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other employees and told them they were being sent home with pay for reasons relating to their citizenship. After five years, and a hearing before the Ontario Human Rights Commission, a settlement was reached with the com- pany (now General Dynamics Land Systems Canada Corp.) and the unionized employees were returned to work but subjected to new restrictions in terms of access to information required to do their job, or provided with alternative assignments. Agreements have been reached between the Canadian and U.S. governments that allow dual-citizen employees of the Ca- nadian Department of National Defence to have clearance to handle information and goods covered by ITAR, "so far, there's been no agreement on how to deal with this issue for Canadian companies," says Catherine Coulter, head of Fraser Milner Cas- grain LLP's Ottawa employment and labour group. "If you're not DND, you're still caught up in this conundrum." She says ITAR is now "one of the biggest yet quietest issues hitting the radar of Canadian importers of U.S. defence-related articles and services," and that since Sept. 11, 2001, the regulations have become even more closely scrutinized than when they were first introduced back in the early 1980s. As of June 19, 2008, however, dual nationals in the Canadian Communications Security Establishment, the Canadian Space Agency, and the National Research Council who are issued a "minimum secret-level security clearance" will be permitted access to ITAR-controlled items. But the State Department has made it abundantly clear that "this applies only to the CSE, CSA, NRC, and DND and is not extended to private companies in Canada." For its part, the Canadian intern concerning the application of the ITAR rules in the hiring process. The complainant, a Haitian-born Canadian who held citizenship in Canada for almost 30 years, applied for an internship with the company as part of a training pro- gram. His application was accepted, along with 14 others, but when he began the internship he was notified that his place of birth disqualified him from continuing under the ITAR rules. In its statement released at the time, the commission reiterated its opposition to the application of the ITAR rules in Quebec "because of their discriminatory impact," saying they were "inconsistent" with the Quebec Charter of Human Rights and Freedoms. It further publicly invited others who felt their rights had been infringed by the application of ITAR to come forward. "The reality is," says Jim Anning, president of Winnipeg's Ad- vanced Composite Structures. "That the people who have the expertise are moving around." Advanced Composite Structures is a leader in helicopter rotor Department of Public Works and Government Services, the ministry responsible for Canada-U.S. relations with respect to ITAR, says, "There are administrative and policy challenges relat- ing to the implementation of ITAR that require the governments of [both countries] to work together." Lucie Brosseau of Public Works says, in the post-Sept. 11 era, "It's gotten a bit ridiculous. What does a nut, bolt, or washer have to do with strategic intelligence?" — JIM ANNING, ADVANCED COMPOSITE STRUCTURES one serious issue between Canada and the U.S. has been the in- creasingly restrictive application of ITAR on U.S. exporters as it relates to access for Canadian citizens with another nationality. But, in spite of this, the timeline for future talks is uncertain, and she will only say that "government officials continue to meet formally and informally on this very important issue." In January 2008, Quebec's Commission des droits de la per- sonne et des droits de la jeunesse, reported that a settlement had been reached between Bell Helicopter and a prospective blade repairs and composite structure repairs for various types of aircraft. It does extensive work in providing the nose cones that fit on the end of a propeller, which, Anning says, has "no military or technical value." But insofar as 25 to 35 per cent of the company's $5 million in annual revenue comes from work relating to the military, it was forced to undergo company-wide compliance to ensure that work kept coming. "It's gotten a bit ridiculous," he says. "What does a nut, bolt, or washer have to do with strategic intelligence?" Anning's frustration is echoed by many who provide parts or services for defence- related articles, and who are confronted with the conundrum of how to comply with the regula- tions while abiding by human rights laws. Although he says the company has yet to deal with any human rights issues rising out of com- pliance with U.S., or the Canadian Controlled Goods Director- ate, Anning is familiar with the consequences of not complying. "The penalties can be quite punishing, and it really makes you think about hiring people who you suspect might be dual na- tionals." During its screening and hiring process, Advanced Composite informs applicants upfront that they will be required to obtain police clearances and a Canadian Security Intelligence Service check, and asks the applicant whether they're a Canadian citi- zen, landed immigrant, or foreign worker — something that so far hasn't had to serve as a weeding-out step. "We've been very fortunate," he says. IH C ANADIAN Lawyer INHOUSE DECEMBER 2008 31