THE WEST BLOCK
Episode 12, Season 13
Sunday, December 3, 2023
Host: Mercedes Stephenson
Guests:
Bill Blair, Defence Minister
Paul Kershaw, Generation Squeeze Founder
Laura Tamblyn Watts, CanAge CEO
Location:
Ottawa, ON
Mercedes Stephenson: A stark warning from Canada’s top military brass that the Canadian Armed Forces are not ready to operate in an increasingly dangerous world. Will the warnings from these admirals and generals change the government’s direction on defence spending?
I’m Mercedes Stephenson. The West Block begins now.
Ottawa announces a $10 billion deal to replace its aging Aurora surveillance aircraft. It’s a bit of good news at a time when the military is stretched to the limit of personnel and equipment. I speak to Defence Minister Bill Blair about the push to turn things around.
Plus, is retirement a pipedream for the next generation? How long will you have to work before you can enjoy your golden years?
The federal government made it official last week. It’s replacing its aging Aurora patrol fleet with Boeing’s P8A Poseidon aircraft. The Aurora’s have played a critical role in Canadian intelligence gathering. For example, they were used to identify ISIS targets in Iraq, and they’re the same aircraft that the Chinese military has been aggressively intercepting over the Pacific. The deal for the new planes will cost just over $10 billion, with the first of the 14 aircraft expected to arrive in 2026. The announcement comes as the military continues to juggle multiple challenges, from aging equipment to major recruitment shortfalls. That message hit home this week in a viral YouTube video that was made by the top commander of the Royal Canadian Navy.
Vice-Admiral Angus Topshee, Royal Canadian Navy Commander: “The RCM faces some very serious challenges right now that could mean we fail to meet our force posture and readiness commitments in 2024 and beyond. The RCM is in a critical state, with many occupations experiencing shortages at 20 per cent and higher.”
Mercedes Stephenson: To talk about the challenges and solutions, hopefully, facing the Canadian military, I’m joined by Defence Minister Bill Blair.
Welcome to the program, Minister Blair.
Bill Blair, Defence Minister: Thank you very much. Good morning, Mercedes.
Mercedes Stephenson: That was a pretty striking video by Admiral Topshee. It’s not often that we hear senior generals or senior admirals come out and be that stark in their assessment, that they may not be able to defend the country. They may not be able to meet their goals. What did you make of Admiral Topshee’s video and do you agree with his assessment?
Mercedes Stephenson: Minister, you acknowledge that we’re living in a more dangerous world. We are watching aggression from China. We are watching the war in the Middle East. We are watching Russia’s war in Ukraine. And yes, you are replacing some platforms, but they are all platforms that were flagged as in need of replacement at least eight years ago when your government took over. At the same time, we’re facing dire shortages. I’ve spoken to a number of senior commanders and in fact, General Wayne Eyre said this at committee: if there was a war, we only have three days’ worth of ammunition. We’re required to have 30 by NATO. We don’t have anywhere near that. We’re 27 days short. Why has your government allowed the critical shortfall of ammunition and other materials that are required to defend Canada?
Mercedes Stephenson: Well and I, you know, Minister…
Bill Blair, Defence Minister: And securing those supply chains is a critical part of what we have to do.
Mercedes Stephenson: I hear you on Ukraine and the material that’s been given out and ammunition, but other countries have bought this. In fact, other countries are spending much more than Canada has. They’re increasing their defence spending. Canada is making cuts to the defence budget, which I know your government says aren’t cuts. But the definition of cuts is usually when you take money out and you don’t put it back in, which is effectively what is happening. Why in light of acknowledging the shortage of personnel in the dangerous world that we live in are you not spending more?
Bill Blair, Defence Minister: Well and—and let me just sort of articulate that because I don’t think you’ve quite captured exactly what we’re doing with defence spending. In 2017, we brought forward a plan, Strong, Secure and Engaged, to increase defence spending by 70 per cent over an eight year period. We’re six years into that and we’re right on track. Defence spending is actually gone up.
Mercedes Stephenson: But you’re at 1.23 per cent, which is well below the 2 per cent NATO target.
Bill Blair, Defence Minister: And—but we’re moving forward. The—the point I want to make is we’re putting significantly new resources in. But we also acknowledge because the world was changing and particularly after the invasion off Ukraine, the increasingly aggressive posture taken on by both Russia and China, and some of the obligations in the Indo-Pacific and in our own Arctic and of course, in NATO. We recognize that we have to continue to invest even more. More than we said in Strong, Secure and Engaged in 2017, and that’s why we have brought forward a plan that’s very much in discussion right now, within our government, about making significant new investments. I hope I’ve made it very clear, publicly, that we recognize we must do more. We’re going to do more, but there’s also some context in the doing that more because there is a fiscal situation in Canada that I have to be realistic about what can be achieved. We’re spending taxpayers’ dollars, Mercedes, and I’ve always tried to be very careful when we do that. So one of the things I was asked to do by Treasury Board is to take a look at how we administer some of our processes in our financial administration, in our human resources administration, in consulting services and professional services and executive travel, and a broad range of things that over time bureaucracies tend to become bureaucratic and I think there is always a need for people like myself to go and make sure that we are being as efficient as possible in delivering the defence capabilities that CAF needs and the country needs.
Mercedes Stephenson: So then why not take that money and put it back into the operations and maintenance budget?
Bill Blair, Defence Minister: Well first of all, we—we have a significant budget for maintenance and for operations…
Mercedes Stephenson: But it’s a shortfall from what we need according to all these senior generals and admirals who are saying that they don’t have what they need to do what’s required.
Bill Blair, Defence Minister: Well let’s—if you don’t—but let’s not mix up apples and oranges. There—there’s a fairly significant expenditure of administrate—in administration and my job is to make sure that we do that as efficiently and as cost effectively as possible. And at the same time, there’s a very significant portion of that budget which is dedicated to that maintenance and that supply. Last year, the Canadian Armed Forces was unable to spend over $2 billion of the budget and it’s because their processes of procurement are not as efficient as they need to be. And so it’s not a matter of us not giving them enough resources. It’s a matter of—of making sure that those processes work for them so that they’re able to do that maintenance, they’re able to acquire that ammunition, they’re able to make the investments that they need to make. And then mostly importantly, is solving this deficit of people because the real strength of the Canadian Armed Forces is the men and women who serve that.
Mercedes Stephenson: Speaking of investments in platforms and technologies. In February of this year, I spoke to Minister Anand when she was the defence minister, and we were talking about the tanks that Canada sent to Ukraine. She told me it was top of her priority list basically to get to work on replacing those tanks, and as you know, there’s a very large number of Canadian tanks in Latvia right now as well. What’s the status of the replacement project for the tanks? I haven’t seen anything come out about it. I haven’t seen it go to tender. Has your government started the process of replacing them?
Bill Blair, Defence Minister: We’re well on our way. Of course, we’ve identified, you know, all of our requirements with respect to those tanks. We know what we want, the Leopard tank, and we’ve got—we’re also making investments in maintaining the ones we’ve got, but we do know we need more. The procurement process is, as I’ve already mentioned to you, Mercedes, first of all, I don’t talk too much about where we’re at and particularly processes because I want to make sure that I don’t do anything that interferes with those contracts, but at the same time, what I’m finding is, and I think you’re aware of this and most Canadians are, some of these procurement contracts take an incredibly long time to execute. And the time between when the Canadian Armed Forces defines the need and when we’ll actually be able to get them in the door, it takes some time—an inordinate amount of time and an unacceptable amount of time, so it’s—we’re trying not to only to manage the cost, but to also manage the time that it takes to deliver them. That again, is one of my responsibilities. I’m working with some of the best people I know in government and in the Canadian Armed Forces to, as you say, untie some of these knots. I was very pleased, yesterday, we were able to—we heard very clearly from the Royal Canadian Air Force about what it needed in a multi-mission aircraft to replace the CP-140, the Auroras. The identified their requirements and we determined that the only plane that currently was available and that met all of those requirements was the P8, and although it was a procurement not without its challenges, I was very, very pleased to be able to announce to the Canadian Armed Forces and to the Royal Canadian Air Force that we were able to acquire those planes for them and that they were going to be getting them within the next two years, before the CP-140s age out of service. And so that’s our responsibility is to get jobs like that done, and I was very pleased that yesterday we were able—I hope we were able to send a signal about our commitment to deliver for the Canadian Armed Forces. We’re going to continue to deliver for them because they deliver for us.
Mercedes Stephenson: Thank you very much for joining us today, minister. And good luck with I’m sure what is a difficult job ahead of you.
Bill Blair, Defence Minister: No, it’s the best job in government. Thanks very much, Mercedes.
Mercedes Stephenson: Up next, is freedom 55 now a pipedream? We dig into a new report that reveals many Canadians aren’t ready for retirement.
Mercedes Stephenson: With numbers out last week that the economy is slowing and unemployment is up, thinking about retirement feels like a pipedream for a lot of us right now, and that’s backed up by a new report that found the majority of people near retirement age are not financially ready to leave the workforce. Only 14 per cent are retirement ready. 31 per cent will need to rely on public income like CPP and Old Age Security. About 55 per cent will have to make lifestyle cuts to avoid outliving their own savings, and a staggering 73 per cent will face financial hardship if they require long term care.
And for young Canadians who are struggling to afford a home and find jobs, is retirement even a possibility? To talk about all of this, I’m joined by Paul Kershaw, the founder of Generation Squeeze and a professor at UBC School of Population and Public Health, and Laura Tamblyn Watts, the CEO of CanAge, a national seniors’ advocacy organization.
Good morning to both of you. Not the cheeriest of topics, but an important one. You know, we were talking about this around the office and just saying whether you’re at the end of your career and thinking about retiring, or recently retired and wondering if you can afford to stay there, or for some of the younger people who work in our bureau, wondering if they’re ever going to be able to retire. It’s not a particularly rosy and optimistic outlook.
Paul, can you start us off with giving us a sense of where this is going and how worried we should be?
Paul Kershaw, Generation Squeeze Founder: Well I think that there are two things that we need to be aware of. On the one hand, for a younger demographic, I do increasingly worry about the pressures that they will face later on in their aspirations to retire because the reality is that for young folks today, hard work doesn’t pay off like it used to. They will go to post-secondary more and pay more for the privilege to land jobs that actually often are paying less after adjusting for inflation. And then we all know they’re facing dramatically higher housing prices that increasingly lock them out of ownership and their consolation prize is lousy, rising rents. And all of that means it’s so much harder to save for retirement down the road. And on top of that, and we have to think about today’s aging population, these are our family members. It’s my mom, my in-laws, etc., and for that demographic, the data are somewhat positive that they have some of the lowest rates of poverty in the country, the most wealth of good amount of housing security, but decades ago, our government kind of let them and let us down because we didn’t work out how to pay effectively for a healthy retirement for an aging demographic driven by the baby boom.
And if I could just add one more observation for your listeners, you know, back in the day when baby boomers were young adults, there were seven working age residents to pay for every retiree. Now boomers have every reason to expect I want the same if not better benefits, but they’re just three working age residents to pay for every retiree, and that’s adding some risks to what can we do to protect the security for our retired loved ones, but it’s also putting a lot of pressure on younger taxpayers.
Mercedes Stephenson: Laura, what happens when you—you’ve worked hard your whole like, you’ve saved appropriately for what you were expecting, but now things are more expensive, people are living longer, especially women often outlive and make less while they’re working than men. What is the scenario right now for senior Canadians?
Laura Tamblyn Watts, CanAge CEO: Well it’s not as rosy as we would wish. You know, I know that the way that we calculate how people are doing in terms of poverty index and so on is there, and with those numbers older adults on the whole look like they’re doing pretty well, but the reality of the circumstance is we measure the wrong stuff. And what that means is the measurements are based on a family of four in kind of their middle years, and the basket of goods and services that we count are not usually the basket of goods and services that seniors need. So care, the cost of care home care, care provision, all of that is not in the basket of goods. When we’re thinking about what we need as older people, including medications and so on that are not covered, those are also not in the basket of goods. And what it means as well is that not only we’re counting the wrong stuff that they’re becoming much more expensive at a time when debt was cheap, so many older people are very much in debt. Boomers are the most indebted generation we’ve ever had. Some of them are retiring with student debt, let along mortgage debt. So they’ve accrued a lot of debt, but their money didn’t make much because interest rates were historically low. Now, the cost of debt has gone up and their cost of living has gone up and often they’re not being able to make as much money in the door, so it is actually a very poor situation.
Mercedes Stephenson: Paul, what happens for the younger generation, and I see this with a lot my friends, delay having children, you know, you’re establishing your career. It’s expensive, you’re waiting until later, and now you’re in a scenario where you are both caring for potentially young children or having to pay for child care and at the same time, worrying about aging parents who may also require care or long term. It seems like a tremendous financial burden and where does the money come from just to get by day to day when you’re dealing with those competing fam—not competing, you know what I mean, but family members at opposite ends of their life spectrum that both require a lot of care and a lot of money?
Paul Kershaw, Generation Squeeze Founder: Well it’s the right question, and I love so much how you corrected like it’s competing. It’s actually what we have, I think, is a lot of love, and there’s a lot of solidarity between older and younger family members and how to work it out so that not only do we make our families work for all generations, but we need to make our country and our government budgets work for all generations. And I’m—I’m onboard with Laura saying we often aren’t right now measuring the right things. And I am sympathetic to the fact that many people right now might be having more debt in retirement, but we need to—need to put that in context. That debt will often be in the context of one’s housing and—well there has been a little bit of a trickle up in the number of boomers who are retiring with mortgage debt. Typically, that’s because they have been refinancing homes and purchasing additional homes because they are making a great deal of wealth coming from the housing system. And so I think Laura is right. When we measure how people are doing, we need to move beyond income and think increasingly about wealth because you can be a widow with a low income of say, around $25 thousand a year and that will be akin to like just above the poverty line and just above getting the Guaranteed Income Supplement in this country, and we might think that that individual is really financially struggling. And if they’re a renter, they absolutely are. But if they’re a home owner in Halifax or Hamilton or Victoria or Vancouver or Toronto, the might be people whose homes that they own outright are worth a million, if not many millions more. And so that’s fundamentally different than say, you might think a young lawyer making $250 thousand, they’re the top earners in the country, but in some instances, they can barely afford to rent a two-bedroom place. And so we need to more and more be thinking about how do we measure affluence in this country. How do we measure our ability to contribute to the services we need in retirement and the services we need like child care, like post-secondary, like affordable housing? We have to really comes to terms with how—what we want, how we are going to pay for what we want and ensure that we’re not leaving large unpaid government bills via deficits for our kids and grandchildren.
Mercedes Stephenson: Laura, what is happening for people who are retiring now? I’ve heard some people contemplating that they may have to come back to work because the amount they saved that they thought would be enough now isn’t enough. Are you seeing a lot of that, or is that more a fear than something that’s actually manifesting?
Laura Tamblyn Watts, CanAge CEO: Oh no, we’re completely changing it. And actually that’s okay to change it, as long as we’re talking about people who are economically secure and increasingly we’re not. What it means is that people not only are living longer, they also need to work longer. They—the idea of retirement at 65 came out of a time where people died at 67. That’s actually when we created our CPP, it was only expected that you would live two years and then you would die. Now we’re looking at a third of our life. It won’t be surprising for anyone to say that people need more money and they need more security. And there are some barriers that we need to callout. One of the biggest barriers for people who want to stay in the workforce longer, even though we are in the biggest labour crunch we’ve ever had in Canada, you know, ageism is playing a huge role. And so folks are having a hard time getting back into the working world, the paid working world, and then we also have these additional layers of complexity around things like the fact is most caregivers for older people are other older people, it’s not actually the generations below and so they’re trying to figure out how they can balance providing free care for spouses, friends, or even, you know, parents in their 90s, while at the same time, they don’t have the accumulated wealth that they need to.
The last piece I just wanted to share is there’s a structural problem around housing, too. Quite right, yes, many people have accumulated wealth or equity in their house, but we don’t actually have places for them to go to that are age-friendly and accessible and so most rental places are not appropriate for older people. They’re not easily able to downsize and stay in their communities. Many of them—they’re going to sell or they’re going to have to move far outside of the area that they are into something much more remote, more challenging to get the services and health care that they need, where transportation becomes a huge issue. So again, it’s not just about the cost of housing, it’s about the cost of including people in communities and we’re failing in that.
Mercedes Stephenson: Well certainly big questions ahead about what that looks like and I’m sure whether or not those in my generation and younger will ever be able to retire. Paul and Laura, thank you both very much for joining us. I’m sure we’ll be talking about this again soon because it is an issue that quite literally affects everyone.
Paul Kershaw, Generation Squeeze Founder: Thank you.
Mercedes Stephenson: Up next, serious misconduct allegations levelled against Canada’s spy agency.
Mercedes Stephenson: Now for one last thing…
Last week, yet another powerful national security organization faced serious allegations of sexual misconduct and a toxic workplace culture. Whistleblowers from Canada’s spy agency, CSIS, told the Canadian Press that the British Columbia office of CSIS was a “dark and disturbing place.” The allegations included harassment and rape. It’s not the first time we’ve heard concerns about CSIS. During the global pandemic, Global News reported on allegations of toxic workplace culture, racism and harassment by senior managers, as well as a demoralized staff.
Those who work in national security are vital to this country and they make a lot of sacrifices, yet rooting out sexual misconduct and ensuring oversight of powerful and shadowy organizations seems to be an ongoing challenge.
Those who defend the country deserve better, and here at The West Block, we have more reporting to come in coming weeks on this subject to hold those organizations accountable.
That’s our show for today. We’ll see you next Sunday.