An underrated force behind the months-long Chinese interference scandal and even David Johnston’s report this week may be the Canadian establishment’s own self-consciousness about its deep-rooted yet wrongheaded commitment to what one might describe as the “China consensus.”

One gets the sense that the key players involved including the prime minister and the former governor general cannot bring themselves to acknowledge that their basic assumptions about Canada’s relationship with China, its broader place in the world, and the sources of its long-term prosperity were in hindsight misplaced.

They’re so resistant to the idea that they made a misjudgment that they’re prepared to live with the perception that they’re corrupt, politically motivated, and ultimately hiding something. Their egos are big enough, in other words, that they’ve come to misread their own self-interest. They’d rather look sketchy than wrong.

The China consensus began to take shape more than 30 years ago in the triumphalism of the Cold War victory. It assumed as a matter of political economy that China’s integration into the global economy would lead to its political liberalization and ultimately democracy. These forces weren’t just seen as contingent. They were casual.

U.S. foreign policy scholar Henry Rowen even famously predicted in a 1996 essay that China would become a democracy in 2015 based on its economic development patterns and the similar experiences in Japan and South Korea.

Although Canadian business and political elites never quite committed themselves to such firm predictions, they strongly endorsed the notion that greater economic integration with China would invariably put it on the path towards broader liberalization. As recently as 2019, for instance, former Chrétien-era Trade Minister, Roy Maclaren, still spoke of how “deepening trade and investment relations with China…would lead to human-rights advances.”

This wasn’t the source of major partisan disagreement. It was a political consensus that extended from Jean Chrétien to Stockwell Day and virtually everyone in between. Even my former boss Stephen Harper who was elected in 2006 with the most skeptical views about China of any major political figure in decades eventually succumb to the consensus in part due to growing frustration with the Obama administration’s indifference to Canada.

It’s fair to say, though, that the Trudeau government came to office in late 2015 with a renewed commitment to the China consensus. The new government’s so-called “reset” included bilateral free trade talks with China even though Australia and other allies were starting to raise alarms about the Chinese government’s duplicitous model of economic and diplomatic engagement.

Canada’s political class wasn’t alone in its “leap of faith” on China. It has extended it far beyond to the country’s broader establishment including Johnston himself. As National Post columnist Terry Glavin has recently documented, Johnston was as committed to the China consensus as any political figure of the era. He oversaw the establishment of one of the country’s Confucius Institutes and has met Chinese President Xi Jinping several times. Glavin even calls him “an elite capture poster boy.”

This optimism about the opportunities inherent in a burgeoning economic relationship with China was rooted in the long-standing Canadian goal of diversifying our economic and geopolitical dependence on the United States. That Canada had been first to officially establish diplomatic relations with China in October 1970 and many in Canada’s establishment were drawn to China’s top-down technocracy reinforced this predisposition.

I’ve assumed that these Sinophiles at the centre of Canadian business, cultural, and political life persisted in their views about China long after the evidence confirmed otherwise out of a sense of dogmatism. They were so committed to the idea of China as an ideological proposition that they refused to see its backsliding under President Xi on the country’s market reforms and his growing political centralization and crackdowns on personal freedoms using the technologies paid for by our two-way trade.

Even as the political classes in the United States, United Kingdom, and elsewhere came to accept that their own bipartisan versions of the China consensus were wrong, Canada remained a bit of an outlier. We’ve been the slowest to come to this realization. Our exclusion from the Indo-Pacific Economic Framework and the AUKUS security alliance is in large part a result of a perception that the Canadian government has yet to fully move on from the China consensus.

The past few years have provided plenty of evidence to bolster this perception. The Trudeau government’s foot-dragging on banning Huawei equipment from Canada’s wireless networks, its bizarre COVID-19 vaccine deal with a military-connected China company (which Johnston describes as “once promising”), and its failure to act in response to the mounting evidence of Chinese election interference are only the highest-profile examples. As I’ve recently written, notwithstanding the government’s tough talk in its newly-released Indo-Pacific Strategy, its actions suggest that it remains uneasy about the implications of reconceptualizing China as a hostile actor and a geopolitical threat.  

The same reluctance is present in Johnston’s report. Although he generally singles out China for foreign interference, he tends to emphasize the more general risk. He never mentions by name the Chinese official at the heart of many of these allegations and defends former Ontario cabinet minister Michael Chan’s proximity to the Chinese consulate in Toronto on the grounds that he’s “admitted it publicly.” He even goes to some length to justify the idea that diplomats posted in Canada will have preferences in our elections and they “may even express those preferences openly or privately.”

These observations read as though they’ve been put forward by someone who’s hesitant to see what he’s actually seen in the intelligence reports. That in and of itself is revelatory. Perhaps it isn’t merely ideology that’s come to blind Canada’s establishment to the true ambitions and activities of the People’s Republic of China. Maybe it’s just ego. Maybe the prime minister, Johnston, and others like them just can’t bring themselves to admit that they were wrong. They cannot acknowledge that their decades-long assumptions about China’s economic and political model and the future of Canada’s global relationships were mistaken. They cannot reckon with the misalignment between their perception of the world and its disappointing yet incontrovertible reality. 

It leaves the rest of us however suspended between the two. We continue to live in a country in which the establishment stubbornly clings to a failed consensus on China. The past several weeks—including what Johnston’s report says and doesn’t say—have exposed the consequences. It’s clear to everyone but seemingly those in charge.  

In broad terms, there were two possible outcomes from David Johnston’s investigation into the Chinese interference scandal. 

The first was evidence of political corruption. He could have found that the government’s failure to respond to the growing body of intelligence on Chinese interference in Canadian democracy was due to purposeful neglect on the part of the prime minister, his Cabinet, and their staff because those efforts aided the Liberal Party’s partisan interests. 

The second was evidence of basic state failure—that is to say, the billions of dollars that we spend on intelligence gathering, analysis, and policy adoption were effectively wasted because of a lack of clarity around information sharing, the persistence of institutional siloes, and disinterest on the part of the political arm of the government. 

Johnston’s report points in the second direction. He says that he found no specific evidence of gross political negligence. Instead, the main issue was that the intelligence that was collected and analyzed never seemed to make it to political actors. In the case of the intelligence on the targeting of MP Michael Chong, for instance, we’re told that while it was sent to Public Safety Minister Bill Blair and his chief of staff, it was sent through a top-secret email system for which they seemingly lacked log-in details. 

The Trudeau government may feel buoyed by the fact that Johnston failed to find evidence of political malfeasance, but that ought to be little relief for Canadians. His report reinforces the mounting evidence that Pierre Poilievre’s diagnosis is essentially correct: Canada is broken. 

We like to talk about how our public services are a major comparative advantage for the country and turn up our noses to the political dysfunction in the United States. But it seems pretty clear that American state capacity is stronger than Canada’s. 

Just consider these recent examples: 

• When it came to the COVID-19 pandemic, the U.S. initiated Operation Warp Speed that produced multiple vaccines on a historic timeframe. The National Research Council, by contrast, signed a self-evidently dumb deal with China and produced no vaccines. 

• The B.C. government is now sending its cancer patients to the U.S. for treatment like they’re citizens from a third-world country. 

• And while U.S. intelligence services have helped Ukraine hold off the much-stronger Russian forces, key Canadian intelligence players (including the cabinet minister) cannot seem to figure out how to get into their email accounts. 

As I’ve written before, there’s a strong case that we’ll probably have to have more government rather than less in the coming years due to aging demographics, growing geopolitical threats, and climate change. Yet these high-profile cases of government failure raise serious questions about our government’s ability to carry out its core functions—let alone plan for and respond to new and emerging ones. 

In that sense, while Johnston’s report may not contain a smoking gun, it would be wrong to characterize it as somehow favourable to the government. It’s a more persuasive case for limited government than any think-tank paper or political speech could ever aim to deliver.  

This is in large part due to the stark dichotomy between the seriousness of the issue and the government’s own unseriousness. Last year’s protracted passport delays may have been an annoyance but in relative terms, they were mostly trivial. We now know from Johnston’s report that the federal government’s brokenness has exposed our democracy to foreign interference. 

His specific findings will undoubtedly lead to various reforms to improve information sharing, reporting to the prime minister, and so on. But these changes will not address the report’s more fundamental insights about the causes and consequences of government failure. 

On this point, the conventional libertarian critique of big government resonates more and more these days in the face of a government that spends more, employs more, and yet seems less capable of carrying out its basic functions. As a former colleague at the University of Toronto used to regularly tell students, a government that tries to do too much invariably does nothing well at all. 

At a time when the Trudeau government is asking Canadians to trust its ability to engineer an industrial transformation—starting with putting an end to the internal combustion engine in the next decade—its essential argument on the Chinese interference story is that the state wasn’t negligent. It was simply incompetent. It’s a tough marketing message for its progressive ambitions. 

A government that can permit years of foreign interference in its democracy because it cannot figure out its email log-in is hardly one to trust to re-engineer the economy or much else for that matter.