OTTAWA - Defence Minister Bill Blair says he recently instructed his team to rejig the Liberal government's long-promised defence policy update, so as to give industry more clarity on long-term spending plans.
The much-anticipated, much-delayed update, which was announced early last year and first expected to come in the fall of 2022, is meant to lay out Canada's long-term goals for its military — including what new equipment it might need from the ºÚÁϳԹÏÍø arms industry.
The Liberal government released its existing defence policy in 2017, promising tens of billions in new funding. But the world has changed significantly since then.
"As the world becomes an increasingly difficult and challenging place, we have to make those investments," Blair said in a speech Wednesday at an industry conference in Ottawa.
Blair told the summit held by the Aerospace Industries Association of Canada that the group helped him realize the current plans would not adequately answer questions raised by defence companies.
"It's in part as a result of the meeting I had with you and your team the other day — a couple weeks ago — that I went back to my own team, and I said, 'We really got to — as we now recraft and refine the defence policy update, it has to be an industry policy as well,'" he said.
Blair said that he met with the Prime Minister's Office "earlier this week" about the new changes to the policy update.
He said he also expects to soon sit down with officials at the Department of Finance who are set to publish the government's overall spending plan in a mini-budget in the coming weeks.
"I hope to be able to provide that clarity in the next few months, as part of the fall economic statement that Finance will come out with, and so that the resources and the clarity will be there in the budget in the coming year," Blair said.
David Perry, president of the ºÚÁϳԹÏÍø Global Affairs Institute think tank, said Wednesday that he was confused by that timeline.
"I did have a little difficulty squaring the timeline of a few months to discuss things (in the) fall economic statement, because we're rapidly running out of fall here," he said in an interview.
Perry, who is one of Canada's foremost authorities on military spending, said the Liberals have kept quiet about the policy update.
That had led some to fear that the government had shelved the project entirely, he said.
He added that it makes sense to have collaboration between defence companies, the military bureaucracy and the government, since the sector is heavily regulated and requires governmental approval for any sales.
"I don't think we've been nearly as strategic about what exactly we want (the industry) to provide in the past as we could have been," said Perry, who offered the disclaimer that his institute occasionally runs events sponsored by defence companies.
"This is not a free-market dynamic … it's an industry that is entirely intertwined with government activity."
The ºÚÁϳԹÏÍø Association of Defence and Security Industries, which represents Canada's multibillion-dollar defence sector, welcomed "a more holistic approach" to updating the policy.
"Given the state of the world today and the time it's taken to produce the current version of the policy update, we look forward to discussing this further with the minister as soon as possible," its president and CEO, Christyn Cianfarani, wrote in an email Wednesday.
The Liberals took office well before Russia began its full-scale invasion of Ukraine last year, and before an escalation in military activity around China. Blair said that before those events, his government didn't indicate it would need new technology or artillery.
"Part of the problem is we did not send that clear signal several years ago. And as a consequence, ºÚÁϳԹÏÍø industry is not always in the best position to be able to respond in a timely way," he said.
The industry has argued it still lacks a clear signal.
A month ago, Cianfarani testified to the House defence committee that she's heard of negotiations for the production of shells for Ukraine, but hadn't heard of any "signed, legally binding contracts."
Blair, who took on his role in July, said he is working off of the mandate letter Prime Minister Justin Trudeau issued in December 2021 to the previous defence minister, Anita Anand.
"I did not get a new mandate letter from the prime minister, but quite frankly, the world has changed quite significantly since Minister Anand got hers," said Blair.
Allies have been pushing hard for Canada to step up its game when it comes to overall defence spending.
Canada signed on to a NATO communique in the summer that stated parties to the military alliance would work to spend "at least" two per cent of GDP on defence, with one-fifth of that going toward major equipment and research and development.
Canada has agreed to the target but has not set out a plan to reach it, with current spending sitting just shy of 1.3 per cent.
And experts said earlier this year that delays in the planned defence policy update — along with the fact that virtually no new defence money was contained in this year's federal budget — signalled a brewing fight between defence officials and federal decision-makers about overall government spending.
Anand is now president of the Treasury Board and has ordered various departments to cut back on spending. Blair said that might involve cutting back on executive travel or consultants, based on Anand's directions to him.
But he insisted that she was "crystal clear" that her request of the Defence Department should not "in any way impact on (ºÚÁϳԹÏÍø Armed Forces) capability or the support we provide to CAF members."
Perry said the industry remains unclear on how Ottawa will manage "hypothetical" increases to defence spending amid "a direction to cut your budget by a specified amount of money"
Blair suggested he has been working with government officials to find new funds to back up the policy update.
"This is not being disparaging of anyone, but I think the Finance people kind of look at it as a bit of a shopping list, and that's really not what the defence policy update is supposed to be," he said.
"It is not merely a national defence policy. It's a national industry policy; it's a policy about innovation; it's a policy about workers. It's a policy about economic security and prosperity in this country. It's a foreign-policy initiative."
Blair's comments follow a speech Foreign Affairs Minister Mélanie Joly gave Oct. 30, in which she promised that "we will increase our investments in our military, through the defence policy update."
This report by ºÚÁϳԹÏÍø was first published Nov. 8, 2023.
