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.
Todayville is a digital media and technology company. We profile unique stories and events in our community. Register and promote your community event for free.
With less than a month to go before President-elect Donald Trump takes office, the top brass are already running for cover. This week the Army’s chief of staff, Gen. Randy George, pledged to cut approximately a dozen general officers from the U.S. Army.
It is a start.
But given the Army is authorized 219 general officers, cutting just 12 is using a scalpel when a machete is in order. At present, the ratio of officers to enlisted personnel stands at an all-time high. During World War II, we had one general for every 6,000 troops. Today, we have one for every 1,600.
Right now, the United States has 1.3 million active-duty service members according to the Defense Manpower Data Center. Of those, 885 are flag officers (fun fact: you get your own flag when you make general or admiral, hence the term “flag officer” and “flagship”). In the reserve world, the ratio is even worse. There are 925 general and flag officers and a total reserve force of just 760,499 personnel. That is a flag for every 674 enlisted troops.
The hallways at the Pentagon are filled with a constellation of stars and the legions of staffers who support them. I’ve worked in both the Office of the Secretary of Defense and the Joint Chiefs of Staff. Starting around 2011, the Joint Staff began to surge in scope and power. Though the chairman of the Joint Chiefs is not in the chain of command and simply serves as an advisor to the president, there are a staggering 4,409 people working for the Joint Staff, including 1,400 civilians with an average salary of $196,800 (yes, you read that correctly). The Joint Staff budget for 2025 is estimated by the Department of Defense’s comptroller to be $1.3 billion.
In contrast, the Secretary of Defense — the civilian in charge of running our nation’s military — has a staff of 2,646 civilians and uniformed personnel. The disparity between the two staffs threatens the longstanding American principle of civilian control of the military.
Just look at what happens when civilians in the White House or the Senate dare question the ranks of America’s general class. “Politicizing the military!” critics cry, as if the Commander-in-Chief has no right to question the judgement of generals who botched the withdrawal from Afghanistan, bought into the woke ideology of diversity, equity and inclusion (DEI) or oversaw over-budget and behind-schedule weapons systems. Introducing accountability to the general class is not politicizing our nation’s military — it is called leadership.
What most Americans don’t understand is that our top brass is already very political. On any given day in our nation’s Capitol, a casual visitor is likely to run into multiple generals and admirals visiting our elected representatives and their staff. Ostensibly, these “briefs” are about various strategic threats and weapons systems — but everyone on the Hill knows our military leaders are also jockeying for their next assignment or promotion. It’s classic politics
The country witnessed this firsthand with now-retired Gen. Mark Milley. Most Americans were put off by what they saw. Milley brazenly played the Washington spin game, bragging in a Senate Armed Services hearing that he had interviewed with Bob Woodward and a host of other Washington, D.C. reporters.
Woodward later admitted in an interview with CNN that he was flabbergasted by Milley, recalling the chairman hadn’t just said “[Trump] is a problem or we can’t trust him,” but took it to the point of saying, “he is a danger to the country. He is the most dangerous person I know.” Woodward said that Milley’s attitude felt like an assignment editor ordering him, “Do something about this.”
Think on that a moment — an active-duty four star general spoke on the record, disparaging the Commander-in-Chief. Not only did it show rank insubordination and a breach of Uniform Code of Military Justice Article 88, but Milley’s actions represented a grave threat against the Constitution and civilian oversight of the military.
How will it play out now that Trump has returned? Old political hands know that what goes around comes around. Milley’s ham-handed political meddling may very well pave the way for a massive reorganization of flag officers similar to Gen. George C. Marshall’s “plucking board” of 1940. Marshall forced 500 colonels into retirement saying, “You give a good leader very little and he will succeed; you give mediocrity a great deal and they will fail.”
Marshall’s efforts to reorient the War Department to a meritocracy proved prescient when the United States entered World War II less than two years later.
Perhaps it’s time for another plucking board to remind the military brass that it is their civilian bosses who sit at the top of the U.S. chain of command.
Morgan Murphy is military thought leader, former press secretary to the Secretary of Defense and national security advisor in the U.S. Senate.
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.
A 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.
