Is Canada beating ploughshares into swords with its NATO 5% pledge? Not likely
Government has levers it can pull in times of urgency
By anyone's measure, $150 billion a year is an eye-watering amount of money to spend on anything — let alone defence.
While it pales in comparison to the inflation-adjusted appropriations of the Second World War, it is potentially, for this generation, the very definition of beating ploughshares into swords.
Or is it?
Following all of the political sound and fury and sticker shock of last week's NATO summit in The Hague, the question of what Prime Minister Mark Carney's government wants to accomplish with all of that money — on an annual basis — is coming into even sharper focus.
On the surface, the Liberals have pledged to quickly and efficiently rearm the Canadian military.
"We are protecting Canadians against new threats. I wish we didn't have to, but we do have to and it is our core responsibility as government," Carney said at the summit.
"The people who have been making sacrifices have been the men and women of the Canadian Armed Forces because they have not been paid to reflect what we are asking them to do. They haven't been operating with the right equipment in many cases.
"We're making up for that."
But the reflex is strong within federal institutions to use military procurement as a tool of economic development. It has been thus for decades.
At the same time, we keep getting told — by the prime minister nonetheless — that we are in extraordinary times and a "national emergency."
Much was made, both in the run-up and in the aftermath of the NATO summit, about the signing of a security and defence industry partnership between Canada and the European Union. Politically, it has been cast since last spring's election as a vehicle — if not the vehicle — to realize rearmament.
There are a few steps to go before Canada can unlock the potential of buying military equipment in bulk with its allies. But when you look at the framework of the partnership, the rearmament potential is dwarfed by the economic opportunity for Canadian defence contractors to sell into Europe under the $1.25-trillion ReArm Europe plan.
The approach seems to be that Canada wants both its guns and butter. Neither, outside great wars of the last century, has ever been mutually exclusive and they don't have to be.
However, the material state of the Canadian military is such that the guns — to extend the metaphor — were needed yesterday.
While a partnership with the Europeans makes good economic and geopolitical sense in the long term, it doesn't appear to be a solution to the immediate rearmament crisis.
"European industrial bases are simply not prepared at the moment for a protracted conflict," said Seth Jones, president of defence and security at the Washington-based Center for Strategic and International Studies.
"If you look at European states, they still lack sufficient capabilities in combat support, in short-range air defence and long-range indirect fires, air lift."
Jones also noted there are significant challenges with "munitions stockpiles, with supply chain weaknesses [and] within the broader European and U.S. industrial bases workforce."
If the Canadian government is serious about rearmament beyond a tool of economic development, the issue will come down to the question of where do you find a hot production line and how quickly can you acquire what the military says it needs.
Poland, a member of the European Union since 2004, decided it wasn't going to put all of its eggs in the EU basket. Shortly after Russia's full-scale invasion of Ukraine in 2022, the government in Warsaw embarked on a swift rearmament plan.
Poland is NATO's top military spender — aiming to direct 4.7 per cent of its gross domestic product toward defence.
It has tapped into production lines in both the United States and South Korea.
Polish Defence Minister Władysław Kosiniak-Kamysz told Politico last winter that his government's strategy was to continue to buy from the U.S. in order to maintain economic relations.
"It's kind of an insurance policy," he said.
The decision was made even though politically, and socially, many in Poland believe the U.S. is an unreliable ally and might not be there in a crisis with Russia.
It is perhaps a lesson for Canada as the Liberal government crosses the treacherous political tightrope of still maintaining a defence relationship with the U.S. and explaining its decisions to a public still angry about the trade war and Trump's 51st state desires.
The first test will come later this summer when a report by the Royal Canadian Air Force and the Department of National Defence about continuing with the F-35 purchase is presented.
Carney and his team will have to decide whether to pivot away from the plan (accept only a limited number of the warplanes and fill out the rest of the order elsewhere) — or stick with what may be a politically indefensible position of carrying on.
The prime minister said at the NATO summit that he had held discussions with European partners for the purchase of fighter jets and submarines.
Speed vs. shift
Carney has called for a shift away from Canada's economic and military reliance on the U.S.
But how much of that is truly possible, if the stated goal is to rearm quickly and if Europe's defence industrial base is still in its own rebuilding phase?
If the Liberal government does intend to move swiftly, there are existing mechanisms such as the National Security Exception (NSE), which allows the government to bypass certain trade agreement obligations when the equipment is deemed essential for national security.
There's also the mechanism of the Urgent Operational Requirement (UOR), which can be used to acquire essential equipment on an accelerated timeline to meet a specific and immediate operational need of the Canadian Armed Forces.
It can also use an Advance Contract Award Notice (ACAN), which indicates the Defence Department's intention to award a contract to a specific supplier and allows other potential suppliers to demonstrate what they can provide.
At the end of the NATO summit, Carney was asked if he intends to use any of those tools at his disposal.
It doesn't sound like it.
"The great question. The first thing we look to do is change the machinery of defence procurement, if I can put it that way," he said referring to the new defence procurement agency being set up by his government.
Once the agency is built, Carney said they'll look to make "adjustments to our ability to buy Canadian and our ability to buy more rapidly as appropriate."
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