Archived - Chapter 5:
Canada’s Leadership in the World

Since the end of the Second World War, Canada has been a steadfast defender of the rules-based international order. We have defended it because a world based on rules is in Canada’s national interest.

But today, that order is facing an existential threat. Russia’s barbaric invasion of Ukraine is not only an attack on the people of Ukraine and on Ukraine’s territorial integrity, but also on democracy and the unprecedented period of prosperity that the world’s democracies have worked continuously to build over the last 75 years.

At the same time, issues ranging from COVID-19 to climate change and increasingly confrontational authoritarian regimes demand the attention of Canada and our allies. The spread of misinformation and disinformation is directly challenging the stability of even the most long-standing democracies.

Budget 2022 recognizes those challenges and proposes new action to respond to them. It invests in Canada’s defence capabilities, and in the alliances that will ensure a strong and coordinated global response to the ongoing challenges that the world today faces.

It commits to reinforcing global democracy, to combatting illicit financing, and to pushing back against the forces of disinformation and misinformation that threaten public institutions around the world. Concurrently, Canada will continue to provide critical international assistance to those who need it most.

The events of the last months have reminded us that the international community is strongest when it acts together in defence of the values we share. In partnership with like-minded democracies around the world, Canada will continue to stand up to the global threats that recognize no borders.

Key Ongoing Actions

In the past year, including through Budget 2021, the federal government has announced a range of important programs and initiatives that are advancing Canada’s leadership in the world, including:

• More than $2.7 billion since the start of the COVID-19 pandemic to support low- and middle-income countries, including by providing access to vaccines, therapeutics, and testing;
• $5.3 billion over five years to double Canada’s international climate financing to help developing countries tackle climate change;
• $180 million at the Generation Equality Forum to support the economic participation and higher education of women around the world;
• $847 million over five years to maintain Canada’s military at a higher state of readiness under the North Atlantic Treaty Organization (NATO) Readiness Initiative, and to increase Canada’s contributions to NATO’s common budget and military activities;
• $252 million over five years, with $160 million in remaining amortization, to lay the groundwork for North American Aerospace Defence Command (NORAD) modernization and sustain existing continental and Arctic defence capabilities;
• $1.5 billion over three years to the International Development Association to help meet the financing needs of the world’s poorest countries as they recover from the pandemic; and,
• $3.7 billion, or 20 percent of Canada’s newly allocated IMF Special Drawing Rights, in support for poverty reduction, sustainability, growth, and resiliency in low-income and vulnerable countries to help those who need it most.

5.1 Reinforcing Our National Defence

National defence is a fundamental responsibility of the federal government. In addition to protecting Canada from international threats and defending our sovereignty, the Canadian Armed Forces play an important role in making the world a safer place.

Investments made through Canada’s 2017 defence policy, Strong, Secure, Engaged, decisively reversed a trend of lagging defence spending that stretched back three decades. Canada’s defence spending is on track to double between 2016-17 and 2026-27. As implementation of this plan continues, Canada must respond to evolving circumstances to ensure that the women and men of the Canadian Armed Forces are prepared to fulfil the missions we ask of them.

To immediately reinforce Canada’s national defence, announcements in Budget 2022 will provide a total of more than $8 billion in new funding over five years—on top of planned increases associated with Strong, Secure, Engaged. This funding will strengthen Canada’s contributions to our core alliances; bolster the capabilities of the Canadian Armed Forces; continue to support culture change and a safe and healthy working environment in the Canadian Armed Forces; and reinforce Canada’s cyber security.

Reviewing Canada’s Defence Policy

Strong, Secure, Engaged set out clear direction on Canadian defence priorities over a 20-year horizon. Informed by the international landscape of the day, it included significant investments to enhance the Canadian Armed Forces’ capabilities and capacity to respond to military operations ranging from humanitarian and relief efforts, to peacekeeping, to combat.

However, recent events require the government to reassess Canada’s role, priorities, and needs in the face of a changing world.

• Budget 2022 announces a defence policy review to allow Canada to update its existing defence policy, Strong, Secure, Engaged, in support of its broader international priorities and the changed global environment. The review will focus on, amongst other things, the size and capabilities of the Canadian Armed Forces; its roles and responsibilities; and making sure it has the resources required to both keep Canadians safe and contribute to operations around the world.

Reinforcing our Defence Priorities

In addition to a defence policy review, to ensure a strong and coordinated global response to the ongoing challenges that the world today faces, Canada will make immediate additional investments in our defence priorities, including our continental defences, alliances and collective security, and in the capabilities of the Canadian Armed Forces.

Investing in NORAD Modernization

Canada is resolute in our defence of the North American continent, especially in the far North. Crucial to this effort is Canada’s partnership with the United States under NORAD.

In Budget 2021, the government committed $252.2 million over five years to sustain existing continental and Arctic defence capabilities, and to lay the groundwork for NORAD’s future. In August 2021, a joint statement between Canada and the United States established the priorities for modernizing NORAD.

The government is currently considering options to fulfill this commitment through significant investments in the following areas:

• Advanced all-domain surveillance and intelligence;
• Modernized command, control, and communications;
• Improved capabilities to deter and defeat threats; and,
• Increased research, development, and innovation.

Doing Our Part in NATO

In addition to making sure we are secure in North America, Canada remains steadfast in its support of our NATO allies, including through assurance and deterrence operations in Central and Eastern Europe.

Through our multi-year renewal of Operation REASSURANCE, Canada is underscoring our commitment to this operation. We are increasing our contribution by up to 460 Canadian Armed Forces personnel, for a total of up to approximately 1,260. A further 3,400 Canadian Armed Forces personnel are available to the NATO Response Force, should they be required.

Budget 2021 previously announced $847.1 million over five years to increase Canada’s contributions to NATO. But we recognize that more needs to be done. Standing shoulder-to-shoulder with our allies means sharing the burden of defending democracy against authoritarianism.

Canada is committed to ensuring NATO remains ready, strong, and united.

Increasing the Capabilities of the Canadian Armed Forces

The review of Canada’s defence policy will include an assessment of the equipment and technology that the Canadian Armed Forces need to fulfill their missions in a world that has fundamentally changed in the face of Russia’s invasion of Ukraine. However, the government realizes that immediate further investments are needed to bolster the capacity of the Canadian Armed Forces.

• Budget 2022 proposes to provide $6.1 billion over five years, starting in 2022-23, with $1.3 billion in remaining amortization, and $1.4 billion ongoing to the Department of National Defence in order to meet our defence priorities, including our continental defences, commitments to our allies, and for investments in equipment and technology to immediately increase the capabilities of the Canadian Armed Forces.

Supporting Culture Change in the Canadian Armed Forces View the impact assessment

Those who serve Canada with our flag on their shoulder contend with enough risks to their safety. Their workplace should not be one of them.

On December 13, 2021, the Minister of National Defence, Chief of the Defence Staff, and the Deputy Minister of National Defence delivered a formal, public apology to all current and former Defence Team members and Veterans who have been affected by sexual assault, sexual harassment, and discrimination based on sex, gender, gender identity or sexual orientation.

Together, the government and Canadian Armed Forces are working to create a culture that ensures every member serves in an environment where they feel safe, protected, and respected.

• Budget 2022 proposes to provide $100.5 million over six years, starting in 2021-22, with $1.7 million in remaining amortization, and $16.8 million ongoing to: strengthen leadership in the Canadian Armed Forces; modernize the military justice system; bring into force the Declaration of Victims Rights as set out in the National Defence Act; undertake engagement and consultation on culture change; and enhance restorative services, including dispute resolution and coaching services. Of this amount, $3 million over three years, starting in 2021-22, will be sourced from existing resources.
• Budget 2022 also proposes to provide $144.3 million over five years, starting in 2022-23, and $31.6 million ongoing to expand the Canadian Armed Forces’ health services and physical fitness programs to be more responsive to women and gender-diverse military personnel.

This builds on funding from Budget 2021 of $236.2 million over five years, starting in 2021-22, and $33.5 million ongoing for the Department of National Defence and Veterans Affairs Canada to support efforts to eliminate sexual misconduct and gender-based violence in the military and support survivors.

Enhancing Canada’s Cyber Security

Budget 2018 announced an action plan to implement Canada’s first comprehensive National Cyber Security Strategy. That strategy is now working to keep Canadians safe from evolving cyber security threats that target Canadians, Canadian businesses, and our critical infrastructure. The Communications Security Establishment (CSE) works to protect Canada from cyber threats, including those that come from foreign actors. But as Canadians grow more dependent on digital systems, the potential consequences of cyber incidents continue to increase, and Canada needs to be ready.

• Budget 2022 proposes to provide $875.2 million over five years, beginning in 2022-23, and $238.2 million ongoing for additional measures to address the rapidly evolving cyber threat landscape. These measure include:

  • $263.9 million over five years, starting in 2022-23, and $96.5 million ongoing to enhance CSE’s abilities to launch cyber operations to prevent and defend against cyber attacks;
  • $180.3 million over five years, starting in 2022-23, and $40.6 million ongoing to enhance CSE’s abilities to prevent and respond to cyber attacks on critical infrastructure;
  • $178.7 million over five years, starting in 2022-23, and $39.5 million ongoing to expand cyber security protection for small departments, agencies, and Crown corporations; and,
  • $252.3 million over five years, starting in 2022-23, and $61.7 million ongoing for CSE to make critical government systems more resilient to cyber incidents.

Canadian academics are some of the leading researchers in important emerging and disruptive technologies, including quantum computing and artificial intelligence. This expertise can be leveraged to ensure Canada’s security and intelligence community stay one step ahead of our adversaries.

• Budget 2022 proposes to provide $17.7 million over five years, starting in 2022-23, and $5.5 million thereafter until 2031-32 for CSE to establish a unique research chair program to fund academics to conduct research on cutting-edge technologies relevant to CSE’s activities. Researchers awarded the grants will split their time between peer-reviewed publishable research and classified research at CSE.

5.2 Supporting Ukraine

Canada condemns in the strongest possible terms Russia’s cruel and illegal invasion of Ukraine. Canadians stand with the brave people of Ukraine as they fight for their lives, for their sovereignty, for their democracy, and for our own.

Canada is a reliable and long-standing partner of Ukraine. In 1991, Canada became the first Western country to recognize Ukraine’s independence. Since then, the relationship between our two countries has been strengthened by deep people-to-people ties, rooted in the Ukrainian-Canadian community, and by our shared belief in democracy and the importance of the rules-based international order.

In the face of Russia’s invasion, Canada has continued to send lethal and non-lethal aid to support Ukraine’s heroic defence. Including new measures proposed in Budget 2022, Canada has announced more than $1.2 billion in direct contributions in support of Ukraine and its people in 2022, in addition to an offer of up to $1.6 billion in loan support for the Ukrainian government. This support has helped respond to the humanitarian crisis, and ensure that the Ukrainian government can continue to provide essential services.

Canada is also examining opportunities to enhance our diplomatic capacity in Eastern Europe, to be ready to assist as the repercussions of this conflict reverberate through the region.

Bolstering Ukraine’s Fight for Freedom

On January 26, 2022, Canada announced the expansion of Operation UNIFIER, the Canadian Armed Forces mission to provide military training and support to Ukrainian forces. Since 2015, Canada has trained nearly 33,000 Ukrainian military and security personnel.

The federal government has also announced more than $90 million in military aid, and is providing military aid—both lethal and non-lethal—to support Ukraine in its efforts to defend its sovereignty. In partnership with our allies, Canada is also sharing intelligence and providing support to enhance Ukraine’s cyber security.

• Budget 2022 proposes to provide an additional $500 million in 2022-23 to provide further military aid to Ukraine.

Holding Russia Accountable

In response to Russia’s illegal invasion, Canada and our allies have swiftly imposed the strongest sanctions ever inflicted on a major economy. In threatening both Ukraine’s independence and the rules-based international order, President Putin and his hangers-on have been personally sanctioned, Russia’s major financial institutions and sovereign wealth funds have been cut out of the global economy, and the assets of Russia’s Central Bank have been frozen.

Since Russia’s invasion of Crimea in 2014, Canada has sanctioned more than 1,000 individuals and entities to prevent their access to Canada’s economy. In partnership with our allies, Canada has formed the Russian Elites, Proxies, and Oligarchs (REPO) Taskforce and committed federal resources to work with our partners, both foreign and domestic, to target the assets and ill-gotten gains of Russia’s elites and those who act on their behalf. This includes the use of resources to identify, freeze, and seize assets to ensure that sanctioned individuals and entities are no longer able to access their resources and wealth abroad.

• Budget 2022 announces the government’s intent to clarify the ability of the Minister of Foreign Affairs to cause the forfeiture and disposal of assets held by sanctioned individuals and entities to support Canada’s participation in the REPO Taskforce.

On March 2, 2022, Canada became the first country to revoke the Most-Favoured-Nation trade partner status of both Russia and Belarus—an enabler of Russia’s invasion—under the Customs Tariff. This effectively imposed a 35 per cent tariff on virtually all goods from those two countries, placing them in a category previously occupied only by North Korea.Since then, several countries have followed Canada’s lead and implemented their own measures. We have also banned Russian-owned ships from Canadian ports and international waters, banned Russian-owned aircraft from entering Canadian airspace, and we were the first to announce a ban on imports of Russian petroleum products.

Canada is also taking every opportunity to isolate Russia at multilateral institutions, including through international financial institutions, and supports efforts by these organizations to suspend operations and programming in both Russia and Belarus.

Supporting Ukrainians Through the Crisis

To date in 2022, Canada has committed $145 million in humanitarian assistance, and $35 million in development assistance to provide direct support to Ukrainians who have been affected by the illegal Russian invasion. This includes $30 million that matched the donations of individual Canadians. However, we know that more needs to be done to help Ukraine continue to provide essential services to its people.

Canada has already offered a total of $620 million in loans this year to support Ukraine’s financial stability, economic resilience, and governance reforms.

Canada is providing additional support through our shareholdings in key international financial institutions, including the International Monetary Fund, the World Bank, and the European Bank for Reconstruction and Development. Since the onset of the invasion, these three institutions have together committed more than $5.6 billion to support Ukrainians.

• Budget 2022 announces that Canada will offer up to $1 billion in new loan resources to the Ukrainian government through a new Administered Account for Ukraine at the International Monetary Fund (IMF) so that the government can continue to operate. Canada worked with the government of Ukraine, the IMF, and other member countries to develop this facility and encourage allies and partners to participate.

A Safe Haven for Ukrainians View the impact assessment

On March 3, 2022, Canada announced two new immigration streams for Ukrainians fleeing Russia’s invasion.

• The Canada-Ukraine Authorization for Emergency Travel was launched on March 17, 2022. With this authorization, Ukrainians and their immediate family members of any nationality may stay in Canada as temporary residents for up to three years. The government also recently announced that additional supports, such as language training and orientation services, will be available to help these Ukrainians settle into their new communities.
• The federal government is also developing a special permanent residence stream for Ukrainian immediate and extended family members of Canadian citizens and permanent residents. This will support Ukrainians who wish to reunite with their family and start a new life in Canada.

All Ukrainians who come to Canada as part of these measures will be eligible to apply for open work permits, making it easier for employers to quickly hire Ukrainian nationals looking to find work. The government will also issue open work permits to Ukrainian visitors, workers, and students who are currently in Canada and cannot safely go home.

The government has provided new funding of $111 million over five years, with $6 million in future years, to implement these new immigration measures. This funding will help to set up the new immigration pathways, expedite the processing of applications, and provide support to Ukrainians once they arrive in Canada.

5.3 Standing Up for Democracy, Transparency, and the Rule of Law

The rules-based international order is built upon a shared commitment to democracy and the rule of law. However, those values are being challenged by hostile forces, including state actors like Russia, criminal organizations, and the wilful purveyors of disinformation that threaten public institutions.

At the Summit for Democracy in December 2021, Canada announced that it will pursue an ambitious agenda to better support good governance around the world, and provide fast and flexible support to fragile or emerging democracies.

As that important work continues, Canada remains resolute in its commitment to push back against the forces that challenge the rules-based international order. In Budget 2022, the federal government is proposing to further strengthen democratic institutions and the rule of law, both in Canada and around the world, including potentially through legislation.

Strengthening Canada’s Anti-Money Laundering and Anti-Terrorist Financing (AML/ATF) Regime

Money laundering and terrorist financing threaten Canadians’ safety, the integrity and stability of our financial sector, and the broader Canadian economy. Ensuring that Canada has the ability to detect these threats through a comprehensive AML/ATF Regime, as well as an equal ability to catch and prosecute these offences is vital to protecting Canadians and safeguarding the rule of law in an increasingly complex financial world.

Fulfilling this commitment will involve a number of steps. First, the federal government is working to bring into force new regulations that extend AML/ATF obligations to payment service providers and crowdfunding platforms. This will ensure that these businesses are required to monitor and report all instances of suspicious activity that may involve attempted money laundering or terrorist financing.

The federal government is also developing legislative changes to, among other things, strengthen the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, the Criminal Code, and other legislation to enhance the ability of authorities to detect, deter, investigate, and prosecute financial crimes and ensure the government is well placed to manage current and emerging threats outside of the scope of the current AML/ATF Regime.

Further, the government will conduct a comprehensive review of the AML/ATF Regime, and additional legislative proposals will be brought forward over the coming months to address identified gaps including ensuring that the government has the tools necessary to preserve financial integrity and economic security, as necessary.

• Budget 2022 proposes to provide $89.9 million over five years, and $8.8 million ongoing, to support the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). This amount represents a 24 per cent funding increase to FINTRAC’s budget and a 13 per cent increase in new staff. This increased capacity will enable FINTRAC to implement new anti-money laundering and anti-terrorist financing requirements for crowdfunding platforms and payment service providers; support the supervision of federally regulated financial institutions; continue to build expertise related to virtual currency; modernize its compliance functions; and update its financial management, human resources, intelligence, and disaster recovery systems.
• To bolster Canada’s ability to quickly respond to complex and fast-moving cases of financial crime, Budget 2022 announces the government’s intent to establish a new Canada Financial Crimes Agency, which will become Canada’s lead enforcement agency in this area. Budget 2022 proposes to provide $2 million to Public Safety Canada in 2022-23 to undertake initial work to develop and design the new agency, with further details to be announced in the 2022 fall economic and fiscal update.

Implementing a Publicly Accessible Beneficial Ownership Registry

Anonymous Canadian shell companies can be used to conceal the true ownership of assets, including businesses and expensive property. This also makes them vulnerable to misuse for illegal activities, including money laundering, corruption, and tax evasion. These anonymous corporations can also be used to avoid sanctions and the tracing and freezing of financial assets. To counter this, authorities need access to timely and accurate information about the true ownership of these entities.

• To this end, the government is accelerating by two years its commitment to amend the Canada Business Corporations Act to implement a public and searchable beneficial ownership registry, which will now be accessible before the end of 2023. The registry will cover corporations governed under the aforementioned 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. Legislative proposals will be forthcoming as part of the Budget Implementation Act.

As part of its ongoing efforts to improve beneficial ownership transparency, the government intends to work with provincial and territorial partners to advance a national approach to a beneficial ownership registry of real property, similar to other countries, including the United Kingdom.

To ensure that corporate data provided to the registry is accurate and timely, the government will also examine approaches that support the validation and verification of the information in the registry.

The government will engage provincial and territorial governments at the earliest opportunity to advance a national approach to beneficial ownership transparency.

Combatting Misinformation and Disinformation

In Canada and around the world, misinformation can quickly spread and erode the trust that people have in public institutions.

Foreign threats to democracy—including state-sponsored disinformation, which is misinformation that is deliberately targeted to deceive people—have continued to grow amidst rising geopolitical tensions, a global pandemic, and the rapid evolution of technology.

At the G7 Summit in Charlevoix, Quebec, Canada led the establishment of the G7 Rapid Response Mechanism as a coordinated effort with our allies to confront the threat of disinformation and protect G7 democracies from foreign threats. Since then, the program has played a key role in detecting and identifying foreign interference and state-sponsored disinformation against democracies and also in monitoring federal elections in Canada.

• Budget 2022 proposes to provide $13.4 million over five years, starting in 2022-23, with $2.8 million ongoing to Global Affairs Canada to renew and expand the G7 Rapid Response Mechanism.

The government will also continue its work to combat misinformation, which includes supporting research at public institutions; ongoing cyber activities to protect Canadians against disinformation; and expanding its efforts into important new areas.

• Budget 2022 proposes to provide $10 million over five years, starting in 2022-23, with $2 million ongoing for the Privy Council Office to coordinate, develop, and implement government-wide measures designed to combat disinformation and protect our democracy.

5.4 Providing International Assistance

Now, more than ever, it is critical that Canada work to build a safer, more stable, and more prosperous world for all. Canada has an important role to play in promoting and strengthening democracy and human rights, and ensuring that, through our Feminist International Assistance Policy, we do our part to improve the lives of women, girls, and vulnerable populations around the world.

The significant challenges facing the international community require strong, united responses from the world’s leading democracies. That is why Canada has continued to maintain high levels of international assistance, with our International Assistance Envelope expenditures reaching a record total of more than $7.6 billion on a cash basis in 2020-21.

Canada has provided significant investments to support the global response to COVID-19; doubled our commitment to help low- and middle-income countries mitigate and adapt to climate change; and provided financial support through the World Bank and International Monetary Fund to help vulnerable countries cope with new crises.

Through Budget 2022, Canada will continue to enhance our assistance efforts, with a focus on bringing an end to the COVID-19 pandemic and strengthening global health security.

Chart 5.2 shows growth going forward, and the government is committed to increasing international assistance funding towards 2030.

Leading in the Global Fight Against COVID-19 View the impact assessment

As we have seen over the past two years, COVID-19 knows no borders. Since February 2020, Canada has committed more than $2.7 billion in international assistance to fight the pandemic, including a contribution of more than $1.3 billion to the Access to COVID-19 Tools Accelerator (ACT-A)—a global effort to improve equitable access to COVID-19 vaccines, tests, and treatments. This made Canada one of only six countries to meet or exceed the independently assessed voluntary contribution target for the ACT-A’s 2020-21 funding cycle.

• Budget 2022 proposes to provide $732 million in 2022-23 to Global Affairs Canada to further support the efforts of the Access to COVID-19 Tools Accelerator. and to ensure that Canada continues to provide its fair share to global efforts to improve access to vaccines, therapeutics, and other tools to fight COVID-19. This will bring Canada’s total contribution to the Access to COVID-19 Tools Accelerator to more than $2 billion since the start of the pandemic.

Strengthening Global Health Security

Canada is a long-standing contributor to global health security, which is a shared challenge that requires strong and consistent collaboration between countries around the world.

• Budget 2022 proposes to provide an additional $296 million over four years, starting in 2023-24, and $74 million ongoing, to Global Affairs Canada to help support efforts to address global health security priorities, such as infectious disease prevention and response.

In 2019, the government committed to increase annual global health spending from $1.1 billion to $1.4 billion by 2023-24. With this additional support, Canada will exceed this commitment, spending nearly $1.5 billion towards global health in 2023-24.