Friday, March 08, 2024

Billion dollar budget

The Main Estimates for Fiscal Year 2024-25, tabled in parliament on February 29th, reveal that CSE is on track to receive its first official billion-dollar budget: $1,041,683,002 to be precise ($1,061,532,258 if you include $19,849,256 in projected revenue). 

The agency may actually cross that threshold during the current fiscal year, 2023-24. CSE's projected spending in the FY 2023-24 Main Estimates was a mere $965,909,359, but increases in its budget authority during the course of the year boosted that total to $1,039,192,674. That said, it is normal for a portion of the agency's budget authority to go unexpended during the year, so CSE's actual 2023-24 spending could very well fall short of the billion-dollar threshold.

In the FY 2001-02 Main Estimates the agency's projected budget was $100.2 million, or about $170 million in today's money.

In other words, CSE's 2024-25 budget is projected to be TEN times as large as its pre-9/11 budget in nominal terms, and even after adjusting for the effects of inflation it will be SIX times as large.  

Six times!

[Update 10 March 2024: The cyber security (formerly information technology security) side of the agency has grown the most. The cyber security side now accounts for about one-third of CSE's budget, while it was more like 23% in the pre-9/11 days. This means the cyber security budget is about 8.9 times its pre-9/11 size, whereas the SIGINT (and now cyber operations) budget is about 5.3 times its earlier size, after adjusting for inflation.]

Interestingly, CSE's staff is only around 3.5 to 4 times as large as it was in 2001. There are probably multiple reasons for the difference: a higher proportion of the budget likely goes to IT systems and services and to agency facilities; pay and benefits packages have probably improved; and the agency may also be contracting more work out to the private sector.

The trajectory of the Canadian Security Intelligence Service's budget makes for an interesting comparison. CSIS has also seen a lot of growth since 9/11, but not on the same scale as CSE. The projected CSIS budget in FY 2001-02 was $170.4 million, or about $290 million in 2024 dollars. CSIS’s projected budget for FY 2024-25 is $702.6 million — about 2.4 times as much as its pre-9/11 budget. 


Tuesday, March 05, 2024

U.K.’s intelligence partnership with Canada

On 5 December 2023, the Intelligence and Security Committee (ISC) of the U.K. Parliament published a report on the U.K.’s international intelligence partnerships

As the report states, the “partnership with the other Five Eyes countries is – and will remain – the most important element of the [U.K.] Intelligence Community’s international engagement.” The U.S. is by far the largest and most important of the Five Eyes partners, but Canada and the other countries also get some attention in the report, and on the topic of Canada the committee makes a couple of intriguing assertions. 


More advanced capabilities

One assertion is that some of Canada’s intelligence capabilities are “more advanced” than those of the U.K.:

“The UK–Canadian intelligence partnership is mutually beneficial. Some of Canada’s capabilities – for instance, *** – are “more advanced” than the UK Intelligence Community’s, and CSIS and CSE provide valuable reporting on a range of intelligence topics.” (p. 83)

(The ISC uses three asterisks to indicate where text in the classified version of its report has been redacted.)

Here, the committee was probably thinking mainly of CSE’s Canadian Centre for Cyber Security:

“GCHQ noted in particular Canada’s mature and leading role on cyber security within the Five Eyes: Canada has been with us at the head of the pack on cyber security and our relationship on cyber security is extremely strong and deep. It’s the deepest of the Five Eyes actually and they have pioneered some things that we are using, including how you monitor for threats across government, and similarly we’ve shared capability in the other direction. So I think Canada is really nimble and they’re very focused on cyber security.” (pp. 83-84)

Canada’s development of host-based sensors is perhaps the best known example of Canadian cyber security technology transfer to the U.K.

But the ISC also praises Canadian intelligence collection and/or analysis capabilities. Unsurprisingly, however, on that subject they leave us guessing as to what exactly Canada is good at: “GCHQ also highlighted Canada’s “very good analytical understanding ***” and the fact that, ***, Canada has become a “world leader in ***”.” (p. 84)


The sun never sets on the UKUSA empire

Also interesting is the report’s description of a Five Eyes practice known as “follow the sun,” a term that I hadn’t seen before.

The Chief of Defence Intelligence “explained to the Committee that geography enables the Five Eyes to achieve more complete and consistent intelligence coverage. This is done through so-called ‘follow the sun’ working, whereby high priority tasks can be ‘passed’ around the Five Eyes community to allow 24-hour working: imagery analysts that are at [RAF] Wyton … hand the mission on to analysts that are in Washington D.C. or St Louis and to our Canadian partners who will then hand on to Australian and New Zealand partners who then hand back to us” (p. 65)

The Canadian partners specifically referred to here are presumably analysts at the Canadian Forces Joint Imagery Centre, which is part of the Canadian Forces Intelligence Command (CFINTCOM).

The report also describes a new building at RAF Wyton that hosts not only British imagery (and other INT) analysts, but also analysts from the other Five Eyes countries.

“[Defence Intelligence] has taken significant steps to integrate Five Eyes partners into its work through the development of its ‘Pathfinder’ facility at RAF Wyton. This was described to the Committee as “a unique experiment within the Five Eyes community … designed from the outset to accommodate Five Eyes working, both in terms of having Five Eyes personnel on the floorplate ***”.” (p. 63)

Note the flags of all five countries flying at the entrance to the building.

The Pathfinder building was described in 2014, one year after its construction, as “headquarters to [the U.K.’s Joint Forces Intelligence Group] and home to the Defence Intelligence Fusion Centre (DIFC).”

“Within the new Pathfinder Building at Wyton, the Joint Intelligence Operations Centre (JIOC) coordinates Intelligence, Surveillance and Reconnaissance (ISR) for Defence, while the DIFC brings together Geospatial intelligence for the Nation and Intelligence Fusion for Defence.”

The image below is an architect's rendering of the building's interior.

Whether Canada has personnel in the building and, if so, whether it is one or two analysts working on exchange or a somewhat larger formal detachment has not been revealed.

I would assume that the SIGINT part of the Five Eyes partnership also benefits from the use of follow the sun working, although the partner agencies focus their efforts on national priorities and also divide some of their work according to geographic and topical specialties. 

The Five Eyes SIGINT partners also exchange personnel and, in some cases, have deployed detachments to work at partner facilities.

In Canada’s case, CSE has a liaison office and also some personnel serving on exchange with GCHQ, and normally at least two members of the Canadian Forces Information Operations Group are on exchange at RAF Digby, home of the Joint Service Signals Organization, JFIG’s SIGINT component.

With respect to the Canada-U.K. SIGINT relationship more generally, the committee concluded that “it is apparent that GCHQ’s partnership with its CSE counterparts – described as “flourishing” to the Committee – is particularly strong.” (p. 83)


Canada joined UKUSA in 1948?

Another interesting claim in the committee’s report is that Canada joined UKUSA in 1948.

“The 1946 British–US Communication Intelligence Agreement – subsequently known as the UKUSA Agreement – formalised the SIGINT partnership and committed the UK and US to an unprecedented level of peacetime co-operation. The UKUSA Agreement was subsequently extended to include Canada (in 1948) and Australia and New Zealand (in 1956), thereby creating the ‘Five Eyes’ intelligence-sharing alliance.” (p. 61)

“Canada was the third country to join the UKUSA intelligence-sharing Agreement (in 1948), and as such is one of the UK’s oldest intelligence partners.” (p. 83)

Similar accounts have cropped up before.

In its 2010-11 report, the Security Intelligence Review Committee summarized the history as follows:  

“During the Second World War, Britain and the United States worked together closely in intercepting the communications of their enemies—what is commonly known as signals intelligence. In 1946, in the context of the emerging Cold War with the Soviet Union, the two major powers decided to institutionalize this cooperation through a formal agreement. Two years later, Canada joined this alliance, with New Zealand and Australia following suit in 1956.” (p. 20)

However, in 1990, Canada’s Intelligence Advisory Committee provided a rather different take on this history in its classified overview of the Canadian intelligence community:

In this telling, the BRUSA (later called UKUSA) agreement was signed in 1945; Canada, Australia, and New Zealand all agreed to join the accord in 1946; and formal agreement incorporating all five parties was reached in 1948.  

As far as I can tell, none of these accounts is quite right.

Let’s start with the IAC.

·        While the text of the BRUSA agreement had been agreed by its U.S. and U.K. negotiators in virtually final form by November 1945, it was formally signed by the two governments on 5 March 1946. Unless there was also an earlier signing, it’s just wrong to say it was signed in 1945.

·        The BRUSA agreement included provision for participation by Canada and other Commonwealth dominions in the partnership if they pledged to abide by certain key clauses of the agreement, and Canada, Australia, and New Zealand provisionally did so at the Commonwealth SIGINT Conference held in February-March 1946. So, if you’re flexible about what it means to “join” the agreement, that part of the IAC account is right.

·        In December 1947, the U.S. and U.K. moved to further formalize the status of the Commonwealth collaborators, limiting the anticipated pool to the existing three countries and laying out the requirements those countries would have to follow in a new appendix to the BRUSA agreement, Appendix J. As part of those requirements, the two parties agreed that the U.K. would “obtain from the Sigint authorities of the collaborating Dominions formal assurance that they will abide by the terms of paragraphs 5, 8, and 9 of the [BRUSA] Agreement and of paragraph 5 of Appendix E to that agreement.” In February 1948, the U.K. conveyed those assurances to the U.S., and when the U.S. and U.K. updated the BRUSA appendices in July 1948 a footnote to that effect was added to Appendix J. These developments are probably the basis for the claim that a formal five-party agreement was signed in 1948. But, in fact, the BRUSA agreement remained a two-party agreement.

There is no evidence, or at least no evidence that I’m aware of, that any actual five-party agreement that could be considered in any way comparable to the BRUSA agreement was signed in 1948 or indeed at any time during the Cold War. The two-party BRUSA agreement was still a two-party agreement at the time it was renamed UKUSA in 1952, and it remained a two-party agreement for the decades that followed. The other three countries were members of the UKUSA partnership, were considered Second Parties, and even had some say over portions of the agreement that affected them, but they were never signatories, and relations among the partner agencies were mostly bilateral rather than Five Eyes-wide.

According to an NSA document leaked by Edward Snowden, “Although NSA has had bilateral relationships with individual Second Party countries going back to the 1940's and 1950's, we did not have any group (5-EYES) partnership until 1993." 

It is only since the 1990s that the Five Eyes partnership has operated on the basis of regular five-party meetings and governance structures.

Another notable piece of negative evidence can be found in the chronology of significant events recorded in the official History of CBNRC (CBNRC was CSE’s name prior to 1975). The page for 1948 contains one redacted entry and a couple of other minor redactions, but there is nothing that might represent a major five-party SIGINT agreement. (The redacted entry is cited to paragraph 9 of chapter 5, which discusses the competition between strategic and tactical priorities in the naval intercept and direction-finding program. SIGINT partners and agreements are mostly discussed in chapter 11.)  

The author of the SIGINT portion of the history, former CSE Chief Kevin O’Neill, was already a senior CBNRC official in 1948, so it is hard to believe he would have failed to include an agreement of such importance in this chronology if a formal quinquepartite agreement actually existed.

Still, for what it’s worth, a CSE document from 2013 makes an almost identical claim, minus the five-dollar word:

So, what’s going on here?

With a vigorous amount of mental contortion, it is possible to interpret these statements not as claims that a single, specific five-party accord was formally agreed in 1948, but as acknowledgments that by 1948 all five countries had in some manner formally agreed to abide by certain key BRUSA provisions. Arguably, that was a development of some significance, although evidently not enough to impress Kevin O’Neill.

Maybe that’s all that those statements were intended to mean. In their plain readings, however, they just seem to be wrong. 

(That said, I’d be happy to see evidence to the contrary.)

Let’s turn now to the U.K. Intelligence and Security Committee’s account.

The ISC, you’ll recall, reported that Canada joined UKUSA in 1948, but that Australia and New Zealand didn’t do so until 1956. Clearly, then, the committee did not have the formal assurances that the three countries provided to the U.K. in 1948 in mind. And the ISC certainly makes no mention of any five-party accord in that year.

The big event that occurred in 1956 was the formal approval by Australia and New Zealand of the conditions for SIGINT cooperation with the U.S. that were negotiated at and in the wake of the Melbourne Tripartite Conference of September 1953 and then added to the UKUSA agreement as Annexure J1 in 1955.

At the time, Australia’s Defence Signals Branch (DSB) was a joint British/Australian/New Zealand organization staffed mainly by Australians but with a significant British contingent and also some New Zealanders. (New Zealand had a radio intercept program and contributed personnel to the DSB, but it had no SIGINT agency of its own until 1977.) The 1956 developments were the culmination of the DSB’s transition from an organization whose only connection to U.S. SIGINT was through GCHQ to one that maintained direct contacts and undertook joint work with the U.S. as well as the U.K.

That’s a significant milestone, and perhaps a reasonable place to identify as the point where Australia and New Zealand truly became UKUSA partners as opposed to just British partners.

But if that’s the criterion we use to judge Australian and New Zealand participation in UKUSA, what does the 1948 date ascribed to Canada correspond to?  

It might be argued that the CANUSA agreement, which formalized SIGINT relations between Canada and the United States, is the logical counterpart to the DSB’s 1956 transition.

But the CANUSA agreement was finalized in 1949, not 1948. So, that doesn’t explain the ISC’s date.

I can’t find anything that does explain it. Just as there is nothing in the History of CBNRC chronology for 1948 that corresponds to a five-party SIGINT agreement, there is nothing that suggests that the UKUSA agreement was “extended to include Canada” during that year.

So, it’s a mystery — and one that also applies to the SIRC account quoted above.

The idea of picking a single date may be part of the problem here.

The integration of Canada, Australia, and New Zealand into the UKUSA partnership is probably best understood as a gradual process of growing interaction and deepening ties that played out over decades — a process that arguably is still playing out as the nature of the partnership itself continues to evolve — so it is quite difficult and perhaps not very helpful to choose a specific date and proclaim it as the line between in and out.

Even what seems like a single event can in fact extend over several years. For example, the History of CBNRC dates Australian (and by implication New Zealand) entry into the partnership to September 1953, the date of the Melbourne Tripartite Conference, arguably the key decision point in the process of integration that culminated in the 1956 formal approval of UKUSA annexure J1 that the ISC report identifies as the moment of partnership.

In Canada’s case, if we do want to pick a year, I think neither 1948 nor 1949 is the one we ought to be looking at.

In my view, Canada was a participant in the post-war UKUSA partnership from the start.

Canada’s residual wartime cryptologic units, consolidated into the Joint Discrimination Unit (JDU) at the beginning of August 1945, remained in operation when the war ended, evolving a year later into the Communications Branch of the National Research Council (CBNRC), which ultimately became CSE. A number of intercept stations also remained in operation, although with reduced staffs. The Canadian government retained these facilities with the explicit expectation that the Canadian post-war SIGINT effort would operate as part of a greater U.S. and U.K. partnership.

Even as they were negotiating that post-war partnership, the U.S. and U.K. also anticipated that combined work with Canada would continue. By November 1945, following consultations with Canadian officials, they had written that expectation into the provisional text of the BRUSA agreement. Canada’s anticipated role was also recognized in the recommendations of the Commonwealth SIGINT Conference held in February-March 1946, which acknowledged that Canada would not be working solely with Commonwealth partners:  

"Canada's geographical position and treaty relations with the U.S.A. make it necessary for her to be able to work directly with Washington. The allocation of interception and cryptographic tasks and the dissemination of Signal Intelligence results to Ottawa will therefore be matters for consultation between Signal Intelligence authorities in Ottawa, Washington and London."

Interim post-war assignments had already been allocated to Ottawa by both London and Washington by that time. While Canada’s intercept and cryptologic efforts were both very small, they were at least marginally operational, worked directly with their U.S. and U.K. counterparts, and were in the process of becoming more capable. In January 1947, CBNRC began working on one of the partnership’s core efforts, processing a portion of the traffic carried by one of the Soviet Union’s most important high-level cryptographic systems, the teleprinter the UKUSA partners called Coleridge. The annual report of the U.S. Army Security Agency (ASA) for fiscal year 1947 (i.e., July 1946 to June 1947) noted that “channels of liaison with other communications-intelligence agencies were gradually systematized and standardized by implementation of joint processing agreements with the British (LSIC), the Navy (CSAW), and the Canadians (CBO)."

As time went on, Canada became increasingly integrated into the partnership, exchanging liaison officers with the U.S. and securing improved access to U.S. SIGINT reporting after the 1949 CANUSA agreement, for example. The nature of Canada’s participation in the partnership has extended and deepened in many ways in the decades since. 

But the fundamental partnership decision had been made by all three parties by the fall of 1945: although never a signatory of the BRUSA/UKUSA agreement itself and always a junior player, Canada was a partner from the beginning.