What Can Europe Learn from Canada About Multilateralism?

Soeren Kern | Elcano Royal Institute for Strategic and International Studies | February 17, 2006

Summary

The first Conservative government in Canada in more than a decade has pledged to recover the country’s lost geopolitical influence by increasing spending on defence and by improving relations with the United States. In an issues-based election largely free of ideology, Conservative leader Stephen Harper tapped into widespread voter anger over government corruption and unseated Prime Minister Paul Martin, whose Liberal Party has ruled Canada for most of the last 100 years. Harper, a pro-American free-market economist with neo-conservative leanings, has promised to cut taxes, reduce crime and clean up the government. But in a signal that Canadians (who are sometimes said to be North Americans with European instincts) are not ready for a wholesale embrace of US-style economic and social policies, Harper fell short of winning a clear majority in the House of Commons. This implies that some of his boldest domestic initiatives may be scaled back as his minority government is forced to compromise with opponents in a fragmented parliament. In foreign policy, however, Harper will be in control. He has not only stressed his desire to regain lost influence with the United States, but he has also pledged to reverse the Liberal Party’s retreat on military spending, which has led to a dramatic decline in Canada’s geopolitical importance.

Analysis

Canadians Vote for Modest Change

Conservative leader Stephen Harper has been sworn in as the new prime minister of Canada, but voters have given him only a small mandate for change. Despite running a nearly flawless eight-week campaign, in which Harper methodically laid out one new policy each day, the Tories won only 124 seats, well below the 155 seats needed to control the 308-seat House of Commons. (The defection on 6 February of David Emerson, the new international trade minister, from the Liberal Party to the Conservative Party, gives the Tories a total of 125 seats.) Therefore, although the Tories won more seats than any other party, they have been left with a minority government that in order to govern will need to compromise with the Liberal Party and the separatist Bloc Quebecois, which hold the balance of power in the new parliament.

Conservatives had hoped to win a majority in order to end a two-year parliamentary stalemate that forced the outgoing Liberals to buy support from opposition parties to keep their own minority government in power. Instead, the Tories now face the same constraints as previous minority governments, which historically last on average for less than 18 months, far shorter than the four-to-five year term a majority government can hold. Indeed, Liberals are already openly musing about whether Harper’s minority government can survive the year. This implies that Canadians may have traded one politically unstable government for another.

Nevertheless, the Conservative victory marks a dramatic turnaround for a party that as recently as 1993 won only two seats in the then 295-seat parliament. That year, Harper and other lawmakers left the party, known then as the Progressive Conservatives, to create the Reform Party. A decade later, Harper brought the two parties together ahead of the vote in 2004 and renamed the group the Conservative Party. Now Harper’s near-term goal is to build sufficient public trust in the unified Conservative Party so that if his minority government is in fact brought down prematurely in a parliamentary vote of no-confidence, the Tories might gain enough popular votes in the subsequent general election to have a majority government. By extension, then, Harper’s long-term objective is to turn the Conservative Party into a permanent contender in Canadian politics.

Harper’s election marks a historic shift of power away from the traditional centres of national politics based in eastern Canada (the vast majority of Canadians live in the eastern provinces, primarily in Ontario and Quebec) that are socially liberal, to the increasingly affluent western provinces that are more conservative. Harper, a 46-year-old free-market economist from Alberta, an oil-rich province in western Canada that in economic and social policy leans to the centre-right, has long argued that Ottawa and the left-leaning eastern Canadian power structure have treated western Canada unfairly. A principal grievance has been the under-representation of western Canada in the House of Commons.

In another surprise, Conservatives also made significant gains in French-speaking Quebec, the most socially liberal province of Canada. By going from zero to 10 seats in Quebec, the Conservatives deprived the separatist Bloc Quebecois of a majority, which to the satisfaction of Canadians across the political spectrum shows that most Quebeckers, while favouring more decentralisation, prefer to remain part of the Canadian federation. All of these factors taken together imply that the Conservative Party can now be considered a truly national party.

Although Harper is often called a neo-conservative in the American mould, he distanced himself from the social conservatives in his party and recast himself as a moderate fiscal conservative after the Liberal Party labelled Harper as an extremist who would destroy Canada’s cherished social programmes. Thus one of Harper’s biggest challenges as prime minister will be to enforce party discipline as he seeks to balance demands to reduce the role of government while steering a “middle-road approach” to key social issues.

In fact, the 55-day campaign, during which the main parties made a total of 1,147 promises, was largely free of strong ideological overtones, and Harper has set mostly straightforward priorities for a Tory government: a two-stage cut in the goods and services sales tax from 7% to 5%; correcting a “fiscal imbalance” by transferring a bigger share of federal tax revenues to the provinces; tougher measures against gun violence; a tax break to help parents pay for child day-care; and a new “accountability” law for politicians and civil servants. He also pledged to cut waiting times for the publicly-funded health system. These are all measures that the majority of Canadians support.

This implies that the Conservative victory may be less about a Tory win than about a Liberal loss. Indeed, the Liberal Party has dominated Canadian politics since the federation was established in 1867, and has ruled all but unopposed since 1993, when Jean Chretien was elected by a landslide. But after a string of four consecutive national election victories and more than 12 years in power, the Liberal Party has become mired in a series of corruption scandals. After a public inquiry found that Liberal officials were paid kickbacks in exchange for lucrative government contracts, Harper and two other opposition parties tapped into widespread anger among Canadian voters (who are proud of their country’s reputation for probity) and brought down Martin’s 17-month government in a vote of no-confidence in November 2005.

Although Martin was not implicated in the scandal, the corruption took place while he was finance minister under the premiership of Chretien. As a result, Martin was unable to convince voters that he had the moral authority to continue governing the country. Indeed, Canadian commentators have cast Martin, a 67-year-old millionaire shipping magnate, as a disappointment who as prime minister did not live up to the bright hopes voters invested in him. He was hugely popular in his previous role as finance minister, in which he erased a C$42 billion deficit, recorded five consecutive budget surpluses, paid down C$36 billion in debt and cut taxes cumulatively by C$100 billion over five years. But despite the fact that Canada today is thriving economically, Martin was widely perceived being weak and indecisive in his role as prime minister.

The final nail was driven into Martin’s political coffin during the middle of the campaign, when the day after Christmas a 15-year-old girl and six others were wounded in a brazen shootout between two gangs in the core of Toronto’s downtown shopping district. The incident highlighted growing lawlessness in Canada, where the rate of violent crime is now twice as high as it is in the United States.

In a desperate final bid to rescue his political career, Martin reverted to the fallback position of playing the anti-Americanism card. Martin unconvincingly sought to shift the blame for Canada’s rising crime problem onto the United States. Then, in a series of opportunistic attack ads that by Canadian standards were unusually caustic, Martin lashed out at Harper, portraying him as a fanatical “American-style” neo-conservative with “an agenda really drawn from the extreme right in the United States”.

These tactics backfired. Canada has a long tradition of anti-populism, and although many Canadians are ambivalent about the United States, they recognise that their prosperity depends on maintaining good relations with America, their closest ally and biggest customer: Canada sells 85% of its exports to the United States.

Anti-Americanism and Canadian Politics

Although foreign policy did not figure heavily in the election campaign, the Liberals ran a television ad that said: “a Harper victory will put a smile on George W Bush’s face”. And indeed it will. Harper, who is ideologically sympathetic to the Bush Administration, is expected to move quickly to improve bilateral relations. And polls show this is what most Canadians want, for good reason.

Canada and the United States are more reliant on each other than ever before in history, and the two countries are linked by a vast network of formal and informal government ties at the federal, provincial and state levels. This is largely due to the fact that the North American Free Trade Agreement (Nafta) has resulted in the near-total vertical integration of Canada’s economy with the United States. The two countries now have the biggest bilateral trading relationship in the world, with some US$1.3 billion in two-way trade crossing the US-Canadian border every day. The United States consumes 85% of Canada’s exports, accounting for an astonishing 40% of Canada’s total GDP. At the same time, some 25% of American exports go north to Canada. (Canada enjoys a US$77 billion trade surplus with the United States.) And with more than 200 million two-way border crossings each year, the shared frontier is the busiest international boundary in the world.

Moreover, the United States accounts for more than 60% of foreign direct investment (FDI) in Canada, while some 50% of Canadian FDI goes to America. Canada is also the largest and most reliable supplier of energy to the United States. Canada supplies more than 15% of US imports of crude and refined oil products, more than any other country at over two million barrels a day. Canada also provides 85% of all US natural gas imports and approximately 25% of the uranium used in US nuclear power plants.

The two countries are also interwoven in the political and military realms. Like the United States, Canada is a member of the G-8, the Asia-Pacific Economic Cooperation (APEC) group and the Organisation of American States (OAS), as well as the North American Aerospace Defence Command (Norad) and the North Atlantic Treaty Organisation (NATO). And as if to underscore just how far Ottawa has been assimilated into the American system, Canada (which is part of the Commonwealth as well as the Francophonie) is one of only five member-countries of Echelon, the super-secret Anglo-American espionage network that makes many Francophone Europeans nervous.

But this gravitational pull towards “ever-closer union” with the United States arouses nationalist sentiments in some parts of Canada’s political spectrum, which the Liberal Party has sometimes clumsily sought to exploit for electoral gain. In this context, Chretien once said: “I like to stand up to the Americans. It’s popular.” Indeed, bonds between the longstanding allies frayed badly over Chretien’s strident criticism of the US effort to remove Saddam Hussein from power in Iraq.

Relations worsened in February 2005, when in a historic shift Martin announced that Canada would not join the US missile defence project, which for Canada is an essentially cost-free opportunity to convey a message of burden-sharing on continental defence. Just a few months earlier, at the Bush-Martin summit meeting in Ottawa in November 2004, Martin had led Bush to believe that Canada would in fact join the project. As a result, Bush, who places great emphasis on the personal trustworthiness of international leaders, was startled and angered by Martin’s reversal.

The White House retaliated in August 2005 by ignoring a NAFTA dispute-panel ruling in favour of Canada, which judged that American anti-dumping duties on Canadian softwood lumber entering the United States are illegal. The American defiance on this issue has cost Canada’s lumber companies more than C$4 billion and many Canadians are furious. Moreover, ranchers are angry over an American ban on Canadian cattle imposed after the discovery of a single case of mad-cow disease in 2003; the United States is Canada’s largest customer of beef.

The once-close relationship soured even further when in December 2005 Martin addressed the United Nations Climate Change Conference in Montreal, and accused the United States of lacking a “global conscience” because of its position on the Kyoto Protocol on Climate Change. Here Harper was quick to point out the hypocrisy in Martin’s argument: since Canada signed the Protocol in 1997 its emissions have risen sharply and are now 20% above its allotted target. (Harper has pledged to reverse Canada’s support of the Kyoto Protocol on climate change, and to focus instead on efforts to develop alternative technologies to reduce emissions.)

The Pentagon then reminded Martin of the phoniness of his war of words with the United States, when an American nuclear submarine travelled through Arctic waters near the North Pole without the knowledge of, or permission from, the Canadian government. Although sovereignty over the territory is in dispute, the incident demonstrated that Canada is, in fact, unable to secure its own borders.

Is Canada American or European?

Americans are used to foreign politicians using anti-Americanism for electoral gain. But in the case of Canada, many observers believe that reflexive anti-Americanism has become the defining element of Canadian national identity. Indeed, some historians say that Canada has a perpetual identity crisis because it lacks a central unifying idea that therefore prevents Canadians from reaching an agreement about the nature of their country and its people. While Canadians desire to be different from Americans, they still have not defined why they are unique. Thus the perennial joke on both sides of the border is that the best definition of a “Canadian” is simply “not American”.

By contrast, the United States was and is defined by the American Revolution, when in 1776 Americans severed their ties to Europe and defined a powerful new vision of the nature and destiny of man. During the following century, Latin Americans followed the lead and mounted revolutions against Spain and Portugal. But Canada never rebelled against British rule and by extension never severed its ties to Europe. In fact, as an outpost of the British Empire, Canada is the only major country in the Western Hemisphere that did not choose the path of revolution and rejection of Europe.

Moreover, after the United States declared independence from Great Britain, immigrants were pressured to fit into the values of the new country. But because Canadians remained loyal colonial subjects of the British Empire for more than 150 years after the American Revolution, newcomers were (and still are today) encouraged to maintain and pursue the cultural traditions of their countries of origin. By preserving its ties with Europe, Canada therefore sheltered European ideas and maintained a political culture that in its essence was un-American. (It also protected itself from being swallowed up by the Americans in their drive towards Manifest Destiny.) Some historians have therefore said that the US-Canada border is what really separated America from Europe.

But the debate that has loomed over Canada for more than two centuries is about whether it can survive separate from the United States. In this context, the most successful attempt thus far to prevent the complete cultural and economic domination of Canada by the United States occurred during the 1970s and 1980s, when Liberal Prime Minister Pierre Trudeau tried to make Canada self-consciously different (and sometimes even hostile to) the United States by remaking Canada in the post-modern European image: left-liberal in politics, socialist in economics, welfarist in social policy, officially bilingual and multicultural in national identity, and multilateral in foreign policy.

Trudeau was also a federalist who asserted the authority of the central government over the provincial governments and defended the unity of Canada against regional interests. Indeed, few issues have been more influential in shaping Canadian nationalism than Quebec separatism because, as postulated in an influential 1996 Foreign Affairs article titled “Will Canada Unravel?”, without French-speaking Quebec, English-speaking Canada is not viable as an independent country. Thus during the Quebec-related political crisis in the 1990s, it was suggested that since the Maritime Provinces as well as the Western Provinces have so much in common with their nearest American states, they should seek statehood in the United States if Quebec were to separate from Canada.

Canada’s geography is very American, too. By fate Canada and the United States share the world’s longest undefended border (8,891 kilometres, which is equivalent to the distance between Spain and China). But as a post-9/11 Washington has placed increased emphasis not only on homeland security but also on continental defence, many Canadians fear a further loss of sovereignty vis-à-vis the United States. In an effort to protect Canadian interests, the Conference Board of Canada in February 2003 released a report titled “Renewing the Relationship: Canada and the United States in the 21st Century”. The seven-point plan says that “with Americans preoccupied with global security concerns, Canada must act first if we want to redefine our relationship”.

In the same vein, in July 2005 the New York-based Council on Foreign Relations (CFR) released a document titled “Building a North American Community”. The 59-page paper spells out a five-year plan for the “establishment by 2010 of a North American economic and security community” with a common “outer security perimeter”.

In summary, Canada today is both American and European, while at the same time it is not really European or American. Although Canada is often viewed as a model that combines the economic dynamism of the United States with European notions of social justice, Canada is second only to Australia in the proportion of its residents born abroad. As most of its 5.4 million immigrants are neither American nor European, Canada’s identity crisis continues.

Rebuilding International Clout

Many of the contemporary problems in the Canadian-American relationship can be traced to the end of the Cold War, which on the one hand has given Canada an opportunity to pursue a much more independent foreign policy, while on the other hand has given Ottawa a convenient excuse to neglect its armed forces. Thus while Chretien and Martin have tried to promote multilateralism as a way to distinguish Canadian foreign policy from that of the United States, spending priorities enacted by both leaders over the past decade have allowed Canada’s diplomatic, defence and development assets to deteriorate to the point where Ottawa now lacks the international clout it needs to make its vision of multilateralism a reality.

This is in stark contrast to 1945, when Canada was the world’s fourth-largest military power with the world’s third-largest navy (it also had the largest volunteer army ever fielded). At the end of World War II, Norway and a large part of the Netherlands were liberated almost solely by the Canadian military. In fact, tens of thousands of fallen Canadian soldiers lie buried in European military cemeteries. Sizable Canadian air and land forces were maintained in West Germany under NATO command from the end of World War II until the early 1990s.

But since the end of the Cold War, Canadians see no external military threats to national survival and as such feel largely invulnerable to contemporary security threats. Moreover, Liberal Party politicians for the past decade have indulged this complacency by acting on the presumption that the United States will always be there to defend Canada, so why bother maintaining armed forces? (Canada has even removed the word “Armed” and its military is officially known simply as “Canadian Forces”.)

According to figures provided by the Canadian Department of National Defence, as a percentage of gross domestic product Canada spends about 1.1% of its GDP on defence, making it NATO’s second-lowest military spender after Luxembourg. With 62,000 troops, the Canadian military is half the size it was 20 years ago, and it now ranks as the 56th largest in the world. And although Canada has some 1,500 troops deployed with NATO operations in Afghanistan, it is largely irrelevant as a force in UN peacekeeping, despite the fact that Canada places the United Nations at the centre of its vision for multilateralism. According to the UN Monthly Summary dated 31 January 2006, Canada is the 32nd largest contributor of military troops and police officers to the United Nations.

The main by-product of this complacency has been a serious erosion of Canada’s international influence. In October 2002, the Conference of Defence Associations, an influential advocacy group in Canada’s defence community, released a study titled “A Nation at Risk: The Decline of the Canadian Forces”. The paper warned that the Canadian military was in danger of falling below a level of operational capability. Similar conclusions were reached in a 2004 book titled “Canada Without Armed Forces?” It says that the Canadian military “is collapsing, not might or could collapse, but is collapsing”.

A much-acclaimed 2003 book titled “While Canada Slept: How We Lost Our Place in the World” argues that Canada no longer ranks among the most influential countries on the world stage because it has starved its defence budget. Its place has been taken by smaller countries like Norway, which plays a leading role as a peacemaker in some of the world’s most difficult conflicts, and the Netherlands, a country with half of Canada’s population but an aid programme almost twice its size.

In 2005, the Canadian Institute of International Affairs published a special report titled “Making a Difference? External Views on Canada’s International Impact”. The paper tries to assess where Canada has made a significant difference since 1989 by interviewing some 50 international affairs experts from 20 countries. The findings are sobering in that they portray a Canada whose international performance and international reputation have fallen dramatically over the last 15 years. The report notes a withering of Canada’s influence on US foreign policy, its contribution to international security and its role in development. “Increasingly active major players such as China, Brazil, India and Mexico and sharply focussed niche players such as Norway are seen to be taking on roles traditionally filled by Canada”, the paper says.

Indeed, several interviewees could identify no examples of where Canada had made a significant difference over the past 15 years. And although Canada has played a leadership role in many aspects of the human security agenda, including the International Criminal Court and the ban on landmines, the report notes how the rise in Canadian rhetoric in this area has coincided with a reduction in military commitments to do something about it.

In an effort to defuse American criticism that Canada (like many medium-sized countries in Europe) wants to sit at the global table by virtue of its economic power while pursuing a foreign policy on the cheap, in February 2005 the Martin government said Ottawa would commit some C$13 billion to boost Canadian defence over the next five years. But in September 2005 the Senate Committee on National Security and Defence reported that: “Of the $12.8 billion the government promised over the next five years, only $1.1 billion was earmarked for the first two years. That means that the rehabilitation process isn’t even going to get started until 2008-2009. Even when the process does stutter to a start, it will remain vastly under-funded, primarily because the armed forces have been starved for money for so many years.” The report further states: “Each branch of the Forces is hundreds of millions of dollars short of what would be required just to perform the basics,” and that the government’s new defence policy is “worthless without proper funding, and the funding simply isn’t there”.

Moreover, Canada lacks a strategic lift capability, a key area that was inexplicably neglected by Martin’s proposal. (Having a fleet of long-range transport aircraft would give Canada instant credibility with the United States.) This has left Canada to rely on borrowed American aircraft or rented Russian aircraft to deploy troops on disaster assistance, and humanitarian and military operations, including the Manitoba floods in 1997, the Quebec ice storm in 1998, the Afghanistan mission in 2002 and the South Asian tsunami relief operation in 2005. In other words, Canada remains dependent upon the United States if it wants to have an impact on the rest of the world.

Taken together, Ottawa’s inconsistent strategic posture makes it a less useful partner for the United States on international issues. In this context, in a February 2005 report titled “Renewing the US-Canada Relationship”, a group of 70 influential Canadians and Americans affiliated with a group called The American Assembly concluded that “Canada is losing its influence in Washington”. The end of the Cold War implies that “Canada has declined in the international political hierarchy”, the report says. It concludes by warning that “Canada needs clout to pursue its hard issues in North America”.

Harper says he wants to restore that clout, and has announced a series of policy changes that are certain to please the White House. As the first practical step in improving bilateral security cooperation, Harper has pledged to reconsider Canadian support for Bush’s missile defence shield. He is also expected to support renewal of Norad, the most important bilateral defence-related institution. Norad, which expires in May 2006, is responsible for continental air defence and for warning the two countries of an impending nuclear attack.

And although Harper says he will not send Canadian troops to Iraq, he has promised C$5 billion in new military spending, which would go to forming a new airborne battalion and buying large transport aircraft to airlift troops and supplies during world crises. He also said he intends to reassert Canadian influence in the world by beefing up its contribution to NATO, and to increase its troop presence in Afghanistan.

Some Lessons for Europe

The Canadian experience offers some important lessons for Europe too. There is a direct relationship between international influence and the military and diplomatic assets a country can bring to the table. Furthermore, the type of multilateralism promoted by Europe as well as by Canada cannot effectively solve international problems without serious military capabilities to back it up. Moreover, multilateralism lacks credibility if the most powerful actor in the global system is not fully committed to its support. And the United States will not jump on the multilateral bandwagon if other countries fail to contribute their fair share to holding up the system.

In this context, dwindling defence spending in Europe and Canada weakens their ability to be a military partner of the United States or to project military power abroad even for peacekeeping missions. Indeed, Washington increasingly views its NATO allies as military free-riders who are happy to profit from America’s largesse while criticising many of its policies. In fact, one of the main lessons the United States has learned from Iraq is that Europeans and Canadians are unreliable partners.

At the annual Munich Conference on Security Policy in February 2005, US Secretary of Defence Donald Rumsfeld said: “Today 3.7 percent of every American tax dollar goes toward our national defence and the defence of our friends and allies. Six of our 25 NATO allies spend 2 percent or more of their GDP on defence, but 19 Allies – 19 – do not even spend 2 percent. Without the US contribution, NATO nations collectively spend only 1.8 percent. It is unlikely that these levels of investment will prove to be sufficient to protect the free people of our NATO nations in the decades ahead.”

This implies that the United States will face no peer competitor for well into the future, and will probably remain the world’s only superpower well beyond 2050. Moreover, as the international balance of power shifts away from the Atlantic and towards the Pacific, Washington will increasingly turn to non-NATO allies in Asia for dealing with future conflicts. Canada and Europe are therefore becoming strategically redundant actors on the global stage, which in turn weakens their ability to create multilateral norms and rules of the road. The US State Department alluded to this when it said in January 2006 that constructing issue-based “coalitions of the willing” would be the key component of future US foreign policy. “We ad hoc our way through coalitions of the willing. That’s the future”, it said.

In any case, Canada has one potentially transformational geo-political advantage over Europe. If Canada is able to recover the estimated 1.7 trillion barrels of petroleum trapped in Alberta’s oil sands, Ottawa will have no lack of influence in Washington.

Conclusion

The new Conservative government in Ottawa has pledged to recover lost Canadian influence in the world by modernising its armed forces and by strengthening its ties to the United States, its most important bilateral relationship. By doing so, it hopes to reassert Ottawa’s historic role in shaping the multilateral system, which is the very essence of what many Canadians claim makes their country less like America and more like Europe. But even under best-case political circumstances which allow the minority Conservative government to complete a full five-year term in office, Canada will need decades to recover its lost international influence. In the meantime, the United States will continue to shape the international system in its own image while Canada and Europe risk being relegated to the sidelines.

Soeren Kern, Senior Analyst, United States and Transatlantic Relations, Elcano Royal Institute for Strategic and International Studies

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What Can Europe Learn from Canada About Multilateralism?