Tag Archives: Alexander Panetta

The 2023 Canadian federal budget: science & technology of the military and cybersecurity and some closing comments (2 of 2)

So far in part 1, the budget continues its focus on life sciences especially biomanufacturing, climate (clean energy, clean (?) manufacturing, mining, space, the forest economy, agriculture, and water. The budget also mentioned funding for the research councils (it’s been a while since I’ve seen them in a budget document).

Now, it’s time to focus on the military and cybersecurity. As noted in part 1 (third paragraph of my introduction), the military is often the source for technology (e.g., television, the internet, modern anesthesiology) that transforms society.

Chapter 5: Canada’s Leadership in the World

Finally, for this blog posting, there’s Chapter 5, from https://www.budget.canada.ca/2023/report-rapport/toc-tdm-en.html,

Key Ongoing Actions

In the past year, the federal government has announced a series of investments that have enhanced Canada’s security and our leadership around the world. These include:

  • $38.6 billion over 20 years to invest in the defence of North America and the modernization of NORAD [North American Aerospace Defense Command; emphasis mine];
  • More than $5.4 billion in assistance for Ukraine, including critical financial, military, and humanitarian support;
  • More than $545 million in emergency food and nutrition assistance in 2022-23 to help address the global food security crisis and respond to urgent hunger and nutrition needs;
  • $2.3 billion over the next five years to launch Canada’s Indo-Pacific Strategy [emphasis mine], including the further global capitalization of FinDev Canada [also known as Development Finance Institute Canada {DFIC}], which will deepen Canada’s engagement with our partners, support economic growth and regional security, and strengthen our ties with people in the Indo-Pacific;
  • $350 million over three years in international biodiversity financing, in addition to Canada’s commitment to provide $5.3 billion in climate financing over five years, to support developing countries’ efforts to protect nature;
  • $875 million over five years, and $238 million ongoing, to enhance Canada’s cybersecurity capabilities [emphasis mine];
  • Delivering on a commitment to spend $1.4 billion each year on global health, of which $700 million will be dedicated to sexual and reproductive health and rights for women and girls; and,
  • Channeling almost 30 per cent of Canada’s newly allocated International Monetary Fund (IMF) Special Drawing Rights to support low-income and vulnerable countries, surpassing the G7’s 20 per cent target.

Defence Policy Update

In response to a changed global security environment following Russia’s illegal invasion of Ukraine, the federal government committed in Budget 2022 to a Defence Policy Update that would update Canada’s existing defence policy, Strong, Secure, Engaged.

This review, including public consultations, is ongoing, and is focused on the roles, responsibilities, and capabilities of the Canadian Armed Forces. The Department of National Defence will return with a Defence Policy Update [emphasis mine] that will ensure the Canadian Armed Forces remain strong at home, secure in North America, and engaged around the world.

With this review ongoing, the Canadian Armed Forces have continued to protect Canada’s sovereignty in the Arctic, support our NATO allies in Eastern Europe, and contribute to operations in the Indo-Pacific.

In the past year, the government has made significant, foundational investments in Canada’s national defence, which total more than $55 billion over 20 years. These include:

  • $38.6 billion over 20 years to strengthen the defence of North America, reinforce Canada’s support of our partnership with the United States under NORAD, and protect our sovereignty in the North [emphases mine];
  • $2.1 billion over seven years, starting in 2022-23, and $706.0 million ongoing for Canada’s contribution to increasing NATO’s [North Atlantic Treaty Organization] common budget [emphasis mine];
  • $1.4 billion over 14 years, starting in 2023-24, to acquire new critical weapons systems needed to protect the Canadian Armed Forces in case of high intensity conflict, including air defence, anti-tank, and anti-drone capabilities;
  • $605.8 million over five years, starting in 2023-24, with $2.6 million in remaining amortization, to replenish the Canadian Armed Forces’ stocks of ammunition and explosives, and to replace materiel donated to Ukraine;
  • $562.2 million over six years, starting in 2022-23, with $112.0 million in remaining amortization, and $69 million ongoing to improve the digital systems of the Canadian Armed Forces;
  • Up to $90.4 million over five years, starting in 2022-23, to further support initiatives to increase the capabilities of the Canadian Armed Forces; and,
  • $30.1 million over four years, starting in 2023-24, and $10.4 million ongoing to establish the new North American regional office in Halifax for NATO’s Defence Innovation Accelerator for the North Atlantic [emphasis mine].

In addition, the government is providing $1.4 billion to upgrade the facilities of Joint Task Force 2, Canada’s elite counterterrorism unit.

Establishing the NATO Climate Change and Security Centre of Excellence in Montreal

Climate change has repercussions for people, economic security, public safety, and critical infrastructure around the world. It also poses a significant threat to global security, and in 2022, NATO’s new Strategic Concept recognized climate change for the first time as a major security challenge for the Alliance.

At the 2022 NATO Summit in Madrid, Montreal was announced as the host city for NATO’s new Climate Change and Security Centre of Excellence, which will bring together NATO allies to mitigate the impact of climate change on military activities and analyze new climate change-driven security challenges, such as the implications for Canada’s Arctic.

  • Budget 2023 proposes to provide $40.4 million over five years, starting in 2023-24, with $0.3 million in remaining amortization and $7 million ongoing, to Global Affairs Canada and the Department of National Defence to establish the NATO Climate Change and Security Centre of Excellence [emphasis mine].

Protecting Diaspora Communities and All Canadians From Foreign Interference, Threats, and Covert Activities

As an advanced economy and a free and diverse democracy, Canada’s strengths also make us a target for hostile states seeking to acquire information and technology [emphasis mine], intelligence, and influence to advance their own interests.

This can include foreign actors working to steal information from Canadian companies to benefit their domestic industries, hostile proxies intimidating diaspora communities in Canada because of their beliefs and values, or intelligence officers seeking to infiltrate Canada’s public and research institutions.

Authoritarian regimes, such as Russia, China, and Iran, believe they can act with impunity and meddle in the affairs of democracies—and democracies must act to defend ourselves. No one in Canada should ever be threatened by foreign actors, and Canadian businesses and Canada’s public institutions must be free of foreign interference.

  • Budget 2023 proposes to provide $48.9 million over three years on a cash basis, starting in 2023-24, to the Royal Canadian Mounted Police to protect Canadians from harassment and intimidation, increase its investigative capacity, and more proactively engage with communities at greater risk of being targeted. 
  • Budget 2023 proposes to provide $13.5 million over five years, starting in 2023-24, and $3.1 million ongoing to Public Safety Canada to establish a National Counter-Foreign Interference Office.

5.4 Combatting Financial Crime

Serious financial crimes, such as money laundering, terrorist financing, and the evasion of financial sanctions, threaten the safety of Canadians and the integrity of our financial system. Canada requires a comprehensive, responsive, and modern system to counter these sophisticated and rapidly evolving threats.

Canada must not be a financial haven for oligarchs or the kleptocratic apparatchiks of authoritarian, corrupt, or theocratic regimes—such as those of Russia, China, Iran, and Haiti. We will not allow our world-renowned financial system to be used to clandestinely and illegally move money to fund foreign interference inside Canada. [emphases mine]

Since 2019, the federal government has modernized Canada’s Anti-Money Laundering and Anti-Terrorist Financing (AML/ATF) Regime to address risks posed by new technologies and sectors, and made investments to strengthen Canada’s financial intelligence, information sharing, and investigative capacity.

Canada’s AML/ATF Regime must continue to be strengthened in order to combat the complex and evolving threats our democracy faces, and to ensure that Canada is never a haven for illicit financial flows or ill-gotten gains.

In Budget 2023, the government is proposing further important measures to deter, detect, and prosecute financial crimes, protect financial institutions from foreign interference, and protect Canadians from the emerging risks associated with crypto-assets.

Combatting Money Laundering and Terrorist Financing

Money laundering and terrorist financing can threaten the integrity of the Canadian economy, and put Canadians at risk by supporting terrorist activity, drug and human trafficking, and other criminal activities. Taking stronger action to tackle these threats is essential to protecting Canada’s economic security.

In June 2022, the Government of British Columbia released the final report of the Commission of Inquiry into Money Laundering in British Columbia [emphasis mine], also known as the Cullen Commission. This report highlighted major gaps in the current AML/ATF Regime, as well as areas for deepened federal-provincial collaboration [emphasis mine]. Between measures previously introduced and those proposed in Budget 2023, as well as through consultations that the government has committed to launching, the federal government will have responded to all of the recommendations within its jurisdiction in the Cullen Commission report.

In Budget 2023, the federal government is taking action to address gaps in Canada’s AML/ATF Regime, and strengthen cooperation between orders of government.

  • Budget 2023 announces the government’s intention to introduce legislative amendments to the Criminal Code and the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) to strengthen the investigative, enforcement, and information sharing tools of Canada’s AML/ATF Regime.

These legislative changes will:

  • Give law enforcement the ability to freeze and seize virtual assets with suspected links to crime;
  • Improve financial intelligence information sharing between law enforcement and the Canada Revenue Agency (CRA), and law enforcement and the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC);
  • Introduce a new offence for structuring financial transactions to avoid FINTRAC reporting;
  • Strengthen the registration framework, including through criminal record checks, for currency dealers and other money services businesses to prevent their abuse;
  • Criminalize the operation of unregistered money services businesses;
  • Establish powers for FINTRAC to disseminate strategic analysis related to the financing of threats to the safety of Canada;
  • Provide whistleblowing protections for employees who report information to FINTRAC;
  • Broaden the use of non-compliance reports by FINTRAC in criminal investigations; and,
  • Set up obligations for the financial sector to report sanctions-related information to FINTRAC.

Strengthening Efforts Against Money Laundering and Terrorist Financing

In keeping with the requirements of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA), the federal government will launch a parliamentary review of this act this year.

This review will include a public consultation that will examine ways to improve Canada’s Anti-Money Laundering and Terrorist Financing (AML/ATF) Regime, as well as examine how different orders of government can collaborate more closely. This will include how governments can better use existing tools to seize the proceeds of crime, and the potential need for new measures, such as unexplained wealth orders. Other topics of consultation will include, but will not be limited to, measures to support investigations and prosecutions, enhance information sharing, close regulatory gaps, examine the role of the AML/ATF Regime in protecting national and economic security, as well as the remaining recommendations from the Cullen Commission [also known as, the Commission of Inquiry into Money Laundering in British Columbia].

  • Budget 2023 announces that the government will bring forward further legislative amendments, to be informed by these consultations, to give the government more tools to fight money laundering and terrorist financing.

Canada is also leading the global fight against illicit financial flows, having been chosen to serve for two years, effective July 2023, as Vice President of the Financial Action Task Force (from which Russia has been suspended indefinitely), as well as co-Chair of the Asia/Pacific Group on Money Laundering for two years, [emphases mine] beginning in July 2022. 

Implementing a Publicly Accessible Federal Beneficial Ownership Registry

The use of anonymous Canadian shell companies can conceal the true ownership of property, businesses, and other valuable assets. When authorities don’t have the tools to determine their true ownership, these shell companies can become tools of those seeking to launder money, avoid taxes, evade sanctions, or interfere in our democracy.

To address this, the federal government committed in Budget 2022 to implementing a public, searchable beneficial ownership registry of federal corporations by the end of 2023.

This registry will cover corporations governed under the Canada Business Corporations Act, and will be scalable to allow access to the beneficial ownership data held by provinces and territories that agree to participate in a national registry.

While an initial round of amendments to the Canada Business Corporations Act received Royal Assent in June 2022, further amendments are needed to implement a beneficial ownership registry.

The government is introducing further amendments to the Canada Business Corporations Act and other laws, including the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and the Income Tax Act, to implement a publicly accessible beneficial ownership registry through Bill C-42. This represents a major blow to money laundering operations and will be a powerful tool to strengthen the security and integrity of Canada’s economy.

The federal government will continue calling upon provincial and territorial governments to advance a national approach to beneficial ownership transparency to strengthen the fight against money laundering, tax evasion, and terrorist financing.

Modernizing Financial Sector Oversight to Address Emerging Risks

Canadians must be confident that federally regulated financial institutions and their owners act with integrity, and that Canada’s financial institutions are protected, including from foreign interference.

  • Budget 2023 announces the government’s intention to amend the Bank Act, the Insurance Companies Act, the Trust and Loan Companies Act, the Office of the Superintendent of Financial Institutions Act, and the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) to modernize the federal financial framework to address emerging risks to Canada’s financial sector [emphasis mine].

These legislative changes will:

  • Expand the mandate of the Office of the Superintendent of Financial Institutions (OSFI) to include supervising federally regulated financial institutions (FRFIs) in order to determine whether they have adequate policies and procedures to protect themselves against threats to their integrity and security, including protection against foreign interference;
  • Expand the range of circumstances where OSFI can take control of an FRFI to include where the integrity and security of that FRFI is at risk, where all shareholders have been precluded from exercising their voting rights, or where there are national security risks;
  • Expand the existing authority for the Superintendent to issue a direction of compliance to include an act that threatens the integrity and security of an FRFI;
  • Provide new powers under the PCMLTFA to allow the Minister of Finance to impose enhanced due diligence requirements to protect Canada’s financial system from the financing of national security threats, and allow the Director of FINTRAC to share intelligence analysis with the Minister of Finance to help assess national security or financial integrity risks posed by financial entities;
  • Improve the sharing of compliance information between FINTRAC, OSFI, and the Minister of Finance; and,
  • Designate OSFI as a recipient of FINTRAC disclosures pertaining to threats to the security of Canada, where relevant to OSFI’s responsibilities.

The government will also review the mandate of FINTRAC to determine whether it should be expanded to counter sanctions evasion and will provide an update in the 2023 fall economic and fiscal update. In addition, the government will review whether FINTRAC’s mandate should evolve to include the financing of threats to Canada’s national and economic security as part of the parliamentary review.

These actions will continue the strong oversight of the financial sector that underpins a sound and stable Canadian economy.

Canada Financial Crimes Agency

To strengthen Canada’s ability to respond to complex cases of financial crime, Budget 2022 announced the government’s intent to establish a new Canada Financial Crimes Agency (CFCA), and provided $2 million to Public Safety Canada to undertake this work.

The CFCA will become Canada’s lead enforcement agency against financial crime. It will bring together expertise necessary to increase money laundering charges, prosecutions and convictions, and asset forfeiture results in Canada. These actions will address the key operational challenges identified in both domestic and international reviews of Canada’s AML/ATF Regime.

Public Safety Canada is developing options for the design of the CFCA, working in conjunction with federal, provincial and territorial partners and external experts, as well as engaging extensively with stakeholders. Further details on the structure and mandate of the CFCA will be provided by the 2023 fall economic and fiscal update.

Protecting Canadians from the Risks of Crypto-Assets

Ongoing turbulence in crypto-asset markets, and the recent high-profile failures of crypto trading platform FTX, and of Signature Bank, have demonstrated that crypto-assets can threaten the financial well-being of people, national security, and the stability and integrity of the global financial system.

To protect Canadians from the risks that come with crypto-assets, there is a clear need for different orders of government to take an active role in addressing consumer protection gaps and risks to our financial system.

The federal government is working closely with regulators and provincial and territorial partners to protect Canadians’ hard-earned savings and pensions, and Budget 2023 proposes new measures to protect Canadians.

  • To help protect Canadians’ savings and the security of our financial sector, Budget 2023 announces that the Office of the Superintendent of Financial Institutions (OSFI) will consult federally regulated financial institutions on guidelines for publicly disclosing their exposure to crypto-assets.

Secure pension plans are the cornerstone of a dignified retirement. While pension plan administrators are required to prudently manage their investments, the unique nature and evolving risks of crypto-assets and related activities require continued monitoring.

  • To help protect Canadians’ retirements, Budget 2023 announces that the government will require federally regulated pension funds to disclose their crypto-asset exposures to OSFI. The government will also work with provinces and territories to discuss crypto-asset or related activities disclosures by Canada’s largest pension plans, which would ensure Canadians are aware of their pension plan’s potential exposure to crypto-assets.

The federal government launched targeted consultations on crypto-assets as part of the review on the digitalization of money announced in Budget 2022. Moving forward, the government will continue to work closely with partners to advance the review, will bring forward proposals to protect Canadians from the risks of crypto-asset markets, and will provide further details in the 2023 fall economic and fiscal update.

Leadership in the world?

Maybe they should have titled chapter 5, “Shoring up Canada’s position in the world.” Most of the initiatives in this section of the budget seem oriented to catching up with the rest of world than forging new paths.

NORAD, NATO, and sovereignty in the North

It’s about time we contributed in a serious way to the “defence of North America and the modernization of NORAD [North American Aerospace Defense Command].” The same goes for NATO (North Atlantic Treaty Organization), where we have failed to contribute our fair share for decades. For the latest NATO/Canada dustup, you may want to read Murray Brewster’s April 7, 2023 article (NATO is getting ready to twist Canada’s arm on defence spending) for CBC news online,

In late March [2023?], NATO published an annual report that shows Canada’s defence spending amounted to just 1.29 per cent of GDP in fiscal 2022-2023.

It’s not much of a stretch to say Canada has no plan to meet that 2 per cent target. There wasn’t one when the previous Conservative government signed on to the notion at the 2014 NATO leaders summit (when the goal was for allies to reach 2 per cent by 2024).

The Liberal government’s 2017 defence policy tiptoed around the subject. Whenever they’ve been asked about it since, Trudeau and his ministers have bobbed and weaved and talked about what Canada delivers in terms of capability.

In an interview with the London bureau of CBC News this week, Foreign Affairs Minister Mélanie Joly was asked point-blank about Stoltenberg’s [NATO Sec. Gen. Jens Stoltenberg] assertion that allies would soon consider the two per cent benchmark the floor, not the ceiling.

She responded that Canada recognized the world changed with the war in Ukraine and that tensions in the Indo-Pacific [emphasis mine] mean “we need to make sure that we step up our game and that’s what we’ll do.”

“Step up our game” may be a relative term, because Joly went on to say that the government is engaged “in a very important defence policy review, which is required before announcing any further investments.”

That defence policy review was announced in the 2022 federal budget. A year later, shortly after presenting its latest fiscal plan, the government announced there would be public consultations on how best to defend Canada in a more uncertain world.

The best-case scenario, according to several experts, is the defence policy being delivered next year and the necessary investments being made at some indeterminate point in the future.

In fairness, the Liberals have committed to spending $19 billion on new fighter jets, starting in 2026. They have agreed to put $4.9 billion toward modernizing continental defence through NORAD.

The current Liberal government has followed a longstanding precedent of many Canadian governments (Liberal or Conservative) of inadequately funding national defence.

Getting back to NATO commitments, yes, let’s pull our weight. Further, I hope they follow through with protecting sovereignty in the North as there’s more than one jurisdiction interested in claiming to be an ‘Arctic” country of some kind, including Scotland (on behalf of the UK?). My November 20, 2020 posting features the Scottish claim. Interestingly, the closest Scottish land (Shetland Islands, which have a separatist movement of their own) is 400 miles south of the Arctic.

China too claims to be close to the Arctic despite being some 900 miles south at its closest point. Roslyn Layton’s August 31, 2022 article (Cold Front: The Arctic Emerges As A New Flashpoint Of Geopolitical Challenge) for Forbes magazine provides good insight into the situation, including this tidbit: ‘on August 26, 2022 the US appointed an Ambassador-At-Large for the Arctic’.

For a Canadian take on the challenges vis-à-vis China’s interest in the Arctic, there’s a January 12, 2021 posting on the University of Alberta’s China Institute website, “China in the Canadian Arctic: Context, Issues, and Considerations for 2021 and Beyond” by Evan Oddleifson, Tom Alton, and Scott N. Romaniuk. Note: A link has been removed,

Shandong Gold Mining Co., a Chinese state-owned enterprise, brokered a deal in May 2020 to acquire TMAC Resources, a Canadian gold mining company with operations in the Hope Bay region of Nunavut [emphasis mine]. At the time, observers voiced concern about the merits of the deal, speculating that Shandong Gold may be motivated by political/strategic interests rather than solely firm-level economic considerations.

I don’t see it mentioned in their posting, but the Shandong acquisition would be covered under the ‘Agreement Between the Government of Canada and the Government of the People’s Republic of China for the Promotion and Reciprocal Protection of Investments‘ (also known as Foreign Investment Protection Agreement (FIPA) or Foreign Investment Protection and Promotion Agreement (FIPPA). It was not a popular agreement in Canada when it was signed, from a September 12, 2014 opinion piece by Scott Harris for The Council of Canadians, Note: Links have been removed,

In the world of official government announcements, a two-paragraph media release sent out in the late afternoon on the Friday before Parliament resumes sitting is the best way for a government to admit, “We know this is really, really unpopular, but we’re doing it anyway.”

That’s the way the Harper government, by way of a release quoting Trade Minister Ed Fast, announced that it had decided to ignore widespread public opposition, parliamentary opposition from the NDP, Greens and even lukewarm Liberal criticism, an ongoing First Nations legal challenge, and even division at its own cabinet table and grassroots membership [emphases mine] and proceed with the ratification of the Canada-China Foreign Investment Promotion and Protection Agreement (FIPA).

With China’s ratification of the deal long since signed, sealed, and delivered (and, really, when you can convince another government to sign a deal this lopsided in your favour, wouldn’t you ratify as quickly as possible too?) Canada’s ratification of the deal means it will enter into force on October 1 [2014]. …

The CBC published this sharply (unusual for them) worded September 19, 2014 article by Patrick Brown for CBC news online,

The secrecy shrouding the much-delayed Foreign Investment Promotion and Protection Agreement (FIPA) with China makes it hard for experts, let alone average Canadians, to figure out what benefits this country will see from the deal.

While reporting on Prime Minister Stephen Harper for the first time, during his visit to China in early 2012, I wrote a column with the headline Great Glorious and Always Correct, which began: “If Stephen Harper ever gets tired of being Canada’s Prime Minister, he might like to consider a second career in China – he’d fit right in.” [Note: Our current Prime Minister, Justin Trudeau, once indicated that he found some aspects of the Chinese Communist Government’s system appealing. November 8, 2013 (article) Trudeau under fire for expressing admiration for China’s ‘basic dictatorship’]

The government revealed the text of the FIPA agreement and signed [emphasis mine] it in Vladivostok not long after the Beijing trip, and gave a briefing to the parliamentary trade committee for one single hour in October 2012 [emphasis mine]. Then the cone of silence descended.

Then late Friday afternoon, the witching hour favoured by spinmeisters with stealthy announcements they hope everyone will forget by Monday, a press release revealed that the agreement with China, mysteriously unratified [emphasis mine] for almost two years, has been approved by cabinet. It goes into effect Oct. 1 [2014].

Critics of the agreement, such as Gus Van Harten, an Osgoode Hall law professor who has written two books on investment treaties, raise several key objections:

  • Canadian governments are locked in for a generation. If Canada finds the deal unsatisfactory, it cannot be cancelled completely for 31 years [emphasis mine].
  • China benefits much more than Canada, because of a clause allowing existing restrictions in each country to stay in place. Chinese companies get to play on a relatively level field in Canada, while maintaining wildly arbitrary practices and rules for Canadian companies in China.
  • Chinese companies will be able to seek redress against any laws passed by any level of government in Canada which threaten their profits.[emphasis mine] Australia has decided not to enter FIPA agreements specifically because they allow powerful corporations to challenge legislation on social, environmental and economic issues. Chinese companies investing heavily in Canadian energy will be able seek billions in compensation if their projects are hampered by provincial laws on issues such as environmental concerns or First Nations rights, for example [emphasis mine].
  • Cases will be decided by a panel of professional arbitrators, and may be kept secret at the discretion of the sued party [emphasis mine]. This extraordinary provision reflects an aversion to transparency and public debate common to the Harper cabinet and the Chinese politburo.
  • Differences between FIPA and the North American Free Trade Agreement may offer intriguing loopholes for American lawyers [emphasis mine] to argue for equal treatment under the principle of Most Favoured Nation.

It is a reciprocal agreement but it seems China might have more advantages than Canada does. So, we’ll be able to establish sovereignty in the North, eh? That should be interesting.

There doesn’t seem to be any mention of involving the indigenous peoples in the discussion around sovereignty and the North. Perhaps it’s in another chapter.

An updated defence policy, the Indo-Pacific region, and cybersecurity

Hopefully they will do a little more than simply update Canada’s defence policy as Paul T. Mitchell’s (Professor of Defence Studies, Canadian Forces College) September 23, 2021 essay (Canada’s exclusion from the AUKUS security pact reveals a failing national defence policy) for The Conversation suggests there are some serious shortcomings dating back at least 100 years, Note: Links have been removed,

The recently announced deal on nuclear submarines between Australia, the United Kingdom and the United States, known as AUKUS, likely seems irrelevant to many Canadians.

But AUKUS is about far more than submarines. And Canada’s exclusion from the pact represents growing suspicions about the Canadian commitment to the rules-based international order.

The problem stems from Canada’s tacit “grand strategy” [emphasis mine] underlying our defence policy.

A country’s grand strategy typically outlines geopolitical realities alongside a plan to achieve its diplomatic goals.

In 1924, Liberal politician Raoul Dandurand famously said “Canada is a fire-proof house, far removed from flammable materials,” putting into words Canada’s approach to defence since 1867 [emphasis mine]. Simply put, three oceans and a superpower sufficiently shield us from having to think about how to achieve national security.

Canadian defence policy has never varied from three priorities — defend Canada, defend North America and contribute to international peace and security — that have appeared in every Defence Department white paper since the 1950s, regardless of the governing party. This attitude was evident in the recent election campaign, when discussions about defence were largely absent, despite growing threats from abroad and the turmoil within our own military.

Since the heydays of defence spending of the 1950s, the Canadian Armed Forces (CAF) have been gradually shedding fundamental capabilities — including long-range artillery, tanks, fighters that are now obsolete, submarine forces, destroyers and maritime logistics.

And while the CAF specifically faces new challenges in terms of diversity, its traditional approach to leadership has alienated thousands within the ranks, causing a rush to the exits, especially among the most experienced of personnel. The lack of support for modern equipment has also contributed to this problem.

We can continue to drag our heels, but eventually the bill will come due when our government commits our forces to a mission they can no longer fulfil because we thought we didn’t need to concern ourselves with the health of the military.

Just prior to the 2023 budget announcement, AUKUS (Australia, United Kingdom, and United States) moved forward on a security deal in the Indo-Pacific region. As far as I’m aware, the UK no longer has any exposure (colonies/territories) in the Indo-Pacific region while Canada, like the US, has one border (defined by the Pacific Ocean) on the region. Lee Berthiaume’s March 13, 2023 article for The Canadian Press can be found on both the CBC website and the CTV website,

Experts are warning that, as the U.S., Britain and Australia move ahead on an expanded military pact, Canada’s omission from that group suggests a larger problem with how this country is perceived by its friends. [emphasis mine]

U.S. President Joe Biden, British Prime Minister Rishi Sunak and Australian leader Anthony Albanese were at a naval base in San Diego on Monday [March 13, 2023] to confirm the next steps of the trilateral agreement, known as “AUKUS” after the three countries involved.

Those next steps include formalizing American and British plans to help Australia develop a fleet of nuclear-powered submarines in response to growing concerns about China’s actions in the Indo-Pacific region.

The Trudeau government has downplayed [emphasis mine] the importance of AUKUS to Canada, saying Ottawa is not in the market for nuclear-powered submarines — even as others have lamented its absence from the pact.

One senior Canadian Armed Forces commander, Vice-Admiral Bob Auchterlonie, told The Canadian Press he worries about Canada not having access to the same cutting-edge technology [emphasis mine] as three of its closest allies.

Canada’s exclusion is seen by some as further evidence that its allies do not believe Ottawa is serious about pushing back against Chinese ambitions, despite the release of a new Indo-Pacific strategy late last year.

Canada’s strategy seeks to strike a balance between confronting and co-operating with China. It says Canada will challenge China “in areas of profound disagreement” while working together on areas of shared interest, such as climate change.

The U.S. is taking a very different approach. In a defence strategy released earlier this month, U.S. Defense Secretary Lloyd Austin described “an increasingly aggressive China” as a “generational challenge” and the American military’s top priority.

Numbers remain uncertain, but Australia reportedly is poised to spend billions of dollars as part of the deal to purchase new submarines. Britain and the U.S. are also expected to put money into the agreement for technology development [emphasis mine], training and other areas.

Defence analyst David Perry of the Canadian Global Affairs Institute noted the U.S., Britain and Australia are all spending two per cent or more of their national gross domestic product on defence, compared to less than 1.3 per cent in Canada. [emphases mine]

They also have solid plans to build new submarines, while Ottawa has yet to even commit to replacing the Royal Canadian Navy’s four trouble-plagued Victoria-class vessels, let alone start work on plans to build or buy a new fleet.

Canadian military commanders — including chief of the defence staff Gen. Wayne Eyre — have repeatedly underscored the need for submarines.

Swiss cheese cybersecurity with a special emphasis on our research

While our defence spending is considered problematic, I suspect our cybersecurity is also in question, as I’ve noted previously in a September 17, 2021 posting (Council of Canadian Academies (CCA): science policy internship and a new panel on Public Safety in the Digital Age), scroll down about 45% of the way to the ‘What is public safety?’ subhead; look for the Cameron Ortis story (hints: (1) he was the top ranking civilian RCMP staff member reporting directly to the commissioner; (2) he was tasked with overseeing cybersecurity issues; and (3) he was fluent in Mandarin). You’ll also find information about the first AUKUS announcement and a link to a documentary about the Cameron Ortis affair further down under the ‘Almost breaking news’ subhead.

The Cameron Ortis story is shocking enough but when you include both the issues around the Winnipeg level 4 virology lab (see the Karen Pauls/Kimberly Ivany July 8, 2021 article for CBC online news for a summary and an analysis) and the National Research Council of Canada’s serious security breach (see the Tom Spears/Jordan Press July 29, 2014 article “Suspected Chinese cyber attack forces NRC security overhaul” for the Ottawa Citizen; it seems unbelievable and yet—it is.

This February 15, 2022 article for CBC news online by Catharine Tunney announces a report on a series of security breaches,

Gaps in Ottawa’s cyber defences could leave the government agencies holding vast amounts of data on Canadians and businesses susceptible to state-sponsored hackers from countries like China and Russia, says a new report from Parliament’s security and intelligence committee.

Their report, tabled late Monday in the House of Commons, shows previous mistakes have allowed state-sponsored actors to infiltrate and steal government information over the past decade.

“Cyber threats to government systems and networks are a significant risk to national security and the continuity of government operations,” says the report from the National Security and Intelligence Committee of Parliamentarians.

Intellectual property, advanced research already stolen

A year-long attack by China while Stephen Harper was prime minister served as a “wake-up call” for the federal government, said the report.

Between August 2010 and August 2011, China targeted 31 departments and eight suffered “severe compromises,” the report said. [emphases mine]

“Information losses were considerable, including email communications of senior government officials, mass exfiltration of information from several departments, including briefing notes, strategy documents and secret information, and password and file system data,” said the report.

In 2014 [emphasis mine], a Chinese state-sponsored actor was able to compromise the National Research Council.

“The theft included intellectual property and advanced research and proprietary business information from NRC’s partners. China also leveraged its access to the NRC network to infiltrate a number of government organizations,” said the report. [emphases mine]

You can find the National Security and Intelligence Committee of Parliamentarians Special Report on the Government of Canada’s Framework and Activities to Defend its Systems and Networks from Cyber Attack here. By the way, we have had a more recent ‘cyber incident’ at the National Research Council as reported in a March 21, 2022 article for CBC online news by Catharine Tunney.

Meanwhile, the 2022 budget (released April 7, 2022) made these announcements (from my April 19, 2022 posting; scroll down about 50% of the way to the ‘Securing Canada’s Research from Foreign Threats’ subhead),

To implement these guidelines fully, Budget 2022 proposes to provide $159.6 million, starting in 2022-23, and $33.4 million ongoing, as follows:

  • $125 million over five years, starting in 2022-23, and $25 million ongoing, for the Research Support Fund [emphasis mine] to build capacity within post- secondary institutions to identify, assess, and mitigate potential risks to research security; and
  • $34.6 million over five years, starting in 2022-23, and $8.4 million ongoing, to enhance Canada’s ability to protect our research, and to establish a Research Security Centre [emphasis mine] that will provide advice and guidance directly to research institutions.

The About page for the Research Support Fund on the SSHRC website (perhaps there’s another fund with the same name somewhere else?) doesn’t mention identifying, assessing, and/or mitigating risks to research security and I cannot find any mention of a Research Security Centre on the government of Canada website or from a Google search. The government doesn’t seem to be rushing to address these issues.

Cybersecurity for the rest of us

As a reminder, there’s this from Chapter 5,

Canada must not be a financial haven for oligarchs or the kleptocratic apparatchiks of authoritarian, corrupt, or theocratic regimes—such as those of Russia, China, Iran, and Haiti. We will not allow our world-renowned financial system to be used to clandestinely and illegally move money to fund foreign interference inside Canada. [emphases mine]

Money laundering and terrorist financing can threaten the integrity of the Canadian economy, and put Canadians at risk by supporting terrorist activity, drug and human trafficking, and other criminal activities. Taking stronger action to tackle these threats is essential to protecting Canada’s economic security.

In June 2022, the Government of British Columbia released the final report of the Commission of Inquiry into Money Laundering in British Columbia [emphasis mine], also known as the Cullen Commission. This report highlighted major gaps in the current AML/ATF Regime, as well as areas for deepened federal-provincial collaboration [emphasis mine]. Between measures previously introduced and those proposed in Budget 2023, as well as through consultations that the government has committed to launching, the federal government will have responded to all of the recommendations within its jurisdiction in the Cullen Commission report.

A March 29, 2023 article by Bob Mackin for The Breaker News comments on some of the government initiatives announced in the wake of the Cullen report about BC’s investigation into money laundering

In the wake of B.C. case collapse, Liberal government promises new regulation of money services businesses

The federal government has pledged to fill a gap in Canada’s anti-money laundering laws, less than a month after a special prosecutor’s report blamed it for the failure to bring a Richmond man to justice.

The Jin case had been one of the biggest organized crime investigations in B.C. history and was featured throughout the B.C. NDP government’s $19 million Cullen Commission public inquiry into money laundering. 

I want to emphasize that it’s not just the Chinese Communist Government that abuses our systems, there is other state-backed interference with various diaspora communities and other Canadian communities.

According to a February 14, 2023 article (The Canadian businessmen accused of helping Iran’s regime) for CBC news online by Ashley Burke and Nahayat Tizhoosh, it seems Iran has used Canada as a ‘safe haven’ for evading US sanctions and to conduct “… transactions on the Iranian regime’s behalf worth more than $750 million US.”

A February 15, 2023 followup article for CBC news online by Ashley Burke and Nahayat Tizhoosh reiterates the businessmen’s claims that the allegations are baseless and not proven in court. The article includes this,

Prime Minister Justin Trudeau says the government is working “very closely with American partners” and the Iranian diaspora in Canada to target people with ties to Iran’s regime.

Iranian-Canadians accuse the government of doing too little to ensure Canada isn’t a safe haven for the Iranian regime’s business transactions. [emphasis mine] Trudeau defended the government’s actions on Wednesday [February 15, 2023], citing the sanctions it has imposed since the fall on Iranian individuals and entities.

In October 2022 [emphasis mine], the government announced it would be spending $76 million to help enforce sanctions on Iran. Some of the money was earmarked for an additional 30 staff members at the RCMP. But the national police force confirmed it’s still working with the Department of Finance on receiving the funds. 

“The process is ongoing and its implementation is expected to start during next fiscal year [2024?],” wrote Robin Percival, a spokesperson for the RCMP.

If memory serves, the Iranian (Persian) diaspora communities like the Chinese communities in Canada have also warned of being targeted by overseas agents.

Coincidentally or not, the Council of Canadian Academies; Expert Panel on Public Safety in the Digital Age released its report, Vulnerable Connections on March 30, 2023. The expert panel was asked to answer these questions, from p. 17 (xvii) of the report,

How have activities relating to serious criminal activity (including organized crime and child sexual exploitation) and online harms (including disinformation, violent extremist and terrorist use of the internet) in Canada changed to exploit the evolving information and communications technologies (ICTs) landscape?

The headline for the CCA’s Vulnerable Connections March 30, 2023 news release highlights what the 2023 federal budget is tacitly confirming, “Advances in digital technology [are] outpacing efforts to address online harms: expert panel report” [emphasis mine].

As you can see from the budget, state-backed efforts extend from the financial sector to attempts to affect elections, intimidate various communities, and more. Let’s not forget the ‘average’ consumer; criminal enterprises are also active. So, the federal government is playing ‘catch up’ with a complex set of issues.

My final comments

As I noted, no splashy announcements but there are some interesting developments, especially with regard to military spending and a focus on cyber issues, and with the announcement of a Canada Water Agency. It all comes back to science and technology.

Always a little disappointment

There are a number of commentaries but I’m most interested in the ‘science and research’ aspect of the budget for which I found two.

First, Universities Canada issued a March 28, 2023 media release that states a position in its headline “Budget 2023 a missed opportunity to keep Canada competitive in science and research,”

“Canada’s universities are disappointed in Budget 2023’s lack of any significant support for Canadian research,” says Paul Davidson, President of Universities Canada. “With no new funding that matches the ambition of our peers, today’s budget is without the investments across Canada’s research ecosystem which are urgently needed to keep Canada competitive and ensure inclusive and sustainable growth.” 

Second, a March 28, 2023 Federation for Humanities and Social Sciences briefing note holds forth in a similar fashion,

Without a plan to attract and support our next generation of researchers, Budget 2023 is a missed opportunity for Canada. Despite a call for action from students, researchers, and our post-secondary sector, the Budget lacks urgently-needed investments in Canada’s graduate students and early-career researchers.

Over the past two decades, Canada’s graduate students and postdoctoral fellows have faced rising living costs and stagnating funding levels. Dedicated support is needed to reverse the declining value of this funding, and to ensure it remains competitive and keeps pace with rising inflation. Investment in Canada’s research talent and skilled workforce will bolster our capacity to solve our most important challenges here in Canada and internationally.

Disappointment is inevitable with any budget. The writers have a point but where will the money come from? We’re having to spend money on our military after ignoring it for decades. As well, we have security issues that are urgent not to mention the oncoming climate crisis, which faces everyone research scientists and graduate students included.

Will our money be well spent?

I don’t think I’ve ever addressed that question in any of my budget commentaries over the years.

The emphasis on the climate is encouraging as is the potential Canada Water Agency. and finally addressing some of our obligations to our military is a relief. (I have a friend who’s been in the regular Army and in the reserves and he’s been muttering about a lack of and outdated equipment for years.) Assuming the government follows through, it’s about time.

As for obligations to NATO and NORAD, our partners have rightly been applying pressure. It’s good to see money going to NORAD and perhaps the promised Defence Policy update will include policy that supports greater contributions to NATO and, since we’ve been left out of AUKUS, perhaps some fleshing out of the federal government’s new found interest in the Indo-Pacific Region. (This represents a seismic shift from the federal government’s almost exclusively eurocentric focus when looking beyond the border with our southern neighbour, the US.)

The greatest focus for election interference and influence on immigrant diaspora communities has been on the Chinese Communist Government (CCG) but there are others. The Trudeau government’s response has not been especially reassuring even with these budget promises. The best summary of the current situation regarding CCG interference that I’ve seen is an April 13, 2023 article by Frederick Kelter for Al Jazeera.

We definitely could do with a boost in our cybersecurity. The latest incident may have involved Russian hackers according to an April 13, 2023 article for CBC news online by Catharine Tunney, Note: A link has been removed,

One of Canada’s intelligence agencies says a cyber threat actor “had the potential to cause physical damage” to a piece of critical infrastructure recently, a stark warning from the Communications Security Establishment [CSE] amid a string of hits linked to pro-Russian hackers.

“I can report there was no physical damage to any Canadian energy infrastructure. But make no mistake — the threat is real,” said Sami Khoury, head of the CSE’s Canadian Centre for Cyber Security during briefing with reporters Thursday.

Earlier this week, leaked U.S. intelligence documents suggested Russian-backed hackers successfully gained access to Canada’s natural gas distribution network.

Defence Minsiter Anita Anand said Canada has seen a “notable rise in cyber threat activity by Russian-aligned” [sic] and issued a cyber flash on April 12 to let critical Canadian sectors know about an ongoing campaign.

Earlier Thursday [April 13, 2023], a pro-Russian hacking group claimed responsibility for a cyberattack on Hydro Quebec, the province’s state-owned electricity provider.

The same group took credit for knocking the Prime Minister Office website offline [emphasis mine] earlier this week in a distributed denial-of-service attack as Canada played host to Ukrainian Prime Minister Denys Shmyhal.

Denial-of-service attacks flood the target website with traffic, triggering a crash. Earlier this week CSE said these types of attacks have very little impact on the affected systems.

Khoury said that state-sponsored cyber threat actors like to target critical infrastructure “to collect information through espionage, pre-position in case of future hostilities, and as a form of power projection and intimidation.”

My answer (will our money be well spent?) is yes, assuming at least some of it goes to the projects mentioned.

Shifting winds

The world seems an unfriendlier place these days, which is what I see reflected in this budget. Multiple references to Russia’s invasion of Ukraine and a major focus on Canada’s financial system being used to support various state-sponsored hostile actions suggest the Canadian government is beginning to recognize a need to respond appropriately and, I hope, in a more time sensitive fashion than is usual for a government that is known for ‘dragging its feet’.

There’s a quite interesting April 19, 2023 article by Alexander Panetta for CBC news online, which highlights some of the tensions, Note: A link has been removed,

A massive leak of U.S. national security documents has now spilled over into Canada.

The Washington Post says it has seen a Pentagon document criticizing Canada’s military readiness among materials allegedly posted online by a Massachusetts Air National Guardsman arrested last week.

The purported document, which CBC has not seen, makes two broad claims, according to the Post.

First, it says that Prime Minister Justin Trudeau has told NATO officials privately that Canada will never reach the military spending target agreed to by members of the alliance.

Second, the document claims wide-ranging deficiencies in Canada’s military capabilities are a source of tension with allies and defence partners.

That US security leak is a good reminder that everyone has problems with security and (not mentioned in Panetta’s article) that the US spies on its ‘friends’. BTW, Canada does the same thing. Everyone spies on everyone.

The past and the future and the now

Strikingly, the 2023 budget went back in time to revisit the ‘staples theory’ when mining, agriculture, and forestry were Canadian economic mainstays.

It’s the first time I’ve seen a reference in a budget to a perennial R&D (research and development) problem, Canadian companies do not invest in research. We score low on investment in industrial research when compared to other countries. In fact, a 2018 report from the Council of Canadian Academies, “Competing in a Global Innovation Economy: The Current State of R&D in Canada; The Expert Panel on the State of Science and Technology and Industrial Research and Development in Canada” executive summary states this,

… The number of researchers per capita in Canada is on a par with that of other developed countries, and increased modestly between 2004 and 2012. Canada’s output of PhD graduates has also grown in recent years, though it remains low in per capita terms relative to many OECD countries.

In contrast, the number of R&D personnel employed in Canadian businesses dropped by 20% between 2008 and 2013. This is likely related to sustained and ongoing decline in business R&D investment across the country. R&D as a share of gross domestic product (GDP) has steadily declined in Canada since 2001, and now stands well below the OECD average (Figure 1). As one of few OECD countries with virtually no growth in total national R&D expenditures between 2006 and 2015, Canada would now need to more than double expenditures to achieve an R&D intensity comparable to that of leading countries. [p. xviii on paper or p. 20 PDF]

Our problems in this area will not be solved quickly. Nor will our defence issues; it’s about time we started paying our way with NORAD and NATO and elsewhere. By the way, I wasn’t expecting to find a “new North American regional office in Halifax for NATO’s Defence Innovation Accelerator for the North Atlantic” (innovation, in this case, being code for technology). This hearkens back to the military being a resource for scientific and technological advances, which affect us all.

More generally, it’s good to see some emphasis on the climate and on water and food security.

There was one odd note regarding the 2023 budget according to an April 18, 2023 CBC news online article by Janyce McGregor (confession: I missed it),

King Charles, Canada’s head of state, will no longer include the phrase “Defender of the Faith” in his official royal title in Canada.

The new language was revealed late Monday [April 17, 2023] when the Liberal government published its notice of the Ways and Means Motion for this spring’s budget implementation bill — the legislation that actually brings into force the measures Finance Minister Chrystia Freeland announced on March 28.

The new title will read: “Charles the Third, by the Grace of God King of Canada and His other Realms and Territories, Head of the Commonwealth.”

In addition to dropping the religious role, the revised title also deletes a reference to Charles as King of the United Kingdom — an update consistent with Canada’s status as an independent country among the 14 other countries that share the same monarch.

Getting back to the budget, I’m mildly optimistic.

The 2023 Canadian federal budget: science & technology of health, the clean economy, reconciliation, and more (1 of 2)

The Canadian federal government released its 2023 budget on Tuesday, March 28, 2023. There were no flashy science research announcements in the budget. Trudeau and his team like to trumpet science initiatives and grand plans (even if they’re reannouncing something from a previous budget) but like last year—this year—not so much.

Consequently, this posting about the annual federal budget should have been shorter than usual. What happened?

Partly, it’s the military spending (chapter 5 of the budget in part 2 of this 2023 budget post). For those who are unfamiliar with the link between military scientific research and their impact on the general population, there are a number of inventions and innovations directly due to military research, e.g., plastic surgery, television, and the internet. (You can check a November 6, 2018 essay for The Conversation by Robert Kirby, Professor of Clinical Education and Surgery at Keele University, for more about the impact of World War 1 and medical research, “World War I: the birth of plastic surgery and modern anaesthesia.”)

So, there’s a lot to be found by inference. Consequently, I found Chapter 3 to also be unexpectedly rich in science and technology efforts.

Throughout both parts of this 2023 Canadian federal budget post, you will find excerpts from individual chapters of the federal budget followed my commentary directly after. My general commentary is reserved for the end.

Sometimes, I have included an item because it piqued my interest. E.g., Canadian agriculture is dependent on Russian fertilizer!!! News to me and I imagine many others. BTW, this budget aims to wean us from this dependency.

Chapter 2: Investing in Public Health Care and Affordable Dental Care

Here goes: from https://www.budget.canada.ca/2023/report-rapport/toc-tdm-en.html,

2.1 Investing in Public Health Care

Improving Canada’s Readiness for Health Emergencies

Vaccines and other cutting-edge life-science innovations have helped us to take control of the COVID-19 pandemic. To support these efforts, the federal government has committed significant funding towards the revitalization of Canada’s biomanufacturing sector through a Biomanufacturing and Life Sciences Strategy [emphasis mine]. To date, the government has invested more than $1.8 billion in 32 vaccine, therapeutic, and biomanufacturing projects across Canada, alongside $127 million for upgrades to specialized labs at universities across the country. Canada is building a life sciences ecosystem that is attracting major investments from leading global companies, including Moderna, AstraZeneca, and Sanofi.

To build upon the progress of the past three years, the government will explore new ways to be more efficient and effective in the development and production of the vaccines, therapies, and diagnostic tools that would be required for future health emergencies. As a first step, the government will further consult Canadian and international experts on how to best organize our readiness efforts for years to come. …

Gold rush in them thar life sciences

I have covered the rush to capitalize on Canadian life sciences research (with a special emphasis on British Columbia) in various posts including (amongst others): my December 30, 2020 posting “Avo Media, Science Telephone, and a Canadian COVID-19 billionaire scientist,” and my August 23, 2021 posting “Who’s running the life science companies’ public relations campaign in British Columbia (Vancouver, Canada)?” There’s also my August 20, 2021 posting “Getting erased from the mRNA/COVID-19 story,” highlighting how brutal the competition amongst these Canadian researchers can be.

Getting back to the 2023 budget, ‘The Biomanufacturing and Life Sciences Strategy’ mentioned in this latest budget was announced in a July 28, 2021 Innovation, Science and Economic Development Canada news release. You can find the strategy here and an overview of the strategy here. You may want to check out the overview as it features links to,

What We Heard Report: Results of the consultation on biomanufacturing and life sciences capacity in Canada

Ontario’s Strategy: Taking life sciences to the next level

Quebec’s Strategy: 2022–2025 Québec Life Sciences Strategy

Nova Scotia’s Strategy: BioFuture2030 Prince Edward Island’s Strategy:

The Prince Edward Island Bioscience Cluster [emphases mine]

2022 saw one government announcement concerning the strategy, from a March 3, 2022 Innovation, Science and Economic Development Canada news release, Note: Links have been removed,

Protecting the health and safety of Canadians and making sure we have the domestic capacity to respond to future health crises are top priorities of the Government of Canada. With the guidance of Canada’s Biomanufacturing and Life Sciences Strategy, the government is actively supporting the growth of a strong, competitive domestic life sciences sector, with cutting-edge biomanufacturing capabilities.

Today [March 3, 2022], the Honourable François-Philippe Champagne, Minister of Innovation, Science and Industry, announced a $92 million investment in adMare BioInnovations to drive company innovation, scale-up and training activities in Canada’s life sciences sector. This investment will help translate commercially promising health research into innovative new therapies and will see Canadian anchor companies provide the training required and drive the growth of Canada’s life science companies.

The real action took place earlier this month (March 2023) just prior to the budget. Oddly, I can’t find any mention of these initiatives in the budget document. (Confession: I have not given the 2023 budget a close reading although I have been through the whole budget once and viewed individual chapters more closely a few times.)

This March 2, 2023 (?) Tri-agency Institutional Programs Secretariat news release kicked things off, Note 1: I found the date at the bottom of their webpage; Note 2: Links have been removed,

The Government of Canada’s main priority continues to be protecting the health and safety of Canadians. Throughout the pandemic, the quick and decisive actions taken by the government meant that Canada was able to scale up domestic biomanufacturing capacity, which had been in decline for over 40 years. Since then, the government is rebuilding a strong and competitive biomanufacturing and life sciences sector brick by brick. This includes strengthening the foundations of the life sciences ecosystem through the research and talent of Canada’s world-class postsecondary institutions and research hospitals, as well as fostering increased collaboration with innovative companies.

Today [March 2, 2023?], the Honourable François-Philippe Champagne, Minister of Innovation, Science and Industry, and the Honourable Jean-Yves Duclos, Minister of Health, announced an investment of $10 million in support of the creation of five research hubs [emphasis mine]:

  • CBRF PRAIRIE Hub, led by the University of Alberta
  • Canada’s Immuno-Engineering and Biomanufacturing Hub, led by The University of British Columbia
  • Eastern Canada Pandemic Preparedness Hub, led by the Université de Montréal
  • Canadian Pandemic Preparedness Hub, led by the University of Ottawa and McMaster University
  • Canadian Hub for Health Intelligence & Innovation in Infectious Diseases, led by the University of Toronto

This investment, made through Stage 1 of the integrated Canada Biomedical Research Fund (CBRF) and Biosciences Research Infrastructure Fund (BRIF) competition, will bolster research and talent development efforts led by the institutions, working in collaboration with their partners. The hubs combine the strengths of academia, industry and the public and not-for-profit sectors to jointly improve pandemic readiness and the overall health and well-being of Canadians.

The multidisciplinary research hubs will accelerate the research and development of next-generation vaccines and therapeutics and diagnostics, while supporting training and development to expand the pipeline of skilled talent. The hubs will also accelerate the translation of promising research into commercially viable products and processes. This investment helps to strengthen the resilience of Canada’s life sciences sector by supporting leading Canadian research in innovative technologies that keep us safe and boost our economy.

Today’s [March 2, 2023?] announcement also launched Stage 2 of the CBRF-BRIF competition. This is a national competition that includes $570 million in available funding for proposals, aimed at cutting-edge research, talent development and research infrastructure projects associated with the selected research hubs. By strengthening research and talent capacity and leveraging collaborations across the entire biomanufacturing ecosystem, Canada will be better prepared to face future pandemics, in order to protect Canadian’s health and safety. 

Then, the Innovation, Science and Economic Development Canada’s March 9, 2023 news release made this announcement, Note: Links have been removed,

Since March 2020, major achievements have been made to rebuild a vibrant domestic life sciences ecosystem to protect Canadians against future health threats. The growth of the sector is a top priority for the Government of Canada, and with over $1.8 billion committed to 33 projects to boost our domestic biomanufacturing, vaccine and therapeutics capacity, we are strengthening our resiliency for current health emergencies and our readiness for future ones.

The COVID-19 Vaccine Task Force played a critical role in guiding and supporting the Government of Canada’s COVID-19 vaccine response. Today [March 9, 2023], recognizing the importance of science-based decisions, the Honourable François-Philippe Champagne, Minister of Innovation, Science and Industry, and the Honourable Jean-Yves Duclos, Minister of Health, are pleased to announce the creation of the Council of Expert Advisors (CEA). The 14 members of the CEA, who held their first official meeting earlier this week, will advise the Government of Canada on the long-term, sustainable growth of Canada’s biomanufacturing and life sciences sector, and on how to enhance our preparedness and capacity to protect the health and safety of Canadians.

The membership of the CEA comprises leaders with in-depth scientific, industrial, academic and public health expertise. The CEA co-chairs are Joanne Langley, Professor of Pediatrics and of Community Health and Epidemiology at the Dalhousie University Faculty of Medicine, and Division Head of Infectious Diseases at the IWK Health Centre; and Marco Marra, Professor in Medical Genetics at the University of British Columbia (UBC), UBC Canada Research Chair in Genome Science and distinguished scientist at the BC Cancer Foundation.

The CEA’s first meeting focused on the previous steps taken under Canada’s Biomanufacturing and Life Sciences Strategy and on its path forward. The creation of the CEA is an important milestone in the strategy, as it continues to evolve and adapt to new technologies and changing conditions in the marketplace and life sciences ecosystem. The CEA will also inform on investments that enhance capacity across Canada to support end-to-end production of critical vaccines, therapeutics and essential medical countermeasures, and to ensure that Canadians can reap the full economic benefits of the innovations developed, including well-paying jobs.

As I’m from British Columbia, I’m highlighting this University of British Columbia (UBC) March 17, 2023 news release about their involvement, Note: Links have been removed,

Canada’s biotech ecosystem is poised for a major boost with the federal government announcement today that B.C. will be home to Canada’s Immuno-Engineering and Biomanufacturing Hub (CIEBH).

The B.C.-based research and innovation hub, led by UBC, brings together a coalition of provincial, national and international partners to position Canada as a global epicentre for the development and manufacturing of next-generation immune-based therapeutics.

A primary goal of CIEBH is to establish a seamless drug development pipeline that will enable Canada to respond to future pandemics and other health challenges in fewer than 100 days.

This hub will build on the strengths of B.C.’s biotech and life sciences industry, and those of our national and global partners, to make Canada a world leader in the development of lifesaving medicines,” said Dr. Deborah Buszard, interim president and vice-chancellor of UBC. “It’s about creating a healthier future for all Canadians. Together with our outstanding alliance of partners, we will ensure Canada is prepared to respond rapidly to future health challenges with homegrown solutions.”

CIEBH is one of five new research hubs announced by the federal government that will work together to improve pandemic readiness and the overall health and well-being of Canadians. Federal funding of $570 million is available over the next four years to support project proposals associated with these hubs in order to advance Canada’s Biomanufacturing and Life Sciences Strategy.

More than 50 organizations representing the private, public, not-for-profit and academic sectors have come together to form the hub, creating a rich environment that will bolster biomedical innovation in Canada. Among these partners are leading B.C. biotech companies that played a key role in Canada’s COVID-19 pandemic response and are developing cutting-edge treatments for a range of human diseases.

CIEBH, led by UBC, will further align the critical mass of biomedical research strengths concentrated at B.C. academic institutions, including the B.C. Institute of Technology, Simon Fraser University and the University of Victoria, as well as the clinical expertise of B.C. research hospitals and health authorities. With linkages to key partners across Canada, including Dalhousie University, the University of Waterloo, and the Vaccine and Infectious Disease Organization, the hub will create a national network to address gaps in Canada’s drug development pipeline.

In recent decades, B.C. has emerged as a global leader in immuno-engineering, a field that is transforming how society treats disease by harnessing and modulating the immune system.

B.C. academic institutions and prominent Canadian companies like Precision NanoSystems, Acuitas Therapeutics and AbCellera have developed significant expertise in advanced immune-based therapeutics such as lipid nanoparticle- and mRNA-based vaccines, engineered antibodies, cell therapies and treatments for antimicrobial resistant infections. UBC professor Dr. Pieter Cullis, a member of CIEBH’s core scientific team, has been widely recognized for his pioneering work developing the lipid nanoparticle delivery technology that enables mRNA therapeutics such as the highly effective COVID-19 mRNA vaccines.

As noted previously, I’m a little puzzled that the federal government didn’t mention the investment in these hubs in their budget. They usually trumpet these kinds of initiatives.

On a related track, I’m even more puzzled that the province of British Columbia does not have its own life sciences research strategy in light of that sector’s success. Certainly it seems that Ontario, Quebec, Nova Scotia, and Prince Edward are all eager to get a piece of the action. Still, there is a Life Sciences in British Columbia: Sector Profile dated June 2020 and an undated (likely from some time between July 2017 to January 2020 when Bruce Ralston whose name is on the document was the relevant cabinet minister) British Columbia Technology and Innovation Policy Framework.

In case you missed the link earlier, see my August 23, 2021 posting “Who’s running the life science companies’ public relations campaign in British Columbia (Vancouver, Canada)?” which includes additional information about the BC life sciences sector, federal and provincial funding, the City of Vancouver’s involvement, and other related matters.

Chapter 3: A Made-In-Canada Plan: Affordable Energy, Good Jobs, and a Growing Clean Economy

The most science-focused information is in Chapter 3, from https://www.budget.canada.ca/2023/report-rapport/toc-tdm-en.html,

3.2 A Growing, Clean Economy

More than US$100 trillion in private capital is projected to be spent between now and 2050 to build the global clean economy.

Canada is currently competing with the United States, the European Union, and countries around the world for our share of this investment. To secure our share of this global investment, we must capitalize on Canada’s competitive advantages, including our skilled and diverse workforce, and our abundance of critical resources that the world needs.

The federal government has taken significant action over the past seven years to support Canada’s net-zero economic future. To build on this progress and support the growth of Canada’s clean economy, Budget 2023 proposes a range of measures that will encourage businesses to invest in Canada and create good-paying jobs for Canadian workers.

This made-in-Canada plan follows the federal tiered structure to incent the development of Canada’s clean economy and provide additional support for projects that need it. This plan includes:

  • Clear and predictable investment tax credits to provide foundational support for clean technology manufacturing, clean hydrogen, zero-emission technologies, and carbon capture and storage;
  • The deployment of financial instruments through the Canada Growth Fund, such as contracts for difference, to absorb certain risks and encourage private sector investment in low-carbon projects, technologies, businesses, and supply chains; and,
  • Targeted clean technology and sector supports delivered by Innovation, Science and Economic Development Canada to support battery manufacturing and further advance the development, application, and manufacturing of clean technologies.

Canada’s Potential in Critical Minerals

As a global leader in mining, Canada is in a prime position to provide a stable resource base for critical minerals [emphasis mine] that are central to major global industries such as clean technology, auto manufacturing, health care, aerospace, and the digital economy. For nickel and copper alone, the known reserves in Canada are more than 10 million tonnes, with many other potential sources at the exploration stage.

The Buy North American provisions for critical minerals and electric vehicles in the U.S. Inflation Reduction Act will create opportunities for Canada. In particular, U.S. acceleration of clean technology manufacturing will require robust supply chains of critical minerals that Canada has in abundance. However, to fully unleash Canada’s potential in critical minerals, we need to ensure a framework is in place to accelerate private investment.

Budget 2022 committed $3.8 billion for Canada’s Critical Minerals Strategy to provide foundational support to Canada’s mining sector to take advantage of these new opportunities. The Strategy was published in December 2022.

On March 24, 2023, the government launched the Critical Minerals Infrastructure Fund [emphasis mine; I cannot find a government announcement/news release for this fund]—a new fund announced in Budget 2022 that will allocate $1.5 billion towards energy and transportation projects needed to unlock priority mineral deposits. The new fund will complement other clean energy and transportation supports, such as the Canada Infrastructure Bank and the National Trade Corridors Fund, as well as other federal programs that invest in critical minerals projects, such as the Strategic Innovation Fund.

The new Investment Tax Credit for Clean Technology Manufacturing proposed in Budget 2023 will also provide a significant incentive to boost private investment in Canadian critical minerals projects and create new opportunities and middle class jobs in communities across the country.

An Investment Tax Credit for Clean Technology Manufacturing

Supporting Canadian companies in the manufacturing and processing of clean technologies, and in the extraction and processing of critical minerals, will create good middle class jobs for Canadians, ensure our businesses remain competitive in major global industries, and support the supply chains of our allies around the world.

While the Clean Technology Investment Tax Credit, first announced in Budget 2022, will provide support to Canadian companies adopting clean technologies, the Clean Technology Manufacturing Investment Tax Credit will provide support to Canadian companies that are manufacturing or processing clean technologies and their precursors.

  • Budget 2023 proposes a refundable tax credit equal to 30 per cent of the cost of investments in new machinery and equipment used to manufacture or process key clean technologies, and extract, process, or recycle key critical minerals, including:
    • Extraction, processing, or recycling of critical minerals essential for clean technology supply chains, specifically: lithium, cobalt, nickel, graphite, copper, and rare earth elements;
    • Manufacturing of renewable or nuclear energy equipment;
    • Processing or recycling of nuclear fuels and heavy water; [emphases mine]
    • Manufacturing of grid-scale electrical energy storage equipment;
    • Manufacturing of zero-emission vehicles; and,
    • Manufacturing or processing of certain upstream components and materials for the above activities, such as cathode materials and batteries used in electric vehicles.

The investment tax credit is expected to cost $4.5 billion over five years, starting in 2023-24, and an additional $6.6 billion from 2028-29 to 2034-35. The credit would apply to property that is acquired and becomes available for use on or after January 1, 2024, and would no longer be in effect after 2034, subject to a phase-out starting in 2032.

3.4 Reliable Transportation and Resilient Infrastructure

Supporting Resilient Infrastructure Through Innovation

The Smart Cities Challenge [emphasis mine] was launched in 2017 to encourage cities to adopt new and innovative approaches to improve the quality of life for their residents. The first round of the Challenge resulted in $75 million in prizes across four winning applicants: Montreal, Quebec; Guelph, Ontario; communities of Nunavut; and Bridgewater, Nova Scotia.

New and innovative solutions are required to help communities reduce the risks and impacts posed by weather-related events and disasters triggered by climate change. To help address this issue, the government will be launching a new round of the Smart Cities Challenge later this year, which will focus on using connected technologies, data, and innovative approaches to improve climate resiliency.

3.5 Investing in Tomorrow’s Technology

With the best-educated workforce on earth, world-class academic and research institutions, and robust start-up ecosystems across the country, Canada’s economy is fast becoming a global technology leader – building on its strengths in areas like artificial intelligence. Canada is already home to some of the top markets for high-tech careers in North America, including the three fastest growing markets between 2016 and 2021: Vancouver, Toronto, and Quebec City.

However, more can be done to help the Canadian economy reach its full potential. Reversing a longstanding trend of underinvestment in research and development by Canadian business [emphasis mine] is essential our long-term economic growth.

Budget 2023 proposes new measures to encourage business innovation in Canada, as well as new investments in college research and the forestry industry that will help to build a stronger and more innovative Canadian economy.

Attracting High-Tech Investment to Canada

In recent months, Canada has attracted several new digital and high-tech projects that will support our innovative economy, including:

  • Nokia: a $340 million project that will strengthen Canada’s position as a leader in 5G and digital innovation;
  • Xanadu Quantum Technologies: a $178 million project that will support Canada’s leadership in quantum computing;
  • Sanctuary Cognitive Systems Corporation: a $121 million project that will boost Canada’s leadership in the global Artificial Intelligence market; and,
  • EXFO: a $77 million project to create a 5G Centre of Excellence that aims to develop one of the world’s first Artificial Intelligence-based automated network solutions.

Review of the Scientific Research and Experimental Development Tax Incentive Program

The Scientific Research and Experimental Development (SR&ED) tax incentive program continues to be a cornerstone of Canada’s innovation strategy by supporting research and development with the goal of encouraging Canadian businesses of all sizes to invest in innovation that drives economic growth.

In Budget 2022, the federal government announced its intention to review the SR&ED program to ensure it is providing adequate support and improving the development, retention, and commercialization of intellectual property, including the consideration of adopting a patent box regime. [emphasis mine] The Department of Finance will continue to engage with stakeholders on the next steps in the coming months.

Modernizing Canada’s Research Ecosystem

Canada’s research community and world-class researchers solve some of the world’s toughest problems, and Canada’s spending on higher education research and development, as a share of GDP, has exceeded all other G7 countries. 

Since 2016, the federal government has committed more than $16 billion of additional funding to support research and science across Canada. This includes:

  • Nearly $4 billion in Budget 2018 for Canada’s research system, including $2.4 billion for the Canada Foundation for Innovation and the granting councils—the Natural Sciences and Engineering Research Council of Canada, the Social Sciences and Humanities Research Council of Canada and the Canadian Institutes of Health Research; [emphases mine]
  • More than $500 million in Budget 2019 in total additional support to third-party research and science organizations, in addition to the creation of the Strategic Science Fund, which will announce successful recipients later this year;
  • $1.2 billion in Budget 2021 for Pan-Canadian Genomics and Artificial Intelligence Strategies, and a National Quantum Strategy;
  • $1 billion in Budget 2021 to the granting councils and the Canada Foundation for Innovation for life sciences researchers and infrastructure; and,
  • The January 2023 announcement of Canada’s intention to become a full member in the Square Kilometre Array Observatory, which will provide Canadian astronomers with access to its ground-breaking data. The government is providing up to $269.3 million to support this collaboration.

In order to maintain Canada’s research strength—and the knowledge, innovations, and talent it fosters—our systems to support science and research must evolve. The government has been consulting with stakeholders, including through the independent Advisory Panel on the Federal Research Support System, to seek advice from research leaders on how to further strengthen Canada’s research support system.

The government is carefully considering the Advisory Panel’s advice, with more detail to follow in the coming months on further efforts to modernize the system.

Using College Research to Help Businesses Grow

Canada’s colleges, CEGEPs, and polytechnic institutes use their facilities, equipment, and expertise to solve applied research problems every day. Students at these institutions are developing the skills they need to start good careers when they leave school, and by partnering with these institutions, businesses can access the talent and the tools they need to innovate and grow.

  • To help more Canadian businesses access the expertise and research and development facilities they need, Budget 2023 proposes to provide $108.6 million over three years, starting in 2023-24, to expand the College and Community Innovation Program, administered by the Natural Sciences and Engineering Research Council.

Supporting Canadian Leadership in Space

For decades, Canada’s participation in the International Space Station has helped to fuel important scientific advances, and showcased Canada’s ability to create leading-edge space technologies, such as Canadarm2. Canadian space technologies have inspired advances in other fields, such as the NeuroArm, the world’s first robot capable of operating inside an MRI, making previously impossible surgeries possible.

  • Budget 2023 proposes to provide $1.1 billion [emphasis mine] over 14 years, starting in 2023-24, on a cash basis, to the Canadian Space Agency [emphasis mine] to continue Canada’s participation in the International Space Station until 2030.

Looking forward, humanity is returning to the moon [emphasis mine]. Canada intends to join these efforts by contributing a robotic lunar utility vehicle to perform key activities in support of human lunar exploration. Canadian participation in the NASA-led Lunar Gateway station—a space station that will orbit the moon—also presents new opportunities for innovative advances in science and technology. Canada is providing Canadarm3 to the Lunar Gateway, and a Canadian astronaut will join Artemis II, the first crewed mission to the moon since 1972. In Budget 2023, the government is providing further support to assist these missions.

  • Budget 2023 proposes to provide $1.2 billion [emphasis mine] over 13 years, starting in 2024-25, to the Canadian Space Agency to develop and contribute a lunar utility vehicle to assist astronauts on the moon.
  • Budget 2023 proposes to provide $150 million [emphasis mine[ over five years, starting in 2023-24, to the Canadian Space Agency for the next phase of the Lunar Exploration Accelerator Program to support the Canada’s world-class space industry and help accelerate the development of new technologies.
  • Budget 2023 also proposes to provide $76.5 million [emphasis mine] over eight years, starting in 2023-24, on a cash basis, to the Canadian Space Agency in support of Canadian science on the Lunar Gateway station.

Investing in Canada’s Forest Economy

The forestry sector plays an important role in Canada’s natural resource economy [emphasis mine], and is a source of good careers in many rural communities across Canada, including Indigenous communities. As global demand for sustainable forest products grows, continued support for Canada’s forestry sector will help it innovate, grow, and support good middle class jobs for Canadians.

  • Budget 2023 proposes to provide $368.4 million over three years, starting in 2023-24, with $3.1 million in remaining amortization, to Natural Resources Canada to renew and update forest sector support, including for research and development, Indigenous and international leadership, and data. Of this amount, $30.1 million would be sourced from existing departmental resources.

Establishing the Dairy Innovation and Investment Fund

The dairy sector is facing a growing surplus of solids non-fat (SNF) [emphasis mine], a by-product of dairy processing. Limited processing capacity for SNF results in lost opportunities for dairy processors and farmers.

  • Budget 2023 proposes to provide $333 million over ten years, starting in 2023-24, for Agriculture and Agri-Food Canada to support investments in research and development of new products based on SNF, market development for these products, and processing capacity for SNF-based products more broadly.

Supporting Farmers for Diversifying Away from Russian Fertilizers

Russia’s illegal invasion of Ukraine has resulted in higher prices for nitrogen fertilizers, which has had a notable impact on Eastern Canadian farmers who rely heavily on imported fertilizer.

  • Budget 2023 proposes to provide $34.1 million over three years, starting in 2023-24, to Agriculture and Agri-Food Canada’s On-Farm Climate Action Fund to support adoption of nitrogen management practices by Eastern Canadian farmers, that will help optimize the use and reduce the need for fertilizer.

Providing Interest Relief for Agricultural Producers

Farm production costs have increased in Canada and around the world, including as a result Russia’s illegal invasion of Ukraine and global supply chain disruptions. It is important that Canada’s agricultural producers have access to the cash flow they need to cover these costs until they sell their products.

  • Budget 2023 proposes to provide $13 million in 2023-24 to Agriculture and Agri-Food Canada to increase the interest-free limit for loans under the Advance Payments Program from $250,000 to $350,000 for the 2023 program year.

Additionally, the government will consult with provincial and territorial counterparts to explore ways to extend help to small agricultural producers who demonstrate urgent financial need.

Maintaining Livestock Sector Exports with a Foot-and-Mouth Disease Vaccine Bank

Foot-and-Mouth Disease (FMD) is a highly transmissible illness that can affect cattle, pigs, and other cloven-hoofed animals. Recent outbreaks in Asia and Africa have increased the risk of global spread, and a FMD outbreak in Canada would cut off exports for all livestock sectors, with major economic implications. However, the impact of a potential outbreak would be significantly reduced with the early vaccination of livestock. 

  • Budget 2023 proposes to provide $57.5 million over five years, starting in 2023-24, with $5.6 million ongoing, to the Canadian Food Inspection Agency to establish a FMD vaccine bank for Canada, and to develop FMD response plans. The government will seek a cost-sharing arrangement with provinces and territories.

Canadian economic theory (the staples theory), mining, nuclear energy, quantum science, and more

Critical minerals are getting a lot of attention these days. (They were featured in the 2022 budget, see my April 19, 2022 posting, scroll down to the Mining subhead.) This year, US President Joe Biden, in his first visit to Canada as President, singled out critical minerals at the end of his 28 hour state visit (from a March 24, 2023 CBC news online article by Alexander Panetta; Note: Links have been removed),

There was a pot of gold at the end of President Joe Biden’s jaunt to Canada. It’s going to Canada’s mining sector.

The U.S. military will deliver funds this spring to critical minerals projects in both the U.S. and Canada. The goal is to accelerate the development of a critical minerals industry on this continent.

The context is the United States’ intensifying rivalry with China.

The U.S. is desperate to reduce its reliance on its adversary for materials needed to power electric vehicles, electronics and many other products, and has set aside hundreds of millions of dollars under a program called the Defence Production Act.

The Pentagon already has told Canadian companies they would be eligible to apply. It has said the cash would arrive as grants, not loans.

On Friday [March 24, 2023], before Biden left Ottawa, he promised they’ll get some.

The White House and the Prime Minister’s Office announced that companies from both countries will be eligible this spring for money from a $250 million US fund.

Which Canadian companies? The leaders didn’t say. Canadian officials have provided the U.S. with a list of at least 70 projects that could warrant U.S. funding.

“Our nations are blessed with incredible natural resources,” Biden told Canadian parliamentarians during his speech in the House of Commons.

Canada in particular has large quantities of critical minerals [emphasis mine] that are essential for our clean energy future, for the world’s clean energy future.

I don’t believe that Joe Biden has ever heard of the Canadian academic Harold Innis (neither have most Canadians) but Biden is echoing a rather well known theory, in some circles, about Canada’s economy (from the Harold Innis Wikipedia entry),

Harold Adams Innis FRSC (November 5, 1894 – November 9, 1952) was a Canadian professor of political economy at the University of Toronto and the author of seminal works on media, communication theory, and Canadian economic history. He helped develop the staples thesis, which holds that Canada’s culture, political history, and economy have been decisively influenced by the exploitation and export of a series of “staples” such as fur, fish, lumber, wheat, mined metals, and coal. The staple thesis dominated economic history in Canada from the 1930s to 1960s, and continues to be a fundamental part of the Canadian political economic tradition.[8] [all emphases mine]

The staples theory is referred to informally as “hewers of wood and drawers of water.”

Critical Minerals Infrastructure Fund

I cannot find an announcement for this fund (perhaps it’s a US government fund?) but there is a March 7, 2023 Natural Resources Canada news release, Note: A link has been removed,

Simply put, our future depends on critical minerals. The Government of Canada is committed to investing in this future, which is why the Canadian Critical Minerals Strategy — launched by the Honourable Jonathan Wilkinson, Minister of Natural Resources, in December 2022 — is backed by up to $3.8 billion in federal funding. [emphases mine] Today [March 7, 2023], Minister Wilkinson announced more details on the implementation of this Strategy. Over $344 million in funding is supporting the following five new programs and initiatives:

  • Critical Minerals Technology and Innovation Program – $144.4 million for the research, development, demonstration, commercialization and adoption of new technologies and processes that support sustainable growth in Canadian critical minerals value chains and associated innovation ecosystems. 
  • Critical Minerals Geoscience and Data Initiative – $79.2 million to enhance the quality and availability of data and digital technologies to support geoscience and mapping that will accelerate the efficient and effective development of Canadian critical minerals value chains, including by identifying critical minerals reserves and developing pathways for sustainable mineral development. 
  • Global Partnerships Program – $70 million to strengthen Canada’s global leadership role in enhancing critical minerals supply chain resiliency through international collaborations related to critical minerals. 
  • Northern Regulatory Initiative – $40 million to advance Canada’s northern and territorial critical minerals agenda by supporting regulatory dialogue, regional studies, land-use planning, impact assessments and Indigenous consultation.
  • Renewal of the Critical Minerals Centre of Excellence (CMCE) – $10.6 million so the CMCE can continue the ongoing development and implementation of the Canadian Critical Minerals Strategy.

Commentary from the mining community

Mariaan Webb wrote a March 29,2023 article about the budget and the response from the mining community for miningweekly.com, Note: Links have been removed,

The 2023 Budget, delivered by Finance Minister Chrystia Freeland on Tuesday, bolsters the ability of the Canadian mining sector to deliver for the country, recognising the industry’s central role in enabling the transition to a net-zero economy, says Mining Association of Canada (MAC) president and CEO Pierre Gratton.

“Without mining, there are no electric vehicles, no clean power from wind farms, solar panels or nuclear energy, [emphasis mine] and no transmission lines,” said Gratton.

What kind of nuclear energy?

There are two kinds of nuclear energy: fission and fusion. (Fission is the one where the atom is split and requires minerals. Fusion energy is how stars are formed. Much less polluting than fission energy, at this time it is not a commercially viable option nor is it close to being so.)

As far as I’m aware, fusion energy does not require any mined materials. So, Gratton appears to be referring to fission nuclear energy when he’s talking about the mining sector and critical minerals.

I have an October 28, 2022 posting, which provides an overview of fusion energy and the various projects designed to capitalize on it.

Smart Cities in Canada

I was happy to be updated on the Smart Cities Challenge. When I last wrote about it (a March 20, 2018 posting; scroll down to the “Smart Cities, the rest of the country, and Vancouver” subhead). I notice that the successful applicants are from Montreal, Quebec; Guelph, Ontario; communities of Nunavut; and Bridgewater, Nova Scotia. It’s about time northern communities got some attention. It’s hard not to notice that central Canada (i.e., Ontario and Quebec) again dominates.

I look forward to hearing more about the new, upcoming challenge.

The quantum crew

I first made note of what appears to be a fracture in the Canadian quantum community in a May 4, 2021 posting (scroll down to the National Quantum Strategy subhead) about the 2021 budget. I made note of it again in a July 26, 2022 posting (scroll down to the Canadian quantum scene subhead).

In my excerpts from the 3.5 Investing in Tomorrow’s Technology section of the 2023 budget, Xanadu Quantum Technologies, headquartered in Toronto, Ontario is singled out with three other companies (none of which are in the quantum computing field). Oddly, D-Wave Systems (located in British Columbia), which as far as I’m aware is the star of Canada’s quantum computing sector, has yet to be singled out in any budget I’ve seen yet. (I’m estimating I’ve reviewed about 10 budgets.)

Canadians in space

Shortly after the 2023 budget was presented, Canadian astronaut Jeremy Hansen was revealed as one of four astronauts to go on a mission to orbit the moon. From a Canadian Broadcasting (CBC) April 3, 2023 news online article by Nicole Mortillaro (Note: A link has been removed),

Jeremy Hansen is heading to the moon.

The 47-year old Canadian astronaut was announced today as one of four astronauts — along with Christina Koch, Victor Glover and Reid Wiseman — who will be part of NASA’s [US National Aeronautics and Space Administration] Artemis II mission.

Hansen was one of four active Canadian astronauts that included Jennifer Sidey-Gibbons, Joshua Kutryk and David Saint-Jacques vying for a seat on the Orion spacecraft set to orbit the moon.

Artemis II is the second step in NASA’s mission to return astronauts to the surface of the moon. 

The astronauts won’t be landing, but rather they will orbit for 10 days in the Orion spacecraft, testing key components to prepare for Artemis III that will place humans back on the moon some time in 2025 for the first time since 1972.

Canada gets a seat on Artemis II due to its contributions to Lunar Gateway, a space station that will orbit the moon. But Canada is also building a lunar rover provided by Canadensys Aerospace.

On Monday [April 3, 2023], Hansen noted there are two reasons a Canadian is going to the moon, adding that it “makes me smile when I say that.”

The first, he said, is American leadership, and the decision to curate an international team.

“The second reason is Canada’s can-do attitude,” he said proudly.

In addition to our ‘can-do attitude,” we’re also spending some big money, i.e., the Canadian government has proposed in its 2023 budget some $2.5B to various space and lunar efforts over the next several years.

Chapter 3 odds and sods

First seen in the 2022 budget, the patent box regime makes a second appearance in the 2023 budget where apparently ‘stakeholders will be engaged’ later this year. At least, they’re not rushing into this. (For the original announcement and an explanation of a patent box regime, see my April 19, 2022 budget review; scroll down to the Review of Tax Support to R&D and Intellectual Property subhead.)

I’m happy to see the Dairy Innovation and Investment Fund. I’m particularly happy to see a focus on finding uses for solids non-fat (SNF) by providing “$333 million over ten years, starting in 2023-24, … research and development of new products based on SNF [emphasis mine], market development for these products, and processing capacity for SNF-based products more broadly.”

This investment contrasts with the approach to cellulose nanocrystals (CNC) derived from wood (i.e., the forest economy), where the Canadian government invested heavily in research and even opened a production facility under the auspices of a company, CelluForce. It was a little problematic.

By 2013, the facility had a stockpile of CNC and nowhere to sell it. That’s right, no market for CNC as there had been no product development. (See my May 8, 2012 posting where that lack is mentioned, specifically there’s a quote from Tim Harper in an excerpted Globe and Mail article. My August 17, 2016 posting notes that the stockpile was diminishing. The CelluForce website makes no mention of it now in 2023.)

It’s good to see the government emphasis on research into developing products for SNFs especially after the CelluForce stockpile and in light of US President Joe Biden’s recent enthusiasm over our critical minerals.

Chapter 4: Advancing Reconciliation and Building a Canada That Works for Everyone

Chapter 4: Advancing Reconciliation and Building a Canada That Works for Everyone offers this, from https://www.budget.canada.ca/2023/report-rapport/toc-tdm-en.html,

4.3 Clean Air and Clean Water

Progress on Biodiversity

Montreal recently hosted the Fifteenth Conference of the Parties (COP15) to the United Nations Convention on Biological Diversity, which led to a new Post-2020 Global Biodiversity Framework. During COP15, Canada announced new funding for biodiversity and conservation measures at home and abroad that will support the implementation of the Global Biodiversity Framework, including $800 million to support Indigenous-led conservation within Canada through the innovative Project Finance for Permanence model.

Protecting Our Freshwater

Canada is home to 20 per cent of the world’s freshwater supply. Healthy lakes and rivers are essential to Canadians, communities, and businesses across the country. Recognizing the threat to freshwater caused by climate change and pollution, the federal government is moving forward to establish a new Canada Water Agency and make major investments in a strengthened Freshwater Action Plan.

  • Budget 2023 proposes to provide $650 million over ten years, starting in 2023-24, to support monitoring, assessment, and restoration work in the Great Lakes, Lake Winnipeg, Lake of the Woods, St. Lawrence River, Fraser River, Saint John River, Mackenzie River, and Lake Simcoe. Budget 2023 also proposes to provide $22.6 million over three years, starting in 2023-24, to support better coordination of efforts to protect freshwater across Canada.
  • Budget 2023 also proposes to provide $85.1 million over five years, starting in 2023-24, with $0.4 million in remaining amortization and $21 million ongoing thereafter to support the creation of the Canada Water Agency [emphasis mine], which will be headquartered in Winnipeg. By the end of 2023, the government will introduce legislation that will fully establish the Canada Water Agency as a standalone entity.

Cleaner and Healthier Ports

Canada’s ports are at the heart of our supply chains, delivering goods to Canadians and allowing our businesses to reach global markets. As rising shipping levels enable and create economic growth and good jobs, the federal government is taking action to protect Canada’s coastal ecosystems and communities.

  • Budget 2023 proposes to provide $165.4 million over seven years, starting in 2023-24, to Transport Canada to establish a Green Shipping Corridor Program to reduce the impact of marine shipping on surrounding communities and ecosystems. The program will help spur the launch of the next generation of clean ships, invest in shore power technology, and prioritize low-emission and low-noise vessels at ports.

Water, water everywhere

I wasn’t expecting to find mention of establishing a Canada Water Agency and details are sketchy other than, It will be in Winnipeg, Manitoba and there will be government funding. Fingers crossed that this agency will do some good work (whatever that might be). Personally, I’d like to see some action with regard to droughts.

In British Columbia (BC) where I live and which most of us think of as ‘water rich’, is suffering under conditions such that our rivers and lakes are at very low levels according to an April 6, 2023 article by Glenda Luymes for the Vancouver Sun (print version, p. A4),

On the North American WaterWatch map, which codes river flows using a series of coloured dots, high flows are represented in various shades of blue while low flows are represented in red hues. On Wednesday [April 5, 2023], most of BC was speckled red, brown and orange, with the majority of the province’s rivers flowing “much below normal.”

“It does not bode well for the fish populations,” said Marvin Rosenau, a fisheries and ecosystems instructor at BCIT [British Columbia Institute of Technology]. …

Rosenau said low water last fall [2022], when much of BC was in the grip of drought, decreased salmon habitat during spawning season. …

BC has already seen small early season wildfires, including one near Merritt last weekend [April 1/2, 2023]. …

Getting back to the Canada Water Agency, there’s this March 29, 2023 CBC news online article by Bartley Kives,

The 2023 federal budget calls for a new national water agency to be based in Winnipeg, provided Justin Trudeau’s Liberal government remains in power long enough to see it established [emphasis mine] in the Manitoba capital.

The budget announced on Tuesday [March 28, 2023] calls for the creation of the Canada Water Agency, a new federal entity with a headquarters in Winnipeg.

While the federal government is still determining precisely what the new agency will do, one Winnipeg-based environmental organization expects it to become a one-stop shop for water science, water quality assessment and water management [emphasis mine].

“This is something that we don’t actually have in this country at the moment,” said Matt McCandless, a vice-president for the non-profit International Institute for Sustainable Development.

Right now, municipalities, provinces and Indigenous authorities take different approaches to managing water quality, water science, flooding and droughts, said McCandless, adding a national water agency could provide more co-ordination.

For now, it’s unknown how many employees will be based at the Canada Water Agency’s Winnipeg headquarters. According to the budget, legislation to create the agency won’t be introduced until later this year [emphasis mine].

That means the Winnipeg headquarters likely won’t materialize before 2024, one year before the Trudeau minority government faces re-election, assuming it doesn’t lose the confidence of the House of Commons beforehand [emphasis mine].

Nonetheless, several Canadian cities and provinces were vying for the Canada Water Agency’s headquarters, including Manitoba.

The budget also calls for $65 million worth of annual spending on lake science and restoration, with an unstated fraction of that cash devoted to Lake Winnipeg.

McCandless calls the spending on water science an improvement over previous budgets.

Kives seems a tad jaundiced but you get that way (confession: I have too) when covering government spending promises.

Part 2 (military spending and general comments) will be posted sometime during the week of April 24-28, 2023.