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Richard Shimooka: The Liberals are not going to fix Canada’s real defence spending problem


This past Monday Sean Speer and Taylor Jackson published an excellent breakdown of Canadian defence spending as part of The Hub’s new DeepDives series. Its release is timely for a number of reasons. Importantly, it provides critical context for the recent federal budget and defence policy update that preceded it. However, its greater value became immediately apparent on Wednesday following Minister of National Defence Bill Blair’s comments at a Canadian Global Affairs Institute conference on NORAD modernization. The most explosive line was his statement that it was difficult to convince his cabinet colleagues to agree to hit NATO’s 2 percent threshold because “nobody knows what that means.” 

I wish I could say this is surprising, but it is not. There is a broad ignorance concerning foreign and defence policy not only among his cabinet colleagues but also among the Canadian public. 

There are many reasons why the government should aim to reach the 2 percent target (which we will not fully rehash here) including the political cost of failing to provide adequate security, the risks of failing to properly manage military capabilities to meet the threats Canada faces, and the reputational damage incurred with our allies by being so out of step with their interests. 

Instead, it’s more interesting to understand why the contours of this debate align as they do. 

For a variety of reasons, Canadians’ overall defence and foreign policy literacy is low. For one, only very small segments have ever served in the military. Perhaps more problematic is that Canada’s defence civil society is extremely weak compared to other countries: there are very few people whose job it is to cover, analyze, critique, or advance thinking on defence issues. Into this vacuum misinformation, sensationalist and poorly thought out takes fill in, further confusing the public on really essential issues concerning national security. That is unfortunate, as potentially a majority of Canadians have good instincts and a genuine interest in Canada having a strong international role commensurate with its size. But most simply have no conception of what that means and are easily led astray. 

It is also fairly evident that there are ideological views about the military and international relations writ large that are simply ignorant of the reality. Our political leadership frankly are lightweights among our international peers. The last leader who was held in very high regard for their views on international relations was the recently departed Brian Mulroney. Stephen Harper and Paul Martin at times rose to that level, but it has been a relatively thin record over the past fifty years. More often than not, parochialism, ignorance, and domestic political concerns have guided Canada’s political leadership’s international instincts. 

Part of the issue is ideological in nature. It is evident that members of the ruling Liberal Party subscribe to a very naive understanding of international relations and military affairs. Glaringly, they have consistently misunderstood and understated the lengths to which China, Russia, and other authoritarian governments seek to overturn the international order and the risks to Canada—up to and including direct interference in Canadian democracy itself.

Similar issues are evident among some members of the Conservative Party. During his final years in office, Harper, based on a broader policy of fiscal austerity, pursued deep budget cuts that severely affected the military’s readiness for the next decade. Similarly, the Conservative Party’s recent vote against the Ukraine free trade agreement because of its carbon tax provisions, despite trenchant support for the beleaguered state, illustrates how even minor ideological wins can override major foreign policy priorities. 

The broad lack of understanding about defence and foreign policy issues feeds into the budget debate. I have long had one thought about the public’s view on defence spending: the actual dollar amounts do not matter that much. Instead, the political perception is all that matters. 

More generally, Canadians have lost their reference points concerning government spending. During COVID the government spent hundreds of billions of dollars to keep the economy afloat and people safe. Certainly, much of it was necessary, but very large investments and spending programs (which were by no means exclusive to the COVID response) have undermined the public’s understanding of what these dollar amounts mean. 

There is no better example of how the numbers do not matter than what occurred with the CF-18 replacement saga. In 2010 the Department of National Defence, based on a fairly in-depth analysis, sought to sole source 65 F-35s for $8.9 billion dollars CAD. It was clear that it was the lowest cost, most capable option that Canada could acquire.  

The Liberal Party, during the 2011 and then 2015 elections, railed against the purchase, claiming it was an unaffordable and unnecessary “stealth” fighter that did not suit Canada’s interests. Once in office, their solution was to acquire a significantly more costly, less capable option: an “interim capability” of 18 Boeing Super Hornets. Instead of spending $9 billion for 65 F-35s, the governing Liberals now proposed spending $6.3 billion for 18 aircraft through a sole source contract.

Prime Minister Justin Trudeau is given a tour of a training facility prior to a press conference regarding the release of Canada’s new defence policy at CFB Trenton on Monday, April 8, 2024. Sean Kilpatrick/The Canadian Press.

Did the Canadian public revolt over this looming boondoggle? Not really. The only concerns were raised by experts who understood the disaster the government was planning to inflict on the country’s national security. There was absolutely no suggestion from the public that this was unacceptable. The Liberals were able to gesture vaguely at the fighter jets they did eventually purchase and the public was mollified that at least they were doing something—even if that “something” was the more expensive, less effective solution. No opposition party sought to subsequently weaponize this for their own purposes, and the issue failed to achieve liftoff. Which is fine for those parties’ domestic political concerns, but ultimately bad for the country in the long run.

Returning to our present 2 percent debate, this context of negligence from our leaders and ignorance from the masses explains why Blair’s cabinet colleagues refuse to commit to spending to that threshold. Again, it is not about the actual amounts. Rather it is the political perception of simply spending more, however incrementally and ineffectively, that is being prioritized. That’s likely why the DPU effectively commits Canada to reaching the 2 percent target while at the same time loudly proclaiming that it actually doesn’t. It allows the political leadership to have it both ways; to say to its core constituents that it is being fiscally responsible while claiming to allies that they actually will meet Canada’s obligations. 

Allies are unlikely to be swayed. Most of Canada’s European and Asian partners have been able to raise their defence and reach or exceed the 2 percent threshold despite also having domestic priorities like health care, social security, and infrastructure. But they see the deteriorating condition of the international system and, determined to actually do something about it, have raised defence spending as a result. To them, Canada’s schtick is getting old.

Furthermore, I suspect Blair, like Anita Anand before him, understands what the budget choices mean. They are clear about the dire situation the military is in and almost certainly realize that if the objective is to even just maintain the extremely limited capability the military has now, 2 percent spending will not be close to sufficient. But again, it is simply domestic political concerns that are driving decision-making here. 

Unfortunately, there are no easy answers to address this situation. Raising the education level of Canadians on these issues would certainly help, but that involves a level of policy coordination across different levels of government and civil society that is hard to imagine coming to fruition. Ideas about national service potentially might address this issue, but it would be extremely costly, further waste precious defence resources, and be politically untenable.

The problem with facing big problems is that it can be hard to know where to begin fixing them. But that doesn’t mean we shouldn’t try anything. If Blair is failing to find the traction he needs within his own government, then it may be up to the next to offer a clean start. The Conservatives should be eager to champion this cause, if only because it offers another stark area of differentiation between them and the Liberals that they can lean into. Yes, this would be another domestic audience play, but at least it’s one with the added advantage of beginning the country’s slow climb out of this mess. There are worse legacies Pierre Poilievre could leave than being the prime minister who arrested Canada’s decline into military and international irrelevance. 

My advice? The 2 percent spending threshold is a helpful target, but ultimately irrelevant if the broader system itself is not fixed. At this point, far more important is what we spend on, and how, than necessarily how much. We need to get that right before the rest can follow. 

Michael Byers and Aaron Boley: From Elon Musk to Russia, the race to own outer space is heating up


As part of a paid partnership, this month The Hub will feature excerpts from this year’s five shortlisted books for the Donner Prize, awarded to the best public policy book in Canada. Our podcast Hub Dialogues will also feature interviews with the authors. The winning title will be awarded $60,000 by The Donner Canadian Foundation on May 8th.

The following is an excerpt from Who Owns Outer Space? International Law, Astrophysics, and the Sustainable Development of Space (Cambridge University Press, 2023).

The asteroid 101955 Bennu is just a pile of rubble, weakly held together by its own gravity, the remnants of a catastrophic event that occurred a billion years ago. But Bennu is also a bearer of both life and death, containing clues about the origins of life on Earth while, at the same time, having the potential to destroy humanity. For over time, the agencies of physics and chance have brought the 500-metre-wide asteroid onto an orbit very near to Earth.

A robotic spacecraft named OSIRIS-REx set out in September 2016 to make contact with Bennu. After many rehearsals, flying close to Bennu each time, the spacecraft made a brief landing—a “touch-and-go” that enabled it to collect a sample from the asteroid’s surface. Scientists will spend decades analysing the 120 grams of material, which include amino acids, the building blocks of life.

The OSIRIS-REx mission, however, is about more than science. NASA readily admits that the visit to Bennu is a prelude for possible mining operations, with governments and private companies hoping to extract water from asteroids to make rocket fuel—thus enabling further space exploration and, perhaps, an off-Earth economy. But some states oppose these plans, arguing that space mining, were it to happen, would be illegal in the absence of a widely agreed multilateral regime. They point to the 1967 Outer Space Treaty, which prohibits “national appropriation” and declares the exploration and use of space to be “the province of all [hu]mankind.” There are also reasons to worry that space mining, if done without adequate oversight, could create risks—including the low probability, high-consequence risk of an asteroid being inadvertently redirected onto an Earth impact trajectory.

A little Pomeranian called Saba missed out on the chance to join Sharon and Mark Hagle on the first of their four planned flights to space, though Blue Origin did offer the dog a consolation prize—a specially fitted flight suit! As for the Hagles, they already have tickets for Virgin Galactic and are now in talks with SpaceX. Travelling to space is an “extraordinary” experience for the Florida-based couple, whose previous adventures included swimming with whales and abseiling into caves. “My thought is you go, I go,” Sharon said of her 73-year-old property developer husband. “Mark has always taken me out of my comfort zone.”

More and more of the world’s ultra-rich are travelling to space as tourists on short sub-orbital flights or much longer orbital flights, with increasing numbers going to the International Space Station. Trips around the Moon might also become a reality soon. Hollywood, unsatisfied with the visual effects provided by CGI or parabolic flights on aeroplanes, is right behind them, with Tom Cruise expected to fly to the International Space Station for a film shoot soon. It is all great fun, of course, unless one considers the environmental impacts.

The Soviet spy satellite Kosmos 1408, launched in 1982, ran out of propellant decades ago and became just another piece of Space junk…until it found a new purpose in life. It was chosen as a target for a powerful military to demonstrate a capability that everyone already knew it possessed—to destroy a satellite at will.

A ground-launched missile struck the 1,750 kg satellite at a relative speed of at least 20,000 kilometres per hour, creating a huge explosion and, at the same time, more than a thousand pieces of high-velocity space debris large enough to be tracked by ground-based radar. Tens of thousands of smaller but still potentially lethal pieces were also undoubtedly created, many of them on elliptical orbits that cross the orbits of thousands of operational satellites, as well as the International Space Station and China’s new Tiangong Space Station. Immediately after the explosion, astronauts, cosmonauts, and taikonauts retreated into the shelter of their capsules, which are hardened for atmospheric re-entry, and closed the hatches while the highest concentrations of debris flew by. 

That was not the end of the story, however. Some of the debris will remain in orbit for many years, posing an ongoing threat to all satellites, including many operational satellites belonging to Russia itself, the state that took this dangerous and completely unnecessary action.

The Milky Way glows above the 6856 meters tall Bhagirathi peaks as seen from Tapovan, at an altitude of 4500 meters in the northern Indian state of Uttarakhand, Friday, May 10, 2019. Altaf Qadri/AP Photo.

SpaceX recently moved the bulk of its operations from California to Texas, attracted by the Lone Star State’s low taxes and minimal regulations. The move may also have contained an implicit threat to the U.S. government: the now-dominant space actor could up stakes again, but next time to another country. Luxembourg, a well-established tax haven, would be an obvious place to incorporate. Although a tiny European country, it provides a friendly home for two of the world’s largest operators of communications satellites in geosynchronous Earth orbit (GEO), and, in 2017, adopted legislation to facilitate commercial space mining. SpaceX, meanwhile, has already acquired two large oil-drilling platforms that could be used to allow launches, quite literally, offshore. 

Having launched more than 5,000 satellites since 2019, SpaceX now controls large swaths of Earth’s most desirable orbits. Should one company, or indeed any actor, be allowed to use the most valuable parts of low Earth orbit (LEO) to such an extent that its use effectively excludes other actors from operating there safely? At what point does SpaceX exceed the carrying capacity of LEO and degrade spaceflight safety for everyone?

Tighter regulations are coming. But those regulations will be the result of negotiations, and companies, knowing this, are now working to establish the strongest possible negotiating positions. The emergence of Luxembourg and other “flag-of-convenience” states in the space domain will certainly help those who seek to minimise regulation. SpaceX only exists because of NASA contracts provided to it when it was a fragile start-up. It still relies on NASA and U.S. Space Force contracts for revenue, but the company is growing ever more powerful, launching thousands of satellites each year and planning missions to both the Moon and Mars. At some point, governments may find that they are negotiating with a leviathan that is both able and willing to transcend all boundaries.