Ray Pennings

Executive Vice President

HERE'S MY TAKE

July 22, 2023

I confess to wincing when the opening sentence of a Wall Street Journal editorial suggested “it’s too bad there wasn’t a junior table” at the NATO summit at which Canadian Prime Minister Trudeau could sit. Even if the critique of Canada’s approach to defence spending was fair (and it is), self-respecting Canadians should cringe when such a put-down appears in an editorial of one of the world’s most respected newspapers.

Equally interesting to the put-down, however, has been the response in Canada. Predictably, some have taken it to be a partisan put-down of Prime Minister Trudeau. That’s not without some justification, given that the editorial linked the prime minister’s 2021 mandate letter to his defence minister for viewing the military as “more of a social project than a fighting force.” But Canada free-riding off of our allies for defence isn’t an invention of the current government. For decades Canada has been critiqued for its lack of military investment. Currently, we spend only 1.27% of GDP on defence (using NATO’s numbers–various reports use slightly different calculations), sixth lowest among NATO allies but clearly the lowest among G7 countries (who average 2.58%.) Canada hasn’t met the NATO commitment to spend 2% of GDP on defence since the 80s, despite promises from all political parties to address this. In fact, while talking a much more proactive game on defence, the Conservatives inherited defence spending of 1.1% of GDP in 2005 and left office with spending at a 1% (inflation adjusted) commitment. I understand that multi-year commitments for purchasing new equipment muddies the calculations and will be cited by Conservatives as a defence, but most non-partisan analysis will conclude that ignoring defence is a Canadian, not a partisan problem, at least for most of our lifetimes.

Those who have been following Canada’s global standing and influence will not be surprised. The 2021 security pact involving Australia, Britain, and the United States (commonly referred to as AUKUS) is the place where our closest allies are discussing cutting-edge military technology. The pact seems to exclude Canada deliberately. Our government’s response appears to be just a confident swagger on the international stage. Prime Minister Trudeau wasn’t shy about defending Canada’s military spending publicly last week without real apology, even in the face of reports earlier this year that he has privately indicated that Canada will never reach the military spending targets. Global media continue to watch Canadian inaction dealing with foreign interference in our elections. Increasingly, Canada-watchers are expressing concern that our international reputation is fading.

Most accept that a military is necessary for a sovereign country. Likewise, most appreciate the history and the present sacrifice of those who serve in the Canadian Armed Forces. That said, Canadians are much more likely to view our role in the international arena as promoting our values rather than our interests. We tend to be peacekeepers rather than protagonists. Apart from those who are directly connected to the military through a family member or friend (a declining number given the military’s recruitment challenges), the military is generally appreciated but hardly a vote-driving priority.

In the face of this criticism, many may wonder whether any of this really matters. Of course, no one likes to read negative things about their own country. And Canadian defenders will surely be quick to point out that notwithstanding all of the above, most international comparisons that measure overall desirability as a place to live consistently rank Canada among the highest. Public opinion surveys on the subject, while influenced by headlines at the time they are taken, still generally show that Canadians retain a very positive assessment of our international reputation.

Some of the social media responses to the various stories regarding Canada’s place in the world suggest that at least some Canadians think these rankings do matter. The entire debate is clouded by political perspective as well. A more progressive mindset might take pride in critiques by “global elites” such as the Wall Street Journal. They would point to global citations like that of the International Energy Agency, which earlier this year cited “Canada’s impressive leadership, both at home and abroad, on clean and equitable energy transitions” as more than offsetting any NATO critique. That Canada welcomes immigrants at a rate several multiples higher than most comparable western countries, and that we carry our weight in international development spending, salves our conscience. By their reckoning, military priorities belong to a past era. And while they concede the maintenance of international order sometimes requires the presence of coercive force, they frame priorities almost exclusively in global terms and are content to let others do the fighting.

One can endlessly cherry-pick the data to make Canada look better or worse on the global stage, depending on one’s agenda. As the kid who was never going to win a school popularity contest and even revelled in occasionally being the “outside-of-the-box” innovator (which resulted in being treated as either intriguing or weird to my classmates), I don’t need to see Canada as #1 on any list to be content. We are the second largest country in the world by geography, the 38^th by population, and typically between 10^th and 15^th in economic size (depending on which economic measures you use). I’m patriotic and thankful my grandparents immigrated to Canada enabling me to enjoy this country’s blessings. Even so, it isn’t as if Canada is somehow God’s chosen country or there is anything that inherently makes us better than any other country. I recognize the map has changed many times over history and am not at all convinced that 50 years from now, Canada as we know it will necessarily exist.

The debate is frustrating because it fails to make an important distinction. There is a version of Maslow’s hierarchy of needs that applies to countries instead of individuals. Maintaining a credible defence capacity is an essential task of a state, necessary to maintain autonomy and sovereignty. True, approximately 10% of the members of the United Nations do not have their own military, but they do rely on alliances and international systems of protection to maintain their independence. I would also note that with 40 million people, Canada can’t really compare itself to a Pacific Island country of 20,000 or so. Moreover, not only does Canada need to defend itself, it also must defend Canadian individuals and goods travelling around the globe as part of our basic trade interests. Talk, agreements, and treaties ultimately don't achieve anything unless there's some form of hard power to back them up.

The growing international pushback to Canada’s longstanding comparative complacency on defence investment suggests that the status quo is not sustainable. As we try to figure out the extent to which there are changing geopolitical threats; as global protectionism diminishes the trend to relying on global trade to motivate peaceful relationships with other countries; and as various interests not necessarily restrained by Canadian sovereignty claims covet our resources especially in the far north, the requirement for Canadian military presence and capacity will likely be greater in the decades to come than it has been in decades past. While global alliances provide significant protection for Canada, maintaining the respect of our allied partners requires us to field a military in proportion to the economic heft of our country. The open suggestion in the Wall Street Journal that Poland (with a GDP per capita less than a third of ours) is a more worthy military partner than Canada isn’t an encouraging signal.

What does matter is how our reputation and ranking are earned. I am thankful for many of the things Canada is known for. But I will admit, when reading the Wall Street Journal article, I was embarrassed. Not only is securing your own independence and security the most fundamental of responsibilities of any government, living up to your word and commitment is an essential part of maintaining any relationship, including those between governments. Rationalising our lack of commitment to defence by stroking our own egos on our other virtues is not only short-sighted and unsustainable, it is in itself a blight on our reputation and worthiness as a nation.

Global politics like all other politics is fraught. The reality of spin, diverse ideological priorities, and self-interested commentaries make clear thinking and declarations difficult. And yes, I know that defence and military spending is a complex subject that has much more nuance than this column covers. Still, the critique of our NATO allies, summarised by the WSJ’s suggestion that Canada be demoted to a lower global ranking, is one that we need to take as a warning, not an insult. Ignoring it may very well make it a self-fulfilling prophecy.

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WHAT I'M READING

Counting Confidence Votes

Summer political punditry offers much musing and poll-checking as to whether the Conservative lead would translate into a majority of seats, or whether, if they win the most seats but not a majority, some form of continuing the Liberal-NDP cooperation might see Prime Minister Trudeau maintain his position. Carleton University Professor Philippe Lagasse helpfully opines on the Civics 101 reality that it is winning a confidence vote in Parliament, not the most seats in an election, which determines who gets to form government. He correctly moderates an absolutist interpretation of this, noting that popular mandates reflected by elections and seats won, cannot be ignored, and that any margin beyond a very few seats would require a change of government. “Resisting a transition of power when there’s been a clear shift in the electoral landscape would likely be untenable for the prime minister’s personal hold on power in particular.”

Swearing the Oath

John Ivison observes that while an online check-box regarding the Canadian oath of citizenship may save a few public dollars and improve efficiency now that Canada is dealing with approximately 250,000 citizenship applications per year, this would take “one of the most meaningful things a person will ever do in their lives and equate it with ordering a new pair of underwear from Amazon.” 

Tolerance, Faith and MAID

UBC Law Professor Brian Bird uses the recent BC controversy over whether a Catholic hospital needs to provide a medically-induced death to helpfully opine on the “dangerous” application of tolerance that is imposed in the debate. Not only does it ignore the significant part that faith-based health institutions play in Canada’s delivery of health care, but indulging in “a tilted vision of rights and clamour of public opinion” is dangerously buying into “a fundamental misunderstanding of how Canada is meant to function.”

MEANINGFUL METRICS

Weaponizing Supply Chains

A series of graphs and charts in visualcapitalist.com made the compelling case that China, with its market dominance of the key components required for solar photovoltaic (PV) devices is using its commercial hegemony for geopolitical purposes. The Hinrich Foundation has measured policy interventions on trade since the G20 Summit of October 2021. The fine print provides reams of data to make almost any point you’d like, but what struck me was that China is in the middle of the pack with 48% of its interventions having the effect of “liberalizing” trade (think of policy interventions such as taxes, tariffs, or regulatory conditions), while 52% of the interventions are judged “harmful” to the commercial interests of foreign countries. The international comparisons are helpful. The United States by this measure introduced 3,905 policy measures, with 96% of them protectionist in nature. Canada had only 146 measures but 99% of them were protectionist. The conclusion I drew is that China is still very aggressive in seeking to liberalize trade across the world, even as it uses protectionism tactically with a view to strengthening its control of select products for which it knows there is a growing and urgent global demand.

Earning and Spending Power

University of Calgary Economist Dr. Trevor Tombe slices and dices the economic news with various graphs of interest on his Twitter feed. Among those I found particularly revealing was one which shows that inflation is currently affecting renters the greatest (hitting 3.1% for them) while homeowners without a mortgage are dealing with 2.1% year-over-year "cost-of-living" increases. Rural Canadians and higher-income Canadians also feel the impact of inflation significantly less than do their urban and lower income counterparts. In fact, as the chart itemizing price changes indicates, the impact of inflation varies widely depending on what basket of goods you are buying. But costs are only part of the equation. Productivity (especially when it comes to our collective ability to pay for public expenses and the impact that government spending has on inflation) is an under-examined part of the equation. Tombe’s calculations of GDP per capita, shown in the above chart, indicate that most Canadian provinces fall near the bottom of the list. There are legitimate questions we should consider in assessing this data (especially as it relates to the health expenses that are expected to be covered from this per capita calculation of spending power) but even with those provisos, the comparative ranking of the 60 North American states and provinces makes for an interesting story.

TAKE IT TO-GO

Defending Dad Jokes

This entry draws inspiration from a Father’s Day Globe and Mail piece but like fine wine, this delayed serving has only improved it. I was surprised by the claim, citing Miriam Webster no less, that the first known use of the phrase “dad joke” wasn’t ‘til 1987. That bit of trivia surprised me since my dad–and almost every other dad I encountered in my youth–had perfected the art long before I was groan. The argument that “unfunny jokes allow children to see their fathers as imperfect and thus help the maturation process” wasn’t my favourite part of the piece, given that I am prone to experience a certain self-satisfaction when able to offer up a timely pun. If the warning was against pun-producing smugness, I’d concede its validity. (Confession: I keep a regular supply of anti-gloating cream on hand which gets rubbed in on suitable occasions.)

But the Globe columnist was not just relying on his skillful wordplay and refined opinion. He had done research and noted that it (he?) immediately becomes a parent if a punning dad gets it right. A Danish researcher is cited noting both the historical development and social benefits of dad jokes. (A total side serving, but the quoting of Danish researchers did have me musing as to what might be served for breakfast at academic conferences in Copenhagen. The author notes that all “dads need puns like bakers knead buns,” but a whole-wheat breakfast really would be eggs-ceptional, no? Stick with the danishes.)

To bring the point home, it is pun-reasonable to think dad jokes have either an “invented when” or a “best before” date. Puns are like the calendar, whose days may seem to be numbered but will outlive us all. This is why a June Globe column on dad jokes provides me with a chuckle in July–confirmation that I indeed am blessed with a pun-derful life.

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