Are Canada’s military export control policies being decided in Washington?



by Neil Desai

Policy Options
April 7, 2016

Washington puts American commercial interests first when it negotiates military export controls, and Ottawa should take an equally shrewd approach.

Much has been written about the Government of Canada’s decision to allow for the sale of $15-billion worth of light armoured vehicles (LAVs) to Saudi Arabia by General Dynamics Land Systems Canada (GDLSC), based in London, Ontario. This is despite that country’s human rights record.  Foreign Affairs Minister Stéphane Dion recently said cancelling the deal would cost Canada 2,000 jobs and would have no impact on human rights.

But as the LAV deal continues to grab headlines, another major story over export controls of military goods went largely unreported in Canada, while south of the border it reverberated all the way to the White House.  Multiple federal departments and security agencies there have been involved in a vigorous debate over international limits on the sale of surveillance (or “hacking”) software.

The attention to the issue and all its complexities, especially domestic economic interests, by the United States government stands in sharp contrast to the way that Canada handles questions of military exports. Here, Global Affairs Canada is the main analyst, negotiator and executor, with our industrial interests largely taking a backseat.

Canada, the United States and 39 other counties are currently parties to the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies. This regime, brought in after collapse of the Soviet Union, focuses on providing transparency and responsibility in arms exports, as opposed to establishing a rigid export-control regime for the purpose of geopolitical containment during the Cold War.

The number of items covered by the arrangement has grown, and now includes more “dual-use” technologies or equipment designed — intentionally or not —for civilian as well as military applications.  Examples of such products include nuclear materials, aerospace, and information security technologies. Amendments to this arrangement work on consensus-basis among its members, giving each a de facto veto.

The reality is that this forum, like almost all multilateral forums, is subject to geopolitical jockeying. The intertwined security and economic interests of the powerful members of the arrangement seem to be taking precedence over the broader interests of the members. The US, as a major developer, consumer and exporter of dual-use goods, drives the agenda at the Wassenaar Arrangement. Where it cannot get consensus, it can utilize domestic regulations and laws to shape global norms and markets. It is safe to assume that General Dynamics, an American firm, is able to build LAVs in Canada for Saudi Arabia, through a subsidiary, only with the US government’s approval.

In 2013, the members of the Wassenaar Arrangement agreed to expand the list of dual-use technologies that were covered to include Internet-based surveillance systems. This included intrusion software designed to circumvent a computer or network’s security measures to extract data. It also listed Internet-protocol network surveillance systems. The United States was a driving force behind the amendments – the annual US Intelligence Community Worldwide Threat Assessment has moved cyber-threats ahead of terrorism as the leading threat to the United States’ security and economic interests.

Ironically, even though the US backed the inclusion of hacking software at the Wassenaar Arrangement table, it hasn’t enforced the amendments at home. Industry heavyweights such as Symantec, Google, Cisco, Boeing and Raytheon raised the alarm, saying their businesses could be hurt by the vague Wassenaar language, which they said would only create bureaucratic impediments and require cumbersome export licenses.

Last month, the Obama administration said it would renegotiate the measures around surveillance software when the Wassenaar members meet in December 2016. It should be emphasized that in the US, the lead agency in implementing the Wassenaar Arrangement is the Department of Commerce. Its general outlook is contributing to American prosperity.  It is clear from this that the US sees its military and dual-use exports (such as cybersecurity technologies) as contributing to its national wealth today and in the future.

If the US is unable to soften the language in December, it will find a way to allow its industry to flourish regardless, leaving countries like Canada at a strategic disadvantage. Our homegrown, innovative cybersecurity companies might have limited international markets to pursue, or be required to go through extensive regulatory processes to receive an export permit for every piece of software they want to sell abroad.

Global Affairs Canada should be as shrewd as the United States when it negotiates and implements further amendments to Wassenaar. Given the speed of change in this field, it is essential for governments to draw on the expertise of departments and agencies that have an understanding of dual-use technologies, including National Defence, Public Safety Canada, and police forces. The national security analysis must be balanced with domestic economic considerations, so that a geopolitical monopoly on cybersecurity technologies isn’t formed, whether inadvertently or strategically.

Photo: Mac Mackay

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