There weren’t too many highlights in the 2024 budget as far as I was concerned. Overall, it was a bread and butter budget concerned with housing, jobs, business, and prices along with the government’s perennial focus on climate change and the future for young people and Indigenous peoples. There was nothing particularly special about the funds allocated for research and, as for defence spending in the 2024 budget, that was and is nominally interesting.
“Boosting Research, Innovation, and Productivity” was found in Chapter Four: Economic Growth for Every Generation.
4.1 Boosting Research, Innovation, and Productivity
For anyone who’s not familiar with ‘innovation’ as a buzzword, it’s code for ‘business’. From 4.1 of the budget,
Key Ongoing Actions
Supporting scientific discovery, developing Canadian research talent, and attracting top researchers from around the planet to make Canada their home base for their important work with more than $16 billion committed since 2016.
Supporting critical emerging sectors, through initiatives like the Pan-Canadian Artificial Intelligence Strategy, [emphases mine] the National Quantum Strategy, the Pan-Canadian Genomics Strategy, and the Biomanufacturing and Life Sciences Strategy.
Nearly $2 billion to fuel Canada’s Global Innovation Clusters to grow these innovation ecosystems, promote commercialization, support intellectual property creation and retention, and scale Canadian businesses.
Investing $3.5 billion in the Sustainable Canadian Agricultural Partnership to strengthen the innovation, competitiveness, and resiliency of the agriculture and agri-food sector.
Flowing up to $333 million over the next decade to support dairy sector investments in research, product and market development, and processing capacity for solids non-fat, thus increasing its competitiveness and productivity.
The only ’emerging’ sector singled out for new funding was the Pan-Canadian Artificial Intelligence Strategy and that is almost all ‘innovation’, from 4.1 of the budget,
Strengthening Canada’s AI Advantage
Canada’s artificial intelligence (AI) ecosystem is among the best in the world. Since 2017, the government has invested over $2 billion towards AI in Canada. Fuelled by those investments, Canada is globally recognized for strong AI talent, research, and its AI sector.
Today, Canada’s AI sector is ranked first in the world for growth of women in AI, and first in the G7 for year-over-year growth of AI talent. Every year since 2019, Canada has published the most AI-related papers, per capita, in the G7. Our AI firms are filing patents at three times the average rate in the G7, and they are attracting nearly a third of all venture capital in Canada. In 2022-23, there were over 140,000 actively engaged AI professionals in Canada, an increase of 29 per cent compared to the previous year. These are just a few of Canada’s competitive advantages in AI and we are aiming even higher.
To secure Canada’s AI advantage, the government has already:
Established the first national AI strategy in the world through the Pan-Canadian Artificial Intelligence Strategy;
Supported access to advanced computing capacity, including through the recent signing of a letter of intent with NVIDIA and a Memorandum of Understanding with the U.K. government; and,
Scaled-up Canadian AI firms through the Strategic Innovation Fund and Global Innovation Clusters program.
Figure 4.1 Building on Canada’s AI Advantage
AI is a transformative economic opportunity for Canada and the government is committed to doing more to support our world-class research community, launch Canadian AI businesses, and help them scale-up to meet the demands of the global economy. The processing capacity required by AI is accelerating a global push for the latest technology, for the latest computing infrastructure.
Currently, most compute capacity is located in other countries. Challenges accessing compute power slows down AI research and innovation, and also exposes Canadian firms to a reliance on privately-owned computing, outside of Canada. This comes with dependencies and security risks. And, it is a barrier holding back our AI firms and researchers.
We need to break those barriers to stay competitive in the global AI race and ensure workers benefit from the higher wages of AI transformations; we must secure Canada’s AI advantage. We also need to ensure workers who fear their jobs may be negatively impacted by AI have the tools and skills training needed in a changing economy.
To secure Canada’s AI advantage Budget 2024 announces a monumental increase in targeted AI support of $2.4 billion, including:
$2 billion over five years, starting in 2024-25, to launch a new AI Compute Access Fund and Canadian AI Sovereign Compute Strategy, to help Canadian researchers, start-ups, and scale-up businesses access the computational power they need to compete and help catalyze the development of Canadian-owned and located AI infrastructure.
$200 million over five years, starting in 2024-25, to boost AI start-ups to bring new technologies to market, and accelerate AI adoption in critical sectors, such as agriculture, clean technology, health care, and manufacturing. This support will be delivered through Canada’s Regional Development Agencies.
$100 million over five years, starting in 2024-25, for the National Research Council’s AI Assist Program to help Canadian small- and medium-sized businesses and innovators build and deploy new AI solutions, potentially in coordination with major firms, to increase productivity across the country.
$50 million over four years, starting in 2025-26, to support workers who may be impacted by AI, such as creative industries. This support will be delivered through the Sectoral Workforce Solutions Program, which will provide new skills training for workers in potentially disrupted sectors and communities.
The government will engage with industry partners and research institutes to swiftly implement AI investment initiatives, fostering collaboration and innovation across sectors for accelerated technological advancement.
Before moving to the part of budget that focuses on safe and responsible use of AI, I’ve got some information about the legislative situation and an omnibus bill C-27 which covers AI, from my October 10, 2024 posting,
You can find more up-to-date information about the status of the Committee’s Bill-27 meetings on this webpage where it appears that September 26, 2024 was the committee’s most recent meeting. If you click on the highlighted meeting dates, you will be given the option of watching a webcast of the meeting. The webpage will also give you access to a list of witnesses, the briefs and the briefs themselves.
November 2024 update: The committee’s most recent meeting is still listed as September 26, 2024.
AI has tremendous economic potential, but as with all technology, it presents important considerations to ensure its safe development and implementation. Canada is a global leader in responsible AI and is supporting an AI ecosystem that promotes responsible use of technology. From development through to implementation and beyond, the government is taking action to protect Canadians from the potentially harmful impacts of AI.
The government is committed to guiding AI innovation in a positive direction, and to encouraging the responsible adoption of AI technologies by Canadians and Canadian businesses. To bolster efforts to ensure the responsible use of AI:
Budget 2024 proposes to provide $50 million over five years, starting in 2024-25, to create an AI Safety Institute of Canada to ensure the safe development and deployment of AI. The AI Safety Institute will help Canada better understand and protect against the risks of advanced and generative AI systems. The government will engage with stakeholders and international partners with competitive AI policies to inform the final design and stand-up of the AI Safety Institute.
Budget 2024 also proposes to provide $5.1 million in 2025-26 to equip the AI and Data Commissioner Office with the necessary resources to begin enforcing the proposed Artificial Intelligence and Data Act.
Budget 2024 proposes $3.5 million over two years, starting in 2024-25, to advance Canada’s leadership role with the Global Partnership on Artificial Intelligence, securing Canada’s leadership on the global stage when it comes to advancing the responsible development, governance, and use of AI technologies internationally.
Using AI to Keep Canadians Safe
AI has shown incredible potential to toughen up security systems, including screening protocols for air cargo. Since 2012, Transport Canada has been testing innovative approaches to ensure that air cargo coming into Canada is safe, protecting against terrorist attacks. This included launching a pilot project to screen 10 to 15 per cent of air cargo bound for Canada and developing an artificial intelligence system for air cargo screening.
Budget 2024 proposes to provide $6.7 million over five years, starting in 2024-25, to Transport Canada to establish the Pre-Load Air Cargo Targeting Program to screen 100 per cent of air cargo bound for Canada. This program, powered by cutting-edge artificial intelligence, will increase security and efficiency, and align Canada’s air security regime with those of its international partners.
There was a small section which updates some information about intellectual property retention (patent box retention) but otherwise is concerned with industrial R&B (a perennial Canadian weakness), from 4.1 of the budget,
Boosting R&D and Intellectual Property Retention
Research and development (R&D) is a key driver of productivity and growth. Made-in-Canada innovations meaningfully increase our gross domestic product (GDP) per capita, create good-paying jobs, and secure Canada’s position as a world-leading advanced economy.
To modernize and improve the Scientific Research and Experimental Development (SR&ED) tax incentives, the federal government launched consultations on January 31, 2024, to explore cost-neutral ways to enhance the program to better support innovative businesses and drive economic growth. In these consultations, which closed on April 15, 2024, the government asked Canadian researchers and innovators for ways to better deliver SR&ED support to small- and medium-sized Canadian businesses and enable the next generation of innovators to scale-up, create jobs, and grow the economy.
Budget 2024 announces the government is launching a second phase of consultations on more specific policy parameters, to hear further views from businesses and industry on specific and technical reforms. This includes exploring how Canadian public companies could be made eligible for the enhanced credit. Further details on the consultation process will be released shortly on the Department of Finance Canada website.
Budget 2024 proposes to provide $600 million over four years, starting in 2025-26, with $150 million per year ongoing for future enhancements to the SR&ED program. The second phase of consultations will inform how this funding could be targeted to boost research and innovation.
On January 31, 2024, the government also launched consultations on creating a patent box regime to encourage the development and retention of intellectual property in Canada. The patent box consultation closed on April 15, 2024. Submissions received through this process, which are still under review, will help inform future government decisions with respect to a patent box regime.
Nice to get an update on what’s happening with the patent box regime.
The Tri-Council consisting of the Canadian Institutes of Health Research (CIHR), the Natural Sciences and Engineering Research Council of Canada (NSERC), and the Social Sciences and Humanities Research Council of Canada (SSHRC) don’t often get mentioned in the federal budget but they did this year, from 4.1 of the budget,
Enhancing Research Support
Since 2016, the federal government has committed more than $16 billion in research, including funding for the federal granting councils—the Natural Sciences and Engineering Research Council (NSERC), the Canadian Institutes of Health Research (CIHR), and the Social Sciences and Humanities Research Council (SSHRC).
This research support enables groundbreaking discoveries in areas such as climate change, health emergencies, artificial intelligence, and psychological health. This plays a critical role in solving the world’s greatest challenges, those that will have impacts for generations.
Canada’s granting councils already do excellent work within their areas of expertise, but more needs to be done to maximize their effect. The improvements we are making today, following extensive consultations including with the Advisory Panel on the Federal Research Support System, will strengthen and modernize Canada’s federal research support.
To increase core research grant funding and support Canadian researchers, Budget 2024 proposes to provide $1.8 billion over five years, starting in 2024-25, with $748.3 million per year ongoing to SSHRC, NSERC, and CIHR.
To provide better coordination across the federally funded research ecosystem, Budget 2024 announces the government will create a new capstone research funding organization. The granting councils will continue to exist within this new organization, and continue supporting excellence in investigator-driven research, including linkages with the Health portfolio. This new organization and structure will also help to advance internationally collaborative, multi-disciplinary, and mission-driven research. The government is delivering on the Advisory Panel’s observation that more coordination is needed to maximize the impact of federal research support across Canada’s research ecosystem.
To help guide research priorities moving forward, Budget 2024 also announces the government will create an advisory Council on Science and Innovation. This Council will be made up of leaders from the academic, industry, and not-for-profit sectors, and be responsible for a national science and innovation strategy to guide priority setting and increase the impact of these significant federal investments.
Budget 2024 also proposes to provide a further $26.9 million over five years, starting in 2024-25, with $26.6 million in remaining amortization and $6.6 million ongoing, to the granting councils to establish an improved and harmonized grant management system.
The government will also work with other key players in the research funding system—the provinces, territories, and Canadian industry—to ensure stronger alignment, and greater co-funding to address important challenges, notably Canada’s relatively low level of business R&D investment.
More details on these important modernization efforts will be announced in the 2024 Fall Economic Statement.
World-Leading Research Infrastructure
Modern, high-quality research facilities and infrastructure are essential for breakthroughs in Canadian research and science. These laboratories and research centres are where medical and other scientific breakthroughs are born, helping to solve real-world problems and create the economic opportunities of the future. World-leading research facilities will attract and train the next generation of scientific talent. That’s why, since 2015, the federal government has made unprecedented investments in science and technology, at an average of $13.6 billion per year, compared to the average from 2009-10 to 2015-16 of just $10.8 billion per year. But we can’t stop here.
To advance the next generation of cutting-edge research, Budget 2024 proposes major research and science infrastructure investments, including:
$399.8 million over five years, starting in 2025-26, to support TRIUMF, Canada’s sub-atomic physics research laboratory, located on the University of British Columbia’s Vancouver campus. This investment will upgrade infrastructure at the world’s largest cyclotron particle accelerator, positioning TRIUMF, and the partnering Canadian research universities, at the forefront of physics research and enabling new medical breakthroughs and treatments, from drug development to cancer therapy.
$176 million over five years, starting in 2025‑26, to CANARIE, a national not-for-profit organization that manages Canada’s ultra high-speed network to connect researchers, educators, and innovators, including through eduroam. With network speeds hundreds of times faster, and more secure, than conventional home and office networks, this investment will ensure this critical infrastructure can connect researchers across Canada’s world-leading post-secondary institutions.
$83.5 million over three years, starting in 2026-27 to extend support to Canadian Light Source in Saskatoon. Funding will continue the important work at the only facility of its kind in Canada. A synchrotron light source allows scientists and researchers to examine the microscopic nature of matter. This specialized infrastructure contributes to breakthroughs in areas ranging from climate-resistant crop development to green mining processes.
$45.5 million over five years, starting in 2024-25, to support the Arthur B. McDonald Canadian Astroparticle Physics Research Institute, a network of universities and institutes that coordinate astroparticle physics expertise. Headquartered at Queen’s University in Kingston, Ontario, the institute builds on the legacy of Dr. McDonald’s 2015 Nobel Prize for his work on neutrino physics. These expert engineers, technicians, and scientists design, construct, and operate the experiments conducted in Canada’s underground and underwater research infrastructure, where research into dark matter and other mysterious particles thrives. This supports innovation in areas like clean technology and medical imaging, and educates and inspires the next wave of Canadian talent.
$30 million over three years, starting in 2024-25, to support the completion of the University of Saskatchewan’s Centre for Pandemic Research at the Vaccine and Infectious Disease Organization in Saskatoon. This investment will enable the study of high-risk pathogens to support vaccine and therapeutic development, a key pillar in Canada’s Biomanufacturing and Life Sciences Strategy. Of this amount, $3 million would be sourced from the existing resources of Prairies Economic Development Canada.
These new investments build on existing federal research support:
The Strategic Science Fund, which announced the results of its first competition in December 2023, providing support to 24 third-party science and research organizations starting in 2024-25;
Canada recently concluded negotiations to be an associate member of Horizon Europe, which would enable Canadians to access a broader range of research opportunities under the European program starting this year; and,
The steady increase in federal funding for extramural and intramural science and technology by the government which was 44 per cent higher in 2023 relative to 2015.
…
Advancing Space Research and Exploration
Canada is a leader in cutting-edge innovation and technologies for space research and exploration. Our astronauts make great contributions to international space exploration missions. The government is investing in Canada’s space research and exploration activities.
Budget 2024 proposes to provide $8.6 million in 2024-25 to the Canadian Space Agency for the Lunar Exploration Accelerator Program to support Canada’s world-class space industry and help accelerate the development of new technologies. This initiative empowers Canada to leverage space to solve everyday challenges, such as enhancing remote health care services and improving access to healthy food in remote communities, while also supporting Canada’s human space flight program.
Budget 2024 announces the establishment of a new whole-of-government approach to space exploration, technology development, and research. The new National Space Council will enable the level of collaboration required to secure Canada’s future as a leader in the global space race, addressing cross-cutting issues that span commercial, civil, and defence domains. This will also enable the government to leverage Canada’s space industrial base with its world-class capabilities, workforce, and track record of innovation and delivery.
I found two responses to the budget from two science organizations and the responses fall into the moderately pleased category. Here’s an April 17, 2024 news release from Evidence for Democracy (E4D), Note: Links have been removed,
As a leading advocate for evidence-informed decision-making and the advancement of science policy in Canada, Evidence for Democracy (E4D) welcomes the budget’s emphasis on scientific research and innovation. Since its inception, E4D has been at the forefront of advocating for policies that support robust scientific research and its integration into public policy. To support this work, we have compiled a budget analysis for the science and research sector here for more context on Budget 2024.
“Budget 2024 provides an encouraging investment into next generation researchers and research support systems,” says Sarah Laframboise, Executive Director of E4D, “By prioritizing investments in research talent, infrastructure, and innovation, the government is laying the foundation for a future driven by science and evidence.”
The budget’s initiatives to enhance graduate student scholarships and postdoctoral fellowships reflect a commitment to nurturing Canada’s research talent, a cornerstone of E4D’s advocacy efforts through its role on the Coalition for Canadian Research. E4D is encouraged by this investment in next generation researchers and core research grants, who form the bedrock of scientific discovery and drive innovation across sectors. Additionally, the formation of a new capstone research funding organization and Advisory Council on Science and Innovation are signs of a strategic vision that values Canadian science and research.
While Budget 2024 represents a significant step forward for science and research in Canada, E4D recognizes that challenges and opportunities lie ahead.
“We note that funding for research in Budget 2024 is heavily back-loaded, with larger funding values coming into effect in a few years time,” adds Laframboise, “Given that this also includes significant structural and policy changes, this leaves some concern over the execution and roll-out of these investments in practice.”
As the details of the budget initiatives unfold, E4D remains committed to monitoring developments, advocating for evidence-based policies, and engaging with stakeholders to ensure that science continues to thrive as a driver of progress and prosperity in Canada.
The April 16, 2024 E4D budget analysis by Farah Qaiser, Nada Salem, Sarah Laframboise, Simarpreet Singh is here. The authors provide more detail than I do.
The second response to the 2024 budget is from the Canadian Institutes of Health Research (CIHR) is posted on a federal government website, from an April 29, 2024 letter, Note: Links have been removed,
Dear colleagues,
On April 16, 2024, the Government of Canada released Budget 2024 – Fairness for Every Generation – a Budget that proposes a historic level of investment in research and innovation. Most notably for CIHR, NSERC, and SSHRC, this included $1.8 billion in core research grant funding over five years (starting in 2024-25, with $748.3 million per year ongoing). This proposed investment recognizes the vital role played by research in improving the lives of Canadians. We are thrilled by the news of this funding and will share more details about how and when these funds will be distributed as the Budget process unfolds.
Budget 2024 also proposes $825 million over five years (starting in 2024-25, with $199.8 million per year ongoing) to increase the annual value of master’s and doctoral student scholarships to $27,000 and $40,000, respectively, and post-doctoral fellowships to $70,000. This will also increase the number of research scholarships and fellowships provided, building to approximately 1,720 more graduate students or fellows benefiting each year. To make it easier for students and fellows to access support, the enhanced suite of scholarships and fellowship programs will be streamlined into one talent program. These proposals are the direct result of a coordinated effort to recognize the importance of students in the research ecosystem.
The Budget proposes other significant investments in health research, including providing:
a further $26.9 million over five years (starting in 2024-25, with $26.6 million in remaining amortization and $6.6 million ongoing) to the granting councils to establish an improved and harmonized grant management system.
$10 million in 2024-2025 for CIHR to support an endowment to increase prize values awarded by the Gairdner Foundation for excellence in health research.
$80 million over five years for Health Canada to support the Brain Canada Foundation in its advancement of brain research.
$30 million over three years (starting in 2024-25) to support Indigenous participation in research, with $10 million each for First Nation, Métis, and Inuit partners.
$2 billion over five years (starting in 2024-25) to launch a new AI Compute Access Fund and Canadian AI Sovereign Compute Strategy, to help Canadian researchers, start-ups, and scale-up businesses access the computational power they need to compete and help catalyze the development of Canadian-owned and located AI infrastructure.
As well, to help guide research priorities moving forward, Budget 2024 announces that the government will create an Advisory Council on Science and Innovation. This Council will be comprised of leaders from the academic, industry, and not-for-profit sectors, and will be responsible for a national science and innovation strategy to guide priority setting and increase the impact of these significant federal investments.
In addition to these historic investments, Budget 2024 includes a proposal to create a “new capstone research funding organization” that will provide improved coordination across the federally funded research ecosystem. This proposal stems directly from the recommendations of the Advisory Panel on the Federal Research Support System, and recognizes the need for more strategic coordination in the federal research system. The Budget notes that the granting councils will each continue to exist within this new organization, and continue supporting excellence in investigator-driven research, including linkages with the Health portfolio. While the governance implications of this new organization are not known at this time, the CIHR Institutes will remain in place as an integral part of CIHR. As stated in the Budget, the timing and details with respect to the creation of this organization still need to be determined, but it did indicate that more details will be announced in the 2024 Fall Economic Statement.
As well, CIHR will be working closely with the Natural Sciences and Engineering Research Council, Social Sciences and Humanities Research Council, Health Canada, and Innovation, Science and Economic Development Canada in the coming months to implement various Budget measures related to research. In the meantime, CIHR will continue its business as usual.
These announcements and investments are significant and unprecedented and will create exciting opportunities for the Tri-Agencies and other partners across the federal research ecosystem to contribute to the health, social, and economic needs and priorities of Canadians. They will also ensure that Canada remains a world leader in science. This is positive and welcome news for the CIHR community. We look forward to embarking on this new journey with Canada’s health research community.
Tammy Clifford, PhD Acting President, CIHR
Defence
I have taken to including information about the funding for the military on the grounds that the military has historically been the source of much science, medical, and technology innovation. (Television anyone?)
As the world becomes increasingly unstable, as climate change increases the severity and frequency of natural disasters, and as the risk of conflict grows, Canada is asking more of our military. Whether it is deploying to Latvia as part of Operation REASSURANCE, or Nova Scotia as part of Operation LENTUS, those who serve in the Canadian Armed Forces have answered the call whenever they are needed, to keep Canadians safe.
On April 8 [2024], in response to the rapidly changing security environment, the government announced an update to its defence policy: Our North, Strong and Free. In this updated policy, the government laid out its vision for Canada’s national defence, which will ensure the safety of Canadians, our allies, and our partners by equipping our soldiers with the cutting-edge tools and advanced capabilities they need to keep Canadians safe in a changing world.
Budget 2024 proposes foundational investments of $8.1 billion over five years, starting in 2024-25, and $73.0 billion over 20 years to the Department of National Defence (DND), the Communications Security Establishment (CSE), and Global Affairs Canada (GAC) to ensure Canada is ready to respond to global threats and to protect the well-being of Canadian Armed Forces members. Canada’s defence spending-to-GDP ratio is expected to reach 1.76 per cent by 2029-30. These include:
$549.4 million over four years, starting in 2025-26, with $267.8 billion in future years, for DND to replace Canada’s worldwide satellite communications equipment; for new tactical helicopters, long-range missile capabilities for the Army, and airborne early warning aircraft; and for other investments to defend Canada’s sovereignty;
$1.9 billion over five years, starting in 2024-25, with $8.2 billion in future years, for DND to extend the useful life of the Halifax-class frigates and extend the service contract of the auxiliary oiler replenishment vessel, while Canada awaits delivery of next generation naval vessels;
$1.4 billion over five years, starting in 2024-25, with $8.2 billion in future years, for DND to replenish its supplies of military equipment;
$1.8 billion over five years, starting in 2024-25, with $7.7 billion in future years, for DND to build a strategic reserve of ammunition and scale up the production of made-in-Canada artillery ammunition. Private sector beneficiaries are expected to contribute to infrastructure and retooling costs;
$941.9 million over four years, starting in 2025-26, with $16.2 billion in future years, for DND to ensure that military infrastructure can support modern equipment and operations;
$917.4 million over five years, starting in 2024-25, with $10.9 billion in future years and $145.8 million per year ongoing, for CSE and GAC to enhance their intelligence and cyber operations programs to protect Canada’s economic security and respond to evolving national security threats;
$281.3 million over five years, starting in 2024-25, with $216 million in future years, for DND for a new electronic health record platform for military health care;
$6.9 million over four years, starting in 2025-26, with $1.4 billion in future years, for DND to build up to 1,400 new homes and renovate an additional 2,500 existing units for Canadian Armed Forces personnel on bases across Canada (see Chapter 1);
$100 million over five years, starting in 2024-25, to DND for child care services for Canadian Armed Forces personnel and their families (see Chapter 2);
$149.9 million over four years, starting in 2025-26, with $1.8 billion in future years, for DND to increase the number of civilian specialists in priority areas; and,
$52.5 million over five years, starting in 2024-25, with $54.8 million in future years, to DND to support start-up firms developing dual-use technologies critical to our defence via the NATO Innovation Fund.
To support Our North, Strong and Free, $156.7 million over three years, starting in 2026-27, and $537.7 million in future years would be allocated from funding previously committed to Canada’s 2017 Defence Policy, Strong, Secure, Engaged.
Budget 2024 also proposes additional measures to strengthen Canada’s national defence:
$1.2 billion over 20 years, starting in 2024-25, to support the ongoing procurement of critical capabilities, military equipment, and infrastructure through DND’s Capital Investment Fund; and,
$66.5 million over five years, starting in 2024-25, with $7.4 billion in future years to DND for the Future Aircrew Training program to develop the next generation of Royal Canadian Air Force personnel. Of this amount, $66.5 million over five years, starting in 2024-25, would be sourced from existing DND resources.
Budget 2024 also announces reforms to Canadian defence policy and its review processes:
Committing Canada to undertake a Defence Policy Review every four years, as part of a cohesive review of the National Security Strategy; and,
Undertaking a review of Canada’s defence procurement system.
With this proposed funding, since 2022, the government has committed more than $125 billion over 20 years in incremental funding to strengthen national defence and help keep Canadians and our democracy safe in an increasingly unpredictable world—today and for generations. Since 2015, this adds up to over $175 billion in incremental funding for national defence.
Enhancing CSIS Intelligence Capabilities
As an advanced economy and an open and free democracy, Canada continues to be targeted by hostile actors, which threaten our democratic institutions, diaspora communities, and economic prosperity. The Canadian Security Intelligence Service (CSIS) protects Canadians from threats, such as violent extremism and foreign interference, through its intelligence operations in Canada and around the world.
To equip CSIS to combat emerging global threats and keep pace with technological developments, further investments in intelligence capabilities and infrastructure are needed. These will ensure CSIS can continue to protect Canadians.
Budget 2024 proposes to provide $655.7 million over eight years, starting in 2024-25, with $191.1 million in remaining amortization, and $114.7 million ongoing to the Canadian Security Intelligence Service to enhance its intelligence capabilities, and its presence in Toronto.
Maintaining a Robust Arctic Presence
The Canadian Arctic is warming four times faster than the world average, as a result of climate change. It is also where we share a border with today’s most hostile nuclear power—Russia. The shared imperatives of researching climate change where its impacts are most severe, and maintaining an ongoing presence in the Arctic enable Canada to advance this important scientific work and assert our sovereignty.
Maintaining a robust research presence supports Canada’s Arctic sovereignty. Scientific and research operations in the Arctic advance our understanding of how climate change is affecting people, the economy, and the environment in the region. This is an important competitive advantage, as economic competition increases in the region.
To support research operations in Canada’s North, Budget 2024 proposes:
$46.9 million over five years starting in 2024-25, with $8.5 million in remaining amortization and $11.1 million ongoing, to Natural Resources Canada to renew the Polar Continental Shelf Program to continue supporting northern research logistics, such as lodging and flights for scientists; and,
$3.5 million in 2024-25 to Polar Knowledge Canada to support its activities, including the operation of the Canadian High Arctic Research Station.
…
Protecting Canadians from Financial Crimes
Financial crimes are serious threats to public safety, national security, and Canada’s financial system. They can range from terrorist financing, corruption, and the evasion of sanctions, to money laundering, fraud, and tax evasion. These crimes have real world implications, often enabling other criminal behaviour. Financial crime also undermines the fairness and transparency that are so essential to our economy.
Since 2017, the government has undertaken significant work to crack down on financial crime:
Investing close to $320 million since 2019 to strengthen compliance, financial intelligence, information sharing, and investigative capacity to support money laundering investigations;
Creating new Integrated Money Laundering Investigative Teams in British Columbia, Alberta, Ontario, and Quebec, which convene experts to advance investigations into money laundering, supported by dedicated forensic accounting experts;
Launching a publicly accessible beneficial ownership registry for federal corporations on January 22, 2024. The government continues to call upon provinces and territories to advance a pan-Canadian approach to beneficial ownership transparency;
Modernizing Canada’s anti-money laundering and anti-terrorist financing framework to adapt to emerging technologies; vulnerable sectors; and growing risks such as sanctions evasion; and,
Establishing public-private partnerships with the financial sector, that are improving the detection and disruption of profit-oriented crimes, including human trafficking, online child sexual exploitation, and fentanyl trafficking.
Budget 2024 takes further action to protect Canadians from financial crimes.
Anti-Money Laundering and Anti-Terrorist Financing
Criminal and terrorist organizations continually look for new ways to perpetrate illicit activities. Canada needs a robust legal framework that keeps pace with evolving financial crimes threats.
To combat money laundering, terrorist financing, and sanctions evasion, Budget 2024 announces:
The government intends to introduce legislative amendments to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA), the Criminal Code the Income Tax Act, and the Excise Tax Act.
Proposed amendments to the PCMLTFA would:
Enhance the ability of reporting entities under the PCMLTFA to share information with each other to detect and deter money laundering, terrorist financing, and sanctions evasion, while maintaining privacy protections for personal information, including an oversight role for the Office of the Privacy Commissioner under regulations;
Permit the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) to disclose financial intelligence to provincial and territorial civil forfeiture offices to support efforts to seize property linked to unlawful activity; and, Immigration, Refugees and Citizenship Canada to strengthen the integrity of Canada’s citizenship process;
Enable anti-money laundering and anti-terrorist financing regulatory obligations to cover factoring companies, cheque cashing businesses, and leasing and finance companies to close a loophole and level the playing field across businesses providing financial services;
Allow FINTRAC to publicize more information around violations of obligations under the PCMLTFA when issuing administrative monetary penalties to strengthen transparency and compliance; and,
Make technical amendments to close loopholes and correct inconsistencies.
Proposed amendments to the Criminal Code would:
Allow courts to issue an order to require a financial institution to keep an account open to assist in the investigation of a suspected criminal offence; and,
Allow courts to issue a repeating production order to authorize law enforcement to obtain ongoing, specified information on activity in an account or multiple accounts connected to a person of interest in a criminal investigation.
Proposed amendments to the Income Tax Act and Excise Tax Act would:
Ensure Canada Revenue Agency officials who carry out criminal investigations are authorized to seek general warrants through court applications, thereby modernizing and simplifying evidence gathering processes and helping to fight tax evasion and other financial crimes.
Canada Financial Crimes Agency
As announced in Budget 2023, the Canada Financial Crimes Agency (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 the seizure of criminal assets.
Budget 2024 proposes to provide $1.7 million over two years, starting in 2024-25, to the Department of Finance to finalize the design and legal framework for the CFCA.
Fighting Trade-Based Fraud and Money Laundering
Trade-based financial crime is one of the most pervasive means of laundering money; it’s estimated that this is how hundreds of millions of dollars are laundered each year. To strengthen efforts to fight trade fraud and money laundering, the 2023Fall Economic Statement announced enhancements to the Canada Border Services Agency’s authorities under the PCMLTFA to combat trade-based financial crime and the intent to create a Trade Transparency Unit.
Budget 2024 builds on this work by proposing to provide $29.9 million over five years, starting in 2024-25, with $5.1 million in remaining amortization and $4.2 million ongoing, for the Canada Border Services Agency to support the implementation of its new authorities under the PCMLTFA to combat financial crime and strengthen efforts to combat international financial crime with our allies.
Supporting Veterans’ Well-Being
After their service and their sacrifice, veterans of the Canadian Armed Forces deserve our full support. Veterans’ organizations are often best placed to understand the needs of veterans and to develop programming that improves their quality of life. In 2018, the federal government launched the Veteran and Family Well-Being Fund, which provides funding to public, private, and academic organizations, to advance research projects and innovative approaches to deliver services to veterans and their families.
Budget 2024 proposes to provide an additional $6 million over three years, starting in 2024-25, to Veterans Affairs Canada for the Veteran and Family Well-Being Fund. A portion of the funding will focus on projects for Indigenous, women, and 2SLGBTQI+ veterans.
Telemedicine Services for Veterans and Their Families
After serving in the Canadian Armed Forces, many veterans who previously received their health care from the Forces need to find a family doctor in the provincial system, which makes their transition to civilian life more stressful, especially if they need health care for service-related injuries.
To ensure veterans and their families have access to the care they deserve after their service to Canada:
Budget 2024 proposes to provide $9.3 million over five years, starting in 2024-25, to Veterans Affairs Canada to extend and expand the Veteran Family Telemedicine Service pilot for another three years. This initiative will provide up to two years of telemedicine services to recent veterans and their families.
The system of rules and institutions that were established in the wake of the Second World War unleashed an era of prosperity unprecedented in human history. This era generated a massive expansion of global trade, and lifted hundreds of millions of people out of poverty. As a trading nation with privileged access to more than two-thirds of the global economy, Canada has benefitted enormously from the stability and certainty that this system provided.
Supply chain disruptions and rising protectionism threaten this Canadian advantage that has been enjoyed for generations. Canada is taking action to make sure we preserve the rules-based international order. We are strengthening our trade relationships and making sure they reflect our values. We are ensuring our economy is resilient and secure, protecting Canadians and Canada from economic pressure from authoritarian regimes, and defending Canada’s economic interests.
Budget 2024 makes investments to ensure the opportunities and prosperity of trade, enjoyed by generations of Canadians, continue to be there for every generation.
Key Ongoing Actions
Launching in 2017 Strong, Secure, Engaged, to maintain the Canadian Armed Forces as an agile, multi-purpose, combat-ready force, ensuring Canada is strong domestically, an active partner in North America, and engaged internationally.
Upholding Canada’s 15 free trade agreements with 51 countries. Canada is the only G7 country with comprehensive trade and investment agreements with all other G7 members.
Implementing the modernized Canada-Ukraine Free Trade Agreement and the United Kingdom’s accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.
Establishing a new Canada-Taiwan foreign investment promotion and protection arrangement in December 2023.
Launching Canada’s Indo-Pacific Strategy in November 2022, committing almost $2.3 billion to strengthen Canada’s role as a strong partner in the region. The strategy included:
$492.9 million over five years to reinforce Canada’s Indo-Pacific naval presence and increase Canadian Armed Forces participation in regional military exercises.
$227.8 million over five years to increase Canada’s work with partners in the region on national security, cyber security, and responses to crime, terrorism, and threats from weapons proliferation.
Canada is negotiating free trade agreements with Indonesia and the Association of Southeast Asian Nations to provide additional trade and investment opportunities in the Indo-Pacific region.
To further reinforce Canada’s role as a trusted supply chain partner, and its commitment to cooperate with like-minded partners in meeting emerging global challenges, including the economic resilience of the world’s democracies, Canada undertook the following actions:
Joined with the U.S. in the Energy Transformation Task Force to accelerate cooperation on critical clean energy opportunities and to strengthen integrated Canada-U.S. supply chains, which as announced in Chapter 4, has been extended for another year.
Canada signed a new agreement in May 2023 with South Korea for cooperation on critical mineral supply chains, clean energy transition, and energy security.
Canada endorsed the Joint Declaration Against Trade-Related Economic Coercion and Non-Market Policies and Practices with Australia, Japan, New Zealand, the U.K., and the U.S. in June 2023.
Protecting Canadian Businesses from Unfair Foreign Competition
Canadian companies and workers are able to do business around the world, selling their goods and expertise, because the government has delivered free trade agreements that cover 61 per cent of the world’s GDP and 1.5 billion consumers. This means Canadians can do business in Japan and Malaysia with the CPTPP; in Europe with CETA; in the United States and Mexico with the new NAFTA; and in Ukraine with a modernized CUFTA. These agreements mean good jobs and good salaries for people across the country.
However, this is only true when Canadian workers and businesses are competing on an even playing field, and countries respect agreed trade rules.
That is why the government has taken steps to ensure that Canada’s trade remedy and import monitoring systems have the tools needed to defend Canadian workers and businesses from unfair practices of foreign competitors. For instance, earlier this year, Canada introduced a system to track the countries steel imports are initially melted and poured in, to increase supply chain transparency and support effective enforcement of Canada’s trade laws.
Budget 2024 proposes to provide $10.5 million over three years, starting in 2024-25, for the Canada Border Services Agency to create a dedicated Market Watch Unit to monitor and update trade remedy measures annually, to protect Canadian workers and businesses from unfair trade practices, and ensure greater transparency and market predictability.
Ensuring Reciprocal Treatment for Canadian Businesses Abroad
Canada is taking action to protect Canadian businesses and workers from additional global economic and trade challenges. These challenges include protectionist and non-market policies and practices implemented by our trading partners. When Canada opens its markets to goods and services from other countries, we expect those countries to equally grant Canadian businesses the access that we provide their companies.
As detailed in the Policy Statement on Ensuring Reciprocal Treatment for Canadian Businesses Abroad, published alongside the 2023 Fall Economic Statement, Canada will consider reciprocity as a key design element for new policies going forward. This approach builds on Canada’s commitment to implement reciprocal procurement policies, including for infrastructure and sub-national infrastructure spending, in the near term. A reciprocal lens will also be applied to a range of new measures including, but not limited to, investment tax incentives, grants and contributions, technical barriers to trade, sanitary and phytosanitary measures, investment restrictions, and intellectual property requirements.
In pursuing reciprocity, Canada will continue working with its allies to introduce incentives for businesses to reorient supply chains to trusted, reliable partners, and will ensure that any new measures do not unnecessarily harm trading partners who do not discriminate against Canadian goods and suppliers.
Protecting Critical Supply Chains
Recent events around the world, from the pandemic to Russia’s full-scale invasion of Ukraine, have exposed strategic vulnerabilities in critical supply chains, to which Canada and countries around the world are responding by derisking, or friendshoring, their supply chains. Canada is actively working with its allies to strengthen shared supply chains and deepen our economic ties with trusted partners, including in the context of accelerating the transition to a net-zero economy.
Ongoing efforts to build our critical supply chains through democracies like our own represent a significant economic opportunity for Canadian businesses and workers, and the government will continue to design domestic policies and programs with friendshoring as a top-of-mind objective.
To reinforce Canada’s role as a trusted supply chain partner for our allies, Budget 2023 took action to mobilize private investment and grow Canada’s economy towards net-zero. These investments are growing Canada’s economic capacity in industries across the economy, while simultaneously reducing Canada’s emissions and strengthening our essential trading relationships.
Eradicating Forced Labour from Canadian Supply Chains
Canada is gravely concerned by the ongoing human rights violations against Uyghurs and Muslim minorities in China, as well as by the use of forced labour around the world.
Budget 2024 reaffirms the federal government’s commitment to introduce legislation in 2024 to eradicate forced labour from Canadian supply chains and to strengthen the import ban on goods produced with forced labour. The government will also work to ensure existing legislation fits within the overall framework to safeguard our supply chains.
This will build on funding committed in the 2023 Fall Economic Statement that, starting January 1, 2024, supports the requirement for annual reporting from public and private entities to demonstrate measures they have taken to prevent and reduce the risk that forced labour is used in their supply chains.
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Before moving on to an interesting analysis of the defence portion of the 2024 budget by someone else, here’s a link to the national defence policy, Our North, Strong and Free: A Renewed Vision for Canada’s Defence, which was released on April 8, 2024 just days before the April 16, 2024 release date for this latest federal budget.
It seems there was a shift in policy during the nine-day interval. From Murray Brewster’s April 16, 2024 article for the Canadian Broadcasting Corporation’s (CBC) news online website, Note: Links have been removed,
The new federal budget promises good things will happen at the Department of National Defence … next year, and hopefully in the years after.
The new fiscal plan, presented Tuesday by Finance Minister Chrystia Freeland, marks a subtle but significant shift from what was proposed in last week’s long-awaited defence policy [emphasis mine], which committed to spending an additional $8.1 billion on defence.
The funding envelope in the budget earmarks the same amount but includes not only the defence department but proposed spending on both the Communications Security Establishment — the country’s electronic spy agency — and Global Affairs Canada. [emphases mine]
While the overall defence budget is expected to increase marginally in the current fiscal year to $33.8 billion, defence experts told CBC News that when the internal cost-cutting exercise ordered by the Liberal government and the new defence policy are factored in, the military can expect roughly $635 million less this year [emphasis mine] than was anticipated before spending restraint kicked in.
Freeland’s fiscal plan projects a 30 per cent increase in defence spending in the next fiscal year, bringing it to $44.2 billion.
…
This is how I understand what Brewster is saying:
2024/25 defence budget as listed is $33.8B
Not all of this money is going directly to defence (the Communications Security Establishment and Global Affairs Canada will be partaking)
the defence department has been ordered to cut costs
so, there will be $635M less than defence might have expected
in 2025/26 defence spending will be increased to $44.2 billion, whatever that means
That’s quite the dance and Brewster’s April 16, 2024 article points out at least one more weakness,
Sahir Khan, the executive vice-president of the University of Ottawa’s Institute of Fiscal Studies and Democracy, said he would love to see the specifics.
“That’s one of the difficulties, I think, with this government is we have seen a lot of aspiration, but not always the perspiration,” said Khan, a former deputy parliamentary budget officer. “What is the plan to achieve the results?”
The politically charged promise to increase Canada’s defence spending to 1.76 per cent of the gross domestic product by the end of the decade could be left in doubt when the spending plans are laid alongside the budget’s economic projections during that time frame.
Generally, the better the economy does, the more the defence budget would have to be increased to meet the target.
“It’s really unclear how we actually get to 1.76 per cent of GDP, if you take the figures that are presented which outline how spending is going to increase,” said Dave Perry, a defence expert and president of the Canadian Global Affairs Institute.
“You can’t put that against the nominal GDP projection provided in the budget” and then add in other government departments, such as Veterans Affairs Canada, “and get anywhere close” to the GDP projection in the defence policy, he said.
About five weeks after the budget was released, Prime Minister Justin Trudeau received a letter, from a May 23, 2024 article by Alexander Panetta for CBC News online,
Nearly one-quarter of the members of the United States Senate have sent an unusually critical letter to Prime Minister Justin Trudeau expressing dismay over Canada’s level of defence spending.
They pressed Trudeau to come to this summer’s NATO summit with a plan to fulfil Canada’s commitment to reach the alliance’s longstanding spending target.
The letter from 23 members of the U.S. Senate, from both parties, represents a dramatic and public escalation of pressure from Washington over a longstanding bilateral irritant.
…
That written critique [letter] comes just days after Defence Minister Bill Blair completed what he referred to as a productive trip to Washington to promote Canada’s new military strategy.
“We are concerned and profoundly disappointed,” says the letter, referring to the spending levels in the strategy Blair came to promote.
A bipartisan pair of U.S. senators say they expect Canada and the U.S. to work collaboratively on shared issues of defence and the border, but suggested Ottawa’s policies on military spending need to change to speed up progress.
Speaking to Mercedes Stephenson from the Halifax International Security Forum in an interview that aired Sunday on The West Block, Republican Sen. James Risch of Idaho and Democratic Sen. Jeanne Shaheen of New Hampshire downplayed concerns that incoming president-elect Donald Trump will penalize Canada on things like trade if it doesn’t step up on defence spending.
…
As far as I’m concerned, this budget offers some moderate gains from a science and technology perspective and with regard to military spending, it seems a little lacklustre overall and with regard to military research, that might be called nonexistent.
A December 1, 2023 news item on phys.org highlights noise pollution research from Simon Fraser University (SFU) based in Vancouver, British Columbia, Canada,
A new study from Simon Fraser University researchers examines the Canadian military’s efforts to reduce the impacts of underwater noise pollution on species during training exercises in the Pacific Ocean but caveat that more can still be done.
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Kieran Cox, Liber Ero and NSERC Fellow from Simon Fraser University, prepares to dive into kelp forests. Photo by Kiara Kattler
The paper, published today [online December 1 or 11, 2023] in Marine Policy, takes aim at a report commissioned by the Canadian Department of National Defence (DND) to reduce the effects of noise pollution from military small-arms munitions training within “Whiskey Hotel”, a 330-square-kilometre area in the Strait of Juan de Fuca off the British Columbia coast.
The military commissioned the report after it committed to pausing exercises in the area for three years to examine the risk in-air and underwater training noises pose to marine mammals, such as the endangered Southern Resident Killer Whales.
With the report complete, the military has indicated it plans to resume training activities in Whiskey Hotel and will implement measures to reduce the impact of noise pollution, such as mitigation avoidance zones, cease-fire procedures, and marine species awareness training.
While researchers acknowledge the report and the mitigation measures as a positive step forward, the SFU-led paper analyzing the original report found several limitations.
For example, the report only looked at the noise pollution created by small arms fire and didn’t consider the significant noise created by the military vessels themselves. The report also focused on marine mammals and didn’t take into account the impact noise pollution also has on local populations of fish, such as salmon, and invertebrates in the area.
Researchers say more can be done in the future to protect fish and invertebrates from noise pollution, especially as the federal government continues to develop a national plan to manage and mitigate the impacts of underwater vessel noise on marine species and their ecosystems.
“It’s important to be clear: this report is a step in the right direction. The government is developing an ocean noise strategy, so legislation on this topic is currently lacking, and activities that pertain to national security will be largely exempt from regulations. Commissioning an investigation and implementing mitigation measures is a conservation success story, one that I’m keen to see this improved upon and used in the future,” says SFU biological sciences postdoctoral fellow Kieran Cox, the lead author of the study.
“I am hopeful that this framework can be adapted to consider all marine life and sources of noise pollution noise, which is needed as we move towards an Ocean Noise Strategy that can inform the coming decades.”
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.
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.
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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].
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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.
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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,
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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.
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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.
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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.
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’]
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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]
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,
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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]
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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.
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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.
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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.
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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.
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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.
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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.
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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.”
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.
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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.
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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.”
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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.
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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]
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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.
King Charles, Canada’s head of state, will no longer include the phrase “Defender of the Faith” in his official royal title in Canada.
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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.”
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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.
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Getting back to the budget, I’m mildly optimistic.
A surprising number of every day products, including items such as microwave ovens, penicillin, nylon, and more have come to us courtesy of military science. While we remember our fallen soldiers today (Remembrance Day 2019) in Canada and elsewhere throughout the Commonwealth countries, I thought it might be interesting to consider contemporary Canadian military science.
I’ve often wondered whether or not we have an equivalent to the US Army’s DARPA (Defense Advanced Research Projects Agency) and their other military research laboratories. We do! Defence Research and Development Canada (DRDC) or Recherche et développement pour la défense Canada (RDDC). Here’s more from its Wikipedia entry (Note: Links have been removed),
[…] is an agency of the Department of National Defence (DND), whose purpose is to provide the Canadian Armed Forces (CAF), other government departments, and public safety and national security communities with knowledge and technology.
DRDC has approximately 1,400 employees across eight research centres within Canada.
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Civilian achievements
Over the years, researchers at DRDC, sometimes in partnership with the NRC [National Research Council of Canada] and others, have been responsible for numerous innovations and inventions of practical application in the civilian world. These include the G-suit, motorized wheelchair, the Alouette 1 satellite, Black Brant rocket, improvements to the carbon dioxide laser, flight data recorder, the Ballard fuel cell membrane, and the Bombsniffer (using gas chromatomography and ion mobility spectrometry).
While there’s been some type of organized Canadian military research since the 1920s (it wasn’t always called DRDC/RDDC), it’s only since 2018 that we have a rough equivalent to DARPA and, in our case known as, the Government of Canada Department of National Defence’s Innovation for Defence Excellence and Security (IDEaS). One of the currently available ‘challenges’ involves finding ways to make it easier to handle waste and manage energy in temporary camps, from the Pop-up City: Integrated Energy, Water and Waste Management Systems for Deployed Camps contest, which was launched August 21, 2019 and has a deadline of December 13, 2019,
The Canadian Armed Forces (CAF) must be ready to deploy on short notice, in any climate and for prolonged periods. The CAF presently relies on Relocatable Temporary Camps (RTCs) for its deployments that sustain personnel through demanding operational and environmental conditions.
The Department of National Defence’s (DND) Innovation for Defence Excellence and Security (IDEaS) Program is calling innovators on to propose and develop solutions that provide integrated energy, water and waste management systems for the CAF’s RTCs deployed in national and international operations.
The “Pop up City” Contest is a multi-phased contest for innovators to propose and develop reliable, energy efficient, integrated and scalable energy, water and waste management systems for RTCs. Contests are a competitive means of finding innovative solutions and awarding prizes to the best solutions derived from the innovation community. Specifically, this Contest is seeking solutions designed to manage the energy, water and waste needs of a 150 to 1,500-person RTC, operating in a temperate climate zone.
To standardize the required performance capacity for system designs, contestants will be supplied with per capita data for energy and water consumption, and waste production, along with representative annual climate data, including wind and solar patterns. Contestants will be asked to provide scalable solutions that can supply the requirements of RTCs over a 12-month period in this climate zone. System designs which would also allow for the occasional deployment to extreme hot and/or frigid climatic zones are strongly encouraged.
Can a Contestant submit a solution for more than one technical domain (i.e. energy, water or waste) in Round 1 of the Contest? Yes, Contestants can submit more than one proposal to the Contest. However, each solution must be submitted with its own complete application package. Contestants may not submit more than one solution proposal per technical domain. Can I submit a proposal describing a solution that already exists? Yes, Contestants may submit proposals describing solutions that are already at a high solution readiness level, with the caveat that Contestants must hold the Intellectual Property (IP) rights or have the necessary authorization from the owner of the IP rights to submit an application for the purpose of this Contest for any existing technologies submitted. How do I apply for this Contest? You must apply online through a Canada Post epost Connect™ service account. Before submitting your application materials (including a completed Application Form and a Declaration Form, and with documentation to demonstrate your eligibility), you must have a Canada Post epost Connect™ service account. It will take some time to register for an account, so it is strongly recommended that you initiate the registration process at least 2 weeks before you plan to submit your application materials. Instructions for creating an account are provided in Section 2.12 of the Contest Program guide. What type of monetary awards will be given to contestants who are screened into Round 1 and Round 2 of the Contest? If a Contestant is successful in Round 1, they will receive an award of $10, 000. If a Contestant is successful in Round 2, they will receive an award of $50,000. Is the Contest a call for proposal process that will be awarding contracts to fund work based on project milestones? No, there is no procurement related activity or contracting process associated with this Contest. Proposals submitted by Contestants may be awarded a monetary prize based on the overall ranking of their technical proposal and eligibility to participate within a specific Round of the Contest. DND will not be entering into a contract for work undertaken by Contestants should they be selected to advance within each Round of the Contest. However should a Contestant be offered a Contribution Agreement to build a prototype in Round 3 they will be reimbursed for eligible costs as stipulated in the Contribution Agreement based on project milestones. If a Contestant has been selected to receive awards in Round 1 or 2, how will the money be disbursed? Contestants will receive their award in a single payment via a grant agreement. If a contestant has been selected to build their prototype in Round 3, how will funding be disbursed? Should a Contestant be offered a Contribution Agreement (CA) to build their prototype, the CA will have clearly defined parameters based on milestone deliverables that will be used to reimburse eligible expenditures. If milestone deliverables demonstrate that progress in building and testing the prototype are not being met as per the CA, funding for the next stage of the project will not be approved and the CA will be terminated. Contestants will be removed from the Contest in these cases. How will milestone deliverables be determined? The milestone deliverables will be specified by the Contestant should they be selected to enter into a CA with DND in Round 3 of the Contest. Do Contestants need to be a legal entity in Canada to participate in the Contest? Yes, Contestants need to constitute an eligible recipient as listed in the Contest Program Guide, and be located in Canada to receive a grant payment or enter into a CA with DND on behalf of the Crown. I am an Academic Institution located in Quebec. Must I abide by the M-30 law? What do I need to do to ensure that I am able to receive funds from the Government of Canada if I am selected in any Round within this Contest? The Contest Program Guide (Annex C) provides some instructions and a form that must be completed by entities located in Quebec, to whom M-30 applies, and signed by the appropriate authority. You will not be able to receive any prize money or funding from the Government of Canada through this Contest until the appropriate authorization has been received by the IDEaS Program Office. Will the winner of the Grand Prize of the Contest ($2.0M) be awarded a contract? A grant agreement, not a contract, will be awarded to the Grand Prize winner at the end of this Contest. Are there any terms and conditions associated with the Grand Prize? It is expected that the Contestant who wins the $2.0M Grand Prize in Round 4 will use it to further develop the winning solution along the path to commercialization. Additional requirements will be stipulated in a grant agreement which will be used to disburse funding. Who will sit on DND’s Technical Review Committee (TRC)? The TRC will consist of Department of National Defence (DND) scientific personnel as well as members of the Canadian Armed Forces. In addition, select subject matter experts from other Government Departments may be invited to support activities associated with the TRC. Who will sit on DND Senior Management Funding Oversite Committee? The Senior Management Funding Oversight Committee (SMFOC), is comprised of the Director General responsible for the IDEaS Program, and the Directors General responsible for DND and/or Canadian Armed Forces organization(s) associated with the Contest. How will submissions be selected to move on from Rounds 1, 2, 3 and 4 and who will select the Grand prize winner? The TRC, along with the SMFOC will assess Round 1, 2, 3 and 4 submissions including the Grand Prize winner. What can the $1.5M in Contribution Agreement for Round 3 winners be used for? The Contribution Agreement will support the development of a prototype system proposed in Round 2. A list of eligible costs will be provided to Contestants. Recipients may be required to leverage additional funding to build their prototype depending on the cost of their proposal. What will the Department of National Defence use the information from the prototype for? This information will help inform the state of the current capabilities of the innovation community in these domains. Can Contestants submit solutions that have already been integrated in 2 or 3 technical domains in Round 1 of the Contest? Yes, however each solution must be submitted individually for assessment to determine if it will be screened into Round 2 of the Contest.
Questions from Information Session The following questions were posed in the English information session held September 11, 2019 for the Pop up City contest. If you did not receive a response to your question, please contact the program directly at: IDEaSContests.IDEeSConcours@forces.gc.ca.
Waste What’s in scope for solid waste? Food waste? Human waste? Non-organic waste? Does ‘solid waste’ include non-organic solid waste? Can a solution address organic waste only, as opposed to organic and non-organic waste? Answer: Human waste is included in the black water volumes provided. Wet waste can be assumed to be organic kitchen waste. Dry waste is a mixture of various materials “shipping, office, plastic, metal and textile” in origin. Assumptions on composition of dry solid waste can be made based on total energy content provided of 15 MJ/kg. Organic and inorganic waste can be managed separately, however all solid waste output from the RTC will be measured. Are solid waste generation numbers segregated from gray water and black water effluents? Answer: Yes. Per capita volumes of grey and black water are provided and do not overlap with per capita weights of dry and wet solid waste provided. Do waste management systems need to handle both solid and liquid waste, or just one stream such as grey or black water? Answer: Solutions must propose management for both solid and liquid waste. Would grey water be acceptable for reuse in some capacity? Answer: Yes, strategies for grey water recycling can be proposed. ….
It seems to me this kind of pop up city waster and energy management solution could be very useful in disaster relief.
In any event and not to lose sight of the purpose for this day, I leave you to your remembrances of those who fought and died or were injured in the various wars and military actions where we have participated. Lest we forget.
