Canada is struggling to stop the influx of foreign funds that serve to radicalize citizens and lure them into violent extremism, the Prime Minister's national security adviser told a parliamentary committee.
Richard Fadden said the money often goes through religious institutions, which helps to shield it from further scrutiny.
"Without commenting on a particular country of origin, there are monies coming into this country which are advocating this kind of approach to life," Mr. Fadden said on Monday before the Senate Committee on National Security and Defence. "Finding out where it all goes in the end, and for what purpose, is in fact quite difficult. A lot of these funds are directed through religious institutions, quasi-religious institutions, and it's very difficult in this country to start poking about religious institutions, because of the respect that we have for freedom of religion."
Mr. Fadden was answering a question from Conservative Senator Daniel Lang, who asked about the government's response to funding from countries such as Saudi Arabia that promotes an "extreme jihadist" interpretation of the Koran.
Mr. Fadden said the federal government is aware of the problem, but noted that his discussions with allies have shown that "nobody has found a systemic solution."
"The difficulty in most cases is that the monies are not coming from governments, they are coming from fairly wealthy institutions and individuals, which makes it doubly difficult to track," he said.
In his appearance, Mr. Fadden argued that the evolving terror threat helps to justify the need for Bill C-51, the proposed anti-terrorism legislation.
"Our enemies have continued to refine their methods and adapt; so must we."
(For more on Bill C-51, read The Globe's in-depth explainer: Privacy, security and terrorism: Taking a closer look at Bill C-51)
Mr. Fadden said the Canadian Security Intelligence Service (CSIS) needs new powers to disrupt potential terrorist activities, in addition to collecting intelligence on the threats facing Canada.
He said the goal of the new disruption measures is to allow CSIS to take action before criminal activities take place, arguing that the RCMP should not be called in these events.
"The police cannot get involved, by the nature of their work, if they cannot see something concrete in terms of criminal activity," Mr. Fadden said. "Otherwise, we are living in a police state."
The new disruption powers would allow CSIS to advise family members that someone is being radicalized to violence or take actions to neutralize a terrorist plot.
Mr. Fadden added the public and the media's concerns over Bill C-51 are exaggerated, referring specifically to the notion that non-governmental organizations will become the target of counterterrorism agencies.
"A number of people in the media and elsewhere have been reported as saying, 'The Girl Guides will be hit next.' Well there has to be an actual threat to national security," he said.
Under questioning by Liberal Senator Colin Kenny, Mr. Fadden rejected the notion that Canada needs a single counterterrorism czar to manage the operations of the various security agencies.
"I have virtually no power, [but] I have a fair bit of influence on the national-security front," Mr. Fadden said. "If I think there is a real problem, I have access to the Prime Minister and ministers."
Mr. Fadden said the current oversight system works, adding it is adapted to Canada's system of government. He said that having active oversight of intelligence activities – as exists in the United States – goes against the political culture in Canada, where ministers already answer for their agencies' actions in front of Parliament.