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J.L. Granatstein: Canada has pressing national interests. We should spend to defend them

Commentary

Few Canadians think of the country’s national interests. Even our governments scarcely ever base policy on them, but interests exist nonetheless, and they are not hard to list.

  1. Canada must protect its territory and the security of its people.
  2. Canada must strive to maintain its unity.
  3. Canada must protect and enhance its independence.
  4. Canada must promote the economic growth of the nation to support the prosperity and welfare of its people.
  5. Canada should work with like-minded nations for the protection and enhancement of freedom and democracy.

The first of these interests is the basic duty of every nation: defend the people and territory of the state against all threats, domestic or foreign. The fifth interest states that Canada has interests abroad, interests that have led Canadians to fight wars that led to tens of thousands of deaths and injuries to its young men and women. The other national interests, while not directly linked to defence, also point to the need to bear in mind that not all Canadians have been eager to join in wars; Québécois’ support for the Great War and the need for conscription was unenthusiastic, to say the least. The fourth interest similarly suggests that relations with the United States must be carefully considered as the government works to keep the economy working well.

The federal government’s April budgetA Plan to Grow Our Economy and Make Life More Affordable makes clear that national interests were not much in mind in Ottawa even as the Russian invasion of Ukraine brought the world closer to war. Yes, Finance minister Chrystia Freeland did make a gesture toward the national interests, stating that “National defence is a fundamental responsibility of the federal government. In addition to protecting Canada from international threats and defending our sovereignty, the Canadian Armed Forces play an important role in making the world a safer place.”Chapter 5: Canada’s Leadership in the World This statement aside, the rest of her budget did little to demonstrate any serious intent to bolster the Canadian Armed Forces.

The CAF, in fact, can do very little to make the world a safer place. The RCAF has forty-year-old fighter jets and too few transport aircraft. The RCN’s ships, once technologically equal to those of any other navy, are now obsolescent. The Army lacks modern tanks, anti-tank weapons, and defence against aircraft, and there are no drones. There are insufficient numbers in the ranks in all three services, and much of the stockpiles of protective equipment, medical supplies, artillery, and obsolete anti-tank weapons are being shipped to help the Ukrainians.

Of course, there are old government pledges, ambitious and expensive plans to build new naval vessels and up-to-date fighters, but nothing will be delivered on time and on budget because the bureaucratic procurement system is completely broken. The Trudeau government issued a paper in 2017 that promised to boost defence spending from $18.9 billion to $32.7 billion in 2026-27. Even that figure, however, would not meet NATO’s call for member states to spend 2 percent of GDP on defence—at best it might reach 1.5 percent—and given the government’s promises of dental care, pharmacare, money for housing, and meeting the demands of the Indigenous population, there is scant chance of hitting even that 2026-27 target. As it is, the defence spending figures are pumped up with veterans’ pensions and other federal department spending, all amounting to some 20 percent of the purported current $24 billion defence expenditure.

To be fair, Ms Freeland did boost defence spending above the 2017 plan by $8 billion over five years. But that is a pittance, a drop in the military bucket. Estimates by the Canadian Global Affairs Institute pointed out that $17 billion more a year would be needed to reach the 2 percent goal, something the Trudeau government seems completely unable to contemplate.

The state of Canada’s military unfortunately is not something that disturbs most Canadians. A Leger poll after the April budget found that almost half said Canada was spending enough, while 18 percent said it should spend less. Only 34 percent wanted more defence spending.The 2022 Federal Budget and Cpc Leadership Race – April 13, 2022 

How can this be? We are watching a brutal Russian war unfold in Ukraine and seeing an aggressive China press forward in the Pacific. The possibility of a major global conflict is very real, Canada cannot avoid being involved should it occur, and Canadians somehow believe—like their government—that we need do nothing to prepare. Most likely think that Canada is a peacekeeper still, despite the fact that the Liberals have effectively removed Canada from military support to UN operations. Most apparently believe that the Americans will rescue us should we be attacked or that two oceans separate us from any conflict. Whatever the reasoning, the public supports the Liberals’ neglect of defence.

The policies and polling numbers notwithstanding, we still have national interests, and numbers 1 and 5, the defence of Canada, democracy, and freedom, still matter. But if neither the public nor the government believes in defence, we can rely only on good wishes and high hopes. Global Affairs minister Melanie Joly said recently that while Canada was not a military power, it was good at “convening.”“On Tuesday, Joly said Canada will continue working with international partners in helping protect Ukraine through aid and diplomacy, but suggested that was the limit of our capabilities. ‘Canada is not a nuclear power, it is not a military power,’ she told CTV Power Play host Evan Solomon. ‘We’re a middle-sized power and what we’re good at is convening and making sure that diplomacy is happening, and meanwhile convincing other countries to do more.'” https://nationalpost.com/news/politics/jolys-what-were-good-at-is-convening-comments-sell-canadian-military-short-generals-say?utm_term=Autofeed&utm_medium=Social&utm_source=Twitter#Echobox=1647477263 This was twaddle, but we must hope she was correct. We could convene a meeting with the G7, the G20, and the UN to ask other nations to forget about us in any coming conflict. They won’t.

Leon Trotsky said that “You may not be interested in war, but war is interested in you.” Unfortunately, he was right.

Sean Speer: The conservative case for federal intervention in housing

Commentary

Housing and homeownership have climbed to the top of the policy agenda in the Conservative party leadership race. This past week, two candidates, Pierre Poilievre and Scott Aitchison, proposed using the federal spending power to push municipal land-use reform in the name of building more homes. 

The basic idea is that Ottawa transfers billions of dollars for infrastructure and social housing to lower orders of government and it should attach conditions to these funds around liberalizing zoning rules and residential development policies. 

These policy pronouncements are an implicit recognition that (1) a lack of housing supply is the principal reason for Canada’s housing affordability challenges and (2) local policy choices are mainly responsible for the lack of adequate housing supply. 

The question, of course, is: what should the federal government do in response to such a supply-driven diagnosis?

The idea of using federal conditionality to drive municipal reform isn’t new. It’s something that Brian Lee Crowley and I first put forward in a 2016 policy paper for the Macdonald Laurier Institute.A Home for Canada’s Middle Class It’s good to see that it’s now getting traction in the Conservative leadership race. 

Yet it’s not a universally popular proposal among conservatives. There’s been some criticism from conservative-policy types on the grounds that the use of the federal spending power conflicts with the conservative preference for decentralization and subsidiarity. Long-time conservative policy thinker Ken Boessenkool in particular has argued that if aspiring federal leaders want to change municipal land-use policies they should run for mayor of a Canadian city. 

His main point is that municipal decisions ostensibly reflect democratic preferences in those places and local voters should be free from federal or provincial interference in local decision-making. They should, in other words, be able to adopt stupid policies if that’s what they want. The federal government shouldn’t have a say in the matter. 

There’s something to this line of argument. Subsidiarity is a fundamental part of the Canadian conservative worldview. I’ve argued elsewhere, for instance, in favour of the genius of Canada’s system of decentralized federalismOttawa needs a history lesson on the benefits of federalism in general and reforming the Canada Health Act to enable greater provincial autonomy in health care in particular.Ottawa should get out of the way on health care

As a general rule, Canadian Conservatives (and conservatives) ought to be champions of a conception of federalism that legal thinker Asher Honickman has described as “watertight compartments.”Reforming Canadian Fiscal Federalism: The Case for Intergovernmental Disentanglement But there’s a strong case that the housing file may be different. Ottawa’s constitutional roleThe Constitution Act, 1867, 30 & 31 Vict, c 3 over the national economic union actually justifies some intervention in housing policy. 

Let me explain: The key point here is that the effects of stringent land-use rules aren’t simply borne by the local community. The consequences—especially in the case of our large, most dynamic, job-creating cities—spill out into the national economy in the form of foregone economic activity and middle-class opportunity. 

One way to think about it is as follows: the labour market functions like a big megaphone that enables communication between employers and job seekers across the country. In cities like Montreal, Toronto, and Vancouver, which have been disproportionately responsible for net new job creation in recent years, the labour market is screaming at the top of its lungs for workers and yet stringent land-use regulations and their effects on housing prices are impeding the ability of individual workers to answer. 

The consequences are far-reaching. People remain stuck in places where there are fewer jobs and less opportunity and the national economy suffers as a result. As Crowley and I wrote back in 2016: 

…housing affordability challenges throw up massive barriers for people to move to the cities with the highest growth and most opportunities. The national economy is undermined when the small number of cities responsible for net job growth are basically unaffordable for a share of the population. Housing costs are therefore obstacles to raising incomes, growth, and productivity for everyone.

This isn’t a conceptual point. Well-known research from the United States, for instance, estimates that stringent land-use regulations in its most dynamic cities such as New York and San Francisco lowered aggregate economic growth by 36 percent between 1964 and 2009.Housing Constraints and Spatial Misallocation 

NIMBYism isn’t merely a local or neighbourhood issue. Its implications for the functioning of the national labour market can be significant and therefore justifies the policy attention of the national government. 

The upshot: while Boessenkool is generally right that conservative policy ought to preference local decision-making and outcomes, the externalities from local land-use rules for the national economy actually justify using the federal spending power to liberalize municipal zoning policies. 

It’s also worth noting that the policy interventions proposed by Poilievre and Aitchison are still voluntary in the sense that municipal officials can keep their local land-use regimes if they feel strongly about them even if it results in fewer federal transfers. That seems like a reasonable balance between localism and the national interest. 

Yet Boessenkool’s opposition is still highly valuable as an ideological check on the temptation to extend the federal spending power to any number of other issues that may be important or politically charged. He’s right that we must place significant constraints around the role of the federal government to avoid a slippery slope of greater and greater intrusion into provincial and municipal affairs. We shouldn’t, as he puts it, throw a big federal government at bad municipal government. 

In this particular case, though, two seemingly conflicting ideas can be true at the same time. There’s a principled case for federal intervention in housing. And it should be an exception to the rule.