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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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Canada among NATO members that could face penalties for lack of military spending

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From the Daily Caller News Foundation

By J.D. Foster

Trump should insist on these measures and order that unless they are carried out the United States will not participate in NATO. If Canada is allowed entry to the Brussels headquarters, then United States representatives would stay out.

Steps Trump Could Take To Get NATO Free Riders Off America’s Back

In thinking about NATO, one has to ask: “How stupid do they think we are?”

The “they,” of course, are many of the other NATO members, and the answer is they think we are as stupid as we have been for the last quarter century. As President-elect Donald Trump observed in his NBC interview, NATO “takes advantage of the U.S.”

Canada is among the “they.” In November, The Economist reported that Canada spends about 1.3% of GDP on defense. The ridiculously low NATO minimum is 2%. Not to worry, though, Premier Justin Trudeau promises Canada will hit 2% — by 2032.

quarter of NATO’s 32 members fall short of the 2% minimum. The con goes like this: We are short now, but we will get there eventually. Trust us, wink, wink.

The United States has put up with this nonsense from some members since the collapse of the Soviet Union. That is how stupid we have been.

Trump once threatened to pull the United States out of NATO, then he suggested the United States might not come to the defense of a NATO member like Canada. Naturally, free-riding NATO members grumbled.

In another context, former Army Lt. Gen. Russell Honore famously outlined the first step in how the United States should approach NATO: Don’t get stuck on stupid.

NATO is a coalition of mutual defense. Members who contribute little to the mutual defense are useless. Any country not spending its 2% of GDP on defense by mid-year 2025 should see its membership suspended immediately.

What does suspended mean? Consequences. Its military should not be permitted to participate in any NATO planning or exercises. And its offices at NATO headquarters and all other NATO facilities should be shuttered and its citizens banned until such time as their membership returns to good standing. And, of course, the famous Article V assuring mutual defense would be suspended.

Further, Trump should insist on these measures and order that unless they are carried out the United States will not participate in NATO. If Canada is allowed entry to the Brussels headquarters, then United States representatives would stay out.

Nor should he stop there. The 2% threshold would be fine in a world at peace with no enemies lurking. That does not describe the world today. Trump should declare the threshold for avoiding membership suspension will be 2.5% in 2026 and 3% by 2028 – not 2030 as some suggest.

The purpose is not to destroy NATO, but to force NATO to be relevant. America needs strong defense partners who pull their weight, not defense welfare queens. If NATO’s members cannot abide by these terms, then it is time to move on and let NATO go the way of the League of Nations.

Trump may need to take the lead in creating a new coalition of those willing to defend Western values. As he did in rewriting the former U.S.-Mexico-Canada trade agreement, it may be time to replace a defective arrangement with a much better one.

This still leaves the problem of free riders. Take Belgium, for example, another security free rider. Suppose a new defense coalition arises including the United States and Poland and others bordering Russia. Hiding behind the coalition’s protection, Belgium could just quit all defense spending to focus on making chocolates.

This won’t do. The members of the new defense coalition must also agree to impose a tariff regime on the security free riders to help pay for the defense provided.

The best solution is for NATO to rise to our mutual security challenges. If NATO can’t do this, then other arrangements will be needed. But it is time to move on from stupid.

J.D. Foster is the former chief economist at the Office of Management and Budget and former chief economist and senior vice president at the U.S. Chamber of Commerce. He now resides in relative freedom in the hills of Idaho.

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You wouldn’t believe how complicated distributing public money can get

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The Audit

 David Clinton

Veteran Affairs: the Big Picture

While researching posts for The Audit, I’ll often confront massive datasets representing the operations of agencies with which I’m not in the least familiar. Getting to the point where all the raw numbers turn into a useful picture can take considerable effort, but it’s a satisfying process.

But my first attempts to understand Veteran Affairs Canada (VAC) felt a bit different. I wasn’t just looking at funding and costs, but at the frustrations and suffering of people who, to a greater or lesser degree, were harmed through their service to the country. Here, I hope, is part of their story.

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Veterans Affairs Funding

There are currently more than 460,000 living veterans of the Canadian military. The estimated 2024-25 spending allocation for Veteran Affairs Canada – whose mandate is to serve that population – is around $4.8 billion. The department employs less than four thousand people, which is actually around eight percent fewer than in 2010. Having said that, employment at the distinct Veterans Review and Appeal Board has grown from zero to 161 since 2017.

Besides VAC, the Office of Infrastructure of Canada will spend around $16.5 million on their Veteran Homelessness Program, and Department of National Defence has another $1.6 million budgeted for Community Support for Sexual Misconduct Survivors Program – something for which veterans will also be eligible.

In addition, nearly $2.5 million in grants from various government agencies (including Canada Mortgage and Housing Corporation) was given in 2023 to the Homes for Heroes Foundation, which provides housing and support for at-risk veterans.

Non-government agencies also work to support veterans. In 2023, for instance, the War Amps reported spending $2.7 million on “Service Bureau and Advocacy” and around $700,000 on “Veterans Issues – Special”. The Royal Canadian Legion Dominion Command spent around $1.15 million on veterans services in 2022.

The True Patriot Love Foundation is also a big player in this area, channeling nearly $2.7 million in 2024 to other charities working for veterans. At the same time, more than 30 percent of their own budget came from government sources.

One example of such flow-through funding was the $360,000 given by True Patriot Love to Veterans Transition Network in 2024. In 2023, Veterans Transition Network themselves received another $2.2 million from government along with a total of $1.7 million from other charities.

These kinds of ultra-complex relationships are common in Canada’s charitable sector. The complexity may provide benefits that outsiders can’t easily see. At the same time, knowing whether moving funds through multiple organizations leads to unnecessary inefficiencies and waste is something that would probably require a serious forensic audit.

Veterans Affairs Spending

The largest line items in this year’s VAC spending include $1.6 billion for pain and suffering compensation, $1.34 billion for the Income Replacement Benefit, and $990 million for pensions for disability and death.

In 2023, VAC awarded $41.6 million in external contracts. The largest of those was worth $13.8 million and went to 674725 ONTARIO LTD for “Other Business services not Elsewhere Specified”. 674725 Ontario Ltd. appears to be closely associated with a company called Agilec which, in turn, is a part of Excellence CanadaHere’s how Excellence Canada describes itself:

“Founded in 1992 by Industry Canada as the National Quality Institute (NQI), then rebranded as Excellence Canada in 2011, we are an independent, not-for-profit corporation that is dedicated to advancing organizational performance across Canada.”

In that context, it’s interesting that in 2022, VAC awarded a $159 million contract to a joint venture between WCG International Consultants Ltd. and March of Dimes Canada for “Other Health Services not Specified Elsewhere”.

What makes that interesting? Well, WCG also shows up on an Innovation, Science and Economic Development Canada (ISED) page related to compliance with the Investment Canada Act (ICA). The ICA exists to provide transparency relating to foreign investments in the interest of maintaining a fair and competitive marketplace

This particular page identifies a “U.S.” company called Ancora BidCo Pty Ltd as the new owners of a number of businesses under contract with the federal government. Those businesses include 674725 Ontario Ltd. and WCG International Consultants Ltd.

In fact, Ancora isn’t really a U.S. company at all. They’re actually Australian (as the Pty designation suggests). But their parent company – the private equity firm Madison Dearborn Partners, LLC – indeed operates in Chicago.

There’s no direct evidence to suggest there’s anything dark and nefarious happening here. But it is strange that so many discrete contracts turn out to be awarded to what now amounts to a single foreign for-profit company.

External Contracting Patterns

Has VAC been increasing their reliance on external contracts in recent years? Well, as you can see from this graphic, it’s complicated:

I don’t know what policy changes drove those two huge spikes in 2014 ($933 million) and 2021 ($2.25 billion). But I can tell you which specific vendors are responsible for most of the increase.

In 2014, three contracts worth a total of $803 million went to Medavie Inc for “Other Business services not Elsewhere Specified”. That was 86 percent of the sum of all VAC contracts from that year.

An eye-popping 98 percent of 2021’s external spending went to just six contracts worth $2.2 billion. Medavie Inc received one of those contracts – worth $228 million. But the other five (worth a total of $1.99 billion) were all joint ventures involving WCG International Consultants Ltd.

Lifemark Health Corp. (currently owned by Loblaw) partnered with WCG for three of those contracts, and March of Dimes Canada had the other two dance slots.

What Is Medavie?

Medavie Inc. is the owner of:

  • Medavie Blue Cross
  • Medavie EMS Inc.
  • Medavie health Services New Brunswick Inc.
  • Emergency Medical Care Inc.

Between them, those companies provide health insurance, healthcare training, and emergency management services. They also provide public health program administration – which would probably account for the majority of those contract amounts.

What’s not clear to me is why there’s no record of Medavie receiving any federal contracts of any sort since 2021 – despite the fact that the VAC website tells us that they’re still actively engaged in service provision through Partners in Canadian Veterans Rehabilitation Services (PCVRS).

What Is WCG International Consultants Ltd?

As we’ve seen, WCG is now owned by an American private equity firm and is most certainly no longer not-for-profit. Their website tells us that they’re part of the APM Group, which is an Australian company providing “services in early childhood, youth, employment, insurance, justice, veterans, health, disability, and aged care”.

You’re correct to assume the APM Group is more or less synonymous with Ancora BidCo Pty Ltd. More specifically: all of APM’s publicly-traded shares were bought out in the past couple of months on behalf of Madison Dearborn Partners.

Just one more detail: according to WCG’s website, they’re:

“Partners in Canadian Veterans Rehabilitation Services (PCVRS) coordinates and administers the Rehabilitation Services and Vocational Assistance Program on behalf of Veterans Affairs Canada (VAC).”

Curious about PCVRS? Since late 2022, they’ve been tasked with administering all medical, psycho-social and vocational assistance services on behalf of VAC. However, reports suggest that not everyone has been happy with either accessibility or responsiveness under the new system.

None of this is necessarily inappropriate. And if you’re willing to work at it, you’ll be able to use public information sources to uncover a wealth of related relationships and details. But the vast amounts of money involved, along with the operational complexity make abuse possible. Which means external oversight is a good thing.

Besides all that logistical stuff, what really matters is whether veterans themselves are receiving the support and services they deserve. And that’s a question only they can answer.

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