Establishment
Commissioner
A n n u a l R e p o rt
2 O12-2 O13
Office of the Communications Security
Establishment Commissioner

Website: www.ocsec-bccst.gc.ca
© Minister of Public Works and
Government Services 2013
Cat. No. D95-2013
ISSN 1206-7490
Cover design: Cameron Fraser
June 2013
Minister of National Defence

Dear Minister:
Pursuant to subsection 273.63(3) of the National Defence Act, I am pleased
to submit to you my annual report on my activities and findings for the period of
April 1, 2012, to March 31, 2013, for your submission to Parliament.

Communications Security
Establishment Commissioner
The Honourable Robert Décary, Q.C.
Commissaire du Centre de la
sécurité des télécommunications
L’honorable Robert Décary, c.r.

ANNUAL REPORT 2012–2013 • www.ocsec-bccst.gc.ca
TABLE OF CONTENTS
Biography of the Honourable Robert Décary, Q.C. /2
Commissioner’s Message: A Summary at the End of My Term /3
Mandate of the Communications Security Establishment Commissioner /9
Commissioner’s Office /15
Impact of Commissioners’ Recommendations /16
Overview of 2012–2013 Findings and Recommendations /17
Highlights of the Six Reviews Submitted to the Minister in 2012–2013 /20
1. Review of certain foreign signals intelligence activities /20
2. CSEC assistance to CSIS under part (c) of CSEC’s mandate and
sections 12 and 21 of the CSIS Act /21
3. Review of CSEC IT security activities not conducted under a ministerial
authorization /26
4. Review of CSEC’s 2010–2011 and 2011–2012 foreign signals intelligence
ministerial authorizations /29
5. Annual review of a sample of disclosures of Canadian identity information to
Government of Canada clients /32
6. Annual review of incidents and procedural errors identified by CSEC in 2012
that affected or had the potential to affect the privacy of Canadians and
measures taken by CSEC to address them /34
ANNUAL REPORT 2012–2013 • www.ocsec-bccst.gc.ca
Complaints About CSEC Activities /36
Duty Under the Security of Information Act /36
Activities of the Commissioner’s Office /36
Work Plan — Reviews Under Way and Planned /38
In Closing /39
Annex A: Commissioner’s Office Review Program — Logic Model /41
Annex B: Excerpts from the National Defence Act and the Security of Information Act
Related to the Commissioner’s Mandate /43
Annex C: 2012–2013 Statement of Expenditures /47

BIOGRAPHY OF THE HONOURABLE
ROBERT DÉCARY, Q.C.
The Honourable Robert Décary, Q.C., was appointed Commissioner of
the Communications Security Establishment on June 18, 2010, for a
three-year term.
Commissioner Décary was born in Montréal in 1944. He received his
education at Collège Jean-de-Brébeuf (BA), at Université de Montréal
(LL.L.) and the University of London (LL.M.). He was called to the
Barreau du Québec in 1967 and named Queen’s Counsel in 1986.
In the course of a career dedicated to public office, the law and
journalism, he was Special Assistant to the Honourable Mitchell Sharp
(then Canada’s Secretary of State for External Affairs) (1970–1973),
Co-Director for Research on the Task Force on Canadian Unity, the
Pepin-Robarts Commission (1978–1979) and member of the French
Constitutional Drafting Committee of the federal Department of Justice
(1985–1990).
He practised law in Montréal, then in Gatineau, where, in the firm Noël,
Décary, he specialized in representing many law offices and the
Attorney General of Québec before the Supreme Court of Canada.
He has written a number of feature articles for Le Devoir and
La Presse, and has contributed to many legal journals and textbooks.
He is the author of Aide-mémoire sur la Cour suprême du Canada
(1988) and of Chère Élize (or The Long and the Short History of the
Repatriation) (1983).
He was a member of the Federal Court of Appeal from 1990 to 2009. In
2009, he was appointed arbitrator of the Court of Arbitration for Sport
in Lausanne, Switzerland, and in 2010 he became a member of the
Sport Dispute Resolution Centre of Canada.
2 ANNUAL REPORT 2012–2013
COMMISSIONER’S MESSAGE: A SUMMARY AT
THE END OF MY TERM
When the Minister of National Defence tables this annual report before
Parliament, I will have completed my three-year term as
Communications Security Establishment (CSE) Commissioner. For
personal reasons I declined an offer to renew my mandate. This message
affords me an opportunity to reflect on my time as the head of
the Office of the CSE Commissioner.
Reports and recommendations
During my tenure as Commissioner I submitted to the Minister of
National Defence 19 review reports, covering almost every aspect of the
activities of Communications Security Establishment Canada (CSEC),
including those carried out under ministerial authorizations or at the
request of law enforcement and security agencies. Among the activities
reviewed were those relating to the collection of foreign signals
intelligence, the protection of electronic information and information
infrastructures considered important by the Government of Canada, and
technical and operational assistance provided by CSEC, notably to the
Canadian Security Intelligence Service (CSIS). My reports contained
12 recommendations.
The integrity of the review process and the credibility of the
Commissioner’s office depend in large part on the follow-up by the
office of CSEC’s implementation of Commissioners’ recommendations.
I am pleased to note that since 1997, fully 92 percent (127 of 138) of
Commissioners’ recommendations in 74 classified reports submitted to
the Minister have been accepted and implemented, or are being
addressed. This means, inter alia that measures to protect the privacy of
Canadians are continually being adapted and refined to reflect the everchanging
technological and operational environment in which CSEC
must work. Indeed, some Commissioners’ recommendations have
resulted in CSEC suspending certain activities to re-examine how the
activities are conducted and, in other instances, have led to important
improvements to CSEC policies and practices.
www.ocsec-bccst.gc.ca 3
Maintaining healthy relations with CSEC
It strikes me as vital that an organization under independent review and
the review body itself cultivate a relationship built on respect and good
faith. By law, CSEC must take measures to protect the privacy of
persons in Canada and Canadians, wherever in the world they may be.
By law, the Commissioner must ensure that CSEC meets this obligation.
The protection of privacy is therefore a shared objective of our two
organizations. I also consider it essential that our relationship be one of
complementarity rather than superiority. With my years of experience, I
see the office more as CSEC’s conscience than as a sword of Damocles,
and I believe that CSEC increasingly sees it this way as well.
I can say with confidence that CSEC’s Chiefs during my time as
Commissioner, John Adams initially and then John Forster, have spared
no effort to instill within CSEC a culture of respect for the law and for
the privacy of Canadians. Both men have been honest in their dealings
with me, sometimes tough, but always acting in good faith.
Transparency
From the start of my time as Commissioner, I have sought to demystify,
within the unavoidable constraints of national security and public safety,
the culture of secrecy pervading the activities of security and intelligence
agencies. I believe I have succeeded to some degree, based on the
feedback that my annual reports have been more informative, more
understandable, and have brought clarity to many of the activities of my
office and of CSEC. Much remains to be done, but I believe that the ice
has been broken and that the security and intelligence agencies
understand they can speak more openly about their work without
betraying state secrets or compromising national security. The greater
the transparency, the less sceptical and cynical the public will be.
4 ANNUAL REPORT 2012–2013
It is in this context of transparency that the Commissioner’s office
organizes periodic luncheon meetings with outside experts in the fields
of national security and privacy. This facilitates greater understanding on
their part of how we go about our work, and we in turn learn about their
perspectives and interests.
Review bodies working cooperatively
My office and the Security Intelligence Review Committee (SIRC) have
similar functions but are subject to different legislation. CSEC and CSIS
also have different legislation but their respective laws authorize
cooperation between them, whereas the legislation governing my office
and SIRC does not contain similar provisions. This means that where
CSEC and CSIS cooperate and conduct joint activities, my office and
SIRC do not have an equivalent authority to conduct joint reviews.
Nonetheless, I believe a certain amount of collaboration among review
bodies is possible under existing legislation. For example, where I have
no mandate to follow-up, I may refer questions to SIRC that concern
CSIS. Activities beyond this, such as the sharing of special operational
information of the agencies, may require the intervention and approval
of Cabinet, and possibly also legislative change. Ideally, the law should
authorize, even encourage, such cooperation.
The creation of an over-arching structure that would group existing
review bodies under a single umbrella, proposed in a past commission of
inquiry report, does not strike me as a sensible solution at this point.
Before we create an additional super-bureaucracy, with the associated
burden and costs, we may be better advised to optimize existing review
bodies and facilitate their collaboration.
www.ocsec-bccst.gc.ca 5
Another form of cooperation among security and intelligence review
bodies has occurred over the past few years. My office has provided an
introductory training course for new employees of security and
intelligence review bodies, to explain various review methods and to
contribute to the development of more rigorous review practices.
Information sharing with international partners
The growth of international cooperation in the intelligence field has
important implications for privacy. We want to ensure that the foreign
countries and organizations with which Canada exchanges information
protect privacy with as much rigour as Canada exercises. This is not an
easy task. On the one hand, nations are sovereign and do not appreciate
interference in their internal affairs, particularly not in the area of
security. On the other hand, review bodies and mechanisms vary from
country to country. In the absence of international intelligence review
standards, I believe the best guarantee of the protection of the privacy of
Canadians in information exchanged with international partners lies in
promoting and ensuring strong and independent review bodies in those
countries. We are, in fact, already doing this to some extent.
For the past 15 years, the review bodies of a dozen countries, including
members of the “Five-Eyes” countries (Canada, the United States,
the United Kingdom, Australia and New Zealand), have attended a
biennial conference. These meetings have been a source of rewarding
exchanges and new inspiration. The sharing of perspectives and best
practices is a stimulating and enriching experience. As well, countries
for which independent intelligence review is in its early stages may be
invited to attend the conferences as observers and gain knowledge
about what is happening elsewhere. Canada hosted this conference in
May 2012.
6 ANNUAL REPORT 2012–2013
On the bilateral level, my office meets with representatives of foreign
review bodies and oversight committees. This past year, for example, I
met with members of a delegation of French parliamentarians seeking
information on the nature and methodology of Canadian review bodies. I
have also met with members of the Belgian Standing Intelligence
Agencies Review Committee and the British Intelligence and Security
Committee. It is my wish that these kinds of beneficial meetings occur
more frequently.
Cyber security and cyber attacks
One can no longer talk about security without mentioning cyber threats.
Barely a week goes by without headlines dealing with the risk of
breaches of public and private computer systems. CSEC, by its very
mandate, is called on to play a leadership role in protecting electronic
information and information infrastructures of importance to the
Government of Canada. CSEC may also lend its experience to assist
Public Safety Canada in its role of helping to protect critical
infrastructure that may involve the private sector.
It is unavoidable that CSEC may unintentionally intercept the private
communications of Canadians while conducting certain information
technology (IT) security activities. For this reason, in recent years, the
Commissioner’s office has increased its vigilance in this area,
completing a number of reviews, while others have been initiated; I have
no doubt that my successor will continue this work.
Proposals for legislative changes to the National Defence Act
I started my mandate with the expectation that the legislative
amendments to the National Defence Act proposed by my predecessors
would soon be introduced in Parliament, but this has yet to happen. I
am deeply disappointed at the lack of action by the government, which
is no longer in a minority situation, to address the ambiguities identified
by my predecessors and myself. These amendments — as I have said
many times before — would improve the provisions that were hastily
www.ocsec-bccst.gc.ca 7
enacted in the aftermath of September 11, 2001. The proposals to
address the issues raised by Commissioners should not, in my opinion,
be controversial.
The independence of the Office of the CSE Commissioner
The office attained its institutional and financial independence just
over five years ago when it received its own funding approved by
Parliament, and was no longer part of the budget of the Department of
National Defence. To emphasize this independence, 2011 marked the
first time the Commissioner issued his own news release to highlight
the tabling in Parliament of his annual report by the Minister of
National Defence. Financial independence, however, does have its
drawbacks. As a result of having its own appropriation, the
Commissioner’s office, a micro-agency with a budget of roughly two
million dollars, is subject to the same accounting and reporting
requirements as all departments, each with their individual budgets,
some into the billions. To my mind, this is an example of excessive
bureaucracy that has resulted in a significant level of reporting that is
of limited value to both the office and its stakeholders.
8 ANNUAL REPORT 2012–2013
MANDATE OF THE COMMUNICATIONS SECURITY
ESTABLISHMENT COMMISSIONER
My mandate under the National Defence Act consists of three key
functions:
1. reviewing CSEC activities to determine whether they
comply with the law;
2. conducting investigations I deem necessary in response
to complaints about CSEC; and
3. informing the Minister of National Defence (who is
accountable to Parliament for CSEC) and the
Attorney General of Canada of any CSEC activities that
I believe may not be in compliance with the law.
Under the Security of Information Act, I also have a mandate to receive
information from persons who are permanently bound to secrecy if they
believe it is in the public interest to release special operational information
of CSEC. (More information on the Commissioner’s responsibilities for
public interest defence is available on the office’s website.)
www.ocsec-bccst.gc.ca 9
CSEC’s mandate
When the Anti-terrorism Act came into effect on December 24, 2001, it added
Part V.1 to the National Defence Act, and set out CSEC’s three-part mandate:
• part (a) authorizes CSEC to acquire and use foreign signals intelligence in
accordance with the Government of Canada’s intelligence priorities;
• part (b) authorizes CSEC to help protect electronic information and
information infrastructures of importance to the Government of Canada; and
• part (c) authorizes CSEC to provide technical and operational assistance
to federal law enforcement and security agencies, including helping them
obtain and understand communications collected under those agencies’
own lawful authorities.
Reviewing CSEC activities
My mandate to review CSEC activities relates to CSEC collecting
foreign signals intelligence, protecting electronic information and
information infrastructures of importance to the Government of Canada,
and assisting federal law enforcement and security agencies.
The purpose of my review mandate is:
• to determine whether the activities conducted by CSEC under
ministerial authorization are, in fact, those authorized by the
Minister of National Defence, and to verify that the conditions for
authorization required by the National Defence Act are met;
• to determine whether CSEC complies with the law and, if I
believe that it may not be complying, to report this to the
Minister of National Defence and to the Attorney General
of Canada;
• to verify that CSEC does not direct its foreign signals intelligence
and IT security activities at Canadians; and
• to promote the development and effective application of
satisfactory measures to protect the privacy of Canadians in all the
activities CSEC undertakes.
Ministerial authorizations
The National Defence Act allows the Minister of National Defence to
give CSEC written ministerial authorization to unintentionally intercept
private communications while collecting foreign signals intelligence or
10 ANNUAL REPORT 2012–2013
Protection of Canadians
CSEC is prohibited by law from directing its foreign signals intelligence
collection and IT security activities at Canadians — wherever they might be in
the world — or at any person in Canada.
while protecting computer systems of the Government of Canada from
mischief, unauthorized use or interference. In each case, the law
specifies the conditions under which a ministerial authorization can be
issued. Ministerial authorizations relate to an activity or class of
activities specified in the authorizations — that is, to a specific method
of acquiring foreign signals intelligence or of protecting computer
systems (the how); however the authorizations do not relate to a specific
individual or subject (the whom or the what). The law also directs the
CSE Commissioner to review activities carried out under a ministerial
authorization and to report annually to the Minister on the review. (More
information on ministerial authorizations as well as on the authorities for
and limitations on CSEC activities are available on the office’s website.)
Selection of activities for review
I use a risk-based and preventative approach to my reviews. I prioritize
CSEC activities where risk is greatest for potential non-compliance with
the law, including for risks to the privacy of Canadians, by considering,
among other factors:
• the controls placed by CSEC on the activity to ensure compliance
with legal, ministerial and policy requirements;
• whether the activity does, or has the potential to, involve private
communications or information about Canadians;
• whether the activity is new, has changed significantly, or has had a
lengthy period elapse since its last in-depth review;
• whether there have been significant changes to the authorities or
technologies relating to the activity;
• whether Commissioners have made findings or recommendations
relating to the activity that require follow-up; and
• issues arising in the public domain.
www.ocsec-bccst.gc.ca 11
Review methodology and criteria
My reviews of activities are ex post, that is, of activities that have
occurred in the past. However, reviews always include an examination
of CSEC’s ex ante reasons for conducting the activities — to confirm
that CSEC’s justifications for the activities are lawful and within
CSEC’s mandate. In conducting a review, my office examines CSEC’s
hard-copy and electronic information and records, as well as CSEC’s
policies and procedures and legal advice received from Justice Canada.
My employees request briefings and demonstrations of specific
activities, interview CSEC managers and employees, and observe CSEC
operators and analysts first hand to verify how they conduct their work.
My employees test information obtained against the contents of CSEC’s
systems and databases.
Each review includes an assessment of CSEC activities against a
standard set of criteria, described below, consisting of legal
requirements, ministerial requirements, and policies and procedures.
Each review may have additional criteria added, as appropriate.
Legal requirements: I expect CSEC to conduct its activities
in accordance with the National Defence Act,
the Canadian Charter of Rights and Freedoms, the Privacy Act,
the Criminal Code, and any other relevant legislation, and in
accordance with Justice Canada advice.
Ministerial requirements: I expect CSEC to conduct its
activities in accordance with ministerial direction, following all
requirements and limitations set out in a ministerial
authorization or directive.
12 ANNUAL REPORT 2012–2013
Information about Canadians: any personal information (as described in the
Privacy Act) about a Canadian, or business information about a Canadian
corporation.
Policies and procedures: I expect CSEC to have appropriate
policies and procedures in place to guide its activities and to
provide sufficient direction on legal and ministerial
requirements including the protection of the privacy of
Canadians. I expect CSEC employees to be knowledgeable
about and comply with policies and procedures. I also expect
CSEC to have an effective compliance validation framework
and activities to ensure the integrity of operational activities is
maintained, including appropriately accounting for important
decisions and information relating to compliance and the
protection of the privacy of Canadians.
My classified review reports document CSEC activities and practices
and contain findings relating to the above-noted criteria. These reports
may also disclose the nature and significance of deviations from the
criteria. In some cases, I make recommendations to the Minister that are
aimed at correcting discrepancies between CSEC activities and the
expectations established by the review criteria.
The logic model in Annex A provides a flow chart of the review
program (p. 41).
Horizontal reviews
Horizontal reviews examine processes common to all CSEC foreign
signals intelligence collection methods or to IT security activities.
For example, the processes by which CSEC:
• identifies, selects and directs its activities at foreign entities of
intelligence interest located outside Canada or at threats to
Government of Canada computer systems;
• uses, shares, reports, retains or disposes of intercepted
information; or
• takes measures to protect private communications intercepted
unintentionally and to protect information about Canadians.
www.ocsec-bccst.gc.ca 13
Conducting investigations
My mandate includes undertaking any investigation I deem necessary in
response to a written complaint — for example to determine whether
CSEC has engaged, or is engaging, in unlawful activity or is not taking
sufficient measures to protect the privacy of Canadians. (More
information on the Commissioner’s responsibilities for conducting
investigations into complaints is available on the office’s website.)
Informing the Minister
Under my mandate to keep the Minister of National Defence informed, I:
• forward the results of my reviews, in classified reports, to the
Minister; and
• submit an unclassified report to the Minister on my activities each
year, which the Minister must then table in Parliament. This is the
17th annual report.
While it is my primary duty to report any non-compliance by CSEC, a
necessary element of my mandate also includes informing the Minister
of any activities that I believe might present, or have the potential to
present, a risk of non-compliance, such as an unlawful interception of a
private communication or other invasion of the privacy of a Canadian.
A number of my reports have included recommendations aimed at
prevention. It is a goal of the Commissioner’s office to strengthen CSEC
practices that contribute to compliance and incorporate measures that
protect the privacy of Canadians.
Independence
While I submit my reports to the Minister of National Defence, who is
responsible for CSEC, my office is completely independent and receives
its own funding from Parliament. My mandate is supported by the
powers I have under the Inquiries Act, including the power of subpoena,
to ensure access to all CSEC information and employees.
14 ANNUAL REPORT 2012–2013
Annex B contains the text of the relevant sections of the
National Defence Act and the Security of Information Act relating to
my role and mandate as CSE Commissioner (p. 43). (Information on
the history of the Office of the CSE Commissioner is available on the
office’s website.)
COMMISSIONER’S OFFICE
Last year, work was completed on the expansion of the physical space of
the office, to provide sufficient accommodation for existing functions,
and for additional responsibilities resulting from the office receiving its
own appropriation from Parliament. The expansion will allow me to hire
two additional review officers to enable adequate review of CSEC,
which has experienced significant growth. I have been supported in my
work by a staff of eight, together with a number of subject-matter
experts, as required. In 2012–2013, my office’s expenditures were
$2,285,718, which is within the overall funding approved by Parliament.
Annex C provides the 2012–2013 Statement of Expenditures for the
Office of the CSE Commissioner (p. 47).
www.ocsec-bccst.gc.ca 15
CSE Commissioner
The Commissioner is an independent statutory officer and is not subject to
general direction from the Prime Minister, the Minister of National Defence or
any other ministers on how to carry out his mandate. The Commissioner assists
the Government of Canada in its control of CSEC by providing advice to the
Minister to support the Minister’s decision making and accountability for CSEC.
The Commissioner’s classified reports to the Minister and unclassified annual
report, through the Minister to Parliament and the public, state whether CSEC
has acted lawfully and the extent to which it protected the privacy of
Canadians in the conduct of its activities.
IMPACT OF COMMISSIONERS’
RECOMMENDATIONS
Since 1997, my predecessors and I have submitted to
the Minister of National Defence 74 classified review reports. In total,
the reports contained 138 recommendations. CSEC has accepted and
implemented or is working to address 92 percent (127 out of 138) of
these recommendations.
Commissioners monitor how CSEC addresses recommendations and
responds to negative findings as well as areas for follow-up identified in
past reviews. This past year, CSEC advised my office that work had
been completed in response to 14 past recommendations. Notably, CSEC
implemented recommendations by:
• providing support to the Minister of National Defence to update
certain ministerial directives;
• updating general memoranda of understanding for the exchange
of information and operational cooperation with CSIS and
Foreign Affairs and International Trade Canada;
• committing to report to the Minister of National Defence certain
information (that cannot be publicly identified for security
reasons), as a measure to protect the privacy of Canadians and to
support the Minister in his accountability for CSEC;
• promulgating a revised policy for operational assistance to law
enforcement and security agencies under part (c) of CSEC’s
mandate, including guidance on the retention and disposition of
records relating to any assistance;
• promulgating a revised procedure that defines risk and risk
mitigation for certain foreign signals intelligence collection
activities as well as adopting a risk management framework for
the planning and approval of these activities; and
16 ANNUAL REPORT 2012–2013
• launching a new secure system with other government
departments and agencies for handling and tracking requests for
and disclosures of suppressed Canadian identity information.
These actions by CSEC demonstrate that review works. The
Commissioner’s office will examine the impact of these enhancements
on compliance and privacy protection in future reviews. In addition, the
Commissioner’s office is monitoring six active recommendations that
CSEC is working to address. The Minister’s responses to two
recommendations of this year were not received by the time this report
was completed.
The office’s website provides a complete list of the 74 classified review
reports submitted to the Minister of National Defence.
OVERVIEW OF 2012–2013 FINDINGS AND
RECOMMENDATIONS
During the 2012–2013 reporting year, I submitted six reports to the
Minister of National Defence on my review of CSEC activities.
These reviews were conducted under two areas of my mandate:
• ensuring CSEC activities are in compliance with the law — as set
out in paragraph 273.63(2)(a) of the National Defence Act; and
• ensuring CSEC activities under a ministerial authorization are
authorized — as set out in subsection 273.65(8) of the
National Defence Act.
www.ocsec-bccst.gc.ca 17
The results
Each year, I provide an overall statement on my findings about the
lawfulness of CSEC activities. With the exception of one review
described below — in which I was unable to reach a definitive
conclusion about compliance or non-compliance with the law for certain
CSEC foreign signals intelligence activities — all of the activities of
CSEC reviewed this past year complied with the law.
As well, this year, I made four recommendations to promote
compliance with the law and to strengthen privacy protection. The
recommendations, which are described in the following review
summaries, relate to reinforcing policy guidance and expanding an
existing practice on privacy protection to other circumstances, as well
as providing the Federal Court of Canada with certain additional
evidence about the nature and extent of the assistance CSEC may
provide to CSIS.
Additionally, I forwarded to the Chair of SIRC, for information,
certain general points relating to CSIS that arose out of the
recommendations I made and that SIRC may wish to examine as it
deems appropriate. This demonstrates how existing review bodies
can, in the spirit of the recommendations of the commission of
inquiry led by the Honourable Justice Dennis O’Connor, collaborate
under existing legislation in the conduct of reviews of activities
involving more than one security and intelligence agency.
Two reviews this year — the review of certain foreign signals
intelligence activities and the review of CSEC assistance to CSIS
under part (c) of CSEC’s mandate and sections 12 and 21 of the
Canadian Security Intelligence Service Act (CSIS Act) — identified
the absence of certain historical information in a CSEC system and
database relating to foreign signals intelligence collection. This system
and database support the process by which CSEC determines that
entities of foreign intelligence interest are indeed foreign and located
18 ANNUAL REPORT 2012–2013
outside of Canada, as required by the National Defence Act. The
absence of the information limited my ability to assess the lawfulness
of the CSEC activities in question, and could also affect review of
other activities of CSEC. Due to the seriousness of this development,
I directed my employees to conduct an in-depth examination of the
issue to determine the implications and advise on a resolution. This
issue added to the time required to complete these two reviews. It is
encouraging that CSEC has already taken action and continues to do
so to ensure the availability of information that is required for
accountability and to demonstrate compliance with the law. The
Commissioner’s office will monitor developments.
In last year’s annual report, I expressed frustration about a reduction in
CSEC support to my office resulting in excessive delays in being able to
proceed with some reviews. CSEC has taken steps to correct this situation
and I am optimistic that these will result in a productive year ahead.
www.ocsec-bccst.gc.ca 19
HIGHLIGHTS OF THE SIX REVIEWS SUBMITTED TO
THE MINISTER IN 2012–2013
1. Review of certain foreign signals intelligence
activities
Background
I examined CSEC’s acquisition, use and exchange of information
relating to certain foreign intelligence activities that occurred a number
of years ago.
Findings and recommendations
I had no concern with respect to the majority of the CSEC activities
reviewed. However, a small number of records suggested the possibility
that some activities may have been directed at Canadians, contrary to
law. A number of CSEC records relating to these activities were unclear
or incomplete. After in-depth and lengthy review, I was unable to reach a
definitive conclusion about compliance or non-compliance with the law.
In the process of review, I found that a number of CSEC records relating
to exchanges of information with CSIS were sometimes unclear, which
led me to recommend that CSEC promulgate policy guidance respecting
how to clearly and consistently communicate with its partners about
what entity the activities are being directed at. As well, I recommended
that CSEC ensure that its foreign intelligence analysts are
knowledgeable about and follow existing policy guidance, introduced
since the period under review, respecting their responsibilities for
determining the foreign status of an entity and the justifications for
directing activities at that entity. Following the completion of my review,
I forwarded to the Chair of SIRC, for information, certain general points
relating to CSIS that arose out of the recommendations I made.
20 ANNUAL REPORT 2012–2013
At my direction, my office has started a review of other more recent
foreign intelligence activities that includes follow-up on matters raised
in this review, and will seek to determine whether developments in
CSEC policies and procedures since the period under review have led to
an improvement in the clarity of language in CSEC information
exchanges with CSIS.
Conclusion
As of the end of the 2012–2013 reporting period, March 31, 2013, I am
awaiting the Minister’s response to the two recommendations. The
responses will be noted in next year’s annual report.
2. CSEC assistance to CSIS under part (c) of
CSEC’s mandate and sections 12 and 21 of
the CSIS Act
Background
In 2007, CSIS sought from the Federal Court of Canada a warrant to
assist in the investigation of threat-related activities that, it was believed,
individuals would engage in while travelling outside of Canada. The
Honourable Justice Edmond Blanchard held that the Court lacked the
jurisdiction to authorize intrusive investigative activities by CSIS
employees outside of Canada (Re CSIS Act, 2008 FC 301).
In 2009, in X(Re), 2009 FC 1058, the Court was asked to revisit the
question of jurisdiction and to distinguish Justice Blanchard’s reasoning
on the basis of a more complete description of the facts relating to the
activities necessary to permit the interception and a different legal
argument concerning how the method of interception was relevant to the
jurisdiction of the Court. The Honourable Justice Richard Mosley was
satisfied that there were sufficient factual and legal grounds to
distinguish the application from that which was before Justice Blanchard
and he issued the first warrant permitting CSIS to intercept the
www.ocsec-bccst.gc.ca 21
communications of Canadians located outside Canada using the
interception capabilities of CSEC. The application was supported by the
affidavit evidence of an employee of CSEC that described the agency’s
interception capabilities and how communications would be intercepted
from within Canada.
Paragraph 273.64(1)(c) of the National Defence Act authorizes CSEC
to provide technical and operational assistance to federal law
enforcement and security agencies in the performance of their lawful
duties. This assistance includes CSEC supporting CSIS with the
interception of Canadians’ communications if CSIS has a judicially
authorized warrant issued under section 21 of the CSIS Act. Pursuant
to subsection 273.64(3) of the National Defence Act, CSEC is subject
to any limitations imposed by law on the agency to which it is
providing assistance — for example, any conditions imposed by a
judge in a warrant. When CSEC provides operational assistance to
CSIS, CSEC becomes the agent of CSIS. CSIS is de jure the owner of
the information and the intercepted communications relating to the
subject of the warrant.
In X(Re), Justice Mosley stated:
Canada has given CSE[C] a mandate to collect foreign
intelligence including information from communications and
information technology systems and networks abroad. It [CSEC]
is restricted as a matter of legislative policy from directing its
activities against Canadians or at any person within Canada, but
it is not constrained from providing assistance to security and
law enforcement agencies acting under lawful authority such as
a judicial warrant. CSIS is authorized to collect threat-related
information about Canadian persons and others and, as
discussed above, is not subject to territorial limitation.
Where the statutory prerequisites of a warrant are met, including
prior judicial review, reasonable grounds and particularization of
the targets, the collection of the information by CSIS with
22 ANNUAL REPORT 2012–2013
CSE[C] assistance, as proposed, falls within the legislative
scheme approved by Parliament and does not offend the Charter.
(X(Re) at paragraphs 75-76)
The objectives of my review were to acquire detailed knowledge of and
to document CSEC’s assistance to CSIS and to assess whether CSEC
activities complied with the law, including with the terms of the warrants
issued to CSIS, and any privacy protections found therein. CSEC’s
assistance to CSIS under the warrants may include use of Canadian
identity information and the interception of the communications of
Canadians. CSEC’s collection, as defined in the warrant, may impact on
the privacy of Canadians.
I examined CSEC assistance to CSIS in support of a number of the first
warrants of this kind relating to counter-terrorism. Specifically, as part
of assessing compliance with the law and privacy protection, for the
warrants examined, I verified that:
• CSEC had a copy of the warrant and had clear and sufficient
information about the assistance sought by CSIS;
• the communications targeted by CSEC for CSIS were only those
communications referred to in the warrants;
• the communications were not targeted before the warrants came
into force and were no longer targeted once the warrants expired;
• CSEC targeted the subjects of the warrants only while they were
believed to be outside Canada;
• CSEC targeted only the types of communications and information
that were authorized in the warrants to be intercepted or obtained; and
• CSEC complied with any other limitations imposed by law on
CSIS, for example, any conditions in the warrants.
www.ocsec-bccst.gc.ca 23
Findings and recommendations
During the period under review, CSEC responded appropriately to two
related privacy incidents it identified involving the unintentional release
of Canadian identity information of some of the subjects of the warrants.
In fact, CSEC has already clarified appropriate internal processes for the
conduct of certain activities and reminded its employees of their
information stewardship responsibilities. This should help prevent
similar incidents.
I questioned CSEC about another incident involving the interception of
communications for CSIS for a small number of days after a particular
warrant had expired. I accepted CSEC’s explanation for this incident,
which was that it resulted from unintentional human error. CSEC also
confirmed that these intercepted communications were destroyed and
that CSIS did not receive them. I am satisfied that CSEC documented
this incident and reminded its employees of proper process to help
prevent similar errors.
During the period under review, operational policies and procedures of
general application to CSEC’s assistance in support of these warrants
and related activities were in place and provided direction to CSEC
employees respecting compliance with the law and the protection of the
privacy of Canadians. Subsequent to the period under review, CSEC
issued specific guidance for the conduct of this assistance and activities.
Generally, CSEC employees interviewed were well aware of the policies
and procedures and demonstrated knowledge of their respective
responsibilities. Interviews with CSEC managers, team leaders and other
employees showed that managers routinely monitored the assistance and
related activities for compliance with governing authorities.
In addition to a detailed examination of CSEC activities under the
warrants, I considered and consulted my independent counsel, who is
also a privacy law expert, on general questions of law relating to this
subject. I made two recommendations to the Minister to help ensure
24 ANNUAL REPORT 2012–2013
CSEC assistance to CSIS is consistent with the authorities and
limitations of the warrants, and to enhance the measures in place to
protect the privacy of Canadians. Specifically, I recommended that:
1. CSEC discuss with CSIS the expansion of an existing
practice to protect privacy to other circumstances; and
2. CSEC advise CSIS to provide the Federal Court of Canada
with certain additional evidence about the nature and extent
of the assistance CSEC may provide to CSIS.
I found that CSEC practices relating to its assistance to CSIS and related
activities were consistent with the general requirements in the
“Accountability Framework” and “Privacy of Canadians” ministerial
directives to CSEC, specifically to comply with the law and to take
measures to ensure that information was lawfully obtained and handled
in a manner consistent with the Canadian Charter of Rights and
Freedoms and the Privacy Act.
Conclusion
While I made two recommendations to the Minister to help ensure
CSEC assistance to CSIS is consistent with the law and to enhance
privacy protection, I concluded that CSEC conducted its activities in
accordance with the law and ministerial direction, and in a manner that
included measures to protect the privacy of Canadians. The Minister
accepted and CSEC has addressed the recommendations.
Following the completion of my review, I forwarded to the SIRC Chair,
for information, certain general points relating to CSIS that arose out of
the two recommendations I made and that SIRC may wish to examine as
it deems appropriate. Subsequently, CSEC advised me that it raised the
recommendations — which relate to matters that are controlled by CSIS,
or require agreement from CSIS — with CSIS.
www.ocsec-bccst.gc.ca 25
3. Review of CSEC IT security activities not
conducted under a ministerial authorization
Background
The National Defence Act mandates CSEC to provide advice, guidance
and services to Government of Canada departments and agencies as well
as to other owners of IT systems to help ensure the protection of
electronic information and of information infrastructures of importance
to the Government of Canada (paragraph 273.64(1)(b)).
During the period under review, the Government of Canada reorganized
its cyber defence efforts. CSEC became the primary point of contact for
cyber incidents faced by Government of Canada departments and
agencies. Public Safety Canada is the primary point of contact for cyber
incidents affecting non-Government of Canada critical infrastructure
sectors. A further distinction is that CSEC is responsible for
sophisticated cyber threats, such as those stemming from foreign state
actors, while Public Safety Canada responds to less sophisticated threats,
for example, those relating to known vulnerabilities in commercially
available computer software.
I examined certain IT security activities conducted by CSEC to detect,
analyse and mitigate cyber threats. CSEC does not undertake these
activities under a ministerial authorization as it does not intercept
communications. Rather, CSEC uses information acquired by the system
owners — under their Criminal Code authorities and, for Government of
Canada system owners, also under their Financial Administration Act
authorities — and disclosed to CSEC. These authorities permit the
interception of private communications by authorized persons when the
interception is reasonably necessary to protect computer systems from
mischief and unauthorized use.
26 ANNUAL REPORT 2012–2013
The objectives of my review were to assess whether CSEC complied
with the law and the extent to which CSEC protected the privacy of
Canadians in carrying out the activities. In addition to acquiring detailed
knowledge about the activities, I examined:
• the legislative and policy framework for the activities;
• CSEC organizational changes;
• technologies, databases and systems used for the activities;
• the amount and treatment of private communications and
Canadian identity information acquired by the activities as well as
a sample of those private communications and Canadian identity
information used by CSEC; and
• agreements in place with Government of Canada departments and
agencies.
I examined activities conducted between April 1, 2009, and
March 31, 2011, including a more detailed examination of activities
and associated reporting for a number of the departments and agencies
assisted by CSEC during that time. Additionally, records were examined
to verify that system owner information retained by CSEC was done so
under an appropriate legal authority. My review also included an
examination of CSEC’s responses to areas for follow-up identified in a
2009 study by former Commissioner Gonthier.
www.ocsec-bccst.gc.ca 27
Private Communication: “any oral communication, or any
telecommunication, that is made by an originator who is in Canada or is
intended by the originator to be received by a person who is in Canada
and that is made under circumstances in which it is reasonable for the
originator to expect that it will not be intercepted by any person other than
the person intended by the originator to receive it, and includes any radiobased
telephone communication that is treated electronically or otherwise
for the purpose of preventing intelligible reception by any person other than
the person intended by the originator to receive it” (section 183 of the
Criminal Code).
Findings
I found that CSEC conducted its activities in accordance with the law
and ministerial direction and I had no questions about the reporting and
retained information examined.
I suggested that CSEC could enhanse its ability to demonstrate that it
has measures to protect the privacy of Canadians by recording the return
or deletion of irrelevant information acquired by a system owner and
shared with CSEC. Notwithstanding this suggestion, I found that these
IT security activities contained satisfactory measures to protect the
privacy of Canadians.
During the period under review, operational policies and procedures
of general application were in place to provide general direction
respecting compliance with the law and the protection of privacy of
Canadians. However, there was no specific operational guidance in
place for these activities. It is a positive development that, subsequent
to the period under review, CSEC issued a specific policy for the
conduct of these activities.
Some CSEC employees who were interviewed were unable to cite
certain policies, but were aware of the rules governing their activities. In
addition, CSEC managers who were interviewed routinely and closely
monitored the activities to ensure that their employees complied with
governing authorities. Based on the records examined, the answers
provided to questions during interviews and CSEC’s policy compliance
validation activities, the activities reviewed complied with relevant
policies and procedures.
Conclusion
My review report contained no recommendations. However, regular indepth
reviews will continue to be conducted of IT security activities not
conducted under a ministerial authorization to verify compliance with
the law, and the extent to which CSEC protects the privacy of Canadians
in carrying out the activities.
28 ANNUAL REPORT 2012–2013
4. Review of CSEC’s 2010–2011 and 2011–2012
foreign signals intelligence ministerial
authorizations
Background
Subsection 273.65(8) of the National Defence Act requires the
Commissioner to review CSEC activities carried out under ministerial
authorizations “to ensure they are authorized and report annually to the
Minister [of National Defence] on the review.” A regular combined
review of the foreign signals intelligence ministerial authorizations is
one way that Commissioners fulfill this part of their mandate. This
year’s review covered two fiscal years: I examined the five foreign
signals intelligence ministerial authorizations in effect from
December 1, 2010, to November 30, 2011, relating to five activities
or classes of activities, as well as the six foreign signals intelligence
ministerial authorizations in effect from December 1, 2011, to
November 30, 2012, relating to six activities or classes of activities.
The purpose of this review was to:
1. ensure that the activities conducted under the ministerial
authorizations were authorized and that the Minister
was satisfied that the four conditions for authorization
required by paragraphs 273.65(2)(a) to (d) of the
National Defence Act were met;
2. identify any significant changes to the ministerial
authorization documents themselves or to CSEC’s
activities described in the ministerial authorizations;
3. assess the impact, if any, of these changes on the risk of
non-compliance and on the risk to privacy, and, as a result,
identify any subjects requiring follow-up review; and
www.ocsec-bccst.gc.ca 29
4. examine, for compliance with the law, a sample of my
choosing of any resulting private communications
unintentionally intercepted by CSEC while conducting
foreign signals intelligence collection activities under the
ministerial authorizations.
Findings
I found that the activities conducted under the 2010–2011 and the
2011–2012 foreign signals intelligence ministerial authorizations were
authorized.
For each of the 11 foreign signals intelligence collection activities, I
examined certain key information relating to interception and to the
privacy of Canadians, to permit comparison of the activities and to
identify any significant changes or trends over time. I found no
significant changes to the scope or operation of any of the activities to
require a follow-up in-depth review of specific activities. The
2010–2011 and 2011–2012 foreign signals intelligence ministerial
authorizations did not contain any significant changes from the previous
year and CSEC did not make any significant changes to the technologies
used for these activities.
Changes made by CSEC in 2010–2011 and in 2011–2012 to its
operational policies for foreign signals intelligence collection activities
clarified authorities and practices and enhanced the protection of the
privacy of Canadians.
30 ANNUAL REPORT 2012–2013
Private communications
The Commissioner monitors the number of private communications
unintentionally intercepted and verifies how CSEC treated and used these
communications. The Commissioner is able to review all of the private
communications that CSEC uses and retains.
I also reviewed a sample of unintentionally intercepted private
communications that CSEC recognized and retained, and that CSEC
did not use in its reports. I found that in both 2010–2011 and
2011–2012, CSEC retained only those private communications
essential to international affairs, defence or security, as required by
paragraph 273.65(2)(d) of the National Defence Act. Again this year,
the proportion of these communications remained very small and
CSEC destroyed most of them. In addition, a new tool is being
developed that will assist CSEC analysts in identifying intercepted
communications that might be private communications. The
Commissioner’s office will examine the impact of this new tool on
compliance and privacy protection in a future review.
In last year’s report, I indicated that certain information about
intercepted communications involving CSEC’s international partners
was not readily available. It is positive that, while not a requirement in
the ministerial authorizations, CSEC has recognized the importance of
reporting this information to the Minister. The Commissioner’s office
will monitor developments.
It is also a positive development that, while not a requirement of a
particular ministerial authorization, CSEC has agreed to report to the
Minister certain information relating to privacy. This measure to protect
the privacy of Canadians will support the Minister in his accountability
for CSEC. It also satisfies an outstanding recommendation I made in
2010–2011. The Minister had initially supported CSEC’s rejection of
this recommendation. However, after further examination, I maintained
my recommendation and so informed the Minister. CSEC reconsidered
its initial position and advised the Minister that it would undertake to
implement the recommendation.
Conclusion
I made no recommendations.
www.ocsec-bccst.gc.ca 31
5. Annual review of a sample of disclosures
of Canadian identity information to
Government of Canada clients
Background
Canadian identity information may be included in CSEC’s foreign
signals intelligence reports if it is required to understand or use the
foreign intelligence. However, any information that identifies a
Canadian must be suppressed in the reports — that is, replaced by a
generic reference such as “a named Canadian.” When receiving a
subsequent request for disclosure of the details of the suppressed
information, CSEC must verify that the requesting client has both the
authority and operational justification for obtaining the Canadian
identity information. Only then may CSEC provide that information.
My officials selected and examined a sample of approximately 20 percent
of the total number of disclosures by CSEC to Government of Canada
agencies or departments during the period October 2011 to June 2012.
The sample included disclosures made to all of the departments that had
requested Canadian identity information during the period under review.
My officials examined: the requests documenting the clients’ authority and
justification for obtaining the Canadian identity information; associated
CSEC foreign signals intelligence reports; and the actual disclosures of
Canadian identity information.
Findings
Based on my assessment of the information reviewed and the interviews
conducted, CSEC conducted its disclosure activities in compliance with
the law. Operational policies and procedures are in place and provide
sufficient direction to CSEC employees respecting the protection of the
privacy of Canadians. CSEC employees were knowledgeable about, and
acted in accordance with, the policies and procedures.
32 ANNUAL REPORT 2012–2013
In addition, in response to a recommendation made by former
Commissioner Cory in his 2010 report, in 2012, CSEC started using a
new on-line secure system to process requests for and disclosures of
Canadian identity information. CSEC provided my employees with a
demonstration of the system, which is currently used with CSEC’s
principal clients. CSEC intends to extend its use to other partners
starting in the coming fiscal year. According to CSEC, the system has
improved the timeliness of responses and resulted in better service to
its clients. It enhances accountability by improving the tracking and
retrieval of requests for and disclosures of Canadian identity
information and it contains a number of features to help ensure the
protection of the privacy of Canadians.
Conclusion
My review did not result in any recommendations. CSEC conducted its
disclosure activities in a thorough manner; all of the requests reviewed
were authorized, justified and well documented.
Should there be an instance of non-compliance in CSEC disclosure of
Canadian identity information, the potential impact on the privacy of
Canadians could be significant. For this reason, annual reviews of a
sample of disclosures will continue. Next year’s sample will include a
detailed examination of the use of the new system, as well as a sample
of disclosures of Canadian identity information to CSEC’s
international partners.
www.ocsec-bccst.gc.ca 33
6. Annual review of incidents and procedural
errors identified by CSEC in 2012 that
affected or had the potential to affect the
privacy of Canadians and measures taken
by CSEC to address them
Background
CSEC maintains a central file describing any operational incidents
that did or could have an impact on the privacy of Canadians. CSEC
records in this file any incidents it identifies that put at risk the
privacy of a Canadian in a manner that runs counter to or is not
provided for in its operational policies. CSEC policy requires its
foreign signals intelligence and IT security employees to report and
document privacy incidents in order to demonstrate compliance with
legal requirements and CSEC policies, and to prevent further
incidents. Incidents could include, for example, the inadvertent
inclusion of Canadian identity information in a report, or mistakenly
sharing a report with the wrong recipient.
Horizontal and in-depth reviews of CSEC activities include an
examination of any privacy incidents and procedural errors relating to
the subject under review and, where appropriate, are reported in the
summaries of those reviews. My employees are vigilant during reviews
about identifying these types of incidents, so we can confirm whether
CSEC also identified and addressed them.
The objectives of this annual review are to: acquire knowledge of the
incidents and procedural errors in 2012 and associated actions; and
inform development of the Commissioner’s work plan, by determining if
there are any systemic issues or issues about compliance with the law or
the protection of the privacy of Canadians that should be the subject of
follow-up review. The review of these privacy incidents and procedural
errors also assists in evaluating how CSEC monitors and validates that
its activities adhere to its operational policies.
34 ANNUAL REPORT 2012–2013
Findings
I examined all foreign signals intelligence and IT security privacy
incidents and procedural errors recorded by CSEC in calendar year
2012, and the subsequent actions taken by CSEC to correct them.
There was a very small number of procedural errors and I agreed with
CSEC’s assessment that these occurrences were minor and did not
amount to privacy incidents.
Based my review of CSEC’s records as well as independent verification
by my office of reports in a CSEC database, I am satisfied that CSEC
took appropriate corrective actions in response to the small number of
privacy incidents it recorded.
I was particularly pleased with certain remedial actions taken by CSEC
to prevent future similar privacy incidents. For example, CSEC is now
conducting a monthly review of its central file to ensure that all required
remedial activities have been completed or are being pursued. As well,
CSEC reminded its employees of the requirement to report an incident
immediately. CSEC also established a process to send reminders to its
employees to make sure that certain information in its systems is up to
date and compliant with existing authorities.
Conclusion
My review of the privacy incidents and procedural errors identified by
CSEC in 2012 did not result in any recommendations. My review did
not reveal any systemic deficiencies or issues that require follow-up
review. Annual reviews will continue to be conducted of the privacy
incidents and procedural errors identified by CSEC.
www.ocsec-bccst.gc.ca 35
COMPLAINTS ABOUT CSEC ACTIVITIES
In 2012–2013, my office was contacted by a number of individuals who
were seeking information or expressing concern about CSEC activities.
However, the inquiries were assessed as outside of the Commissioner’s
mandate or as lacking credibility. No complaints about CSEC activities
warranted investigation by the Commissioner. (More information on the
complaints process is available on the office’s website.)
DUTY UNDER THE SECURITY OF INFORMATION ACT
I have a duty under the Security of Information Act to receive
information from persons who are permanently bound to secrecy seeking
to defend the release of special operational information — such as
certain information relating to CSEC activities — on the grounds that it
is in the public interest. No such matters were reported to me in
2012–2013. (More information on the Commissioner’s responsibilities
under the Security of Information Act is available on the office’s website.)
ACTIVITIES OF THE COMMISSIONER’S OFFICE
In last year’s annual report, in an attempt to clarify misconceptions and to
better inform the public about CSEC’s and my mandates and activities, I
provided more detail than ever before on CSEC’s activities, what
Commissioners review, how reviews are carried out, and the impact of
reviews. Work is ongoing to improve the website, which contains detailed
information on the activities of the Commissioner’s office. Of course, the
Commissioner provides the Minister of National Defence with additional
classified information — which cannot be disclosed in this public report
or on the website — so that the Minister can be fully aware of the
Commissioner’s review of CSEC activities. Last year, employees of my
office and I also met with a number of academics and other professionals
interested in review of security and intelligence agencies to talk about my
role and work and their views on effective review. In addition, my office
made presentations to five cohorts of new CSEC employees attending
36 ANNUAL REPORT 2012–2013
CSEC’s foundational learning course, which is a requirement for every
new employee. These presentations provide an introduction to what it is I
and my office do, how we go about our work, and how it may affect them
as CSEC employees.
During the past year, CSEC provided a number of detailed briefings to
employees of my office as part of the conduct of reviews. CSEC also
provided an overview briefing on recent and important operational,
policy and organizational changes and issues. I attended an interactive
presentation that demonstrated CSEC’s foreign signals intelligence
capabilities and response to an incident. The event was very effective in
demonstrating how the many different parts of CSEC, many personnel
and many different government departments and agencies cooperate, in
response to a top Government of Canada priority. I was struck by the
knowledge and professionalism of CSEC employees and their evident
dedication to their respective responsibilities. In addition, my employees
attended CSEC training on foreign signals intelligence activities and on
communications security.
Following a conference on security and privacy at the Université de
Montréal in October 2011, my office’s Executive Director wrote a
chapter in a book, Circulation internationale de l’information et sécurité,
published in late 2012. The chapter was based on his participation in
one of the conference panels, describing distinctions between national
security and public safety, the role and impact of review, and the
integration of technology and privacy protection in national security.
At the beginning of March, the Executive Director delivered a luncheon
address at the 15th annual conference organized by the Centre for Military
and Strategic Studies at the University of Calgary, with the theme Global
Security: Past, Present and Future. His address dealt with the role of
intelligence review, focussing on four questions: why is review
important; how effective can it be and what makes for effective review;
what is the view of the intelligence agencies themselves concerning
review; and what of the future and some challenges.
www.ocsec-bccst.gc.ca 37
WORK PLAN — REVIEWS UNDER WAY AND
PLANNED
Commissioners use a risk-based and preventative approach to reviews.
A three-year work plan is updated twice a year. Developing the work
plan draws on many sources. Two important ones are regular briefings
from CSEC on new activities and changes to existing activities, and
the Chief of CSEC’s classified annual reports to the Minister of
National Defence on CSEC’s priorities and legal, policy and management
issues of significance.
The results of several reviews currently under way are expected to be
reported to the Minister of National Defence in the coming year and
included in my successor’s 2013–2014 annual report. The subjects of
these reviews include: CSEC counter-terrorism activities; a follow-up to
this year’s review of certain foreign signals intelligence activities;
CSEC’s policy compliance validation framework and activities; and a
review of particular signals intelligence collection activities conducted
under ministerial authorizations.
In addition, before the end of my term as Commissioner, I will report to
the Minister on my ongoing review of CSEC’s foreign signals intelligence
sharing with its closest international partners — the United States’
National Security Agency, the United Kingdom’s Government
Communications Headquarters, the Australian Defence Signals
Directorate and the New Zealand Government Communications Security
Bureau. CSEC and its international partners respect each other’s laws by
pledging not to direct collection activities at one another’s citizens’
communications. CSEC is prohibited from requesting an international
partner to undertake activities that CSEC itself is legally prohibited from
conducting. However, CSEC sharing information with its international
partners could affect a Canadian; it is in the international sharing of
personal information where the risks are higher than for sharing involving
domestic partners. My 2011–2012 annual report contained an update on
38 ANNUAL REPORT 2012–2013
this review. This year, I continued my in-depth review and consulted my
independent counsel on general questions of law relating to this subject.
Some of the reviews planned for 2013–2014, which may carry over to
the next year, are: a review of CSEC IT security activities conducted
under ministerial authorizations in support of Government of Canada
efforts to address cyber threats; a follow-up review of CSEC activities
carried out under a ministerial directive for the purposes of identifying
new foreign entities believed to be of foreign intelligence interest; and a
follow-up review of CSEC efforts to address numerous gaps related to
CSEC’s dealings with the Canadian Armed Forces, as identified by
CSEC internal evaluators. In addition, the office plans to continue the
annual reviews of: (1) foreign signals intelligence ministerial
authorizations; (2) CSEC disclosures of Canadian identity information;
and (3) privacy incidents and procedural errors identified by CSEC and
the measures subsequently taken by CSEC to address them. The office
will work with my successor to put in place a comprehensive work plan
soon after his or her appointment.
IN CLOSING
The position of Commissioner is a legislated part of how the government
decided, in enacting the National Defence Act, to strike a balance
between — on the one hand — the Government of Canada’s need for
foreign signals intelligence and IT security services, and — on the other
hand — the need to protect the privacy of Canadians.
The role of the Commissioner and the Commissioner’s office is to be
sceptical and critical of CSEC activities and it is natural that our
respective organizations may sometimes disagree. However, we have a
shared objective with CSEC, which is to ensure CSEC complies with the
law and protects the privacy of Canadians in the conduct of its activities.
www.ocsec-bccst.gc.ca 39
The fulfillment of the Commissioner’s mandate rests on the integrity of
the office, its ability to effect change at CSEC and inspire confidence in
the public that CSEC is under rigorous review.
Finally, I thank the staff of my office, whose dedication, enthusiasm,
teamwork, rigour and sense of duty have been nothing short of
remarkable these past three years. I can say with pride and confidence
that CSEC is truly being watched.
40 ANNUAL REPORT 2012–2013
ANNEX A: COMMISSIONER’S OFFICE REVIEW PROGRAM —
LOGIC MODEL
www.ocsec-bccst.gc.ca 41
Plan, conduct and report on reviews
and studies of CSEC’s activities
Reports to Minister of
National Defence
and CSEC
- assurance
- information
- findings
- recommendations
CSEC accepts and
implements advice and
recommendations
Government and public confidence in the
lawfulness of CSEC’s activities
Notifications to Minister
of National Defence and
Attorney General of any
CSEC activity that may
not be in compliance with
the law
Annual reports to
Minister of National
Defence for tabling
in Parliament:
- assurance
- information
Support for
Minister of National
Defence in his/her
accountability for
CSEC
CSEC activities based
on sound policies,
procedures and
practices
Low CSEC susceptibility to, and
incidence of, lack of compliance
with the law; high level of
safeguarding privacy
OUTCOMES OUTPUTS ACTIVITIES
(Final) (Intermediate) (Immediate)

ANNEX B: EXCERPTS FROM THE NATIONAL DEFENCE ACT
AND THE SECURITY OF INFORMATION ACT RELATED TO THE
COMMISSIONER’S MANDATE
National Defence Act — Part V.1
Appointment of Commissioner
273.63 (1) The Governor in Council may appoint a supernumerary judge or a retired
judge of a superior court as Commissioner of the Communications Security
Establishment to hold office, during good behaviour, for a term of not more
than five years.
Duties
(2) The duties of the Commissioner are
(a) to review the activities of the Establishment to ensure that they are in
compliance with the law;
(b) in response to a complaint, to undertake any investigation that the
Commissioner considers necessary; and
(c) to inform the Minister and the Attorney General of Canada of any
activity of the Establishment that the Commissioner believes may not be
in compliance with the law.
Annual report
(3) The Commissioner shall, within 90 days after the end of each fiscal year,
submit an annual report to the Minister on the Commissioner’s activities and
findings, and the Minister shall cause a copy of the report to be laid before
each House of Parliament on any of the first 15 days on which that House is
sitting after the Minister receives the report.
ANNUAL REPORT 2012–2013 • www.ocsec-bccst.gc.ca 43
Powers of investigation
(4) In carrying out his or her duties, the Commissioner has all the powers of a
commissioner under Part II of the Inquiries Act.
Employment of legal counsel, advisors, etc.
(5) The Commissioner may engage the services of such legal counsel, technical
advisers and assistants as the Commissioner considers necessary for the
proper performance of his or her duties and, with the approval of the
Treasury Board, may fix and pay their remuneration and expenses.
Directions
(6) The Commissioner shall carry out such duties and functions as are assigned
to the Commissioner by this Part or any other Act of Parliament, and may
carry out or engage in such other related assignments or activities as may be
authorized by the Governor in Council.
[...]
Review of authorizations
273.65 (8) The Commissioner of the Communications Security Establishment shall review
activities carried out under an authorization issued under this section to ensure
that they are authorized and report annually to the Minister on the review.
44 ANNUAL REPORT 2012–2013
Security of Information Act
Public interest defence
15. (1) No person is guilty of an offence under section 13 or 14 if the person establishes
that he or she acted in the public interest. [...]
Prior disclosure to authorities necessary
(5) A judge or court may decide whether the public interest in the disclosure
outweighs the public interest in non-disclosure only if the person has complied
with the following: [...]
(b) the person has, if he or she has not received a response from the deputy head
or the Deputy Attorney General of Canada, as the case may be, within a
reasonable time, brought his or her concern to, and provided all relevant
information in the person’s possession to, [...]
(ii) the Communications Security Establishment Commissioner, if the
person’s concern relates to an alleged offence that has been, is being or
is about to be committed by a member of the Communications Security
Establishment, in the purported performance of that person’s duties and
functions of service for, or on behalf of, the Communications Security
Establishment, and he or she has not received a response from the
Communications Security Establishment Commissioner within a
reasonable time.
www.ocsec-bccst.gc.ca 45
46 ANNUAL REPORT 2012–2013 • www.ocsec-bccst.gc.ca
ANNEX C: 2012–2013 STATEMENT OF EXPENDITURES
Standard Object Summary ($)
Salaries and Benefits 907,567
Transportation and Telecommunications 15,412
Information 59,131
Professional and Special Services 305,572
Rentals 217,803
Repairs and Maintenance 1,515
Material and Supplies 10,383
Machinery and Equipment 16,985
Capital Assets, including Leasehold Improvements 751,350
Total 2,285,718