Canadian exports shouldn’t fuel conflict

Steven Staples
Ottawa Citizen
August 8, 2013

Should Canada have an arms industry? It seems that the Harper government thinks so, and it has been taking steps to work closely with the “big guns” of defence companies to support military production in Canada to supply the Canadian Forces and, more alarmingly, sell in the international arms market.

Last weekend in these pages, Tim Page, the president of Canada’s largest defence lobby association, applauded the government’s efforts to create a “healthy domestic defence industry.”

Mr. Page’s lobby association wants the government to “buy local” to satisfy the need of the Canadian Forces. More than that, he and his colleagues want the government to play a parental role in fostering and developing an entire defence industry in Canada.

This will require a significant, long-term commitment of billions of public dollars, in addition to weakened export regulations, and even diplomatic support abroad to promote Canadian-built arms sales. In short, there are few winners from this plan.

Unlike the auto industry, for instance, where short-term government assistance can help the industry until its commercial market improves, the arms industry is utterly dependent on government spending, since there are few commercial customers. And it will lobby strenuously to ensure that military spending is not reduced even if the international security environment improves, or if there are other competing government priorities.

For instance, in the depths of the financial crisis in early 2010 while government was reducing spending on social services, the Canadian Association of Defence and Security Industries (CADSI) wrote to Finance Minister Jim Flaherty urging him to “confirm the government’s 20 year funding commitment of $240B in non personnel related defence spending…[and] proceed on an expedited basis with land, sea and air defence projects that are in the procurement pipeline.”

To the defence industry, a tax dollar spent on a hospital is a tax dollar not spent on a fighter jet.

The other side of the arms sales coin is the international weapons marketplace. Selling arms to the Canadian government is merely a launching point to selling arms abroad in the much larger and more lucrative international arms bazaar. That’s why the defence association’s Mr. Page called on National Defence and other trade-related departments and agencies to take a whole-of-government approach to “increase Canadian defence exports.”

But is this sound business advice? Scanning the international media it’s easy to see that the global financial crisis has hit European and American defence budgets hard and their militaries are scaling back. If Canadian firms start shifting to defence production, they will find themselves trapped in a declining market and laying off thousands of Canadian workers.

This crisis will encourage Canada to relax its export control policies intended to ensure Canadian defence exports don’t end up in war-racked regions or arming human rights abusers.

According to the industry, half of Canada’s roughly $6 billion in annual defence exports flow to the United States without any permit requirement at all. Canadian factories have been the number one supplier of ammunition to the U.S. Army, fuelling their bloody invasion of Iraq.

Even when export permits are required and authorized, Canadian-made arms find their way to conflicts. For instance, light armoured vehicles produced in Canada and sold to Saudi Arabia in the 1990s were spotted being used by their security forces to suppress the pro-democracy movement in neighbouring Bahrain. Another sale of LAVs to conflict-plagued Colombia has recently been announced.

Almost an afterthought is the military itself. The Canadian Forces should be provided with the best equipment at the most reasonable price, as quickly as possible. This is only achieved through an open and fair process. Of course, if two products are equivalent in performance and price, then the benefit to Canadian industry and job creation should be a priority in selecting a supplier, as the process already requires.

In fact, foreign defence suppliers are required to make investments in Canada equivalent to the value of the contract, and our system of direct and indirect “offsets,” as they are called, has served Canadian workers and the Canadian Forces well.

Above all else is the larger question: what kind of export economy do Canadians want? Many people are already concerned about Canada’s growing oil exports perpetuating unsustainable energy demands. To this will we add arms exports fuelling conflicts and propping up illegitimate governments around the world?

Nobody wants an economy that benefits from climate change and war. The government should not pursue a defence strategy designed to build an arms industry in Canada, but should instead focus on building Canadian prosperity on peace and sustainability, in keeping with Canadian values.

Steven Staples is the president of the Rideau Institute, an Ottawa-based research and advocacy group.

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