The Aukus security pact pushes Canada further to the margins

Welcome to The Hub’s Federal Election 2021 Policy Pulse, where we’ll be tracking all the policy announcements from the major parties, with instant analysis from our crew of experts.

With the election scheduled for Sept. 20, we’ll be monitoring 36 days worth of policy ideas, so watch out each morning for the day’s live blog where we’ll be tracking every announcement as it happens.

5:00 p.m. — The Aukus security pact pushes Canada further to the margins

By Howard Anglin, contributor at The Hub

The Aukus security pact announced yesterday between the U.K. the US and Australia has raised some eyebrows, as has the U.S.’s agreement to share its nuclear submarine technology with Australia.

(Previously the U.S. had only been willing to share their technology with the U.K. Some Canadians might remember when Canada considered acquiring our own nuclear powered submarines in the 1980s and the US was firmly against it and said it was unnecessary given the naval umbrella they provided).

From the point of view of the Canadian election, the pact is interesting for who is not part of it: namely, us. (New Zealand is the other Five Eyes country left out, presumably because of its government’s opposition to nuclear submarines in their waters and Jacinda Ardern’s weakness when it comes to the Chinese Communist regime).  

On the one hand, with the government in purdah for the election, it would have broken with convention for the Trudeau government to join a new security pact that would have encumbered an incoming government. On the other hand, our government was presumably aware of the negotiations and could have requested a delay for a week or two if they were interested in joining ab initio after the election.

It may still be possible for Canada to join the new alliance, although whether we would even be able to in the near term would depend on the pact’s expectations in terms of our commitments and military upgrades. I expect Conservative leader Erin O’Toole would interested, given his platform pledge to join the Quad. I expect he would also be keen on Canada joining any alliance that might secure the Indo-Pacific against Chinese territorial ambitions, especially vis-a-vis the Republic of China (Taiwan). 

I do not expect a re-elected Trudeau government to show the same interest. For one, their election platform was silent on China and Indo-Pacific security. Second, they have expressed little interest over the last six years in strengthening formal ties with other likeminded countries to counter Chinese strength. Finally, new military spending is unlikely to be a priority as they deal with the economic consequences of their pandemic largesse and all the new election spending promises.

In the meantime, as the Five Eyes, of which Canada has been a central player, gives way to the Quad and now a trilateral U.K.-US-Australia pact, Canada drifts further to the margins of international importance. 

Canada is back, yes. Way at the back. 

3:30 p.m. — Canada’s role in the world: A platform comparison

By Livio Di Matteo, contributor at The Hub

As a recently released poll conducted for The Hub by Public Square Research and Maru/Blue illustrated, most Canadians surveyed think that Canada’s standing in the world has gotten worse in the wake of the COVID-19 pandemic.

As a small open economy, we have generally always been subject to external forces beyond our control but nevertheless it is important how we approach our role in the world as evidenced by our foreign relations and defence policies. A survey of the party platforms suggests that overall, none of the parties have really articulated a fully integrated and coherent strategic long-term vision of Canada’s interests and role in a rapidly changing world marked by technological and economic change, pandemics, climate change, Arctic warming, American withdrawal, and Chinese and Russian resurgence. However, some platforms offer more than others.

To start, the governing Liberal Party platform frames international issues using what they term a principled approach to foreign affairs that lays the emphasis on preserving an open, rules-based system on trade while hedging its bets with new investments in national resilience and supply chain protection. There is a lot on protecting democracy and human rights, Afghanistan refugee resettlement, freedom of expression for diverse minorities, and vaccine donation. Security policy emphasizes working with the United States and our NATO partners including modernizing NORAD to better secure Arctic sovereignty. With respect to defence, there is a statement regarding expanding our airlift capacity for international response.

It is essentially a continuation of our current approach to foreign affairs that emphasizes engaging with the world in our traditional manner with Canadian values as the theme underlying all our foreign policy. It does not discuss in any detail issues such as increased Russian and Chinese interest in our Arctic though it does put forward working with our allies to respond to illegal and unacceptable behaviour by authoritarian states such as China, Russia, and Iran. It also does not offer any new insights on our key foreign policy relationship: the United States.

LPC Summary: Everyone forward with the status quo.

The Conservative Party platform is advanced as a detailed plan to secure and promote the national interest with points on defence and international development. The sections are quite detailed and acknowledge the resurgent great power rivalries and growing security threats. Protecting Canadian democracy from foreign interference is explicitly stated with measures that include a Foreign Agents Registry Act to monitor foreign lobbying as well as amending the Elections Act to restrict foreign source political donations.

Defense policy mentions more resources for Canada’s Cyber command, expanding the Canadian Rangers and surveillance for Arctic sovereignty, modernizing, and extending our NORAD warning systems to the entire Arctic Archipelago and increasing our military commitment to NATO by moving defence spending “closer to our 2 percent aspirations.” There is a commitment to more military hardware including replacing submarines, fast tracking new fighter jet acquisitions and armed ice breakers for the Arctic in the face of increased international activity there.

There is direct reference to China’s new assertiveness and the role of the Indo-Pacific in the 21st century as well as the Middle East, the Americas and international aid and development. In short, there is a specific focus on Canadian interests, lots of detail on the global environment and quite a few concrete proposals dealing with specific regions and issues. The amount of detail can be interpreted as an acknowledgement that the world has changed, has become more dangerous and that business as usual will not be a suitable option but the resource commitment remains aspirational.

CPC Summary: Recognizing that a more difficult world exists.

The NDP makes the case for a better role in the world, but the details are vague. The NDP says they will stand up to China with a strong, coherent, and principled foreign policy based on human rights and global peace and security as support for those facing threats by Chinese entities in Canada. The NDP sees Canada’s global role as helping the most vulnerable by boosting international development assistance and supporting policies to make vaccines freely available as well as a leadership role in helping lower income countries deal with climate change. They also support nuclear disarmament, recommit to peace keeping and will ensure that Canadian made weapons do not fuel conflict and human rights abuses.

With respect to defence, they pledge investment in replacing outdated equipment and training and support for our national defence and international commitments including peacekeeping. In contracting for new military equipment preference will be given to suppliers who will create jobs in Canada. Notably, there is little mention of NATO, NORAD, or Arctic sovereignty.

NDP Summary: Helping Canadians help themselves by helping the world.

The foreign policy and defence platform for the People’s Party is direct and succinct in articulating a vision of Canada on the international scene. It presents the world to date as moving dangerously towards a globalist vision with Canada merging its identity in a post-national quasi-world UN sponsored state with no identity. The response to this perceived situation is a Canada first common-sense foreign policy that will work closely with allies to maintain international peace but not get involved in conflicts unless there is a direct benefit to Canada. The United States will be the priority focus for foreign relations and there will be a withdrawal from all UN commitments that are seen as threatening Canadian sovereignty. Development aid will be phased out and international assistance will focus on humanitarian disaster relief. With respect to defense, there is little mention of new investment in military hardware or defence capabilities or even Arctic sovereignty. It is a very short and simple foreign policy with very sweeping assertive statements and little detail.

PPC Summary. The world is dark and full of terrors so raise the drawbridge.

Finally, the Green Party places their international affairs and defence platform in the Just Society component on their platform. There is a lot of criticism of the current government’s record on the pandemic and international vaccine distribution, greenhouse emissions, Afghan refugees and our reputation in the international community. The Green Party proposes to engage internationally in more egalitarian forms of collaboration with a more diverse set of international partners. They will retool the military to support disaster response while maintaining combat readiness while reconsidering our current network of alliances and trade relationships that have made us overly dependent on traditional allies and authoritarian states. Foreign policy will be characterized by living up to commitments on issues like climate, respect for international law, sustainable international development policy, and international fair trade. As well, they will reinforce Arctic sovereignty through expanded patrols and community infrastructure development.

GP summary: An aspirational foreign policy seeking a global just society.

Overall, the foreign and defence policy platforms of all the parties range from reasonably detailed collections of policies to very vague statements. None of them really present a fully integrated and coherent vision of what Canada’s foreign policy strategy should be but that probably is more the function of a White Paper or Royal Commission.

If anything, the major criticism is the lack of any substantive debate of these issues during the current election campaign. Ignoring these issues is a somewhat myopic splendid isolationism approach that relies on simple platitudes about our past glories as a cooperative and outward-looking middle power under the wings of the U.S. defense umbrella. This will not cut the mustard in the rougher world of the unfolding 21st century.

1:30 p.m. — Our short-term focus is unemployment, but we need a plan for a long-term labour shortage

By L. Graeme Smith, The Hub’s content editor

Jobs, jobs, and a million more jobs. Creating more jobs to get Canadians back to work is a primary focus of each major party platform. All well and good. Doing so is crucial to rebuilding the economy and providing people with stability as the country exits the plague years. 

But in some ways the pandemic-induced spike in unemployment has obscured the bigger and more long-term labour market challenge facing the country: labour market shortages. Soon close to one in four Canadians will be over the age of 65 and this will have profound effects on supply and demand for workers across the country.

There’s evidence in fact that it’s already starting to. Employment-services provider ManpowerGroup Inc. recently surveyed 45,000 employers across 43 countries and found 69 percent of employers reported difficulty filling roles. This marks a 15-year high for talent shortage rates, the provider reports. 

This RBC Economics report looking at the latest numbers highlights that job vacancies in Canada grew 22 percent in June from May, for a total of 800,000 unfilled positions. It notes that the country was experiencing tight labour-market conditions even before the pandemic hit, with the national unemployment rate at a historic low of 5.7 percent in 2019. 

Additionally, Canada’s overall job-vacancy rate climbed to 5 percent in June, which is double the level it was at five years earlier.

Statistics Canada reports that in the first quarter of 2021, one in five job vacancies was in health care and social assistance. 

In the Q4 2021 Net Employment Outlook examining the hiring intentions of Canadian businesses this upcoming quarter, ManpowerGroup Inc. shows that 50 percent of employers plan to hire, 35 percent plan to keep work levels steady, 11 percent expect to let staff go, and 4 percent are unsure about hiring plans. 

The Hub’s editor-at-large Sean Speer spoke about this overall challenge with host Alicja Siekierska on Yahoo Finance Canada’s Crisis Management podcast in June of 2021, highlighting the serious effects this underexplored issue will have on economic growth: 

“I’m not sure we have gotten our collective heads around this new reality. Every time that we seem to be focusing the policy discussion around this long-term secular trend, something emerges that restores unemployment as a matter of concern. Think of the 2008-09 financial crisis, or the experience of the pandemic. But the truth is these temporary experiences don’t change the underlying reality: for the foreseeable future, the primary labour market and, I would argue, economic issue facing our country is the fact that we have too few workers.”

How do the parties seek to address the labour shortage issue? 

The Conservative party platform promises to: 

• Recognize the need for international farm workers and facilitate their timely entrance into Canada to work on Canadian farms. 

• Develop a long-term strategy to attract skilled workers to the meat processing sector, which is currently facing a 30,000 worker deficit that is putting Canada’s supply chains at risk and harming our long-term competitiveness.

• Double the Apprenticeship Job Creation Tax Credit for the next three years to help create more places for apprentices.

• Invest $250 million over two years to create the Canada Job Training Fund.

• Create the Working Canadian Training Loan to provide low interest loans of up to $10,000 to people who want to upgrade their skills.

• Introduce a Construction Mobility Tax Credit to help with expenses construction workers incur when they temporarily relocate for work.

• Give Québec more input into the assignment of temporary foreign workers to particular regions and their pathways to permanent residency to address critical labour shortages.

The Liberal platform includes the following pledges: 

• Reform economic immigration programs to expand pathways to Permanent Residence for temporary foreign workers and former international students through the Express Entry points system. 

• Build on the Economic Mobility Pathways Pilot and work with employers and communities across Canada to welcome 2,000 skilled refugees to fill labour shortages in in-demand sectors such as health care. 

• Establish a Trusted Employer system to streamline the application process for Canadian companies hiring temporary foreign workers to fill labour shortages that cannot be filled by Canadian workers.

• Grow and improve the Global Talent Stream program by simplifying permit renewals, upholding the 2-week processing time, and establishing an employer hotline, to allow Canadian companies to attract and hire highly skilled workers. 

• Continue to work with provinces, territories, and regulatory bodies to improve foreign credential recognition.

• Introduce a new Labour Mobility Tax Credit to allow workers in the building and construction trades to deduct up to $4,000 in eligible travel and temporary relocation expenses giving them a tax credit of up to $600 a year.

• Make it easier for women and vulnerable groups to access training by requiring businesses supported through the Sectoral Workforce Solutions Program to include wrap-around supports.

• Introduce a Career Extension Tax Credit: seniors who earn a minimum of $5,000 at their jobs will be able to eliminate tax payable on a portion of their income and receive a tax credit of up to $1,650.

• Develop a sector-specific Agricultural Labour Strategy with employers and unions to address persistent labour shortages.

• Create a new stream of the Youth Employment and Skills Strategy Program (YESS) to support 5000 opportunities a year for young people.

• Double the Union Training and Innovation program to $50 million a year to support more apprenticeship training opportunities and additional partnerships in the Red Seal trades across Canada.

• Establish a new Apprenticeship Service which will connect 55,000 first-year apprentices in Red Seal trades with opportunities at small and medium-sized employers.

The NDP platform promises to “make important new investments in training Canadians and boost support to traditionally underemployed groups, ensuring that they can access good jobs that pay a fair wage,” but it does not include any specific policies to address talent shortages.

11:00 a.m. — Breaking down the party platforms on foreign policy

By Amal Attar-Guzman, The Hub’s associate editor

With election day looming, and the campaign only seeing the briefest discussions on foreign policy, it’s a useful exercise to compare and contrast the three major party platforms on Canadian foreign policy and its engagement in the world.

I decided to focus on current issues and issues that have not really been discussed during the election campaign.

Trade

The Liberals and Conservatives have similar ideas when it comes to international trade in the Asia-Pacific and African regions. However, when it comes to North American trade, the CPC plans to negotiate a compensation package for farmers and processors impacted by USMCA, the renegotiated NAFTA deal.

The NDP are focusing on more transparency in trade agreements, protecting national industries and ensuring that trade agreements have more enforceable labour, human rights and environmental protections. Further, they plan to ensure trade agreements are consistent with the UN’s Declaration on the Rights of Indigenous Peoples.

Afghanistan

On Afghanistan, the Liberals promised to increase the number of Afghan refugees being resettled from 20,000 to 40,000. Since the CPC and NDP platforms were released while it was still unfolding, the situation in Afghanistan is not mentioned. In media appearances, Erin O’Toole has promised that a CPC government would resettle at least 20,000 refugees.

China

China is mentioned once by the LPC in terms of foreign interference. The NDP mentioned China four times, planning to stand up to China while working with allies and for its human rights abuses with respect to Hong Kong.

The CPC share similar sentiments with the NDP, but goes further, discussing China in terms of Arctic sovereignty, withdrawing Canada from the Asian Infrastructure Investment Bank, banning Huawei from Canada’s 5G infrastructure, imposing a carbon border tariff, using Magnitsky to sanction China’s human rights offenders. China is mentioned 31 times in the Conservative platform.

Israel-Palestine

On the Israel-Palestine conflict, the CPC plans to defend Israel from being “unjustly [singled] out” by the UN, acknowledges Jerusalem as the capital of Israel and plans to have the Canadian Embassy relocated there. The NDP supports Palestinian self-determination and want Canada to stop selling weapons to Israel.

Israel-Palestine is not mentioned in the LPC platform.

Cybersecurity and foreign interference

The CPC mention cybersecurity and preventing foreign interference and disinformation campaigns in great length, planning to work with national security agencies, passing the Foreign Agents Registry Act, and cooperate with the Five Eyes allies.

The LPC also plans to work with national security agencies, as well as review and modernize the Investment Canada Act to provide additional resources to them. Further, the LPC plans to introduce legislation to safeguard Canada’s infrastructure and 5G networks, and work with the G7, NATO and other international partners.

The NDP briefly mentions foreign interference, espionage and terrorism, stating that their government will also work with international allies and enhance oversight of security services, while “fully respecting the privacy and Charter rights of all Canadians.”

International assistance

The LPC plans to increase international assistance by an additional $200 million to accomplish the UN Sustainable Development Goals. The CPC plans to legislate $250 million allocation from Canada’s annual International Assistance Envelope to fragile democracies and the NDP plan to boost international assistance with the goal to contribute 0.7 percent of GNI to international aid.

Comparing all the party platforms, the CPC has the most detailed foreign policy platform, followed by the LPC and NDP. In terms of budget, the LPC has more detailed funding than the CPC and NDP.

Regardless of their positions, party leaders are seemingly aware about the importance of Canada’s position in the world.

In a recent Hub Poll, 57 percent of Canadians say that Canada ‘s place in the world is worse since COVID-19. Further, in the CIC’s 2021 “Foreign Policy by Canadians” report, majorities of Canadians are ready for Canada to be more engaged in the world. So, whoever wins this election will have to face this reality.

If you want to read the party platforms yourself, you can read the Liberal Party Platform here, the Conservative Party Platform here, and the NDP party platform here.

8:30 a.m. — The pandemic revealed a big problem in our health-care system and none of the platforms address it

By Sean Speer, The Hub’s editor-at-large

Health care has loomed large in the federal election campaign. That’s probably to be expected in light of the ongoing global pandemic and its immense consequences for provincial health-care systems.

COVID-19 has exposed various structural problems with our health-care systems ranging from too little hospital capacity to the inherent weaknesses of our long-term care model to inadequate numbers of doctors, nurses, and other health-care professionals in certain parts of the country.

For all of the talk about the pandemic’s effects on where we work and live, it’s a safe bet that its biggest long-term consequences will be felt in the problems that it has both illuminated and precipitated in our health-care systems.

Most of these challenges are of course not new. They’ve persisted for some time but have gone largely unaddressed by provincial governments for various reasons including resource constraints (health care already represents about 40-50 percent of provincial spending), legal and ideological constraints (the interrelationship between the Canada Health Act and our dogmatic commitment to our current single-payer model), and institutional constraints (the organization of our health-care system has contributed to a path dependency).

The collective failure to break through these constraints and address structural problems in the country’s health-care systems has now led to a new, pandemic-induced crisis: massive surgical and testing backlogs. Take Ontario for instance. The province’s Financial Accountability Office has estimated that by this month, Ontario’s surgical backlog could exceed 420,000 and its testing backlog could reach 2.5 million.

It will take years and billions of dollars to eliminate these backlogs and even that may be overly optimistic in light of evidence that the pandemic has actually obscured the full magnitude of the problem due to lower-than-normal levels of health-care consumption. Consider, for instance, the Quebec government has reported a 24-percent drop in requests to be placed on a surgical wait list during the pandemic compared to a non-pandemic year.

As the pandemic subsidies and people return to normal behaviour therefore, it’s quite likely that there’s further spike in demand for surgeries and tests. This gap between the estimated and actual backlog has been characterized as the “invisible wait list.”

This combination of these structural and pandemic-induced problems would be challenging enough if it was occurring in isolation. But it’s not. It’s happening against a backdrop of the slow yet overwhelming arithmetic of aging demographics.

The growing share of Canada’s population over the age of 65 (which is presently 18 percent but set to rise to more than 23 percent by 2030) and its interaction with health-care consumption patterns is bound to put tremendous pressure on provincial health-care systems. It’s the reason why, that even prior to the pandemic, the Parliamentary Budget Office had assessed that most provincial finances were unsustainable over the long-term.

Which brings us back to the federal campaign. Each of the major parties have made several policy commitments concerning health care.

These policy commitments share one major commonality: they assume that the overall structure of provincial health-care systems is broadly optimal (including, for instance, the mix of public and private delivery and the structure of single-payer financing) and the principal problem is a lack of public resources. The parties therefore have promised varying forms and levels of federal transfer payments to help provincial and territorial governments essentially manage the health care status quo.

This, in my view, is a mistake. It fails to consider role of policy and institutional design in contributing to our poor performance on wait lists, access to specialists, and a role for technology. This seems like a big omission. It’s hard to understand how one could observe the extraordinary failings of our health-care systems in response to the pandemic and think that the only problem is simply the need for more resources.

One of the main reasons why we’ve had such stringent lockdowns is the weak capacity of our health-care systems. Just consider that Canada has 1.95 acute care hospital beds per 1,000 which is fewer than any other OECD country besides Mexico.

Accounting for the inevitable pressures from aging demographics and the risks of future pandemics, one would think that there would be an appetite for more structural changes including, for instance, possibly revisiting parts of the Canada Health Act. But there’s been none of this in the campaign. Instead the party leaders have essentially fought over who’s a bigger defender of the rickety status quo. More federal dollars may temporarily paper over some of the immediate problems. But they won’t solve these structural issues or prepare us for inexorable rise of health-care demand.

Where there have been differences among the federal parties is in the form and structure of new and higher federal transfer payments. The difference mainly lies in how and what strings are attached.

The Conservative Party’s promise is straightforward: it would restore the growth rate of the Canada Health Transfer from a rolling average of nominal GDP to 6 percent per year. The Canada Health Transfer would continue to be subject to the Canada Health Act but there isn’t any indication from Erin O’Toole or the party platform that the Conservatives would attach additional conditions to the transfer payments. There would be, in other words, no new health accords between Ottawa and the provinces.

The Liberal Party and the New Democrats, by contrast, would leave the Canada Health Transfer’s growth rate unchanged and would instead create a number of “side-car” transfer payments for specific aspects of health-care services and delivery. The Liberals, for instance, would establish a new transfer payment for mental health services, provide dedicated funding to hire doctors and nurses and set wages for personal support workers, and extend new funding (dictated by new federal legislation) for long-term care homes.

The NDP similarly has committed to targeted funding in various health-care areas including human resources, pharmacare, dental care, long-term care, and so on.

What’s interesting is that the totality of the Liberal and NDP promises for health-care spending represents a larger cumulative increase in federal transfer payments than the Conservative proposal but they’re doing it in a piecemeal way with various negotiations and conditions attached to these different individual payments.

The upshot: while the federal parties agree that we shouldn’t consider structural changes to our health-care systems and that more federal funding is needed to preserve the status quo, they differ on Ottawa’s role in deciding how and where the provinces spend these incremental federal dollars.

What are Canadians to make of this? Although the parties have substituted money for ideas to address the structural problems facing our health-care systems, the Conservative plan is the least bad for resisting the temptation to micromanage provincial health-care systems from Ottawa.

The good news is that recent provincial responses to the pandemic-induced backlogs — including leveraging greater private delivery as a form of “surge capacity” — may actually help to achieve more meaningful reform irrespective of what the federal parties have said during this campaign.

7:00 a.m. — Where the leaders are today

Liberal leader Justin Trudeau will be in Montreal to make an announcement at 9:15 a.m.

Conservative leader Erin O’Toole will be in Saint John, New Brunswick to make an announcement at 10 a.m. ET.

NDP leader Jagmeet Singh will be in Toronto to make an announcement at 9 a.m.