CSIS: China Outpaces Russia as Arctic Threat in Canada

Canada’s Focus on Economic Security in the Arctic

Ottawa — While Russia continues to be a military threat in the Arctic, Canadian security officials have recently emphasized that their primary concern lies with China's economic activities in the region. During a recent meeting with the House of Commons committee, Paul Lynd, assistant director at the Canadian Security Intelligence Service (CSIS), highlighted that although Russia has significant interests in the Arctic, it is not the main focus of current security concerns.

Lynd explained that the CSIS has been increasing its collaboration with Indigenous communities, territorial and municipal governments in northern Canada. This effort aims to address threats related to foreign interference and economic espionage, particularly from China. He stated that the primary concern regarding threats in the Arctic now centers around economic security.

“Foreign interference in our economic sector is a major issue,” said Lynd. This includes predatory investment practices, attempts to gain control over the critical minerals sector, and efforts to establish footholds in critical infrastructure.

The CSIS investigates and collects information on these activities, providing advice to the government on potential threats. One of the key tools used for this purpose is the Investment Canada Act (ICA). This legislation enables the federal government to conduct national security reviews of foreign investments.

The federal government has previously used the ICA to protect Canada’s national security interests in commercial sectors. For instance, in 2020, the 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 government also banned Huawei, a Chinese technology company, from working on Canada’s 5G networks due to security concerns.

Lynd’s warnings come shortly after Prime Minister Mark Carney signed a new “strategic partnership” with President Xi Jinping of the People’s Republic of China. This agreement encourages increased two-way investment and trade between Canada and China. It also allows 49,000 Chinese electric vehicles into Canada’s car market at a reduced tariff rate, in exchange for Chinese tariff relief on Canadian canola and seafood exports.

A recent report by Toronto-Dominion Bank estimates that China’s foreign direct investment in Canada will grow to around $90-100 billion over the next five years, with an additional $15-25 billion in investment thanks to the new agreement. While Carney’s government is open to more Chinese investment in sectors like oil and gas, agri-food, and technology, sensitive areas such as critical minerals, artificial intelligence, and telecommunications are likely to face constraints under the ICA.

Arctic Security and International Cooperation

Arctic security has become a growing concern following U.S. President Donald Trump’s threat to take over Greenland, a Danish territory, due to perceived threats from Russia and China near the strategically important island. In response, NATO launched the Arctic Sentry initiative, which coordinates allied activities in the North. Foreign Affairs Minister Anita Anand has expressed support for making this initiative permanent.

Anand is currently at the Munich Security Conference, engaging with international counterparts to enhance cooperation in the Arctic. NATO allies, including Canada, have committed to increasing defense spending to five per cent of GDP by 2035, with 3.5 per cent allocated for core military needs and 1.5 per cent for security-related infrastructure. Canada has historically spent below two per cent of its GDP on defense.

René Ouellette, director general at CSIS, pointed out that the lack of infrastructure in the North poses indirect risks to national security. Communities in the region may be more susceptible to accepting foreign investments that could increase their vulnerability.

Lynd acknowledged that despite the increased engagement by CSIS in the Arctic, the agency does not have a permanent presence there. “Like all government departments, we’ve had to allocate our resources across the country in a way that maximizes impact,” 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.”

National Post
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