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Auditor General's Report

Canadian secrets vulnerable to spying: Auditor general's report

By Daniel Proussalidis, National Bureau

OTTAWA – The feds can’t account for billions of dollars in security funding, the auditor general said Tuesday in a harsh report that also warned classified information remains an easy target for spies.

Liberal and Conservative governments devoted about $12.9 billion for anti-terrorism projects between the 9-11 terror attacks in 2001 and March 2009, but reported only $9.8 billion spent within that period.

The audit found “information to explain the difference of $3.1 billion … was not available.”

NDP Leader Thomas Mulcair seized on the finding as a “$3-billion boondoggle.”

Prime Minister Stephen Harper says the issue is accounting, not misspent money.

“The auditor general himself said today this has nothing to do with any improper use of government money,” Harper said. “On the contrary, what it has to do (with) is with the categorization and reporting of expenses between departments.”

The government says the $3.1 billion would still have been reported in the annual public accounts.

Meanwhile, the auditor general says government secrets are still needlessly vulnerable to spying five years after another report pointed out gaps in “protecting sensitive information and assets” when the feds hire private contractors.

“This is all about making sure the safeguards are in place that contractors only have access to the assets and information (to which) they should have access,” Michael Ferguson said in his report.

In some cases, the government is giving contracts to people who don’t have proper clearance.

His report singled out National Defence for taking cavalier risks by sometimes using military personnel to escort contractors without security clearance on a project site, or by trying to remove classified material from a place where an uncleared contractor is working.

Despite a 2011 CSIS warning about massive state-sponsored espionage targeting Canada, and a recent high-profile case of a navy officer spying for the Russians, the military also scrapped special precautions during the construction of a secure communications area at CFB Petawawa last year.

Defence Minister Peter MacKay candidly admitted his department “must do better” and added that he appointed a security upgrade team in 2009.

“Today I’m making it clear that I want to see an interim report by the fall of 2013,” he said.

The auditor general rated the RCMP as “mostly compliant” with proper security procedures, though paperwork was sometimes incomplete.

Only CSIS and Communications Security Establishment Canada were found to comply with or exceed requirements for outside contractors.

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