Prime Minister Justin Trudeau arrives in Biarritz, France, in August 2019. Photo: Adam Scotti (PMO)
Justin Trudeau will remain Canada’s prime minister following the latest national elections, but his Liberal Party lost seats and will move forward in a minority government.
Back in 2015, the Liberals secured a majority by winning 184 out of 338 seats (170 seats are needed for a majority). This time around, the Liberals picked up 157 seats with 33.1 percent of the popular vote. The Conservative Party won 121 seats, despite winning a larger percentage of the popular vote (34.4 percent). The Conservatives had a stronger showing than in 2015 when they won 99 seats. Canada’s smaller parties rounded out the vote totals, with the Bloc Quebecois winning 32 seats, the New Democrats winning 24 seats, and the Green Party winning three seats. There is also one independent seat.
Failing to secure a majority means that Trudeau will have to work together with other parties to keep the government running. Canada has fixed elections every four years, but minority governments in Canada historically last fewer than two years. Minority governments can fall through a no confidence vote, which can be initiated in a number of ways, including failure to pass significant legislation or budgets. However, the political maneuver can backfire. Conservative leader Stephen Harper lost a confidence vote in 2011, triggering an election in which Harper actually secured a majority government.
Defense issues generally took a back seat during the 2019 election. Conservative leader Andrew Scheer said that if victorious, he would have joined the U.S. missile defense program and purchased a new fleet of submarines. The Liberals repeated prior campaign promises of bolstering support for United Nations operations and pursuing acquisition reform, including the establishment of a defense procurement agency. Canada has a notoriously complex and often inefficient defense acquisition system that is prone to delays.
Trudeau’s victory indicates the government will continue with its defense strategy that includes an increase in military spending, but the reality is more complex. The Liberal’s 2017 defense policy review called for increasing the defense budget to CAD32.7 billion ($25 billion) by 2026, up from CAD18.6 billion ($14 billion) in 2016, but the success of this plan is questionable. Most of the growth in the plan doesn’t occur until 2020 or later, meaning a significant increase will be required over a relatively short timeframe to reach the new spending targets. Sustaining the necessary increases would be extremely difficult, especially given the return of sizable federal deficits under the Trudeau government. The 2019 budget released in the spring shows defense spending decreasing between 2020 and 2021, further complicating matters.
Canadian defense spending as outlined in the 2019 budget (Canadian dollars). Source: Department of National Defence 2019-20 Departmental Plan
Even in a best-case scenario where the defense spending targets are reached, the plan shows the budget falling by nearly 20 percent between 2027 and 2030, bringing into question whether the strategy actually provides long-term budget stability for the Department of National Defence.
When the defense policy was released, the DND claimed that defense spending would reach 1.4 percent of GDP by 2024, still well below NATO’s 2 percent goal. Of that total, approximately 0.2 percent of GDP represents national security spending outside of the DND.
There is another major problem with Canada’s current budget strategy. The government advertised the new defense spending plan as increasing the scope of acquisition programs; however, the “new” programs discussed in the defense policy were pre-existing requirements and programs that had not yet been included in the accounting books. When it comes to acquisition, the spending increase represents the realization that existing modernization plans are going to cost more than planned, rather than a broadening of capabilities. This means that if funding fails to materialize, then existing acquisition efforts will need to be scaled back, delayed, or completely eliminated. These concerns are exacerbated by two massive acquisition efforts on the horizon, one for a new fighter and the other for a new surface combatant, that will require a high level of sustained funding.
These issues are nothing new for Ottawa. Defense spending growth plans under the previous Conservative government generally failed to materialize, and many acquisition programs were ultimately deferred as defense spending was cut to rein in the deficit. Trudeau has continued the trend of deferring acquisition programs to future years, which will place greater stress on the budget if and when these programs come to fruition.
As editor of International Military Markets, North America, Shaun has cultivated a deep understanding of the vast defense markets in the United States and Canada. Shaun's perspective on defense procurement and budget issues has been cited in a variety of defense periodicals, including Defense News and National Defense Magazine. Further, Shaun played an integral role in the development of Forecast International's U.S. Defense Budget Forecast product, which offers an unprecedented level of insight into the Pentagon's acquisition budget. In addition to providing original analytical content for the U.S. Defense Budget Forecast, Shaun oversees an internal defense budget forecasting process involving Forecast International's team of skilled systems analysts following release of the DoD's annual budget request. Shaun is also in charge of managing Forecast International's Weapons Inventory database.
