Regime in Iran Exploits Canada’s Policy of Engagement Without Pressure

Canada has little to show for its government’s conciliatory approach to the Islamic Republic of Iran following the death of 57 Canadian-Iranians on January 8, when the Islamic Revolutionary Guard Corps (IRGC) shot down Ukraine International Airlines Flight 752. Ottawa has engaged in lengthy negotiations without putting serious pressure on Tehran, so the clerical regime has predictably refused to allow an independent and credible investigation of the Flight 752 atrocity. To change this dynamic, the Canadian government ought to impose sanctions on the responsible parties and launch a comprehensive inquiry into the Islamic Republic’s illicit activities within Canada itself.

Three months after the downing of Flight 752, the plane’s flight recorder, or black box, remains in Tehran, its contents unexamined. The Trudeau government appears to have calculated that diplomatic appeasement would lead to better behavior by the regime, including the transfer of the black box to a neutral third party for evaluation. Trudeau and his foreign minister have met repeatedly with Foreign Minister Muhammad Javad Zarif in order to “get answers,” as the prime minister promised Canadians. Rather than oblige Trudeau, Tehran publicized the prime minister’s timid and deferential approach by releasing video footage of a February meeting in which Trudeau warmly grasped the hands of a smiling Zarif. For good reason, this led to widespread derision of Trudeau by Canadian journalists and Canadian-Iranian human rights activists.

The Islamic Republic’s contempt for Canada’s efforts to hold it accountable is visible most clearly in the regime’s efforts to intimidate the family of an Iranian student at the University of Alberta who died in the crash. His parents, brother, and aunt sought refuge in Edmonton after the IRGC threatened them for speaking publicly about the crash.

Ottawa should respond to this stonewalling and intimidation by designating the entire IRGC as a terrorist organization. In addition, Ottawa should launch a full investigation of the clerical regime’s lobbying and money laundering network in Canada, which is one of its largest and most effective in the Western world.

Canada is home to one of the largest Iranian diaspora communities, numbering at least 200,000. Motivated by commercial interests, Ottawa has at times been eager to maintain good relations with Tehran. Canada’s Liberal Party has historically pursued a policy of positive inducements toward the regime, including the re-establishment of formal bilateral relations and increased investment in Iran. However, Supreme Leader Ali Khamenei has consistently pocketed rewards from Ottawa, only to pursue an even more aggressive policy toward Canada.

Ottawa’s soft policy has also left an opening for the Islamic Republic to conduct influence operations from within the Canadian-Iranian community. Canadian-Iranians, many of whom fled the Islamic Republic to escape persecution, are one of the most successful Iranian diaspora communities. However, the regime has exploited Canada’s freedoms to establish its own lobbying and influence network there. Several human rights activists told the author that many wealthy Iranians with ties to the regime have settled in Canada in recent years, especially in Toronto and Vancouver. According to one activist, former regime officials, including those from Iran’s Ministry of Intelligence, live openly in Canada with their families and even travel regularly between the two countries.

Furthermore, a number of “grassroots” and religious non-governmental organizations and even politicians are suspected of actively lobbying for the Islamic Republic by pushing for greater diplomatic and business ties between Ottawa and Tehran. The extent of the sympathy for the regime was on display in January when many Canadian-Iranians demonstrated in support of Qassem Soleimani, the commander of Iran’s Qods Force, the IRGC’s external operations branch, after his death in a U.S. air strike.

Canada is also reportedly a base for the regime’s money-laundering. Iran’s inability to access the global banking system has forced the regime to rely more heavily on the hawala informal banking mechanism to move money around the Western world. The profusion of informal Iranian currency exchanges in cities such as Toronto may also be a worrying indicator, although the extent of the regime’s illicit financial activities remains unclear given Ottawa’s habit of looking the other way. Some Canadian officials may be tempted to view the large inflow of funds from Iran as beneficial for the Canadian economy.

The Islamic Republic’s actions over the past few months, from the massacre of 1,500 peaceful Iranian protesters in November to the downing of Flight 572, demonstrate that only a policy of pressure can protect Canadian interests in the face of this malign regime. Moreover, it will have to be sustained pressure. One or two gestures will not persuade the regime that Canada has gotten tough. The regime is also likely to test Canada’s resolve with new provocations to see if Ottawa returns to its old ways at the first sign of danger. Yet in the midst of a deep, multi-year recession and domestic unrest – both brought on by American sanctions – the Islamic Republic has to pick its fights carefully.

Ottawa’s first step in this new direction should be the designation of the entire IRGC as a terrorist organization. So far, Canada has designated only the IRGC’s Qods Force as a terrorist organization, despite a parliamentary motion recommending that the entire IRGC be designated as such.

The U.S. designation of the entire IRGC has improved Washington’s ability to punish those who provide material support to the Guard, making banks, businesses, and other financial institutions even more careful in their transactions with the Islamic Republic. Similarly, Ottawa’s designation of the entire IRGC would prohibit Canadian companies from engaging with entities affiliated with the Guard, which controls most of the Iranian economy. The terrorist designation would also pave the way for enhanced investigation of the Guard’s assets and networks in Canada under the Anti-terrorism Act. Designating the entire IRGC will send an unmistakable message that Canada’s government will no longer placate the Islamic Republic as it increasingly targets Canadian security in Canada and abroad.

Alireza Nader is a senior fellow at the Foundation for Defense of Democracies (FDD), where he also contributes to FDD’s Center on Military and Political Power (CMPP). For more analysis from Alireza and CMPP, please subscribe HERE. Follow Alireza on Twitter @AlirezaNader. Follow FDD on Twitter @FDD and @FDD_CMPP. FDD is a Washington, DC-based, nonpartisan research institute focusing on national security and foreign policy.