1996 November Report of the Auditor General of Canada
Chapter 27—The Canadian Intelligence Community—Control and Accountability
Estimates for Parliament do not provide specific details on all aspects of the intelligence community
Opportunities exist to further strengthen ministerial control and accountability for foreign intelligence functions
Responsible Auditor: Henno Moenting
27.2 Since the end of the Cold War, the scope and focus of intelligence activities have changed significantly. In addition to continuing needs for information on long-standing concerns, such as terrorism, the government now requires intelligence on many new issues; for example, the proliferation of weapons of mass destruction, transnational organized crime and economic espionage.
27.3 To obtain intelligence, the government relies on agencies that need the authority to use intrusive techniques and that must do much of their work in secret. Control and accountability arrangements, therefore, are critical from two perspectives: to balance the need to protect and promote national interests with the need to safeguard individual rights and freedoms, and to respond to growing expectations for all government organizations to be efficient and effective.
27.4 Our audit provides an overview of the Canadian intelligence community - those agencies and units that collect, analyze and report security intelligence and foreign intelligence and those that co-ordinate or review their operations. In addition, it informs Parliament about the nature, extent and functioning of control and accountability arrangements in the intelligence community.
27.5 Substantial arrangements for control and accountability are in place, and progress has been made in recent years in strengthening them. Although Parliament's role is limited by the fact that the activities and performance of intelligence agencies cannot be subject to the same degree of public scrutiny and debate as other government organizations, several bodies external to government do provide scrutiny and review. The government provides direction to the community by setting priorities and co-ordinates its activities through the Privy Council Office. Procedures exist to provide for ministerial control and accountability in significant and sensitive areas of activity, and both the Canadian Security Intelligence Service and the Communications Security Establishment have plans, policies and procedures to guide operational activities. Finally, the Department of Justice plays an important legal control role.
27.6 There are opportunities, however, to improve control and accountability arrangements. Action in such areas, for instance, as strengthening leadership and co-ordination, measuring and monitoring community-wide performance, establishing broad ministerial directions and internal reviews within the departments of National Defence and Foreign Affairs and International Trade, and improving performance measurement in the Canadian Security Intelligence Service and the Communications Security Establishment will help the community respond to challenges arising from the changing intelligence environment, and to growing public expectations for improved control and accountability of all government institutions.
Intelligence is an important function of government27.7 Canada is a democratic, peaceful and prosperous country, deeply engaged in the international community. It is an active peacekeeper, an important member of many multilateral institutions, a global trader and a refuge for many from other, less fortunate, countries. Canada's intelligence community operates within this broad context by collecting, analyzing, assessing and disseminating to government decision makers information and advice that help to protect and promote Canadian interests.
27.8 Users of the intelligence community's product include ministers as well as senior officials of most departments and agencies - but particularly those concerned with foreign policy, trade and economic policy, defence policy and public safety. Although the end of the Cold War has altered the range and focus of the intelligence community's efforts, it has not diminished the need for the government to collect, assess and disseminate intelligence - as the hypothetical examples in Exhibit 27.1 suggest.
27.9 The term "intelligence", as we use it in this chapter, refers to information needed by the government that, in whole or in part, is not available from conventional sources. The distinguishing characteristic of intelligence, therefore, is that it requires having access to information collected by "secret", or clandestine, means. Information gathered in this way can be used in either a raw or an assessed form. When assessed, such information is frequently interpreted in combination with other information available from conventional sources; for example, the print media. Both raw intelligence, and assessed intelligence that is objective and policy-neutral, can contribute to informed policy analysis and decision making by the government.
Secrecy is a valuable resource but involves some risks27.10 To obtain information that others would deny or keep secret, the government must rely on intelligence agencies that need capabilities and authorities not available to other federal departments. Intelligence agencies not only must use intrusive techniques, such as intercepting communications, but also must have the legal power to use them. Furthermore, the agencies have to do much of their collection and analysis in secret. Secrecy is an invaluable resource for intelligence agencies, for if their sources and methods become known, the targets of their investigations will react to protect their secrets, and access to the intelligence may be lost.
27.11 The need for secrecy means that the activities and performance of intelligence agencies cannot be as transparent as those of other government bodies, or be subject to the same degree of public scrutiny and debate. For example, publishing information on the allocation of resources or the successes of intelligence agencies would risk revealing their capabilities and targets and, by doing so, might seriously compromise their effectiveness.
27.12 However necessary it may be, secrecy creates a scenario for the potential or perceived abuse of intrusive powers by intelligence agencies as well as the perception that inadequate attention may be given to obtaining value for the money spent. To obtain the benefits and avoid the risks, control and accountability arrangements must balance, and be seen to balance, the need to protect and promote national interests with the need to safeguard individual rights and freedoms. At the same time, those arrangements need to ensure an appropriate focus on achieving desired results.
Different categories of intelligence27.13 Although intelligence can be categorized in different ways, we deal with two standard categories in this chapter:
- Security intelligence is information about activities that could threaten Canada's security, such as espionage, sabotage, foreign-influenced activities or politically motivated violence. It is collected to help maintain public safety and protect national security.
- Foreign intelligence is information about the capabilities, activities or intentions of foreign states, organizations or individuals. It is collected to help promote as well as to safeguard national interests - including political, economic, military, scientific, social and security interests.
Canada's intelligence community comprises a number of organizations27.15 The main components of Canada's intelligence community are shown in Exhibit 27.2 and described briefly below. For the purposes of this chapter, we defined Canada's intelligence community as including the units of several departments, the agencies and other organizations that share the day-to-day responsibilities for collecting, analyzing and disseminating security or foreign intelligence, and those organizations that co-ordinate or review the operations of intelligence agencies. Parliament's role in relation to this community is discussed under Observations and Conclusions .
27.16 By convention, the Prime Minister has leadership in areas of fundamental importance to the national interest, such as foreign affairs and the security of the nation. The Prime Minister therefore provides direction on key intelligence policy issues. As Exhibit 27.2 shows, the Privy Council Office (PCO) supports the Prime Minister in his ultimate responsibility for the security and integrity of Canada and related intelligence matters.
27.17 A senior official of the Privy Council Office, supported by the Security and Intelligence Secretariat, has a mandate from the Prime Minister to co-ordinate intelligence community activities. The PCO also houses the Intelligence Assessment Secretariat, which both assesses and co-ordinates the assessment of political, economic, strategic and security intelligence for the Prime Minister, the Cabinet, ministers and senior officials.
Collecting, analyzing and reporting security intelligence27.18 Primary responsibility for collecting, analyzing and reporting security intelligence rests with the Canadian Security Intelligence Service (CSIS), which was created as a civilian agency in 1984 by the Canadian Security Intelligence Service Act to replace the Royal Canadian Mounted Police Security Service . The Act assigns ministerial responsibility for CSIS to the Solicitor General and specifies a number of responsibilities for the Deputy Solicitor General.
27.19 Among other things, the Act mandated the creation of two independent bodies to review the activities of CSIS:
The Security Intelligence Review Committee (SIRC) is a non-parliamentary committee of Privy Councillors that reviews the performance by CSIS of its duties and functions and examines complaints concerning security clearances, immigration, citizenship and other matters involving CSIS investigations.
The Office of the Inspector General of CSIS is a review body, internal to the government but external to CSIS, that reviews compliance by CSIS with law, ministerial direction and operational policy. The Inspector General is responsible to the Deputy Solicitor General.
Canada's foreign intelligence needs are met from a variety of sources27.20 Unlike most of its allies and competitors, Canada does not have an agency dedicated to gathering foreign intelligence abroad. More specifically, Canada does not have the equivalent of the United States' Central Intelligence Agency or the United Kingdom's Secret Intelligence Service. Instead, Canada's foreign intelligence requirements are met from a variety of sources.
27.21 The Communications Security Establishment (CSE), an agency of the Department of National Defence, is one of the main organizations devoted to providing the government with foreign intelligence. CSE analyzes and reports on intercepted foreign radio, radar and other electronic emissions, referred to as signals intelligence (SIGINT), and provides this foreign intelligence to Canadian government clients. The Canadian Forces Supplementary Radio System (CFSRS) supports CSE primarily in its signals intelligence collection and analysis roles. In addition, CSE has access to allied SIGINT through reciprocal sharing agreements.
27.22 The Communications Security Establishment's other mandate is to provide technical advice, guidance and service to the government on the means of ensuring the security of federal government telecommunications and electronic data processing. This area is commonly referred to as INFOSEC.
27.23 The Chief of CSE reports to two deputy ministers: the Deputy Minister of National Defence for financial and administrative issues, and the Co-ordinator of Security and Intelligence (PCO) for policy and operational matters. Those two officials support the Minister of National Defence, who is accountable to Parliament for CSE.
27.24 On 19 June 1996, the government announced the appointment, under Part II of the Inquiries Act , of a Commissioner for the Communications Security Establishment. The Commissioner, who was appointed for a three-year term, is charged with reviewing the agency's activities to determine their compliance with the law and the Constitution of Canada. The Commissioner will report findings of an unclassified nature annually to the Minister of National Defence, who will table the report in Parliament. In addition, the Commissioner may at any time report findings of a classified nature to the Minister.
27.25 The Minister of Foreign Affairs and the Minister of National Defence have primary responsibility for the conduct of Canada's foreign affairs and the defence of Canada respectively. As such, they require intelligence, as well as knowledge of intelligence activities, that supports informed policy and operational decisions consistent with their broad mandates. Under section 16 of the CSIS Act , CSIS can assist in the collection of foreign intelligence within Canada at the request of the Minister of Foreign Affairs or the Minister of National Defence. The departments of National Defence and Foreign Affairs and International Trade also collect information and intelligence from open sources or by means of exchanges with allied countries.
Resources allocated to the intelligence community have declined27.26 We estimate that the components of the intelligence community identified in Exhibit 27.2 spent a total of approximately $440 million in 1995-96. This represents a decrease of about 13 percent, in constant dollars, over the five-year period since 1990-91. Over this same period, the number of people employed (full-time equivalents) also fell by about 13 percent.
Some departments and agencies have close links with the intelligence community27.27 Some departments and agencies - for example, the Royal Canadian Mounted Police, Citizenship and Immigration, Revenue Canada (Customs) and Transport Canada - though not components of the intelligence community as we have defined it, have close links with the community. This is because they are significant users of the community's product in support of their specific mandates and, in some cases, may contribute information and intelligence to the community. Other departments and agencies that have important, specialized functions relating to the work of the intelligence community include the Federal Court, which issues warrants to CSIS to authorize the use of certain intrusive powers, and the Department of Justice, which provides legal advice to some key agencies and, through interdepartmental committees, to the community as a whole.
The intelligence community maintains relationships with other countries27.28 Canada has close formal intelligence relationships with a number of countries. The closest of these were forged during World War II and solidified during the Cold War. Links remain particularly strong with the United States, the United Kingdom, Australia and New Zealand. Intelligence products, including analyses and assessments, are exchanged, and technical assistance is provided by each to the others. These, and other relationships, provide Canada with information and technological resources that would otherwise be unobtainable with current resources.
27.29 Because intelligence requirements of government decision makers relate increasingly to matters that are global or transnational in nature, the community's relationships with other countries are expanding. This is particularly the case in the area of security intelligence regarding such shared concerns as terrorism.
The intelligence environment has become more complex and volatile27.30 For more than four decades following World War II, intelligence activities were carried out in a fairly stable and predictable environment. Most of Canada's foreign and security intelligence efforts were focussed on Communist military and espionage threats.
27.31 The end of the Cold War, however, has not removed threats to Canada's security or national interests. In addition to many long-standing concerns such as terrorism, there are new issues facing the intelligence community - including ethnic and religious conflict, the proliferation of weapons of mass destruction, transnational organized crime, uncontrolled migration, and economic espionage. Other trends affecting the intelligence community include globalization of the economy and increasing competition, budget reductions forced by fiscal realities, and technological advances that help intelligence targets protect their secrets.
27.32 The changing environment has a number of implications for Canada's intelligence community. These include the need:
- to shift from one primary intelligence target to a broader, more diverse range of targets;
- to co-operate with intelligence agencies in a larger number of other countries;
- to serve a broader range of government clients with a growing variety of intelligence requirements;
- to invest in new technology that is required to maintain access to important intelligence sources;
- to have clear intelligence priorities that help guide decisions in a period of increasing diversity of targets and diminishing resources; and
- to continue to respect, and be seen to respect, the rights and freedoms of Canadians while effectively carrying out intelligence functions.
27.34 At the same time, growing demands that governments be more accountable for their actions, and for the results achieved with the use of public resources, have led to an evolution in public accountability in many areas of public administration. The intelligence community is not, and should not be, totally immune to these developments.
Focus of the audit27.35 Our objectives were:
- to provide an overview of Canada's intelligence community and of the role of foreign and security intelligence in government; and
- to determine, and inform Parliament about, the nature, extent and functioning of the control and accountability arrangements in the intelligence community.
What we mean by control and accountability27.37 "Control", in the narrowest sense, means ensuring that specific procedures are followed. In the broadest sense, it means creating the conditions that lead to the achievement of agreed standards of performance, including desired results as well as compliance with law and policy.
27.38 Control may be exercised by a combination of informal means (for example, ethics, values and leadership) and formal means (for example, policies and procedures, funding, audit, review, authorizations, organizational structures and forums). Though we recognize the importance of informal controls and saw many examples of their operation in the intelligence community, our primary focus in this examination was on formal control mechanisms.
27.39 "Accountability" refers to a relationship based on the obligation to demonstrate and be responsible for performance in light of agreed expectations. There are a number of prerequisites for effective accountability:
- clear and agreed roles and responsibilities;
- clear and agreed performance expectations - including what is to be done (and how), what is not to be done, and what is to be achieved;
- performance expectations that are balanced by the relevant capacities (for example, authorities, skills and resources) of each party;
- credible and timely reporting to demonstrate the performance achieved in light of expectations; and
- review of and feedback on the performance reported, such that achievements are recognized and necessary corrections made.
Observations and Conclusions27.40 The arrangements for control and accountability of the intelligence community comprise elements that, in whole or in part, are external to government, as well as some that operate entirely within government.
External Control and Accountability27.41 By external control and accountability, we refer to the roles of bodies that are external to the government. This includes the role of Parliament as well as the roles of the Security Intelligence Review Committee (SIRC), the Commissioner for the Communications Security Establishment, the courts, the Privacy Commissioner, the Information Commissioner, the Canadian Human Rights Commission, the Commissioner of Official Languages and the Auditor General of Canada.
Parliament's role in the control and accountability of the intelligence community27.42 The nature and extent of Parliament's role in the control and accountability of the Canadian intelligence community differs significantly among organizations. This difference originates largely in the enactment of the Canadian Security Intelligence Service Act in June 1984 (see Exhibit 27.3 ). Since that time, Parliament has played a more active role with respect to CSIS than with those components of the intelligence community that are engaged primarily in collecting, analyzing and disseminating foreign intelligence.
27.43 The Canadian Security Intelligence Service. When Parliament adopted the CSIS Act and the Security Offences Act in 1984, it called for a comprehensive parliamentary review of their provisions and operation after five years. Accordingly, a special House of Commons committee was established in 1989 and reported its findings in 1990.
27.44 The special committee's report, "In Flux but not in Crisis", concluded that the basic scheme of the CSIS Act was working well. Nevertheless, the committee made a number of recommendations. Among other things, it sought to augment the role of Parliament by recommending the creation of a permanent subcommittee of the (then) House of Commons Standing Committee on Justice and Solicitor General to deal exclusively with security and intelligence matters, including agencies other than CSIS.
27.45 With few exceptions, the government of the day chose not to act on the committee's recommendations, arguing against structural change and noting that it was too early to open the Act for amendment. It did, however, undertake to provide Parliament with more information and to arrange for another parliamentary review of progress in 1998. The former undertaking has been effected by the Solicitor General providing to Parliament, since 1992, an annual statement on national security, accompanied by the tabling of an annual public report of CSIS. Although such statements and reports are necessarily constrained in scope and detail by national security considerations, they nevertheless provide Parliament with the opportunity to consider security intelligence matters.
27.46 No permanent subcommittee for the review of security and intelligence matters has been established. In 1991, however, a Subcommittee on National Security was constituted as a subcommittee of the Standing Committee on Justice and Legal Affairs. This subcommittee has been reconstituted in each Parliament since then - most recently on 26 March 1996. The Subcommittee's mandate is defined by resolution of the Standing Committee on Justice and Legal Affairs. In broad terms, that mandate extends to reviewing the operations of CSIS and SIRC through, among other means, reference to SIRC's annual report, special reports made by SIRC under section 54 of the CSIS Act , the Solicitor General's annual statement on national security and the annual public report of CSIS.
27.47 Foreign intelligence components. Parliament's role in relation to the foreign intelligence components of Canada's intelligence community has been limited. The foreign intelligence functions carried out by the departments of National Defence and Foreign Affairs and International Trade fall within the general ambit of the legislation setting up those departments. Although the standing committees on National Defence and Veterans Affairs and on Foreign Affairs and International Trade have potential interest in these functions, both committees have broader responsibilities and interests that have generally taken precedence.
27.48 Officials of the Communications Security Establishment have seldom been requested to appear before parliamentary committees. Their most recent appearance was in May 1995, when the Co-ordinator of Security and Intelligence of the Privy Council Office and the Chief of CSE provided the Standing Committee on National Defence and Veterans Affairs with a briefing on CSE. This briefing was the most comprehensive of its kind to date, and included information on such matters as CSE's programs, resources and relationships with foreign countries.
27.49 We noted earlier that CSE is a key player in gathering and producing foreign intelligence. The organization's mandate is based on the royal prerogative and the mandate of the Department of National Defence in section 4 of the National Defence Act , orders-in-council and other government directions. Its precursor, the Communications Branch of the National Research Council, was established through an order-in-council in 1946. That branch was transferred to the Department of National Defence in 1975.
27.50 The Communications Security Establishment uses substantial public funds in carrying out intelligence functions that are important to the national interest, sensitive and potentially controversial. However, CSE's existence, its objectives, the scope of its functions, and the framework within which it should operate have not been publicly debated or endorsed by Parliament through legislation. We believe the government should consider the advantages of a legislative framework for this agency.
Estimates for Parliament do not provide specific details on all aspects of the intelligence community27.51 In theory, Parliament has another potential window on the intelligence community through the scrutiny of Estimates and voting of funds. However, much of the information about the activities, expenditures and performance of the agencies and units carrying out intelligence functions is, of necessity, classified, and cannot be included in public documents. Moreover, only the funding for CSIS and SIRC are provided through separate votes. Funding for other components of the intelligence community is included in votes that do not relate specifically to intelligence functions and that do not clearly identify the intelligence components.
27.52 Most of the funding for CSE, for example, is provided through votes for the Department of National Defence operating and capital expenditures. The CSE's operating and capital budgets ($84 million and $29 million respectively in 1995-96) make up only a small proportion of the total operating and capital budgets of National Defence ($7.5 billion and $2.7 billion respectively in 1995-96) that are visible to Parliament.
The intelligence community is subject to a range of other external scrutiny and review27.53 As is the case generally with federal departments and agencies, the units and agencies making up the intelligence community are subject not only to the independent scrutiny of the courts but also to scrutiny and review by the Canadian Human Rights Commission, the Privacy Commissioner, the Information Commissioner, the Commissioner of Official Languages and the Auditor General of Canada. These review bodies can bring only their specific mandates to bear in carrying out their work. Moreover, the understandable restrictions that result from the need for secrecy place limits on their public reporting. However, our experience in carrying out this examination convinces us that the role of these review bodies in the control and accountability framework is important. As one example of the exercise of this role, the Privacy Commissioner recently completed an audit of CSE. He concluded that CSE operates in compliance with the Privacy Act and the principles of fair information practices. In his 1995-96 annual report, the Privacy Commissioner noted, among other things, that there is no evidence that CSE intentionally targets Canadians or monitors their communications, and that CSE uses strict procedures to minimize the possibility that information about Canadians will be inadvertently captured in monitoring foreign communications.
27.54 Although review by these external bodies provides for some public scrutiny of the intelligence community, and assists Parliament in holding it to account, that review is, of necessity, both intermittent and narrow in scope. In this context, we note that until the recent announcement of a Commissioner for the Communications Security Establishment, the only body specifically designed for and assigned to the task of ongoing external review in the intelligence community has been the Security Intelligence Review Committee (SIRC).
The Security Intelligence Review Committee reviews and monitors CSIS27.55 The Security Intelligence Review Committee is a permanent committee, established by the CSIS Act , of not less than three, and no more than five, Privy Councillors who are not sitting members of the House of Commons or the Senate. Committee members are appointed by the Governor in Council after consultation by the Prime Minister with the leaders of all parties having more than 12 members in the House of Commons. Members are appointed to a term not exceeding five years and may be reappointed for a second term. In 1995-96, SIRC had a budget of $1.4 million and the equivalent of 14 full-time staff.
27.56 The Security Intelligence Review Committee has two distinct mandates: to provide external review of CSIS, and to examine complaints concerning security clearances, immigration, citizenship and other matters involving CSIS investigations.
27.57 The CSIS Act charges SIRC with reviewing generally the performance by CSIS of its functions and duties through a variety of means: for example, by reviewing directions issued by the Minister, arrangements of CSIS with domestic and foreign governments and agencies, reports by the Director of CSIS on operational activities, and the associated certificates of the Inspector General (see paragraph 27.93); and by compiling and analyzing statistics on operational activities. In addition, SIRC is required to assess whether the activities of CSIS comply with the Act, regulations made under the Act, and ministerial direction, and whether they involve any unreasonable or unnecessary exercise of powers. To this end, SIRC can direct either the Inspector General or CSIS to carry out reviews of specific activities or it can carry out these reviews itself. In practice, SIRC has occasionally directed the Inspector General, but not CSIS, to carry out such reviews. For the most part, it has carried out the reviews itself.
27.58 The Security Intelligence Review Committee submits annual reports to the Solicitor General, who tables them in both the Senate and the House of Commons. At the request of the Solicitor General, or of its own volition, SIRC also prepares special reports for the Solicitor General. Although the Act does not require it, the Minister can choose to make these special reports public - as in the case, for example, of SIRC's December 1994 report on the Heritage Front affair. In effect, SIRC serves public accountability by reporting to the Minister, who is accountable to Parliament, as well as by reporting to Parliament itself.
27.59 Most observers agree that through an active program of review and monitoring, as well as through public reporting, SIRC has played an important role in strengthening the control and accountability of CSIS. Although we did not assess the quality of the review work carried out by SIRC, we did examine its nature and range. We found that in addition to responding to issues as they arise, SIRC has followed a systematic approach to reviewing, and reporting on as appropriate, those activities and operations of CSIS that give rise to the greatest risk of compromising individual rights and freedoms. These include, for example, authorizing targets for investigation, preparing warrant affidavits, executing warrants, using intrusive powers of investigation and managing information - including its dissemination and retention.
27.60 The creation of SIRC was an innovative and unique response to the need to provide independent external review and a measure of public accountability for CSIS while avoiding the difficulties involved in making classified information regularly available to parliamentarians. The CSIS Act provides SIRC with full access to the information it requires to carry out its duties and functions, with the exception of Cabinet confidences. It is worth noting that SIRC has never been responsible for a known "leak" of classified information.
SIRC needs the confidence of Parliament to remain effective27.61 In passing the CSIS Act , Parliament chose to create SIRC as an external review body rather than to establish a joint parliamentary committee on security and intelligence, as had been recommended by the McDonald Commission. We therefore believe that SIRC's continuing effectiveness hinges critically on having Parliament's confidence.
27.62 Unfortunately, relations between SIRC and members of the Subcommittee on National Security have become increasingly strained in recent years, as evidenced in the course of the Subcommittee's investigation of the Heritage Front affair and the June 1996 report on that investigation issued by the Standing Committee on Justice and Legal Affairs. We are concerned by the possibility that continuing strained relations with the Subcommittee could lead to an erosion of Parliament's (and the public's) confidence in SIRC to the point where its effectiveness would be compromised.
27.63 In view of the extraordinary powers available to CSIS, we believe that SIRC has a central role to play in the control and accountability framework for that agency. We therefore believe it important for the government to take action to improve relations. A possible first step could be to clarify the respective roles and responsibilities of the Subcommittee and SIRC in relation to each other.
The government has appointed a Commissioner for the Communications Security Establishment27.64 The 19 June 1996 order-in-council authorizing the Minister of National Defence to appoint a Commissioner for the Communications Security Establishment sets out the Commissioner's mandate. In short, the Commissioner must review CSE's activities to determine whether they comply with the law. The Commissioner is to submit a report to the Minister each year on his activities and findings that are not of a classified nature. The Minister is required to table that report in Parliament. In addition, the Commissioner may at any time submit to the Minister a report containing classified information, and must advise the Minister and the Attorney General of Canada of any CSE activity he believes may not be in compliance with the law. The Commissioner was preparing to review CSE operations when we concluded our work.
27.65 We note that the Commissioner's mandate focusses entirely on compliance with the law, which is of paramount importance. We believe that the government has taken an important step toward enhancing CSE's public accountability by establishing, for the first time, an external review mechanism for CSE. Among other things, the work of the Commissioner should increase the scope for informed parliamentary scrutiny and debate, including the question of whether it would be in the public interest for Parliament to consider creating a statutory basis for CSE.
Government Control and Accountability27.66 We reviewed the arrangements for control and accountability within the government at three main levels: the role of the centre (including the Prime Minister, the Cabinet and the Privy Council Office (PCO)), the exercise of ministerial control and accountability, and control and accountability within CSIS and CSE.
Central direction and co-ordination27.67 As already described, the Canadian intelligence community is dispersed among various departments and agencies that are independently funded and managed. The Prime Minister, the Cabinet and the Privy Council Office play key roles in directing and co-ordinating the intelligence community.
27.68 The Prime Minister is ultimately responsible for the integrity and security of the state and for related intelligence matters. There is currently no standing committee of the Cabinet to deal with security and intelligence issues. Ministers, however, generally meet once each year to deal with setting priorities and other major items.
27.69 The Prime Minister exercises his leadership role in respect to security and intelligence in part by chairing these meetings of ministers. The ministers who attend are those whose departments and agencies have primary responsibility for security and intelligence matters. The Minister of Justice also attends.
27.70 The Co-ordinator of Security and Intelligence in PCO is responsible for providing co-ordination to the security and intelligence activities of all Canadian government agencies and, through the Clerk of the Privy Council and Secretary to the Cabinet (the Clerk), advising the Prime Minister on security and intelligence matters. The Clerk, or in the Clerk's stead the Security and Intelligence Co-ordinator, supports the meetings of ministers on security and intelligence issues.
27.71 The Security and Intelligence Secretariat of PCO supports the Clerk in advising the Prime Minister on security and intelligence matters. In addition, the Secretariat assists the Co-ordinator, and itself plays a co-ordinating role within the intelligence community.
27.72 As described earlier (see paragraph 27.17), PCO also houses the Intelligence Assessment Secretariat (IAS). This is a central intelligence assessment unit that undertakes national intelligence assessments on matters related to Canadian foreign, defence and security policy. National intelligence assessments are interdepartmentally agreed assessments with a broad governmental perspective that cuts across departmental boundaries. The IAS undertakes its own analyses and also supports the Intelligence Assessments Committee (IAC). The IAC is an interdepartmental group, chaired by the Executive Director of the IAS, that co-ordinates and facilitates interdepartmental co-operation in preparing analytical and assessment reports to ministers and senior government officials.
Co-ordination is effected through interdepartmental committees27.73 The Security and Intelligence Secretariat helps co-ordinate the work of the community through several interdepartmental and ad hoc, issue-specific committees that it chairs. In addition to the co-ordination that is effected through these committees, we believe that the committees provide a measure of informal control that results from sharing information and from discussing plans and operations among committee members.
27.74 The Interdepartmental Committee on Security and Intelligence (ICSI) includes the deputy heads of the departments and agencies directly and indirectly involved in security and intelligence matters. In practice, the executive subcommittee of ICSI is currently the most senior forum at the officials' level for regular consideration of security and foreign intelligence matters, and the primary interdepartmental mechanism for reviewing proposals and submissions to ministers. It also has responsibility for the management of resources to ensure that priorities are met by the various departments and agencies.
27.75 The Intelligence Policy Group (IPG) is the principal policy and operational co-ordination forum in the community. Its membership is drawn from the assistant deputy minister level in key departments and agencies of the intelligence community. It also includes the Assistant Deputy Attorney General (Criminal Law), who has functional responsibility for co-ordinating legal advice by the Department of Justice to the intelligence community.
27.76 Finally, there are a number of other interdepartmental committees and working groups. These cover foreign intelligence as well as national security matters (for example, counter-terrorism). Their purpose is to provide support and co-ordinated advice to the committees of senior officials and to ministers.
27.77 Meetings of the various interdepartmental committees are held regularly and are generally well attended. There is a stability to the process, which is not crisis-driven. We were told by many of the participants that the quality and level of disclosure and communication in these meetings has improved significantly in recent years. We were advised, and saw some evidence to confirm, that co-operation and mutual reliance are generally reinforced by the ongoing communications.
27.78 Nevertheless, we noted some opportunities to strengthen further the leadership and co-ordination of what is already widely seen as a successful process. These include:
- increased senior-level guidance to, and review of, intelligence plans and products, with particular attention to the intelligence needs of the Prime Minister, the Cabinet and ministers;
- a more co-ordinated approach to dealing with intelligence services of other countries;
- a stronger focus on scrutiny of budgets and expenditures in relation to national intelligence priorities, in view of the current fiscal climate and ICSI's role in managing resources; and
- continued exploration of ways to strengthen the contribution, to the community's intelligence product, of some departments and agencies that are not within the intelligence community as such (for example, the departments of Citizenship and Immigration, Revenue Canada (Customs) and the Royal Canadian Mounted Police).
The government sets direction for the intelligence community by establishing priorities27.79 The government has approved national priorities, generally annually, for security intelligence and for foreign intelligence. These priorities take into account, for example, the government's foreign and defence priorities, and changes in the national security environment. They identify the subjects, countries, groups and organizations on which the Canadian intelligence community is expected to contribute information of national interest and value. The purpose of setting national priorities is to direct the collectors of intelligence and guide the assessors in their efforts over the coming year.
27.80 The differences between security intelligence and foreign intelligence influence the approach to setting national priorities. As the main security intelligence agency in Canada, CSIS has a mandate to advise the government on threats to national security. As a result, CSIS's priorities and subsequent collection activities are inevitably based largely on requirements that it has identified. Foreign intelligence collection, however, is driven by the need to support government policy.
27.81 The articulation of national intelligence priorities is a relatively recent phenomenon. In 1987, People and Process in Transition: Report to the Solicitor General by the Independent Advisory Team on the Canadian Security Intelligence Service (the Osbaldeston report) recommended that Cabinet consider annually a CSIS overview of the threats to Canadian security and approve broad national security intelligence priorities that the Solicitor General would then issue to CSIS. The first security intelligence priorities were issued in 1989.
27.82 Foreign intelligence priorities were first developed in 1991 to respond to the dramatic changes in the world environment. The Privy Council Office, in consultation with the departments of National Defence and Foreign Affairs and International Trade, takes the lead role in developing the annual foreign intelligence priorities. This activity also involves the principal collectors of intelligence within the federal government, meeting as working groups under PCO's leadership. With respect to both security intelligence and foreign intelligence priorities, there is interdepartmental consultation, review of draft priorities by PCO-chaired interdepartmental committees, ministerial input, and Cabinet approval through the meetings of ministers described above (paragraphs 27.68 and 27.69) .
27.83 The government is seeking ways to improve the priority-setting process. Until recently, for example, some government departments that are major clients for foreign intelligence had no opportunity to outline their requirements as input to setting the priorities. In 1995, PCO began to consult a group of client departments when developing the foreign intelligence priorities. It is now taking steps to develop and systematize the consultations for future rounds.
27.84 We believe there are further opportunities for improvement that the government might consider as the process evolves. First, consideration needs to be given to clearer tasking against the foreign intelligence priorities. This could include determining the proportion of effort that should be allocated to various priorities, as well as seeking more co-ordination and up-front agreement on which agencies will do what in responding to them.
27.85 Second, final approval of both foreign and security intelligence priorities has sometimes occurred late in the year to which the priorities are to apply. If government direction is to be meaningful, we believe every effort needs to be made to ensure timely approvals. Finally, although efforts have already been made to enhance the usefulness of the priorities as guides to collection and assessment, further consideration could be given to refining the ranking of the priorities at all levels.
27.86 The intelligence agencies use the national priorities as a framework to help in setting their collection plans. A limited analysis by one agency noted evident gaps between what foreign intelligence priorities call for and what is or can be done in collection and assessment. This raises questions about the extent to which collection fully covers the foreign (and security) intelligence priorities, and the capability of the community to respond to them.
27.87 The government, however, has not assessed actual collection against priorities and identified gaps for the community as a whole. Therefore, it is not in a position to know the extent to which the foreign and security intelligence collected responds to the priorities established at a government-wide level, the reasons for any significant differences, or whether resources are used to best advantage. Among other things, this kind of information would be of value to the Interdepartmental Committee on Security and Intelligence in its role of managing resources to help ensure that priorities are effectively pursued. The Privy Council Office recognizes the need and plans to take action during the coming year.
No regular measurement of community-wide performance27.88 Although there is no regular measurement or review of community-wide performance with respect to results, over the past two years the government has carried out an internal review of the intelligence community and developed a long-term plan. As one element of the review, deputy ministers asked that foreign intelligence programs be reviewed in terms of their relevance and adequacy in meeting current and future Canadian user needs, and that they be placed in priority order relative to their effectiveness.
27.89 In response, a number of conclusions on the coverage, timeliness and relevance of foreign intelligence collection programs were reported to deputy ministers and ministers, and used in formulating the long-term plan. These conclusions were based on some consultations with client departments, discussions within the community, review of limited data, and a descriptive review of the mandate and activities of the foreign intelligence collection programs. In our view, a more rigorous evaluation would have been needed to support the conclusions reported.
27.90 We recognize that there are significant limitations and challenges when evaluating intelligence collection programs. Nevertheless, in our view, further evaluation is possible and is needed to answer, with greater confidence and reliability, the questions initially raised by deputies concerning the relevance, adequacy and effectiveness of foreign intelligence collection programs. In addition to those questions, other performance-related questions about security and foreign intelligence collection, as well as assessment, remain to be answered by evaluation. These questions include the following:
- Does the intelligence product adequately serve the needs of the government - particularly the needs of the Prime Minister, the Cabinet and ministers?
- Does the intelligence product adequately serve the needs of client departments and agencies?
- Do burden-sharing arrangements work effectively?
- To what extent is there duplication among various intelligence products and are there opportunities to streamline the process?
Ministerial control and accountability27.92 Because security considerations impose limits on the extent of parliamentary scrutiny of the intelligence community, it is especially important for the ministers concerned to have the information and the support they need to discharge adequately their fundamental democratic responsibility and accountability. To this end, we expected that ministers would provide policy direction, authorize sensitive operations and be appropriately informed of performance. We also expected that ministers would have assurance, either from internal or external review mechanisms, that operations remain within prescribed legal and operational policy limits.
The Minister's role with regard to CSIS is defined in legislation27.93 In the case of CSIS, where the Minister's role is defined in legislation, the following processes are in place:
- Ministerial direction . The CSIS Act provides that the Minister may issue direction, including written direction, to CSIS. The power to issue written direction has been used extensively, and formal ministerial direction now covers a wide range of subjects. These subjects include, for example, the statutory duties and functions of CSIS, investigative methods and techniques, the negotiation of co-operative arrangements with domestic and foreign organizations, and arrangements to assist CSIS's accountability to the Minister. The Minister also uses the Cabinet's Record of Decision on security intelligence priorities to issue related written direction to CSIS. This ministerial direction on priorities, however, has sometimes been issued late in the process. We believe that issuing it on a timely basis reinforces ministerial control and accountability.
- Authorizations . The Minister's responsibility for approving important matters is established in the CSIS Act as well as in subsequent ministerial direction. The Minister personally approves assistance by CSIS to the Minister of National Defence or the Minister of Foreign Affairs in the collection of foreign intelligence in Canada, all applications for judicial warrants for the exercise of certain intrusive powers, arrangements of CSIS with other departments, agencies and governments, and a variety of other sensitive operations.
- Reports and briefings . As required by the CSIS Act, the Minister receives periodic (in practice, annual) reports on the operational activities of CSIS, as well as reports of instances of possible unlawful conduct by CSIS employees in carrying out the agency's duties and functions. In addition, CSIS provides written and oral briefings to the Minister on a continuing basis.
- Independent review . The Minister's role is supported by the work of the Security Intelligence Review Committee (see paragraphs 27.55 to 27.60) and, more directly, by the work of the Inspector General of CSIS. The Inspector General, who is responsible to the Deputy Solicitor General, has been described as the "ministry's eyes and ears" on CSIS. For 1995-96, the Inspector General had a budget of about $900,000 and the equivalent of 10 full-time staff. The Inspector General monitors CSIS's compliance with its operational policies, reviews its operational activities, and submits certificates to the Minister with respect to CSIS reports on operational activities. A certificate states the extent to which the Inspector General is satisfied with the report and brings to the Minister's attention anything done by CSIS that, in the Inspector General's opinion, is not authorized by the Act, contravenes ministerial direction or involves an unreasonable or unnecessary exercise of CSIS's powers.
- Departmental support . The CSIS Act assigns a number of specific responsibilities to the Deputy Solicitor General. These include advising the Minister on ministerial direction issued to CSIS, and being consulted by the Director of CSIS on operational policies and before CSIS applies to the Federal Court for a judicial warrant. In practice, it is the National Security Directorate of the Department of the Solicitor General that carries out the day-to-day staff work involved in supporting the statutory role of the Deputy Solicitor General and, thereby, the Minister. In addition, the Department of Justice maintains a legal services unit in the Department of the Solicitor General.
Opportunities exist to further strengthen ministerial control and accountability for foreign intelligence functions27.95 The Minister of Foreign Affairs and the Minister of National Defence are responsible for the intelligence-related activities undertaken by their respective departments and are accountable to Parliament for them. Intelligence functions are not covered in specific terms, but fall within the general ambit of the enabling legislation for these two departments:
- The Department of Foreign Affairs and International Trade Act gives the Minister responsibility for the conduct of foreign affairs.
- The National Defence Act requires the Minister to manage and direct all matters relating to national defence.
27.97 To provide a framework for the control and accountability of intelligence functions in these departments, we expected that there would be broad directives, approved by ministers, on the means by which ministers would exercise control, exact accountability from officials and be in a position to render it to Parliament. Although such directions do not exist at a general level, in specific key areas - such as the process whereby the Minister of Foreign Affairs or the Minister of Defence can (pursuant to section 16 of the CSIS Act ) request and receive the assistance of CSIS in the collection of foreign intelligence in Canada - there are such documented directions, approved by ministers, setting out the procedures to be followed.
27.98 In addition, it is normal government practice for ministers to be consulted on all important matters relating to their portfolios. Our interviews and file reviews showed that the ministers are indeed briefed about, and asked to approve, significant and sensitive activities and operations.
27.99 We found, however, that there have been no internal or external review processes to provide systematic assurance to the ministers that control and accountability arrangements are working effectively. Until the recent appointment of the Commissioner for the Communications Security Establishment, there were no mechanisms dedicated to review on the foreign intelligence side. The work of the Commissioner for the Communications Security Establishment can be expected to help the Minister of Defence significantly with his responsibility and accountability for CSE.
27.100 We believe that for the other intelligence functions carried out by the Department of National Defence, and those carried out by the Department of Foreign Affairs and International Trade, the articulation of broad directives - covering matters such as objectives, the scope and limits of intelligence functions, relationships with other agencies, the criteria for activities and operations that require ministerial approval, and formal reporting requirements - would further strengthen ministerial control and accountability. Among other things, such directives would provide bases for periodic assessments of performance and compliance by internal review, with summary reporting to the respective minister as appropriate.
Control and accountability in CSIS and CSE27.101 We expected to find that operational plans in both CSIS and CSE would set out intelligence requirements that, among other things, take into account the national intelligence priorities approved by the government. We also expected that the agencies would have clear policies and procedures designed to guide activity toward the achievement of desired results and to address risks, and that they would seek assurance from review mechanisms (internal or external) about the framework and functioning of controls. Finally, given that information is the lifeblood of any control and accountability framework, we expected that the agencies would gather, use and report information on their performance.
National intelligence priorities provide a framework for agency plans27.102 As described in paragraphs 27.79 to 27.83, national priorities for both security and foreign intelligence are established to guide collection and assessment. Because CSIS has primary responsibility for security intelligence, and therefore has to be self-tasking in some measure, it is instrumental in shaping the national priorities for security intelligence. Its plans, therefore, largely put into operation the national priorities.
27.103 In CSE, we found that the national priorities provide a framework within which the agency sets its own plans. CSE's plans for the collection of signals intelligence are influenced by several factors, including its mandate and capabilities. In addition to the national priorities, CSE takes into account the ongoing requirements of its direct public sector clients. The availability of financial, human and technological resources also influence what can be collected and processed.
Operational policies and procedures in CSIS and CSE are clearly set out27.104 Both CSIS and CSE have comprehensive policies and procedures to guide their operational activities. In CSE, the policies and procedures are internally derived and have been neither explicitly requested nor approved by the responsible minister. In CSIS, many of the policies and procedures respond directly to provisions of the CSIS Act or to ministerial direction. Examples include the procedures for approving targets for investigation and preparing applications for Federal Court warrants.
27.105 The policies and procedures of CSIS, and compliance with them, are subject to ongoing monitoring and review by the Inspector General as well as the Security Intelligence Review Committee. CSIS also undertakes internal audits. In view of the work of the Inspector General and SIRC, these audits focus mainly on administrative and operational support matters.
27.106 We found that CSE has annually reviewed its operations as they relate to safeguarding the privacy of Canadians. Although some internal reviews have been carried out to identify opportunities for improving operational efficiency and effectiveness in CSE, there have been no systematic reviews or audits of compliance with operational policies and procedures. We are encouraged to note, however, that the agency is in the process of gearing up to review annually its compliance with internal policies.
Measuring performance is difficult but remains important27.107 The results - and particularly the ultimate effects - of intelligence collection, assessment and reporting are inherently difficult to measure. We recognize that this is especially true in the case of security intelligence, which does not always result in a definable product. Nevertheless, we believe there is a minimum that is feasible to measure, including the nature, extent and cost of activity in relation to national and agency priorities and plans, user satisfaction with intelligence products and, in some cases, identifiable impacts.
27.108 In CSIS, assessments of threat and risk directly affect the deployment of its resources. However, there is little tracking of the total costs or outputs of activities in relation to plans or priorities. As part of managing its programs, CSIS seeks feedback on its products, but the feedback is not systematically gathered, analyzed and summarized to identify client satisfaction and other performance trends.
27.109 The Communications Security Establishment maintains an extensive customer relations program to support federal departments and agencies that use its products. As that program has evolved over the past few years, so too has CSE's interest in performance measurement. The agency has made an effort to cost its products and identify gaps in its collection of signals intelligence in relation to national priorities and specific client requirements. It maintains a broad base of information on client satisfaction with its intelligence products and also compiles information on the impact of products on decision making. Improvements are currently being pursued to reduce the level of subjective measurement and increase direct client feedback on CSE's performance.
Role of the Department of Justice27.110 We found that the Department of Justice exercises an important legal control with respect to the intelligence community. It does this with the help of a specialized National Security Group at Justice headquarters that provides legal advisory services to the Privy Council Office on security and intelligence matters and is responsible for developing co-ordinated legal advice within the Department of Justice. In addition, the Department of Justice maintains an overview of the intelligence community by membership on the key co-ordinating committees chaired by the Privy Council Office.
27.111 It is noteworthy that Justice legal counsel in both CSIS and CSE have clearance for and access to all levels of information in those agencies. This allows counsel to be members of senior management committees in both agencies and to be integrated into operational decision-making processes on a proactive basis. They are asked to advise on the legality of proposed activities as well as to review ongoing activities to determine whether they are being conducted in compliance with the law.
27.112 In CSIS, for example, counsel from the legal services unit sit on the Target Approval and Review Committee as well as on the Warrant Review Committee. In addition, all warrant applications are reviewed by an independent counsel. This counsel is supplied by the Department of Justice.
- strengthening leadership and co-ordination through increased senior-level guidance to and review of intelligence plans and products, greater scrutiny of community budgets and expenditures in relation to national intelligence priorities, a wider scope of contribution to the community's intelligence products, and a more co-ordinated effort in dealing with intelligence services of other countries;
- enhancing the national priorities process through clearer tasking against priorities, more timely approvals, a more complete ranking system and systematic assessment of intelligence collection against approved priorities;
- integrating the measurement and monitoring of community-wide performance with government priority setting and resource management;
- improving relations between the parliamentary Subcommittee on National Security and the Security Intelligence Review Committee. A possible first step could be to clarify respective roles and responsibilities in relation to each other;
- establishing broad ministerial directives and internal reviews within the departments of National Defence and Foreign Affairs and International Trade to define and provide assurance on such matters as the scope and limits of intelligence functions and relations, as well as requirements with respect to authorizations and reporting;
- considering the advantages of a legislative framework for the Communications Security Establishment in view of the significance, sensitivity and cost of its operations; and
- improving the measurement and assessment of performance in the Canadian Security Intelligence Service and the Communications Security Establishment.
Intelligence community's response:
This was an unprecedented audit that posed significant challenges for the intelligence sector and the Auditor General's Office, particularly in light of the necessary secrecy of the intelligence business. The intelligence community wishes to thank the Auditor General and his staff for the professional approach they took to this audit.
The intelligence community finds the Auditor General's observations both valuable and constructive. We are keenly aware of the importance of responding to public expectations regarding control and accountability. We therefore note with satisfaction the main finding that substantial control and accountability arrangements are in place and continue to be strengthened. We are also pleased that the audit acknowledges the effectiveness, in terms of control and co-ordination, of the interdepartmental committees that deal with intelligence.
We believe that the description of the Canadian intelligence community will serve to raise the awareness of Canadians as to the value of intelligence in support of Canada's national interests, and the challenges the community has faced since the end of the Cold War.
The Auditor General's suggestions that the intelligence community strengthen central leadership and co-ordination and enhance the national intelligence priorities process coincide with our own objectives. Indeed, the development of clear priorities to guide intelligence collection and reporting efforts is more important than ever, given that the Canadian intelligence community has more consumers interested in more topics, while, at the same time, it has fewer resources to do the job.
About the Audit
ObjectivesOur objectives were:
- to provide an overview of Canada's intelligence community and of the role of foreign and security intelligence in government; and
- to determine, and inform Parliament about, the nature, extent and functioning of the control and accountability arrangements in the intelligence community.
ScopeWe examined the arrangements for the control and accountability of Canada's intelligence community. More specifically, we examined the nature and extent of co-ordination and direction given to the intelligence community, the availability and reporting of information on results and on compliance with law and policy, and the existence and operation of mechanisms for control. We did not audit the operational activities of the intelligence community; nor did we assess the quality of financial management and control, or try to assess the value of the results obtained for the resources committed.
We carried out our examination in the agencies and units that collect, analyze, assess and disseminate foreign and security intelligence, as well as those that co-ordinate or review their operations.
ApproachWe completed a preliminary survey, based largely on interviews and document analyses, to learn about the intelligence community and determine a scope for the examination phase. During the examination, we carried out additional interviews, document analyses, and file and other reviews. As well, we examined how control and accountability of intelligence communities are exercised in some other democracies.
Our examination has been the first of its kind in Canada and, as far as we know, no legislative audit offices in other countries have yet undertaken similar work. In view of the newness, sensitivity and complexity of the examination, we could not have done it without the special co-operation and help we received from all levels of management and staff of the intelligence community.
Audit TeamHenno Moenting
For information, please contact Henno Moenting, the responsible auditor.