The rhetorical flourish during the lead-up to Thursday’s federal budget was more ambitious than the actual announcement. It will be recalled that Russia’s unprovoked full-scale invasion of Ukraine in February upended global stability and forced many of Canada’s allies, especially those in the 30-member North Atlantic Treaty Organization, to confront the very real prospect of nuclear war and years of violent instability on the European continent.
The Canadian Armed Forces, as a budgetary issue was therefore unavoidable. Not only is the public fixated on the horror show occurring in Ukraine, but some of Canada’s closest and like-minded allies are undertaking abrupt changes in defence and foreign policy in response to the crisis are hard to ignore.
The standout in this regard is the new left-wing coalition government in Germany. Mere days after the Russian invasion, it discarded decades of post-Cold War policy built on underinvesting in the country’s armed forces and economic engagement with Russia. Berlin declared it would meet the NATO goal (established in 2014) of spending two per cent of its GDP on defence, and upping this year’s defence budget to 100 billion euros from 43 billion euros in 2021.
Apparently sensing the rapidly changing geopolitical climate, Canadian defence minister Anita Anand made bold statements in March that hinted at a similar rethink. First, came the promise of a “robust package” of updates in the “short term” to NORAD.
Modernizing the longstanding continental defence alliance between Canada and the United States, whose North Warning System radars set up in 1986-92 desperately need replacement, was left out of the Trudeau government’s 2017 20-year defence policy and funding plan, Strong, Secure, Engaged. That project is estimated to cost between $10 billion and $15 billion and is vitally necessary in an era of sophisticated hypersonic missiles and Russian military build-up in the Arctic.
Then the minister stated that she would bring “aggressive options” to Finance Minister Chrystia Freeland and Prime Minister Justin Trudeau: they’d either exceed that two per cent target, meet it, or get just below it. With Canada’s defence spending currently measuring 1.36 per cent of GDP, hitting two percent would require adding, by some estimates, another $16 billion to $17 billion per year to the defence budget. This money would be over and above the planned 70 per cent increase laid out in Strong, Secure, Engaged, which envisioned spending peaking at $32.7 billion in 2026-27.
Finally, the decision late last month to finally end the dozen year search for a new frontline jet fighter and negotiate a contract (paid with monies already allocated under the 2017 defence policy) with U.S. defence giant Lockheed Martin for 88 F-35A fighter jets, only added to the sense that big changes were afoot.
In the end, all that ambitious telegraphing was for naught. April’s budget comes nowhere close to the lofty rhetoric of March. Instead of $15 billion to $16 billion in new annual funding, the Canadian Armed Forces (CAF) will get $6.1 billion over five years. When combined with the 2017 funding plans, this at best gets Canada to the 1.5 per cent of GDP mark later this decade.
Moreover, unlike past federal budgets, it’s not exactly clear what this money will be spent on, as no specific capabilities are identified for purchasing. Despite promises of a robust package, the government is still “considering options” for NORAD modernization. Details remain scarce.
To be fair, one item that may clear up some of this ambiguity is the budget’s call for a “new defence policy review” to update Strong, Secure, Engaged, a welcomed idea as the 2017 policy is out of date, given recent global events.
No timelines are provided beyond it being done “swiftly,” but by linking an assessment of the CAF’s size and capabilities with resource needs, the potential for bigger defence boosts exists even if it’s not two per cent of GDP. The upcoming June NATO summit in Madrid offers an opportunity for the government to make a bigger splash should its review be complete by then.
Until we see the outcome of that review, big questions about how this country wishes to defend its interests and values at home and with its allies abroad remain unanswered.
Beyond NORAD modernization, will the Trudeau government fund a replacement for the current four diesel-electric submarines due to be retired in 2036-42? Will these new submarines have an under-ice capability currently only found in nuclear submarines? How prepared is the country to respond to Russian brinkmanship in the Arctic?
Is the government still committed to the $62 billion (at least), 15 ship Canadian Surface Combatant project if costs escalate? How will the troop shortfall of 12,000 positions be plugged?
Hopefully, the review clarifies for Canadian security what the budget did not.
Jeffrey F. Collins is Fellow with the Canadian Global Affairs Institute and a Strategic Research Associate with Samuel Associates.
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