CSIS officials say China is more of a concern in Canada’s Arctic than Russia

OTTAWA — While Russia remains a military threat in the Arctic, Canada’s security officials told a House of Commons committee this week that they remain primarily focused on China’s threats to economic security in the North.

“Russia has a tremendous interest and focus in the Arctic,” Paul Lynd, assistant director at the Canadian Security Intelligence Service (CSIS), told the foreign affairs committee on Thursday. “However, they are of less concern than, say, the activities of China and other hostile state actors at this time.”

Lynd told the committee CSIS has recently stepped up its engagement with Indigenous communities, territorial and municipal governments in northern Canada to help mitigate China’s foreign interference and economic espionage in the region.

“I would say now, our primary concern about the threat in the Arctic falls under economic security,” said Lynd. “It’s foreign interference in our economic sector.”

Lynd said this would include predatory investment, attempts at control in the critical minerals sector and China’s attempts to gain footholds in critical infrastructure.

“The concern we have would be with clandestine or deceptive investment practices or economic engagement in certain market sectors in the Arctic,” he said. “From a CSIS perspective, we investigate, collect information on that, and we advise government on the rest of the threat.”

Lynd said this is achieved through the Investment Canada Act (ICA), which is legislation that allows the federal government to conduct a national security review of any foreign investment.

The federal government has used the ICA before to protect Canada’s national security interests in commercial fields.

In 2020, the federal government blocked Shandong Gold Mining Company from purchasing a gold mine in Hope Bay, Nunavut.

In November 2022, then Industry Minister François-Philippe Champagne ordered three Chinese firms to divest their interests in Canadian critical mineral companies. That same year, the federal government banned Chinese-owned technology company Huawei from working on Canada’s 5G networks over security concerns.

Lynd’s warning comes just a month after Prime Minister Mark Carney signed a new “strategic partnership” with President of the People’s Republic of China Xi Jinping that encourages more two-way investment and trade between Canada and China. The agreement also allows 49,000 Chinese electric vehicles into Canada’s car market at smaller tariff rate, in exchange for Chinese tariff relief on Canadian canola and seafood exports.

A recent report by Toronto-Dominion Bank estimates China’s foreign direct investment in Canada will grow to around $90-100 billion over the next five years, with $15-25 billion more investment thanks to the agreement.

While Carney’s government has signalled it would like to see more Chinese investment in the oil and gas sector, agri-food and technology, more sensitive sectors like critical minerals, artificial intelligence and telecommunications will likely be constrained under the ICA.

Arctic security has become more of a focus in recent months, following U.S. President Donald Trump’s threat to take over Greenland, a Danish territory, due to what he says are increased threats posed by Russia and China near the strategically positioned island.

In response, the North Atlantic Treaty Organization (NATO) this week launched the Arctic Sentry, a new initiative that coordinates allied activities in the North. Foreign Affairs Minister Anita Anand told the Arctic 360 conference on Wednesday that Canada would like to see this initiative become permanent.

Anand is at the Munich Security Conference this week, meeting with counterparts, with a focus on advancing cooperation with allies in the Arctic.

NATO allies, including Canada, have committed to increasing defence spending to five per cent of GDP by 2035, with 3.5 per cent for core military needs and 1.5 per cent for security-related infrastructure. Canada has typically spent below two per cent.

René Ouellette, director general at CSIS, emphasized to the committee that the lack of infrastructure in the North poses indirect risks to national security, because communities in this context are more likely to accept foreign investment that would make them even more vulnerable.

Lynd also acknowledged that despite the increased engagement by CSIS in the region, the agency has no permanent presence there.

“Like all government departments, we’ve had to allocate our resources across the country in a way that maximizes impact, and so it is a resource issue at the current time,” he told the committee. “What we have done is increase our travel from our offices that are not in the Arctic by sending employees much more regularly and much more frequently into the Arctic as often as possible, not just the territorial capitals, but also into the smaller cities as well.”

National Post

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