Scant new funding on defence and foreign policy in budget

With Canada caught in a great global power competition, the government’s budget offers little new investment in the country’s defence and foreign policy. Last year, the government announced it was increasing spending on defence by more than $8-billion. This year’s budget, which was tabled in the House of Commons by Deputy Prime Minister Chrystia Freeland (University-Rosedale, Ont.) on March 28, includes just $30-million of new defence spending over the next five years, including the expiring 2022-2023 fiscal year. The new money, along with an additional $10-million from past departmental resources, is devoted to creating a NATO Climate Change and Security Centre of Excellence, which was agreed upon during the military alliance’s 2022 summit in Madrid. The centre will be located in Montreal. While the budget trumpets ongoing investments in Canada’s defence—including $38.6-billion for NORAD modernization over 20 years, and $2.1-billion over seven years to increase Canada’s NATO contribution—it puts forward little new funding at a time when Ottawa has been under increased pressure from its allies, including the United States and France, to increase its defence spending. The budget references the ongoing defence policy review, which was announced last year, but offers little information on the status of that review, with no end date in sight. The budget document notes that the review and its public consultations are “ongoing.” The federal government is also pledging to donate $200-million in Canadian military equipment to Kyiv in the current expiring fiscal year, which will include the eight previously announced Leopard 2 tanks for Ukraine’s military. Prime Minister Justin Trudeau and Deputy Prime Minister Chrystia Freeland pose with the latest federal budget on March 28. The Hill Times photograph by Andrew Meade Over the last 13 months, Canada has donated more than $1-billion in military assistance for Ukraine, which most recently included the donation of the eight tanks and the purchase of a $406-million surface-to-air missile system from the U.S. for Ukraine. More pressure has been building on Canada and its allies to look at donating fighter jets to Ukraine to further help bolster its aerial defences. In the previous budget, Canada announced that it would be pledging $500-million for Ukraine to purchase new military equipment. As part of its assistance for Ukraine, this year’s budget pledges a $2.4-billion loan for the war-torn country, which will be used for “paying pensions and delivering essential government services to Ukrainians,” as well as “purchasing fuel to get through winter, and restoring damaged energy infrastructure.” To support the extension of the interim Canada-Ukraine emergency travel authorization, the budget includes a plan to spend $171.4-million over three years. Keeping an eye on Beijing Ottawa had previously released a $2.3-billion Indo-Pacific strategy to reposition its engagement with China, noting that the nation has become “an increasingly disruptive power.” Amid headline-grabbing reporting of alleged Beijing interference in the 2019 and 2021 federal elections, the government is creating a National Counter-Foreign Interference Office, with $13.5-million in funding over five years. Ottawa is also pledging $48.9-million over three years for the RCMP to quell “harassment and intimidation” from foreign governments, boost policing, and consult with those communities at the greatest risk of threat. The government is also increasing funding of national security reviews with $53-million over two years to benefit the work of the National Security and Intelligence Review Agency and the National Security and Intelligence Committee of Parliamentarians. Ottawa is also putting $60-million over three years towards modernizing CSIS’s IT systems. ‘Friendshoring’ gets a boost The budget pledges to “indefinitely extend” the removal of Russia and Belarus from most-favoured-nation status, which adds a 35 per cent tariff to “virtually all” imports from the two countries—a distinction they share with North Korea. Ottawa is also looking to help farmers transition away from reliance on Russian fertilizer, and the budget proposes $34.1-million over three years for Agriculture and Agri-Food Canada to help Eastern Canadian farmers, who are more reliant on Russian fertilizer, adopt “nitrogen management practices” to reduce dependency on fertilizer. Placing itself in line with the U.S. in its push towards “friendshoring,” Ottawa is pledging around $20-billion towards green economy initiatives in the next five years, a response to large-scale U.S. subsidies for green technology to confront climate change challenges as part of the Inflation Reduction Act (IRA). Canada and the United States are seeking to be more self-reliant to avoid any dependence on authoritarian-ruled China and Russia. In the March 28 budget, the federal government staged its response to the Biden administration's large-scale green subsidy initiatives. The Hill Times photograph by Sam Garcia Prior to U.S. President Joe Biden’s recent visit to Ottawa, a senior government official told reporters that Canada was seeking greater inclusion in the IRA, beyond a tax credit carveout for electric vehicles. Conservative Leader Pierre Poilievre (Carleton, Ont.) said during Biden’s visit that he wants to see a favourable resolution to the long-standing softwood lumber dispute. The budget sets aside $51-million over two years for “efforts towards a softwood lumber agreement,” including the cost of litigation. The government is also pledging to lower the tariff rate charged on imports from “least developed” countries until 2034, which the budgets estimates would reduce the tariff fees Canada collects by $130-million over six years. Forced labour bill coming To address concerns with Bill S-211 forwarded by Independent Senator Julie Miville-Dechêne (Inkerman, Que.), which currently is at third reading in the House of Commons following its passage in the Senate, the government will be introducing new legislation “by 2024” on forced labour in Canada’s supply chain and to “strengthen” the ban on goods produced through forced labour. The budget notes that Ottawa will “also work to ensure existing legislation fits within the government’s overall framework to safeguard our supply chains.” The document spotlights that Canada is “gravely concerned” about the “ongoing human rights violations against Uyghurs and Muslim minorities in Canada, as well as the use of foreign labour around the world.” Then-United Nations Human Rights Commissioner Michelle Bachelet released a report in 2022 that found “serious human rights violations have occurred” in Xinjiang against Uyghurs, and Beijing’s actions “may constitute international crimes, in particular crimes against humanity The House of Commons has voted to recognize Beijing’s persecution of Uyghurs as a genocide, and supported a motion earlier this year to bring 10,000 Uyghurs refugees to Canada. Rounding out foreign policy commitments in the budget, the government is pledging $16-million over two years for the implementation of legislation that will allow humanitarian organizations to operate in Taliban-controlled Afghanistan. Bill C-41 is currently before the House Justice Committee. To align defence procurement with U.S. requirements, Ottawa is proposing to spend $25-million over four years to establish a cyber security certification program for defence purchases. For increased protection of Canada’s Arctic sovereignty, $113-million over five years has been earmarked for a revised submission to “secure Canada’s rights over its extended continental shelf in the Arctic Ocean.” nmoss@hilltimes.com The Hill Times

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Scant new funding on defence and foreign policy in budget

Budget 2023 pledges $13.5-million for creation of National Counter-Foreign Interference Office and $48.9-million to combat diaspora harassment.

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