Standing Senate Committee on National Finance (NFFN): June 19, 2025

Table of contents

• A. Appearance details
• B. Key highlights and prep material
  • Opening remarks
  • Main estimate page proofs
  • Supplementary estimates a page proofs
  • Main and supplementary estimates (A) overview
  • Key topics
  • Potential questions & answers
• C. Issue notes
  • Defence investments
  • Cyber security and cyber capabilities
  • U.S. Partnership
  • Border security
  • Arctic defence and sovereignty
  • Top cybersecurity points

Appearance details

Date: Thursday, June 19
Location: Room C128, Senate of Canada Building
Time: 1:00 pm – 2:00 pm

Appearing:

• Caroline Xavier
  Chief, Communications Security Establishment Canada
• Julie Chassé
  Chief Financial Officer, Communications Security Establishment Canada
• Samantha McDonald
  Assistant Deputy Minister, Strategic Policy, Planning, and Partnerships, Communications Security Establishment Canada

Details: Chief, CSE will appear alongside senior officials to speak on Main and Supplementary Estimates A 2025-26.

Key highlights and prep material

Opening remarks

Time Allotted: 5-7 minutes
Current word count: 1044
Current estimated time: 7 minutes

Introduction

Good afternoon, Chair, and members of the Committee. Thank you for the invitation to appear today to discuss CSE’s 2025-2026 Main Estimates and Supplementary Estimates A 2025-26 on behalf of the Communications Security Establishment Canada.

My name is Caroline Xavier, and I am the Chief of the Communications Security Establishment Canada, also known as CSE. Today, I am joined by my colleague, Samantha McDonald, Assistant Deputy Minister for Strategic Policy, Planning and Partnerships, as well as Julie Chassé, our Chief Financial Officer.

CSE and Cyber Centre Overview

For committee members less familiar with our agency, CSE is an important part of Canada’s security and defence ecosystem. As a standalone agency, we report directly to the Minister of National Defence.

Our role is to:

• Collect and report on foreign signals intelligence.
• Provide cyber security, information assurance and secure communications for the Government of Canada, and cyber guidance and services to help protect systems of importance to the Government of Canada.
• Disrupt foreign cyber threats and take action in cyberspace to defend systems of importance to the Government of Canada, and to support Canadian international affairs, defence and security.
• Provide technical and operational assistance to federal law enforcement and security agencies, including to the Department of National Defence and the Canadian Armed Forces; and
• We also lead the Canadian Centre for Cyber Security (Cyber Centre), which offers cyber security advice to external stakeholders and the public.

CSE is a proud and valuable member of the Five Eyes, the world’s longest-standing and closest intelligence-sharing alliance. The Five eyes is a key element in Canada’s intelligence and security landscape – a force multiplier for CSE and Canada - providing a forum to share intelligence, technology and insights to hone our understanding of threats, risks and adversaries and strengthen our collective defences - helping to protect Canada’s security and prosperity.

Threat landscape

CSE’s information advantage, gained through our activities to support our mandate and our partnerships, provides Canada with a comprehensive understanding of the threat landscape.

As a national security and intelligence organization, you can understand that we cannot publicly disclose all our information and intelligence; however, we use publications such as our unclassified National Cyber Threat Assessment (NCTA) report to share threat information to help raise Canada’s cyber security bar so Canadians can live and work online safely and with confidence.

Canada is confronting an expanding and complex cyber threat landscape with a growing cast of malicious and unpredictable state and non-state cyber threat actors, from cybercriminals to hacktivists, that are targeting our critical infrastructure and endangering our national security. These cyber threat actors are evolving their tradecraft, adopting new technologies, and collaborating in an attempt to improve and amplify their malicious activities.

Canada’s state adversaries are becoming more aggressive in cyberspace. State-sponsored cyber operations against Canada and our allies almost certainly extend beyond espionage. State-sponsored cyber threat actors are almost certainly attempting to cause disruptive effects, such as denying service, deleting or leaking data, and manipulating industrial control systems, to support military objectives and/or information campaigns. We assess that our adversaries very likely consider civilian critical infrastructure to be a legitimate target for cyber sabotage in the event of a military conflict.

At the same time, cybercrime remains a persistent, widespread, and disruptive threat to individuals, organizations, and all levels of government across Canada that is sustained by a thriving and resilient global cybercrime ecosystem.

Investments to bolster CSE’s mandate

In this year’s Main Estimates, CSE sought a total of $1.22 billion dollars. In addition, through the Supplementary Estimates A, CSE sought $370.1 million for a total of $1.59 billion dollars all of which contribute towards reaching the 2% of GDP in defence expenditures this year.

The Main Estimates include allocating $21 million dollars to enhance foreign intelligence coverage of transnational organized crime and illegal drug supply chains. This funding was allocated to CSE to bolster the capacity to provide actionable intelligence to federal partners on foreign transnational criminal actors involved in trafficking of fentanyl, other illicit drugs, and their precursors to North America. This funding will also be used to bolster the cyber operations aspect of its mandate to disrupt these illicit supply chains.

As announced last week by the Prime Minister, Canada will meet the NATO spending for investing 2% of GDP on defence this year. You will have heard from our colleagues at National Defence earlier this week that the Supplementary Estimates will provide both DND and CSE with investments for enhanced tools, capabilities and digital foundations, to support operations and help protect Government of Canada systems including our most Top Secret networks against the cyber threats I outlined earlier.

In support of defence, security and diplomatic goals, the $370.1 million dollars sought through Supplementary Estimates for CSE will harden and modernize our equipment and technology.

Towards a secure and sovereign Canada, investments in these digital foundations will expand our capabilities to:

• Keep Canada’s most sensitive information, communications and operations protected.
• Communicate securely with our allies; and
• Enable emerging capabilities such as artificial intelligence to be used in real-time to support decision-makers at the most classified level.

These investments will further allow us to expand our capabilities towards timely access to sensitive, mission-critical information, maximizing technological advancements that we know are being used by our adversaries.

This investment will also increase the diversification of technology and equipment used by the Fives Eyes, helping to build both the interoperability and resilience among allies.

Conclusion

In conclusion, CSE continues to deliver its important mandate and investments detailed in these Estimates represent Canada’s commitment towards a hardened and modernized Top Secret ecosystem, in support of Canada’s defence security, diplomatic, and economic goals.

The funding we are requesting through these Estimates is critical to the integral role that CSE and the Cyber Centre play in helping to protect Canada and Canadians against foreign threats, helping to ensure our nation's security, stability, and prosperity now and into the future.

Once again, thank you for the invitation to appear before the committee today and my colleagues and I look forward to answering any questions you may have.

Thank you. Merci.

Main estimates page proofs

Raison d’être

The Communications Security Establishment (CSE) is Canadaʼs national authority for foreign intelligence (Signals Intelligence) and the national technical authority for cyber security and information assurance.

CSE provides critical foreign intelligence to help inform the Government of Canadaʼs decision making on a wide range of issues, including national security.

CSEʼs sophisticated cyber and technical expertise helps identify, prepare for, and defend against threats to Canadaʼs most important systems and networks. CSE may also proactively stop or impede foreign cyber threats before they can damage Canadian systems, and conduct online operations to advance national objectives.

In addition, CSE provides technical and operational assistance to federal law enforcement, security partners, the Department of National Defence, and the Canadian Armed Forces.

2025-26 Estimates annex

2025-26 Estimates

This table shows the forecast of total expenditures by Standard Object, which includes the types of goods or services to be acquired, or the transfer payments to be made and the revenues to be credited to the vote.

Definitions of standard objects available at: http://www.tpsgc-pwgsc.gc.ca/recgen/pceaf-gwcoa/2526/7-eng.html

Interest payments relating to capital leases are included under "Public debt charges". These payments are voted expenditures and are not included under the "Public Debt" heading on the Composition of Estimates and Expenditures table.

Supplementary estimates A page proofs

Supplementary Estimates (A), 2025-26 Annex

Items for inclusion in the Proposed Schedules to the Appropriation Bill

Supplementary Estimates (A), 2025-26

Supplementary Estimates (A), 2025-26
Budgetary expenditures by standard object

This table shows the forecast of total expenditures by Standard Object, which includes the types of goods or services to be acquired, or the transfer payments to be made and the funds to be credited to the vote.

Definitions of standard objects available at: http://www.tpsgc-pwgsc.gc.ca/recgen/pceaf-gwcoa/2526/7-eng.html

Horizontal items

The items listed in this table are horizontal initiatives and other jointly funded items. Both types of horizontal items generally involve two or more organizations with a formal funding agreement (e.g. Memorandum to Cabinet or Treasury Board submission). Through horizontal initiatives, the organizations work in partnership toward the achievement of shared outcomes. In jointly funded items, organizations receive incremental funding, and each independently contributes to the realization of the stated objective(s).

Main and supplementary estimates (A) overview

Speaking notes - Main Estimates

Details

• The Communications Security Establishment (CSE) is one of Canada’s key security and intelligence agencies and the lead federal technical authority for cyber security.
• CSE provides valuable foreign intelligence to inform the Government of Canada’s decision making and protect national security.
• Its sophisticated cyber and technical expertise also helps identify, prepare for, and defend against threats to Canada and its cyber systems and networks.
• While conducting these activities, CSE respects the highest standards of lawfulness, ethics, values, and the protection of the privacy of Canadians.
• CSE’s 2024-25 Main Estimates are $1,220.6M, a net increase of $178.9M from the 2024-25 Main Estimates of $1,041.7M.
• CSE’s 2025-26 Supplementary Estimates A represent a net funding increase totaling $370.1M.

• New funding of $131.2M announced in Budget 2024 to enhance intelligence and cyber operations;
• New funding of $21.0M associated with Border Security measures;
• New funding of $4.1M for Canada’s Approach to National Cyber Security: Advancing a Secure and Prosperous Digital Canada Strategy;
• A net increase of $18.4M resulting from funding profile changes related to previously approved initiatives in support of CSE’s mandate;
• Additional funding of $7.2M for economic increases resulting from the collective agreement signed in September 2023;
• A net increase of $3.8M associated with statutory funding adjustments;
• A net decrease of ($0.7M) associated with inter-departmental transfers; and
• A decrease in funding of ($6.1M) as part of the Government of Canada’s efforts towards Refocusing Government Spending Phase I. This reduction is in addition to the 2024-25 reduction of ($5.6M).
• A net decrease of $9.5 million associated with inter-departmental transfers.

Details

New funding of $131.2M announced in Budget 2024 to enhance intelligence and cyber operations

• Funding to protect Canada’s economic security and respond to evolving national security threats.

New funding of $21.0M associated with Border Security measures;

• In December 2024, the Government of Canada announced it is taking concrete action to further strengthen border security and the immigration system to keep communities safe.
• CSE will utilize this funding to Enhance collection and sharing of foreign signals intelligence, conduct cyber operations and provide technical and operational assistance to Government of Canada partners.

New funding of $4.1M for Canada’s Approach to National Cyber Security: Advancing a Secure and Prosperous Digital Canada Strategy;

• On February 6, 2025, the Government of Canada announced its new National Cyber Security Strategy (NCSS).

A net increase of $18.4M resulting from funding profile changes related to previously approved initiatives in support of CSE’s mandate;

• Funding profile changes related to previously approved initiatives in support of CSE's mandate (could include: Treasury Board submission funding, transfers, and a multitude of other non-statutory and statutory items).

Additional funding of $7.2M for economic increases resulting from the collective agreement signed in September 2023;

A net increase of $3.8M associated with statutory funding adjustments;

A net decrease of ($0.7M) associated with inter-departmental transfers; and

A decrease in funding of ($6.1M) as part of the Government of Canada’s efforts towards Refocusing Government Spending Phase I. This reduction is in addition to the 2024-25 reduction of ($5.6M).

• CSE has developed a strategy to meet the spending reductions and will continue to monitor the situation to minimize the impact on operational priorities.
• CSE remains committed to meeting spending reductions while still delivering its mission.

A net decrease of $9.5 million associated with inter-departmental transfers.

Speaking notes - Supplementary Estimates A

Treasury Board (TB) Submission funding ($370.1M):

• CSE’s 2025-26 Supplementary Estimates A represent a net funding increase totaling $370.1M.
  • Treasury Board Submission funding of $370.1M for Digital tools and Capabilities

• Funding for a Sovereign and Secure Digital Canada (SSDC) ($370.1M):
  • Horizontal initiative with the Department of National Defence (DND) for Digital tools and Capabilities.

Key topics

• CSE’s 2025-26 Main Estimates are $1.2 billion ($1,220.6 million), a net increase of $178.9 million from the 2024-25 Main Estimates.
• CSE’s 2025-26 Supplementary Estimates A represent a net funding increase totaling $370.1 million.

Table of contents

• 1. Recruitment and retention
• 2. Facts
• 3. Budget reductions
• 4. Contracting
• 5. Cyber defence
• 6. OAG report on combatting cybercrime
• 7. India
• 8. Emerging technology (AI)

Recruitment and retention

• The Communications Security Establishment Canada (CSE) is an employer of choice – we are fortunate that many talented people choose to work with us. Each year CSE receives on average, 10,000 to 15,000 applications from applicants with diverse skill sets and cultural backgrounds.
• Over the past several years, CSE has experienced continued and sustained growth. We believe that this growth, combined with our comparatively low attrition rate reflects the positive work environment, employee development and support programs we have in place.
• For the 10th time, CSE has been recognized as a Top Employer in the National Capital Region (2013, 2014, 2015, 2018, 2020, 2021, 2022, 2023. 2024, 2025), as well as one of Canada’s Top Employer for Youth for the past 9 years in a row (2017 to 2025).
• CSE maintains a very low total attrition rate of 3 percent*, however, we do have employees who choose to pursue opportunities outside CSE. No organization has a zero percent attrition rate, nor would they want it. We value the contribution of all employees no matter how long they stay with us.
  *This figure excludes term employment and retirements
• CSE’s employees are amongst the brightest and most talented people in their fields. Their unique skillsets are in high demand and there are opportunities for them outside of CSE.
• There was a slight rise in the number of employees leaving during and post-pandemic period, however, our overall numbers remain very low.

Facts

• Since 2014, CSE and the Government of Canada have officially attributed 13 cyber incidents to nation-state and state-affiliated actors.
• CSE’s workforce is comprised of over 3,800 full-time, permanent employees – an increase of 6% from the previous year.

Budget reductions

• CSE will contribute $20.0M ongoing by FY2026-27 to TBS’ budget reduction effort.
• Reductions will be achieved through efficiencies in operating without affecting operational priorities.
• CSE has examined the years ahead and has developed a strategy to meet the spending reductions outlined by TBS.
• CSE is committed to meeting spending reductions while still delivering its mission. CSE is carefully analyzing the areas that could be reduced with the least operational impact.

Contracting

• CSE does not disclose information pertaining to vendors or contractual activities as the information could provide hostile actors with insight into CSE’s operations thereby compromising national security.
• Furthermore, given the constant evolution of the threat environment in which CSE operates, CSE no longer releases detailed information about its workforce beyond what is already publicly available.
• The information would provide hostile actors insights that may be used by malicious actors to gain insights into our security posture and processes thereby compromising national security.
• That said:
  • CSE is an organization largely made up of IT experts which reduces our need for contracted resources.
  • CSE employees have an obligation under the Ethics Charter to declare any conflicts of interest.
  • We have a robust internal regime for the disclosure, prevention and management of any situation that would give rise to concerns related to conflicts of interest.
  • CSE has a Contract Review Committee and constantly reinforces its contracting processes based on guidance provided by PSPC, the OAG and Central Agencies.

Cyber defence

• The Government of Canada deals with ongoing and persistent cyber risks and threats every day. These threats are real, they are sophisticated, and they continue to evolve.
• CSE is always monitoring for cyber threats and as the threat landscape changes and will continue to assess its requirements.
• Although CSE generally does not comment on cyber incidents, I can assure the committee members that we are working with our federal partners, including smaller departments and agencies, to make them aware of the threats and remind them of cyber security best practices.
• The government has systems and tools in place to monitor threats, and CSE continues to use all the resources at its disposal to protect the GC from these evolving threats.
• For example, CSE’s Cyber Centre uses sensors, which are software tools installed in partner IT systems, to detect malicious cyber activity on government networks, systems, and cloud infrastructure.
• CSE works with departments including SSC, TBS, Public Safety, the RCMP, CSIS), and the Department of National Defence (DND) on a number of cyber security issues.
• Cyber defence is the responsibility of all GC departments and agencies. We continue to work together to ensure we can detect and investigate potential threats, and take active measures as required.

OAG Report on Combatting Cybercrime

• On June 4, 2024, the Auditor General tabled Report 7 — Combatting Cybercrime in the House of Commons.
• The report found that the federal government does not have the capacity and tools to effectively fight cybercrime, including to address the growing number and sophistication of cyberattacks.
• The report stated that many incidents were reported to the wrong organizations and where organizations did not respond or redirect the reports they received.
• In general, the OAG found that Canada’s cybersecurity workforce needed to be strengthened across organizations.
• The report made a number of recommendations including that Public Safety Canada (PS), the Royal Canadian Mounted Police (RCMP), CSE, and the Canadian Radio-television and Telecommunications Commission should work together to ensure that cybercrimes reported by Canadians and Canadian businesses are routed to the organization with the mandate to address them.
• The CSE, RCMP, PS and CRTC agree with this recommendation.

India

• On October 30, 2024, the Communications Security Establishment Canada (CSE) released its National Cyber Threat Assessment (NCTA) for 2025-2026.
• CSE assesses that India’s leadership almost certainly aspires to build a modernized cyber program with domestic cyber capabilities.
• India very likely uses its cyber program to advance its national security imperatives, including espionage, counterterrorism, and the country’s efforts to promote its global status and counter narratives against India and the Indian government.
• We judge that official bilateral relations between Canada and India will very likely drive Indian state-sponsored cyber threat activity against Canada.
• We assess that Indian state-sponsored cyber threat actors likely conduct cyber threat activity against Government of Canada networks for the purpose of espionage.
• We continue to monitor for any developing cyber threats and share threat information with our partners and stakeholders to help prevent incidents.
• The Cyber Centre’s primary focus is on defending federal networks and other systems of importance to the Government of Canada, including critical infrastructure, from cyber threats.
• CSE and the Cyber Centre continue to work hand-in-hand with our allies to protect our shared national interests and keep our population safe from state-sponsored cyber threats.

Emerging technology (Artificial Intelligence)

• The Communications Security Establishment Canada (CSE) is a thought leader and pathfinder in emerging digital and cyber technologies. CSE’s expertise is leveraged to inform Government policies on emerging technologies, ranging from 5G to Artificial Intelligence (AI) and quantum.
• Despite emerging technologies being in varying states of development and realization, they all have implications for Canada’s economic prosperity, national security, and the individual safety and privacy of Canadians.
• While emerging technologies present great opportunities, they can also be maliciously deployed by sophisticated threat actors.
• For example, with machine learning, a rapidly developing subset of artificial intelligence, cyber threat actors can attack the models through adversarial machine learning techniques. These techniques exploit flaws in the machine learning model’s logic to deceive it or force it to return unintended, sometimes confidential, information.
  • In November 2023, the Guidelines for secure AI system development were released. CSE’s Cyber Centre worked alongside the UK National Cyber Security Centre (NCSC), the US Cybersecurity and Infrastructure Security Agency (CISA), and 20 international partner organizations to develop and publish this document.
• CSE continues to advocate for the digital use of online technology in a safe and secure way and have published an AI Fact Sheet to help inform Canadians generally on this evolving topic.
• Developments in quantum computing could also threaten the security of current cryptographic methods. CSE’s Cyber Centre is working with federal, commercial, academic, and international partners to develop reliable post-quantum cryptography.
• The Cyber Centre is a partner with the National Institute of Standards and Technology (NIST) in the United States. NIST recently published standards for 3 post-quantum cryptographic algorithms. These standards will enable cyber security solutions to be secure against the threat posed by quantum computers.
• Budget 2022 proposed new funding to enhance Canada’s cyber security capabilities through research investment. CSE has since been approved for $44.5 million over 9 years to fund academic research on cutting-edge technologies relevant to CSE’s activities.
• CSE’s Research Directorate includes teams of researchers in the fields of cryptography, cyber security, vulnerability research, high-performance computing, data science and artificial intelligence.
• CSE is also home to the Tutte Institute for Mathematics and Computing (TIMC), a government research institute focused on fundamental mathematics and computer science.
  • The TIMC’s key research areas are cryptography and data science.
  • While a large portion of its work is classified, when possible, results are released to the academic and open-source communities.

Potential questions and answers

1. What funding is CSE receiving in the 2025-26 Main estimates and Supplementary Estimates A 2025-26?

CSE’s 2025-26 Main Estimates are $1.2 billion ($1,220.6 million), a net increase of $178.9 million from the 2024-25 Main Estimates.

CSE’s 2025-26 Supplementary Estimates A represent a net funding increase totaling $370.1 million.

2. What additional funding is included in CSE’s 2025-26 Main estimates?

New funding of $131.2 million announced in Budget 2024 to enhance intelligence and cyber operations.

New funding of $21.0 million associated with Border Security measures to enhance collection and sharing of foreign signals intelligence, conduct cyber operations and provide technical and operational assistance to Government of Canada partners.

New funding of $4.1 million for Canada’s Approach to National Cyber Security: Advancing a Secure and Prosperous Digital Canada.

3. CSE has received significant investments in recent years. How has this funding been used? How will the new funding be allocated?

Recent investments in CSE, such as $875.2 million from Budget 2022 and $917 million over five years via the most recent Defence Policy Update, have been allocated to modernize critical systems, enhance cyber operations, and improve intelligence collection capabilities.

Earlier this month, the Government of Canada announced funding for DND and CSE for enhanced tools, capabilities and digital foundations, to support operations.

This important foundational digital investment will enable the delivery of resilient and sovereign Canadian solutions to enhance security, interoperability and integrity of classified operations and services.

New investments outlined in these Estimates aim to deliver resilient Canadian solutions, improve interoperability, and leverage technological advancements to counter emerging threats effectively.

4. How will the additional funding contribute to the Government of Canada’s Border Plan?

CSE contributes to Canada’s Border Plan through the collection of strategic and actionable foreign intelligence on organized crime and drug networks, particularly the trafficking of fentanyl and its precursors into North America.

CSE also leverages its technical expertise to provide operational assistance to federal law enforcement and security partners on border security priorities.

CSE will utilize this funding to enhance collection and sharing of foreign signals intelligence, conduct cyber operations and provide technical and operational assistance to Government of Canada partners.

5. Does CSE need more resources?

CSE continues to use all the resources at its disposal to protect Canadians as the threats Canada faces continue to evolve.

As the situation evolves, CSE will continue to assess its operational requirements.

6. Will the TBS-directed cuts will have any impact on CSE's operations?

CSE will contribute $20.0M ongoing by FY2026-27 to TBS’ budget reduction effort.

Reductions will be achieved through efficiency in operating and salary expenditures without affecting operational priorities.

CSE has examined the years ahead and has developed a strategy to meet the spending reductions outlined by TBS.

CSE is committed to meeting spending reductions while still delivering its mission. CSE is carefully analyzing the areas that could be reduced with the least operational impact.

7. Are we sufficiently funded for every cyber attack in Canada?

The Communications Security Establishment Canada (CSE) is always monitoring for cyber threats that may be directed against Canada and Canadians.

CSE continues to use all the resources at its disposal to protect Canadians as the threats Canada faces continue to evolve.

As the threat landscape changes, CSE will continue to assess its requirements.

It is important to note that many organizations across the Government have a role to play with respect to cyber security in Canada.

CSE works with departments including Public Safety, The Royal Canadian Mounted Police (RCMP), Canadian Security Intelligence Service (CSIS), Department of National Defence (DND), Department of Industry (ISED) on a number of cyber security issues.

Issue notes

Defence Investments

• On June 9, 2025, the Government of Canada announced funding for the Department of National Defence (DND) and the Communications Security Establishment Canada (CSE) for enhanced tools, capabilities and digital foundations, to support operations.
• In Supplementary Estimates A, CSE is seeking $370.1 million, which contributes towards Canada’s defence investments.
• As a key element of this government’s new investments in Canada’s defence, CSE is hardening and modernizing the federal government’s critical systems that encrypt and secure our most sensitive communications, information and operations.
• This important foundational digital investment will enable the delivery of resilient and sovereign Canadian solutions to enhance security, interoperability and integrity of classified operations and services.
• These investments will further allow CSE to expand its capabilities towards timely access to sensitive, mission-critical information, maximizing technological advancements that we know are being used by our adversaries.
• Emerging technologies, artificial intelligence and quantum are critical capabilities Canada needs in support of defence, security, and international affairs goals.
• Achieving these goals will require building on the talent and industrial capacity in Canada to support our own sovereignty and strategic autonomy.
• Investments in these capabilities will help safeguard the government’s classified information, provide greater interoperability within Canada and with Five Eyes intelligence partners, and contribute towards Canada’s defence spending targets.

If pressed on Five Eyes relationship:

• The Five Eyes alliance is a strong and valuable partnership among our respective intelligence, military, and cyber defence teams.
• CSE is a trusted and contributing partner within the Five Eyes community.
• Collaboration among likeminded countries is vital to defending shared principles, norms, and values, as well as national sovereignty.
• Five Eyes partners actively collaborate and aim to improve interoperability, overall capabilities, and efficiency of joint modernization in the online cyberspace.

Background

• Canada is not immune to threats to its digital infrastructure. As new technologies emerge and our adversaries develop new techniques over time, investments are needed to both leverage these new capabilities and secure our digital infrastructure.
• The new Defence Investments aim to modernize Canada’s Top Secret systems to support national defence, security, and international affairs. This includes foundational investments in Canada’s top secret ecosystem, including Canada’s Top Secret Network, artificial intelligence and cryptography.
• These investments strengthen Canada’s sovereignty and security, ensure the protection of sensitive information, and position Canada as a capable and trusted partner in global defence and intelligence collaboration.

Threat environment

• Canada’s digital environment is increasingly vulnerable to adversaries and technological advances such as quantum computing. CSE assesses that as early as the 2030s, a powerful enough quantum computer will exist that will break the cryptography used today to secure communications worldwide. The Government of Canada relies on cryptography to protect sensitive information, communications, and information technology systems from cyber threats and unauthorized access.
• To address this reality, Canada, in line with its Five Eyes allies, continues to modernize and harden its operations and services for its Top-Secret environment. In addition, new investments are needed to take full advantage of artificial intelligence and the other emerging technologies being used by our adversaries.
• This investment will enable the delivery of resilient and sovereign Canadian solutions to enhance security, interoperability and integrity of classified operations and services. While at the same time keeping pace with technological advancements which enable timely access to sensitive, mission-critical information.

Future year funding:

• CSE is actively engaged with the Treasury Board Secretariat and federal partners to secure TB approval on implementation plans, and the required funding will be sought as part of future Estimates.

Canadian Top Secret Network (CTSN):

• The Canadian S&I community comprises several distinct but interconnected communities: intelligence, law enforcement, defence, security, and foreign affairs.
• The efficient and effective functioning of this community relies on the right information getting to the right people securely and at the right time in order to take timely and decisive action.
• The Canadian Top Secret Network (CTSN) allows information to be shared at the Top Secret level across the Canadian S&I community. CSE runs Canada’s Top Secret Network (CTSN). This is a secure IT network used to collaborate and communicate at the Top Secret level.
• CTSN enables clients across the Government of Canada and the Five Eyes to access CSE’s intelligence reporting.

Cyber security and cyber capabilities

• Protecting Canada’s cyber security is essential for our security, safety, prosperity and competitiveness.
• That is why the federal government has been working to strengthen our national cyber resilience and helping Canadians adopt cyber security best practices.
• Every day, the Communications Security Establishment Canada (CSE) uses sophisticated cyber capabilities to identify and defend against threats to Canada’s systems and networks.
• CSE’s Canadian Centre for Cyber Security provides Canadians with expert advice and guidance and leads the Government’s response to cyber incidents.
• Cyber security is a whole-of-society concern, and the federal government works together with other jurisdictions, small-and-medium enterprises as well as critical infrastructure owners and operators to raise Canada’s cyber security bar.
• In February 2025, the Government of Canada released its new National Cyber Security Strategy (NCSS). The NCSS articulates Canada’s long-term plan to partner with provinces, territories, law enforcement, industry, Indigenous communities and academia to tackle Canada’s cyber security challenges.
• Under the NCSS, the Government of Canada established the Canadian Cyber Defence Collective (CCDC) a multi-stakeholder engagement body.
• The CCDC ensures critical infrastructure operators, businesses and everyday Canadians benefit from shared intelligence, innovations and best practices.
• This initiative strengthens Canada’s ability to detect, prevent and respond to cyberattacks, creating a safer digital landscape for Canadians.
• Further, cyber operations capabilities are a key element of military and state power, needed to deter and defeat foreign-based threats to Canada in times of peace and conflict.
• Canada’s 2024 Defence Policy Update: Our North, Strong and Free, announced commitments to improve the Canadian Armed Forces’ (CAF) ability to conduct cyber operations.
• This included establishing a Canadian Armed Forces Cyber Command, and a joint Canadian operations capability between CSE and the CAF.
• Cyber activities are conducted in accordance with the Charter, Canadian and international law.

Background

Communications Security Establishment Canada (CSE) and the Canadian Centre for Cyber Security (Cyber Centre)

• CSE is Canada’s foreign signals intelligence agency and the technical authority for cyber security and information assurance.
• CSE’s sophisticated cyber and technical expertise helps identify, prepare for and defend against the most severe and persistent cyber threats against Canada’s computer networks and systems.
• The Cyber Centre consolidates the key cyber security operational units of the Government of Canada under a single roof.
• The Cyber Centre is a unified source of expert advice, guidance, services and support on cyber security operational matters, providing Canadian citizens and businesses with a clear and trusted place to turn for cyber security advice.

CSE Cyber Capabilities

• The CSE Act authorizes CSE to carry out 2 different types of foreign cyber operations: active and defensive. Both types of operations involve taking action in cyberspace to disrupt foreign-based threats to Canada.
• CSE may use defensive cyber operations to defend Canada against foreign cyber threats by taking online action. For example, CSE could prevent cyber criminals from stealing information from a Government of Canada network by disabling their foreign server.
• This authority can also be used to defend systems designated by the Minister of National Defence as being of importance to the Government of Canada, such as energy grids, telecommunications networks, healthcare databases, banking systems, and elections infrastructure.
• Active cyber operations allow CSE to take online action to disrupt the capabilities of foreign threats to Canada, such as foreign terrorist groups, foreign cyber criminals, hostile intelligence agencies, and state-sponsored hackers. Threats that CSE disrupts must relate to international affairs, defence or security.
• CSE, supported by Global Affairs Canada and the CAF, has a proven track record of cyber operations that respects and reinforces Canada’s statement on international law and cyber norms.

CSE and CAF Cooperation

• CSE and the CAF have a long history of partnership in the development of highly technical and specialized capabilities, including those required in the cyber domain.
• Cooperation between CSE and the CAF ensures the best use of tools and capabilities, reduces unnecessary duplication of efforts, leverages each other’s authorities, and improves the chances of meeting mission objectives.

Authorizations and Safeguards

• Joint CSE/CAF Cyber operations undertaken in support of government objectives will be pursuant to the CSE Act, the Crown Prerogative and the National Defence Act, and will be consistent with Canada’s international legal obligations.
• The CSE Act requires that CSE’s activities do not target Canadians anywhere in the world, or any person in Canada.
• Cyber operations conducted under CSE authorities require the Minister of National Defence to issue a Ministerial Authorization, which requires either consultation with the Minister of Foreign Affairs (for defensive cyber operations) or at the request of or with the consent of the Minister of Foreign Affairs (for active cyber operations).
• In conducting cyber operations, Canada recognizes the importance of adhering to international law and agreed norms of responsible state behaviour in cyberspace.
• Canada’s authorities and governance framework to conduct cyber operations is supported by a strong independent review process, as well as internal oversight for operational compliance.
• Foreign cyber operations are further subject to proven checks and balances such as rules of engagement, targeting and collateral damage assessments.

Canada’s New National Cyber Security Strategy

• In February 2025, the Government of Canada announced its new National Cyber Security Strategy (NCSS).
• The new NCSS includes two overarching principles that will guide Canada’s approach to cyber security:
  • Whole-of-society engagement: The Government of Canada will deepen partnerships with key stakeholders to address crucial issues in the cyber security landscape. Partnerships with other levels of government, law enforcement, Indigenous communities, the private sector, academia, and civil society will be critical to developing the solutions that will address tomorrow’s cyber security challenges.
  • Agile leadership: Canada’s cyber security solutions will be developed in close collaboration with partners and stakeholders and set out in a series of issue-specific action plans over the coming years, that will provide opportunities for the Government of Canada to make ongoing investments in Canada’s cyber security.
• The Government of Canada will use these principles to deliver results under three pillars:
  • Working with partners to protect Canadians and Canadian businesses from cyber threats;
  • Making Canada a global cyber security leader; and
  • Detecting and disrupting cyber threat actors.

U.S. Partnership

• The Communications Security Establishment Canada (CSE) works closely with its US counterparts to develop joint intelligence priorities and identify how we can work more closely to build a stronger, more resilient cyberspace.
• Most recently, in support of Canada’s Border Plan, CSE has enhanced its collection of strategic and actionable foreign intelligence on organized crime and drug networks to help counter threats impacting Canada and the US.
• This includes sharing information and supporting federal law enforcement operations in both countries aimed at disrupting the transnational criminal networks involved in the supply chain of illicit synthetics.
• From a cyber security perspective, CSE continues to share valuable threat information with US partners to help defend systems of importance and critical infrastructure.
• For example, CSE and the US Cybersecurity and Infrastructure Security Agency regularly issue joint alerts and cyber security advisories to businesses and other levels of government to warn of cyber security threats.
• The US is a valued Five Eyes partner. In 2024-25 alone, CSE endorsed over 20 joint publications with Five Eyes and like-minded partners on common concerns related to cybercrime activity, artificial intelligence, and threats targeting critical infrastructure.

Border Security

• CSE contributes to Canada’s Border Plan through the collection of strategic and actionable foreign intelligence on organized crime and drug networks, particularly the trafficking of fentanyl and its precursors into North America.
• CSE also leverages its technical expertise to provide operational assistance to federal law enforcement and security partners on border security priorities.
• Where appropriate, CSE may conduct foreign cyber operations to disrupt or degrade activities that threaten Canadian and allied security.
• Both foreign intelligence and cyber operations are conducted in close collaboration with domestic and international partners to achieve this priority objective.
• For example, CSE is an active participant in the Joint Operational Intelligence Cell (JOIC), which brings together Canadian security departments and agencies, and law enforcement partners to better protect Canada’s border.
• The JOIC builds on existing cooperation between law enforcement partners and security agencies to enhance the production, analysis, sharing and actioning of intelligence on transnational organized crime, money laundering, and drug trafficking.
• CSE also has strong allied partnerships, particularly with the United States, and will continue to identify ways in which we can work more closely together.

Background

Canada's Border Plan

• In December 2024, the Government of Canada released Canada’s Border Plan.
• Backed by an investment of $1.3 billion and built around five pillars, Canada’s Border Plan aimed to bolster border security and strengthen the immigration system by supporting more personnel, new technology and equipment, and enhancing coordination between national security, intelligence, and law enforcement agencies.
• The five pillars include:
  • Detecting and disrupting the fentanyl trade.
  • Introducing significant new tools for law enforcement.
  • Improving operational coordination.
  • Expanding information sharing.
  • Minimizing unnecessary border volumes.
• Specifically, the government announced an investment of $180 million over 6 years to expand CSE’s intelligence collection and foreign cyber operations capacity, enabling CSE to target transnational organized crime and fentanyl trafficking more effectively.
• The government is ensuring 24/7 eyes on the border through round-the-clock surveillance and by mobilizing law enforcement and civilian forces with new and modernized equipment. Nearly 10,000 frontline personnel are working on protecting the border.

Directive on Transnational Crime and Border Security

• In February 2025, the Government of Canada issued a new intelligence directive on transnational crime and border security to detail how the national security, law enforcement, and intelligence community will use the new resources in the Border Plan to help advance the Intelligence Priority for “Translational Organized Crime, Cyber Crime, and Border Security”.
• In line with the Border Plan, the Government of Canada also established a Joint Operational Intelligence Cell (JOIC), led by Public Safety Canada, to bring together Canadian security departments and agencies, and law enforcement partners to better leverage information sharing to target transnational organized crime, money laundering, drug trafficking and improve border security.

Strong Borders Act

• In June 2025, Public Safety Canada introduced the Bill, the Strong Borders Act, to strengthen laws and keep Canadians safe.
• This Bill will ensure law enforcement has the right tools to keep Canadian borders secure, combat transnational organized crime, stop the flow of illegal fentanyl, and crack down on money laundering.
• It will bolster Canada’s response to increasingly sophisticated criminal networks and enhance the integrity and fairness of the immigration systems while protecting Canadians’ privacy and Charter rights.

Arctic defence and Sovereignty

• As one of Canada's key security and intelligence organizations, the Communications Security Establishment Canada (CSE) works alongside domestic and international partners in maintaining our Arctic security and sovereignty.
• Throughout the past year, CSE shared 196 intelligence reports on Arctic security with 20 Government of Canada departments and with Canada’s international allies.
• These reports included information on foreign states’ political intentions, military capabilities, technological advancements, economic interests, and research activities in the region.
• Moreover, the Canadian Centre for Cyber Security (Cyber Centre) deployed sensors to help protect the cyber systems of high-priority non-federal institutions, such as the Northwest Territories, Nunavut and Yukon government systems.
• The Cyber Centre also continues to work with partners in the North such as critical infrastructure providers and other systems of importance including airports and universities to provide advice and guidance and help raise the cyber security bar.
• Further, Canada’s new Arctic Foreign Policy cites CSE as a key partner in bridging the intelligence gap to address the complex range of threats facing the Arctic.
• Partnerships remain critical to our success and, CSE took several steps to deepen ongoing Arctic partnerships, including:
  • supporting the Canadian Armed Forces (CAF) as they monitored and tracked threats from foreign adversaries in the Arctic region;
  • continuing to co-chair, alongside the Privy Council Office (PCO), the Arctic Intelligence Coordination Group, which coordinates Arctic security activities across the Government of Canada;
  • continuing to participate in and provide leadership at domestic and international conferences and forums concerning Arctic and polar issues; and
  • hosting an in-person conference in Ottawa for an international forum on signals intelligence concerning both polar regions.
• CSE continues to invest to meet the growing demand for intelligence from a variety of Arctic stakeholders and to advance related partnerships in areas such as cyber defence, economic security and countering foreign interference.

Top Cybersecurity points

• Cyber security is a foundation for Canada’s future, for our digital economy, our personal safety, and our national prosperity and competitiveness.
• Every day, the Canadian Centre for Cyber Security (Cyber Centre), as part of the Communications Security Establishment Canada (CSE), uses sophisticated cyber and technical expertise to monitor, detect, and investigate threats against the Government of Canada’s information systems and networks, and to take active measures to address them.
• In 2024-25, the Cyber Centre responded to 1,155 cyber security incidents reported by the Government of Canada.
• Under the CSE Act, the Cyber Centre can assist other entities designated by the Minister of National Defence as being of importance to the Government of Canada, which may include critical infrastructure.
• Examples include providing cyber defence services to the Territories and cyber security assistance to Ukraine and Latvia.
• The Cyber Centre works with industry partners across Canada to provide support and share threat information helping prevent cyber incidents and keeping critical services secure.
• Cyber security legislation, such as the former Bill C-26 (An Act Respecting Cyber Security), which was introduced but not passed in the last session is a critical next step to provide the government with new tools and authorities to bolster defences, improve security across critical federally regulated industry sectors, and protect Canadians and Canada’s critical infrastructure from cyber threats.
• If Canadian companies are impacted by cyber threats, I urge them to contact the Cyber Centre toll free at 1-833-CYBER-88, by email at contact@cyber.gc.ca or report an incident through the cyber.gc.ca website.

Background

Canadian Centre for Cyber Security

• Across the globe, cyber threat activity targeting democratic processes and critical infrastructure is on the rise.
• In 2024 to 2025, CSE worked with key stakeholders to help protect the integrity of Canadian elections, democratic institutions and critical infrastructure. This included holding briefings to raise awareness on evolving threats and working with partners to increase cyber security resilience across this important landscape.
• CSE and its Canadian Centre for Cyber Security (Cyber Centre) continued to support federal institutions this year to respond to cyber incidents, mitigate cyber threats, brief departments that experienced cyber incidents, and generally enhance cyber resilience across the federal landscape. We worked with 150 Government of Canada organizations and delivered comprehensive briefings focused on small departments and agencies, which were identified as being at increased risk of cyber threats and attacks.
• Throughout the year, the Cyber Centre provided various support and services to federal institutions to help increase cyber resilience across the federal government landscape. This included:
  • delivering advice and guidance
  • conducting supply chain integrity assessments
  • supporting secure communications capabilities
  • monitoring and producing threat assessments in support of high-impact, high-priority and high-risk government projects, services and initiatives
  • As part of the Cyber Centre’s mission, it defends the Government of Canada’s computer systems and networks from cyber attacks. Sensors are software tools that can detect malicious cyber activity on devices, at the network permitter and in the cloud. They are one of the Cyber Centre’s most important tools for defending the government’s networks from malicious cyber threats

National Cyber Security Strategy

• In February 2025, the Government of Canada released its new National Cyber Security Strategy (NCSS). The NCSS articulates Canada’s long-term plan to partner with provinces, territories, law enforcement, industry, Indigenous communities and academia to tackle Canada’s cyber security challenges.
• An important player in the NCSS, the Cyber Centre is responsible for:
  • protecting government systems
  • leading cyber security defence and incident response efforts
  • acting as Canada’s technical authority on cyber security
  • providing advice, guidance and services to various sectors
  • promoting collaboration, partnership, innovation and cyber skills across sectors
• As Canada’s operational cyber security leader, the Cyber Centre provides threat intelligence and guidance.

Support to critical infrastructure

• Ensuring that the Cyber Centre continues to develop strong partnerships with critical infrastructure is vital in preventing disruptions that could have widespread and severe consequences to Canadians.
• The Cyber Centre establishes strategic partnerships with Canada’s critical infrastructure owners and operators to share advanced cyber threat information, promote the integration of cyber defence technology and foster strong engagement.
• This year, the Cyber Centre collaborated and built partnerships with critical infrastructure by collaborating with mobile network operators and global security experts to identify emerging threats and initiate activities to increase the cyber resilience of Canadian 5G networks.
• Furthermore, the Cyber Centre participated in over 200 speaking engagements across critical infrastructure sectors such as:
  • energy (electricity, oil, mining, nuclear)
  • small and medium organizations
  • water
  • defence industrial base
  • health
  • transportation
  • finance
  • telecommunications and information and communication technology
• In 2024-25, the Cyber Centre provided 38 biweekly threat briefings, each of which had over 600 participants, for IT security professionals in Canada’s critical infrastructure sectors.
• It also participated in 13 tabletop exercises and held 7 “walk-the-talk” sessions to provide actionable information and expert briefings on technical topics like AI, the quantum threat and post-quantum cryptography, and cybercrime.

Supply chain risk assessments

• As part of supporting and protecting federal critical infrastructure, the Cyber Centre conducts risk assessments for Government of Canada clients looking to procure IT equipment.
• These assessments look at numerous factors, including technical vulnerabilities of products and the business practices, cyber maturity and foreign ownership of vendors.
• The Cyber Centre increasingly works with partners outside the federal government—such as provinces, territories and private sector partners—on supply chain risks.
• This year, the Cyber Centre conducted 1,371 supply chain risk assessments.