Sunday, June 08, 2014

CSEC confirms collection of economic intelligence

The CSEC Q&As document I discussed a few days ago contains a short section acknowledging that CSEC does indeed collect economic intelligence, but asserting that such intelligence is not used to provide a "competitive advantage" to Canadian companies (see page 11 of the document):
In Canada, foreign signals intelligence exists to support the Government in the pursuit of its national interests within the scope of defence, security and international affairs. This includes economic interests because in any state a strong economy is integral to national security. For instance, intelligence on economic matters can provide us early warning of impending international financial crises, or provide insight into terrorist financing.

However, it should be clearly understood that Canada's foreign signals intelligence activities are NOT used to provide Canadian private companies with any competitive advantage. Private businesses, here in Canada or anywhere, should compete fairly in the global marketplace on the merits of their own offerings, without any assistance provided by state intelligence capabilities.
This statement is much clearer than the other, rather elliptical statements CSEC has made on this topic, and it lays to rest the question of whether or not CSEC does collect economic intelligence (see earlier discussion here, here, here, here, and here.)

Many people, including at least two of the senators who have examined CSEC in recent years, do not believe CSEC's claim that economic intelligence is never used to benefit Canadian companies. Several specific instances of such assistance have been alleged over the last few decades, but no case has ever been officially confirmed, and mostly these instances involved quasi-public enterprises rather than private companies. CSEC's statement doesn't make any assurances about public sector activities.

As others have noted, there are several reasons why assistance is not likely to be directly provided to private corporations on a large scale. First of all, many companies have global operations and global ownership these days, and the nationality of their head office does not necessarily indicate whether assistance to that company would help the Canadian economy as a whole. Second, the fact that many of the competitors that Canadian companies face are companies based in Canada's Five Eyes allies clearly limits the extent to which CSEC could draw on its partners' capabilities for such purposes. The danger of embarrassing and costly leaks would also be great if such information were widely shared.

There is also probably some genuine ideological commitment on the part of recent governments to the idea that the free market should be permitted to choose economic winners and losers on their own merits, as the final sentence of CSEC's statement asserts.

That same commitment, however, could also be used to justify some commercial intelligence gathering. CSEC states that economic intelligence is not used to "provide Canadian private companies with any competitive advantage". But what about situations where a Canadian company may be at an unfair disadvantage, as for example when a foreign competitor subverts the competition by bribing the buyer? The CSEC statement does seem to leave open the possibility of action to level the competitive playing field. The U.S., which also denies gathering economic intelligence to provide an unfair advantage to American companies, has acknowledged doing this kind of monitoring.

Principles only go so far with most governments, however, and there does seem to be reason to suspect that when the stakes are high enough, say billions of dollars in contracts or thousands of jobs in a key industry, a helpful word may get whispered in a crucial ear from time to time in both countries, not just to level the playing field but to tilt it in favour of the home team.

CSEC had a "Business Support Unit" in the mid-2000s. It would be interesting to know if this unit or something similar still exists and, if so, what precisely its function is.

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