armed forces
Canadians are finally waking up to the funding crisis that’s sent the Canadian Armed Forces into a “death spiral”
From the Macdonald Laurier Institute
By By J.L. Granatstein
Must we wait for Trump to attack free trade between Canada and the US before our politicians get the message that defence matters to Washington?
Nations have interests – national interests – that lay out their ultimate priorities. The first one for every country is to protect its population and territory. It is sometimes hard to tell, but this also applies to Canada. Ottawa’s primary job is to make sure that Canada and Canadians are safe. And Canada also has a second priority: to work with our allies to protect their and our freedom. As we share this continent with the United States, this means that we must pay close attention to our neighbouring superpower.
Regrettably for the last six decades or so we have not done this very well. During the 1950s, the Liberal government of Louis St. Laurent in some years spent more than 7 percent of GDP on defence, making Canada the most militarily credible of the middle powers. His successors whittled down defence spending and cut the numbers of troops, ships, and aircraft. By the end of the Cold War, in the early 1990s, our forces had shrunk, and their equipment was increasingly obsolescent.
Another Liberal prime minister, Jean Chrétien, balanced the budget in 1998 by slashing the military even more, and by getting rid of most of the procurement experts at the Department of National Defence, he gave us many of the problems the Canadian Armed Forces face today. Canadians and their governments wanted social security measures, not troops with tanks, and they got their wish.
There was another factor of significant importance, though it is one usually forgotten. Lester Pearson’s Nobel Peace Prize for helping to freeze the Suez Crisis of 1956 convinced Canadians that they were natural-born peacekeepers. Give a soldier a blue beret and an unloaded rifle and he could be the representative of Canada as the moral superpower we wanted to be. The Yanks fought wars, but Canada kept the peace, or so we believed, and Canada for decades had servicemen and women in every peacekeeping operation.
There were problems with this. First, peacekeeping didn’t really work that well. It might contain a conflict, but it rarely resolved one – unless the parties to the dispute wanted peace. In Cyprus, for example, where Canadians served for three decades, neither the Greek- or Turkish-Cypriots wanted peace; nor did their backers in Athens and Ankara. The Cold War’s end also unleashed ethnic nationalisms, and Yugoslavia, for one, fractured into conflicts between Serbs, Croats, Bosnians, Christians, and Muslims, leading to all-out war. Peacekeepers tried to hold the lid on, but it took NATO to bash heads to bring a truce if not peace.
And there was a particular Canadian problem with peacekeeping. If all that was needed was a stock of blue berets and small arms, our governments asked, why spend vast sums on the military? Peacekeeping was cheap, and this belief sped up the budget cuts.
Even worse, the public believed the hype and began to resist the idea that the Canadian Armed Forces should do anything else. For instance, the Chrétien government took Canada into Afghanistan in 2001 to participate in what became a war to dislodge the Taliban, but huge numbers of Canadians believed that this was really only peacekeeping with a few hiccups.
Stephen Harper’s Conservative government nonetheless gave the CAF the equipment it needed to fight in Afghanistan, and the troops did well. But the casualties increased as the fighting went on, and Harper pulled Canada out of the conflict well before the Taliban seized power again in 2021.
Harper’s successor, Liberal Prime Minister Justin Trudeau, clearly has no interest in the military except as a somewhat rogue element that needs to be tamed, made comfortable for its members, and to act as a social laboratory with quotas for visible minorities and women.
Is this an exaggeration? This was Trudeau’s mandate letter to his defence minister in December 2021: “Your immediate priority is to take concrete steps to build an inclusive and diverse Defence Team, characterized by a healthy workplace free from harassment, discrimination, sexual misconduct, and violence.” DND quickly permitted facial piercings, coloured nail polish, beards, long hair, and, literally, male soldiers in skirts, so long as the hem fell below the knees. This was followed by almost an entire issue of the CAF’s official publication, Canadian Military Journal, devoted to culture change in the most extreme terms. You can’t make this stuff up.
Thus, our present crisis: a military short some 15,000 men and women, with none of the quotas near being met. A defence minister who tells a conference the CAF is in a “death spiral” because of its inability to recruit soldiers. (Somehow no one in Ottawa connects the culture change foolishness to a lack of recruits.) Fighter pilots, specialized sailors, and senior NCOs, their morale broken, taking early retirement. Obsolete equipment because of procurement failures and decade-long delays. Escalating costs for ships, aircraft, and trucks because every order requires that domestic firms get their cut, no matter if that hikes prices even higher. The failure to meet a NATO accord, agreed to by Canada, that defence spending be at least 2 percent of GDP, and no prospect that Canada will ever meet this threshold.
But something has changed.
Three opinion polls at the beginning of March all reported similar results: the Canadian public – worried about Russia and Putin’s war against Ukraine, and anxious about China, North Korea, and Iran (all countries with undemocratic regimes and, Iran temporarily excepted, nuclear weapons) – has noticed at last that Canada is unarmed and undefended. Canadians are watching with concern as Ottawa is scorned by its allies in NATO, Washington, and the Five Eyes intelligence sharing alliance.
At the same time, official Department of National Defence documents laid out the alarming deficiencies in the CAF’s readiness: too few soldiers ready to respond to crises and not enough equipment that is in working order for those that are ready.
The bottom line? Canadians finally seem willing to accept more spending on defence.
The media have been hammering at the government’s shortcomings. So have retired generals. General Rick Hillier, the former chief of the defence staff, was especially blunt: “[The CAF’s] equipment has been relegated to sort-of-broken equipment parked by the fence. Our fighting ships are on limitations to the speed that they can sail or the waves that they can sail in. Our aircraft, until they’re replaced, they’re old and sort of not in that kind of fight anymore. And so, I feel sorry for the men and women who are serving there right now.”
The Trudeau government has repeatedly demonstrated that it simply does not care. It offers more money for the CBC and for seniors’ dental care, pharmaceuticals, and other vote-winning objectives, but nothing for defence (where DND’s allocations astonishingly have been cut by some $1 billion this year and at least the next two years). There is no hope for change from the Liberals, their pacifistic NDP partners, or from the Bloc Québécois.
The Conservative Party, well ahead in the polls, looks to be in position to form the next government. What will they do for the military? So far, we don’t know – Pierre Poilievre has been remarkably coy. The Conservative leader has said he wants to cut wasteful spending and eliminate foreign aid to dictatorial regimes and corrupted UN agencies like UNRWA. He says he will slash the bureaucracy and reform the procurement shambles in Ottawa, and he will “work towards” spending on the CAF to bring us to the equivalent of 2 percent of GDP. His staff say that Poilievre is not skeptical about the idea of collective security and NATO; rather, he is committed to balancing the books.
What this all means is clear enough. No one should expect that a Conservative government will move quickly to spend much more on defence than the Grits. A promise to “work towards” 2 percent is not enough, and certainly not if former US President Donald Trump ends up in the White House again. Must we wait for Trump to attack free trade between Canada and the US before our politicians get the message that defence matters to Washington? Unfortunately, it seems so, and Canadians will not be able to say that they weren’t warned. After all, it should be obvious that it is in our national interest to protect ourselves.
J.L. Granatstein taught Canadian history, was Director and CEO of the Canadian War Museum, and writes on military and political history. His most recent book is Canada’s Army: Waging War and Keeping the Peace. (3rd edition).
armed forces
Canada among NATO members that could face penalties for lack of military spending
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.
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.
armed forces
You wouldn’t believe how complicated distributing public money can get
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.
The Audit is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.
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 Canada. Here’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.
The Audit is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.
-
Alberta1 day ago
Proposed $70 billion AI data centre in MD of Greenview could launch an incredible new chapter for western Canadian energy
-
Alberta22 hours ago
Your towing rights! AMA unveils measures to help fight predatory towing
-
Frontier Centre for Public Policy2 days ago
False Claims, Real Consequences: The ICC Referrals That Damaged Canada’s Reputation
-
National2 days ago
When’s the election? Singh finally commits. Poilievre asks Governor General to step in
-
COVID-192 days ago
Former Trudeau minister faces censure for ‘deliberately lying’ about Emergencies Act invocation
-
Alberta14 hours ago
Ford and Trudeau are playing checkers. Trump and Smith are playing chess
-
Daily Caller2 days ago
Party Leaders Exposed For ‘Lying’ About Biden Health
-
Alberta2 days ago
Free Alberta Strategy trying to force Trudeau to release the pension calculation