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From swaggering to staggering – Canada’s decline into irrelevance

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From the MacDonald Laurier Institute

By Philip Cross

It’s remarkable how much our international reputation has faded over the past 10 years, both diplomatically and economically.

It is remarkable how much attitudes about Canada have shifted, both here and abroad, over the past 10 years. A decade ago, riding the wave of a booming economy, Canada was widely admired for a banking system that had got through the 2008-2009 global financial crisis without government bailouts. Today the country’s global stature is much diminished and Canadians are rapidly losing confidence in their economic prospects.

In the years leading up to 2016 Canadians grew accustomed to global accolades. In a 2003 cover story, The Economist touted the prospects for “cool Canada,” following up in 2006 that Canada’s relative economic performance made it a “superstar” as the “only country running both current-account and budget surpluses.” Steve Poloz, then chief economist at EDC, said in 2005 the stars were aligned for Canadian firms to achieve the “productivity miracle” already realized in the U.S. In 2012, the OECD secretariat forecast Canada’s economic growth would lead the G7 nations over the next 50 years. Our AAA credit rating, stable economy and resource riches prompted the IMF in 2012 to recommend central banks hold more currency reserves in Canadian dollars, leading to headlines about “loonie set to join global currency elite” as a safe haven in turbulent times.

A Maclean’s article reporting 2011 poll results proclaimed Canada was “on top of the world” and “Canadians have never felt so upbeat about the future.” A year later, Joe O’Connor could claim in this newspaper that “Canada’s got swagger.” This confidence was reinforced when Britain hired Mark Carney in 2012 as the first foreign-born governor of the Bank of England, calling him the “best central banker of his generation.” On the global stage, in 2016 U.S. President Barack Obama told Parliament: “the world needs more Canada.”

A stable banking system was not Canada’s only perceived financial advantage. Some analysts predicted Toronto would become a major trading centre for the North American cap-and-trade carbon market. Moody’s Analytics projected Toronto’s financial services industry would employ more people than London’s by 2017. Tiff Macklem, then dean of the Rotman School, wrote an op-ed in 2016 touting Toronto’s “potential to become the leading global fintech hub.”

That was then. Today Canada’s reality is much different than people were expecting before 2015. Its finance sector is known for being “an ATM and safe deposit box for money laundering,” according to Jonathan Manthorpe in his 2019 book,  Claws of the Panda. In 2018, The Economist noted that Canada “has long had a reputation as a place to snow-wash money.” Regulation is split between federal and provincial governments and there are almost no restrictions on lawyers involved in laundering.

Instead of buoyant economic growth, the OECD last year downgraded Canada’s prospects to 2060 to dead last out of 38 nations. In a 2019 feature, The Economist noted that the top Canadian firm on Fortune’s list of the world’s largest companies ranked 241st, concluding that our “economy and business culture will have to become more American.”

Nothing has damaged Canada’s economy and global stature more than the obstacles governments have deployed to hamper our energy industry. In 2011, the late Jim Prentice, then vice-chairman of CIBC, reviewed the slew of Canadian energy projects then underway, from hydro in Labrador to Alberta’s oil sands, and concluded “no one else is bringing on energy projects on the pace and scale of Canada.” Today, by contrast, British Columbia and Quebec are struggling to meet electricity demand, while the oil sands have slashed investment.

The harm from discouraging oil and gas development was fully revealed after Russia’s 2022 invasion of Ukraine. Canada was unable to answer Europe’s desperate need for oil and gas. When German Chancellor Scholz visited Canada to plead for more natural gas, our prime minister claimed there was “no business case” to support LNG exports to Europe. Meanwhile, since March 2022, American firms have signed now fewer than 57 supply agreements with Europe for 73 million metric tons of LNG annually, according to a recent report in the Wall Street Journal.

A recent Nanos poll found even fewer Canadians (just 13 per cent) thought our global reputation had improved than were satisfied with the state of our economy (23 per cent). The Wall Street Journal said last year that Canada’s paltry defence spending should disqualify us from G7 membership, while Spain is openly lobbying to take our place. We have become irrelevant to the geopolitics of our natural allies, whether the problem at hand is the growing rivalry between the U.S. on the one hand and Russia and China on the other or the EU’s fixation on rectifying its energy and defence deficits.

More broadly, Canada has failed in its traditional role of explaining the U.S. to the rest of the world. Though it’s strange to recall, immediately after Donald Trump’s election in 2016, the hope was Trudeau would be the “Trump Whisperer,” establishing Canada as an “indispensable nation,” to quote Maclean’s Scott Gilmore. Instead, we have reverted to our traditional sense of moral superiority over Americans and now parrot the global chorus condemning the direction of U.S. politics. We have a plan for dealing with Trump, the prime minister assures us. Good luck to us with that.

Philip Cross is a senior fellow at the Macdonald-Laurier Institute.

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Trudeau pledges another $500 million to Ukraine as Canadian military suffers

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From LifeSiteNews

By Clare Marie Merkowsky

Despite the nation’s own armed forces grappling with an alarming recruitment crisis, Justin Trudeau and his government have poured over $13.3 billion into Ukraine.

More Canadians tax dollars are being sent overseas as Prime Minister Justin Trudeau has promised an additional $500 million in military aid to Ukraine. 

During a July 10 meeting with Ukrainian President Volodymyr Zelensky, Trudeau announced that he would send another $500 million to Ukraine as it continues its war against Russia, despite an ongoing decline in Canada’s military recruitment.  

“We’re happy to offer we’re announcing today $500 million more military aid this year for Ukraine, to help through this very difficult situation,” Trudeau said. 

In addition to the $500 million, Canada will also provide much of Ukraine’s fighter jet pilot training as Ukraine receives its first F-16s. 

Trudeau’s statement comes after Canada has been under fire for failing to meet NATO’s mandate that all members commit at least two percent of their gross domestic product (GDP) to the military alliance. 

According to his 2024 budget, Trudeau plans to spend $8.1 billion over five years, starting in 2024-25, and $73.0 billion over 20 years on the Department of National Defence.   

Interestingly, $8.1 billion divided equally over five years is $1,620,000 each year for the Canadian military. Therefore, Trudeau’s pledge of $500 million means he is spending just under a third on Ukraine compared to what he plans to spend on Canadians.  

Indeed, Trudeau seems reluctant to spend money on the Canadian military, as evidenced when Canadian troops in Latvia were forced to purchase their own helmets and food when the Trudeau government failed to provide proper supplies.  

Weeks later, Trudeau lectured the same troops on “climate change” and disinformation.       

However, at the same time, Trudeau readily sends Canadian tax dollars overseas to Ukraine. Since the Russia-Ukraine war began in 2022, Canada has given Ukraine over $13.3 billion, including $4 billion in direct military assistance.    

In May, Trudeau’s office announced $3.02 billion in funding for Ukraine, including millions of taxpayer dollars to promote “gender-inclusive demining.”  

Trudeau’s ongoing funding for Ukraine comes as many Canadians are struggling to pay for basics such as food, shelter, and heating. According to a recent government report, fast-rising food costs in Canada have led to many people feeling a sense of “hopelessness and desperation” with nowhere to turn for help.  

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Federal government “not serious about defence,” warn Canadian military leaders

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From the Macdonald Laurier Institute

J.L. Granatstein for Inside Policy

“The current prime minister of Canada is not serious about defence. Full stop. A large number of his Cabinet members are not serious about defence. Full stop.”

The Communist regime in China ramps up its aggression against Taiwan, while actively interfering in the political processes of Western democracies – including Canada. In Europe, Russia wages a brutal full-scale war against Ukraine, while sabre-rattling about nuclear strikes on our NATO allies. Meanwhile, Russian President Vladimir Putin’s Arctic ambitions threaten our sovereignty in the North.

With danger all around, one would think Canada’s federal government, led by Prime Minister Justin Trudeau, would be sounding the klaxon – rallying the country and steeling its citizens for looming conflicts with authoritarian regimes while bolstering our military for 21st-century warfare.

Alas, that seems to be far from the case, according to a pair of senior Canadian military leaders who warned recently about the federal government’s lack of commitment to and support of the military.

Over the course of four media reports that were published between May 12 and June 30, 2024, we heard the opinions of Lieutenant General (Ret’d) Andrew Leslie, and General Wayne Eyre, the Chief of Defence Staff who is retiring later this summer. Leslie, a former Liberal MP, was featured in the National Post on May 12 and again on June 30. As for Eyre, he appeared in an Ottawa Citizen article on June 20, and then in an end-of-term interview with the National Post on June 30 – just two days after the federal government announced the beginning of construction planning for the Royal Canadian Navy’s proposed fleet of fifteen destroyers.

Of these four articles, Leslie’s were by far the most important. The former Chief of Land Staff had retired from the Canadian Armed Forces to run for the federal Liberals in 2015. Elected to Parliament, he served four years – but then decided not to run for re-election. If Leslie was disillusioned, and he was, he kept silent in public until his National Post interviews. His remarks were extraordinarily blunt, but they seemingly failed to attract the public notice they deserved. Here in point form are some of his comments from his first interview:

  • “The current prime minister of Canada is not serious about defence. Full stop. A large number of his Cabinet members are not serious about defence. Full stop.”
  • “Our NATO allies are despairing. Our American friends are frustrated.”
  • “[T]he Liberal government has no intention of meeting [the NATO standard of] two per cent (by 2030) and no intention of meeting 1.76 per cent [of GDP] (as promised in the April 2024 budget) because they rest confident in the smug knowledge that the Americans will always defend us.”
  • “Since 2015, the Trudeau government has not spent, re-profiled, re-allocated, deferred, or lapsed $20 billion that was promised for defence. The impact of that is that ship fleets have not been replaced, aircraft are extraordinarily old, as are helicopters; the army is in a state of despair.”

These remarks from a former senior officer are, to my mind, devastating – much more so than those from Opposition politicians or academic experts. So too were the remarks Leslie offered on June 30:

  • “According to the numbers I have 72% of the army’s vehicles and trailers are offline…. I think the big issue is, right now, the men and women in uniform don’t see any demonstrable proof that the federal government is actually seized of the issue of trying to get them the capabilities they need to better defend Canadians.”
  • “The Liberal government sees defence spending as discretionary… They believe there’s a whole host of societal funding requirements, ranging from increases in healthcare, to day care, to children getting breakfast at school – and a bewildering array of boutique allocations of funds to cater to voter-sensitive initiatives. And defence comes after all of that.”

One area of special concern, Leslie maintained, was artillery shells, one of the many military items Ukraine needs in huge quantities. Canada, he stated, was falling down in producing them: “Canada has a tiny stockpile of 155-mm ammo…. One to two years prior to Russia’s latest invasion of Ukraine in 2022, a bunch of idiots decided to cancel the standing offer [with the two Canadian manufacturers of 155-mm artillery shells] because there was no business case for Canada to continue investing in the production of ammunition.”

Leslie ended the second interview by talking of those leaders he admired: “I had the privilege and honour to be in close proximity to three consecutive prime ministers who made the system work such that we bought tanks, artillery ammunition, small arms ammunition, helicopters, guns, armour-protective vehicles, new weapons systems, the list goes on. And those were Prime Minister [Jean] Chrétien, Prime Minister [Paul] Martin, and Prime Minister [Stephen] Harper.”

The general had been a member of the Trudeau government and had worked in drafting the Liberals’ defence platform in the 2015 election. But nothing had been done to implement it in a timely fashion. In Leslie’s list of prime ministers who took defence and national security seriously, Trudeau was notably absent.

The Ottawa Citizen article, by veteran defence reporter David Pugliese, was not a direct interview with General Eyre, but rather, a report on comments Eyre made behind closed doors in a speech to senior officers. Pugliese did not have a copy of Eyre’s speech but learned of it from an audience member.

According to Pugliese, Eyre, who only had a few weeks left as Chief of the Defence Staff, sounded almost optimistic about the Liberals’ 2024 budget that pledged $8 billion in new defence spending by 2030 and $73 billion more over twenty years.

Eyre reportedly told the officers, “Yeah, this policy was not as fast as we wanted it to be. And it did not give us everything we needed. But I will tell you it’s more than I expected, much more than I expected…. The prime minister told me that defence spending is only going in one direction and that is up.”

The general also reportedly spoke of creating a small team to work out an implementation plan for the new defence policy initiatives, and that he wanted some “quick hits… I see ammunition production as one of those quick hits that we absolutely have to get on with.”

In his interview with the National Post on June 20, Eyre was at times both pessimistic and positive in his assessment of the Canadian military: “[The world has entered a] pre-wartime security environment… If you’re in uniform, you learn to be pessimistic about the security situation because you’re trained for the worst case… Given the indicators and the trends that we see, I am pessimistic about the security situation…. Is this a 1938 moment? Is this a 1912 moment? The world has seen this before, with ebbs and flows, and we’re back in a multi-polar dangerous moment where the structures that have kept us generally at peace are fraying.”

If Eyre is right, Canada should be preparing for a war that is certain to affect Canada and its allies. But the Canadian procurement system for munitions and equipment is broken – a fact that Eyre freely acknowledges: “We are applying peacetime processes and peacetime mentalities to what could be considered a wartime or immediate pre-wartime security environment. So, what did we do in 1939? What did we do in 1914? We certainly didn’t take 10 or 15 or 20 years to get capabilities in place, because the war would be over by that point…. We have to deliver, and we have to deliver fast.”

The Chief of Defence Staff then spoke optimistically about Canada’s role in Latvia, where the Canadian Armed Forces leads the NATO brigade stationed there, and where the commitment is supposed to be increased in the next few years.

“We are very well respected in that part of the world,” Eyre said. “Do they want more of us? Yeah, absolutely, but for me it drives home that we produce a pretty good product…. [Canada] has and can do so much on the world stage. Compared to the majority of countries out there, we have got so much going for us.”

On June 28, 2024, Minister of National Defence Bill Blair and Angus Topshee, the Chief of the Naval Staff, announced the government’s plans to replace Canada’s Halifax-class frigates. Fifteen new destroyers would be constructed at the government’s estimate of $56 billion to $60 billion, Blair said. The Parliamentary Budget Officer earlier had estimated the construction cost at $84 billion with a “life-cycle” cost to operate and maintain the vessels at $306 billion. In reality, Blair’s announcement was not for the beginning of construction of the ships but only for a “test module.”

Some background is needed here. The Harper Conservative government in 2010 approved the National Shipbuilding Program, but it was not until 2018 that the Trudeau government, in power for three years, selected the as yet (and still) unproven British Type 26 ship as its choice. The vessels were to be constructed in Halifax at the Irving shipyards that first had to build the Arctic Offshore Patrol Ships, only completed this year (late and over-budget). Now in 2024, work at last can begin on the new destroyers.

The plan is that the first of the ships will be completed and ready for sea trials in 2033, 9 years from now and 23 years after the Harper government announced the shipbuilding program; presumably the first destroyer will not be deemed fully ready for service until at least 2034. (HMCS Halifax, the first of the frigates, went to sea in 1992, and by the time the first replacement is ready, Halifax will be 42 years old.)

But the planned completion of construction of all fifteen vessels will be glacial. Defence Minister Blair told Global TV  on June 28 that the first nine ships would not be completed until 2040 and the remaining six not until 2050. In other words, it will take a quarter century for Irving to build fifteen ships – if it is able to maintain even that production schedule. The one certainty is that the ships will cost more to build – the rate of inflation for military construction is at least 6 percent higher than national inflation. The costs will be so high for these ships that it is all but certain that fewer than fifteen will ever be launched. Will any of the destroyers still be combat effective by 2050? That seems highly unlikely.

Remember what Eyre told the National Post: “We are applying peacetime processes and peacetime mentalities to what could be considered a wartime or immediate pre-wartime security environment…. We have to deliver, and we have to deliver fast.” And don’t forget Leslie’s damning comment: “The current prime minister of Canada is not serious about defence. Full stop. A large number of his cabinet members are not serious about defence. Full stop.”

At the July NATO summit in Washington, American leaders increased the heat on Trudeau to reach the 2-percent-of-GDP benchmark for military spending. “Welcomed @CanadianPM Trudeau to the U.S. Capitol today,” U.S. Senate Republican Leader Mitch McConnell wrote on X on July 9. “Shared values and close economic ties have always been the strength of the U.S.-Canada relationship. But it’s time for our northern ally to invest seriously in the hard power required to help preserve prosperity and security across NATO.”

The Trudeau government will be long gone by the time the first of the new destroyers puts to sea, and it will be completely forgotten by the time the last one sets sail. We must hope that no war intervenes in the next quarter-century because Canada certainly will not be ready – and not only with its navy. “Not serious about defence”– let’s hope we will not pay a high price for the neglect of this country’s most vital national interest.


J.L. Granatstein taught Canadian history, was Director and CEO of the Canadian War Museum, and writes on military and political history. A member of MLI’s Research Advisory Board, Granatstein’s most recent book is Canada’s Army: Waging War and Keeping the Peace. (3rd edition).

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