CSIS warning Inuit leaders about covert foreign investment in Arctic, documents show

Canadian Coast Guard icebreaker Louis S. St-Laurent crashes through the ice near Resolute Bay, Nunavut on July 12, 2008. CSIS has warned the region’s leaders that foreign adversaries may try to gain a foothold in the region through investment. (Jonathan Hayward/CP)

Inuit leader calling on spy agency to share more information with region’s leaders

The Canadian Security Intelligence Service (CSIS) has warned Inuit leaders that foreign adversaries could gain a foothold in Canada by offering to fill infrastructure gaps in the North.

But Natan Obed, president of the Inuit Tapiriit Kanatami (ITK) — the nonprofit organization that represents more than 65,000 Inuit across Inuit Nunangat and the rest of Canada — said the spy agency’s inability to share classified intelligence with the region’s decision-makers leaves them in the dark about the risks.

“We are making decisions every day that are currently not as informed as they could be about threats and considerations,” Obed recently told CBC News.

“The partners that we choose are sometimes not the partners that we hope to have.”

Internal CSIS documents obtained by CBC News show that the agency is trying to grow its presence in the North and deepen its relationship with Inuit communities in response to “economic, strategic and military interests of foreign states in the North.”

“Foreign interference is a significant threat, primarily from China and then Russia. Both desire access to natural resources in the Arctic, like minerals,” said one of the CSIS documents, released through an access to information request.

“To date, however, [CSIS’s] presence in Canada’s North and Arctic has been limited.”

The documents show that CSIS Director David Vigneault visited the region in 2022 and has had meetings with Obed and Duane Smith of the Inuvialuit Regional Corporation.

David Vigneault, director of the Canadian Security Intelligence Service (CSIS), prepares to appear before a Commons committee on Parliament Hill on June 13, 2023. (Justin Tang/Canadian Press)

His talking points for those meetings, released to CBC News, included questions for the leaders about partnering with foreign telecommunication providers.

“CSIS’s interests in Canada’s North and the Arctic stem from our mandated responsibilities to address security threats, including foreign interference and espionage,” the talking points say.

“These take the form of activities such as covert foreign investments or partnership arrangements, efforts to interfere in decision-making at all levels of government, theft of research or data and interference in research agendas or funding.”

CSIS did not respond to CBC’s request for an interview.

We need detailed warnings, Obed says

The North has long suffered from a deep infrastructure gap that includes a housing shortage and unreliable ice highways.

“Canada isn’t built yet,” said Obed.

“There’s still incredible infrastructure deficits in the Canadian Arctic, whether it be for airports, for marine facilities, or for just a network for shipping.”

A person walks down the Inuvik Tuktoyaktuk Highway. It was closed due to rainy and muddy conditions in May 2018. (Submitted by Michael Wieleba)

Obed said CSIS reached out to discuss its foreign investment concerns but hasn’t been able to offer detailed warnings.

“It’s just a very general statement about other nation states wishing to make foreign investments in this country so as to enable them to do other business within the country, or intelligence gathering within Canada,” he said.

Obed said he told CSIS that the ITK is working to find funding for infrastructure projects and needs to be warned in advance if its potential funding partners pose a threat.

“Especially if the Canadian government is not investing in infrastructure development in the Arctic, then it pushes our pursuit for partners in investment into other places,” he said.

“If we are, without our knowledge, entering into spaces where there may be considerations from the federal government for foreign interference, we don’t want to ever get caught up into that.”

CSIS officials offered to write budget proposal

Broad concerns about foreign investment even spurred CSIS officials to offer to help write a budget proposal to motivate the federal government to spend more in the North, according to a CSIS “contact report” released to CBC.

The report summarizes a 2022 phone meeting between representatives of the ITK and CSIS officials. They discussed the North’s infrastructure deficit and “how China helps develop infrastructure rapidly,” the document says.

Someone from the ITK said they were in the midst of crafting a budget proposal, according to the documents.

While CSIS employees on the call (their names are redacted) acknowledged that the agency can’t fund infrastructure, they “offered to assist with crafting the proposal to help identify complementarities between our mutual interests,” says the report.

The document says CSIS officials added that “increased relationship-building and information sharing on security threats can be leveraged by ITK to bolster their infrastructure requests and the necessity thereof.”

China’s vast interests in the North

Casey Babb, an international fellow with the Glazer Center for Israel-China Policy and an instructor at Carleton University in Ottawa, said China uses foreign investment as a strategic tool.

“They use foreign investment as a door, as an entry point, to gain access to markets, to gain access to government, to investors as well,” he said.

“It’s a great way to sort of use licit means to carry out illicit, or even legal but injurious, activities.”

Babb said China is looking to tap into the region’s natural resources, including oil, critical minerals and fish.

Chinese President Xi Jinping has long said he wants to be a polar power and is thinking about capitalizing on a thawing Arctic passage, Babb said.

“They want to understand how to operate there, how certain technologies, some of which are dual-use, could be applied in the region or elsewhere. There are technologies that are being used in the Arctic that, you know, perhaps they could be used in other places that are of strategic importance to the regime,” he said.

“Militarily, there could be opportunities for China there as well, to increase not only their capabilities in the Arctic but to use the Arctic as a testing ground of sorts for carrying out conflict in other parts of the world.”

Concerns about Arctic research 

Obed said he also raised with Vigneault the issue of research in the Arctic.

He said more and more universities and foreign countries have been applying for research licences, often focused on the region’s flora and fauna.

“It is another way for foreign actors to gain access to Canadian soil and to gain information,” he said.

“We just talked to CSIS about the need to have a clear understanding from their perspective about what are the threats that we may not be aware of when it comes to partnering, or when it comes to consideration for potential research.”

A suspected Chinese spy balloon drifts to the ocean after being shot down off the coast in Surfside Beach, South Carolina on February 4, 2023. (Randall Hill/Reuters)

Citing the Chinese spy balloon that passed over Canada earlier this year — and kicked off an international media frenzy — Obed said CSIS has to bring the region’s leadership into the loop on foreign threats.

“There’s obviously something happening in the Arctic. There’s something happening within our homeland,” he said.

“And the inability for the government of Canada to share anything other than public information about what is happening is, I think, a vestige of another time — a more parental approach.”

He said he wants a security clearance that would allow him “to understand what is happening in the Arctic” and provide advice on sensitive files. He said his request for a security clearance hasn’t been granted.

Government suggests changes are coming

Obed is not the only leader to find CSIS’s briefings lacking.

British Columbia Premier David Eby said he’s received briefings from CSIS about Prime Minister Justin Trudeau’s claim that there are “credible allegations” linking the Indian government to the death of Sikh activist Hardeep Singh Nijjar in his province.

But those open-source briefings are frustrating, he said, because their contents don’t go beyond “anything that’s in the newspaper.”

By law, the Canadian Security Intelligence Service cannot share its tightly-guarded intelligence with anyone outside of the federal government.

Public Safety Canada has suggested legislative changes are coming but hasn’t offered a timeline.

A bill that would bolster Canada’s foreign investment review law, the Investment Canada Act, is moving its way through Parliament.

A spokesperson for Innovation, Science and Economic Development Canada said the Investment Canada Act’s national security provisions can apply broadly to new investments in Canada by non-Canadians.

“This includes majority and minority investments, as well as greenfield investments, in Canadian businesses and operations in Canada,” said Justin Simard. (A “greenfield investment” is a type of foreign investment that sees a parent company set up a subsidiary in a different country.)

“This broad application ensures that the government has the flexibility to address potential national security harms arising from such foreign investments.”

Related stories from around the North: 

Canada: Potential Canadian Northern Corridor would present unique security challenges and opportunities, say researchers, Eye on the Arctic

China: Satellite imagery reveals construction progress on new Chinese Antarctic base, Eye on the Arctic

Denmark: Danish policy prioritizes low-conflict Arctic amidst Russian tensions, Eye on the Arctic

Iceland: Nordics should aim for common approach to China’s Arctic involvement says report, Eye on the Arctic

Norway: Svalbard’s travails in a changing Arctic, Blog by Marc Lanteigne

Russia: National security chief says Russia must bolster its Arctic military, The Independent Barents Observer

United Kingdom: Russia’s growing dependence on China altering dynamics in Arctic, UK committee hears, Eye on the Arctic

United States: Russian, Chinese vessels near Alaska reminder of ‘new era of aggression’: Senators, Eye on the Arctic

Catharine Tunney, CBC News

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