Canada’s new budget thin on Arctic policy substance: expert

Prime Minister Justin Trudeau shakes hands with Minister of Finance Bill Morneau after he delivered the federal budget in the House of Commons on Parliament Hill in Ottawa, Wednesday March 22, 2017. (Sean Kilpatrick/The Canadian Press)
At a time when all of Canada’s circumpolar neighbours are beefing up their capability to operate in the increasingly accessible Arctic, the Liberal government is making dramatic cuts to its military spending, experts warn.

The second budget tabled by the government of Prime Minister Justin Trudeau on Wednesday also shows a lack of a clear Arctic policy, both in terms of security and foreign policy, as well as adequate infrastructure and job creation investment in the North, said Rob Huebert, an associate professor in the Department of Political Science at the University of Calgary and a senior research fellow with the Centre for Military and Strategic Studies.

The Canadian Arctic makes up about 40 per cent of the country’s landmass and about half of its coastline, and is home to more than 100,000 Canadians.

Yet federal Finance Minister Bill Morneau did not mention the Arctic once in his budget speech on Wednesday.

New Liberal branding

Northern communities and Inuit were mentioned once each, while the minister managed to mention the “middle class” 17 times, perhaps, not surprising given the fact the Liberal government’s 2017 budget is entitled Building a Strong Middle Class.

“You can see the policy brand that the Liberals are trying to do,” said Huebert. “But when you start to examine it closer, particularly when you look at foreign policy, defence policy or Arctic policy, it gets pretty thin pretty quickly.”

Bad news for the military
Finance Minister Bill Morneau and Prime Minister Justin Trudeau hold copies of the federal budget in the House of Commons in Ottawa, Wednesday, March 22, 2017. (Adrian Wyld/The Canadian Press)

The Liberal budget has nothing but bad news for Canada’s Department of National Defence, wrote David Perry, a Senior Analyst and a Fellow with the Canadian Global Affairs Institute, in an analysis published Wednesday.

“This budget, the second for Prime Minister Justin Trudeau has removed a massive amount of money – $8.48 billion – set aside to buy capital equipment and build infrastructure over the next twenty years,” Perry wrote.

The reallocation of funding to 2035–36 is required to accommodate two key capital projects: the procurement of fixed-wing search and rescue aircraft, and the modernization of light armoured vehicles that were originally scheduled to receive only partial upgrades, according to the budget document.

Just like Harper?

The reallocation amounts to a huge cut in the DND’s budget, said Huebert. But the Trudeau government is borrowing a page from the previous Conservative government by trying to spin the news, he added.

“They’re just like with the Conservatives, they’re not going to call it what it actually is, so there is a lot of effort to hide the effect of what they are trying to do,” Huebert said.

“It’s obvious what they’re trying to do. Given how much deficit they run up in their first budget, they had limited capability to introduce anything new in the second budget and they’re looking for ways that they can take a little bit the edge off some of their deficit spending.”

Less ambitious defence policy?

The 2017 federal budget is particularly important for the Canadian military because it sets the fiscal framework for the Liberal’s new defence policy, Perry said.

The worry is that the massive budget cut signals a much less ambitious defence policy, including fewer funds to equip the Canadian military to maintain a more robust presence and operate in the increasingly ice free Arctic, Huebert said.

The government has also not made any announcements in new funding to start replacing the Canadian Coast Guard’s ageing fleet of icebreakers.

Uncertainty over Arctic offshore patrol ships
Artist’s impression of the Harry DeWolf-Class Arctic/Offshore Patrol Vessel (Irving Shipbuilding Inc. 2015)

The budget document mentions that “construction is already underway on two Harry DeWolf Class Arctic/Offshore Patrol Vessels” but says nothing the four others the government was planning to build, Huebert said.

“I hope that’s not signalling that after they build just the two, they’ll shut it down,” Huebert said. “We desperately need six or seven.”

The lightly armed ice capable vessels are expected to play a critical role in giving the Royal Canadian Navy the ability to operate in the Arctic for the first time since 1954, Huebert said.

“There had been some criticism of these vessels when they were first put forward that they weren’t going to be able to go far enough during enough parts of the season,” Huebert said. “But if you look into reports today in terms of the possibility of having no permanent sea ice, I think those vessels will be more than adequate.”

The vessels will give the government a major constabulary capability in the Arctic waters, enabling it to respond to any possible environmental crises such as oil spills, ship groundings and other emergencies, as well providing armed sea-borne surveillance of Canadian waters, Huebert said.

Washington watching?

The cut in Canada’s military expenditures will also not go unnoticed in Washington, where the Trump administration has put all its NATO allies on notice that they expect them to shoulder a greater share of the defence burden, Huebert said.

“To have this type of a budget and to think that we’re then going to be able to carry business as usual with the Americans, I just think it’s like living a little bit in the fool’s paradise,” Huebert said. “It’s wishful thinking.”

Northern development

There isn’t much for the social and economic development of the three northern territories either, Huebert said.

The 2017 federal budget is promising Nunavut, Northwest Territories and Yukon $300 million for northern housing over the next 11 years, with the actual disbursements delayed until 2018-19.

Nunavut will receive the lion’s share of that funding: $240 million. The Northwest Territories and Yukon will get $36 and $24 million respectively.

The government claims these investments “will help approximately 3,000 northern families find adequate, suitable and affordable housing.”

Budget highlights for the North:

Climate change adaptation

  • $83.8 million over five years to “enhance Indigenous community resilience through infrastructure planning and emergency management in those communities where flooding risks are increasing; and enhance resilience in northern communities by improving the design and construction of northern infrastructure.”
  • $26.4 million over five years to support Indigenous collaboration on climate change.


  • $400 million for an Arctic Energy Fund, to help remote communities reduce their reliance on diesel. The fund is scheduled to begin in 2018/19, with an investment of $40 million a year.


  • $108 million over four years into the Territorial Health Investment Fund:
    • Nunavut: $54 million
    • Northwest Territories: $28.4 million
    • Yukon: $25.6 million


  • $14.7 million top up for the Northern Adult Education Program over three years.
  • $90 million over two years for the Post-Secondary Student Support Program for Indigenous students
  • $50 million in 2017-2018 for the Access to Skills Development and Training for Indigenous Peoples program.

Indigenous Guardians Pilot Project

  • $25 million over five years, starting in 2017–18, for a pilot Indigenous Guardians Program to hire Indigenous Canadians as protectors and monitors of their traditional lands

Mining tax credit extension

  • The 15-per-cent Mineral Exploration Tax Credit for junior exploration companies is being extended for an additional year.

Indigenous Tourism

  • $8.6 million over four years to support the Aboriginal Tourism Association of Canada’s five‑year Indigenous Tourism Strategy.
‘A positive next step’
Prime Minister Justin Trudeau and President of the Inuit Tapiriit Kanatami Natan Obed talk as they overlook Iqaluit, Nunavut on Thursday, Feb. 9, 2017. (Sean Kilpatrick/The Canadian Press)

Canada’s national Inuit organization Inuit Tapiriit Kanatami, which signed an Inuit-Crown partnership agreement with the Trudeau government in February, said it was disappointed that the 2017 budget “lacks the Inuit-specific language needed to understand how our regions will be affected.”

“Budget 2017 provides no clarity on how much funding will flow directly to Inuit to build the homes we need in our regions,” ITK President Natan Obed said in a statement.

Nunavut Finance Minister Keith Peterson called the budget “a positive next step.”

“Nunavut faces unique challenges, especially related to housing and energy,” said Peterson. “We have encouraged the federal government to invest in these areas for some time.”

N.W.T. Premier Bob McLeod said he was “very pleased” with the budget, adding that the territory “could always use a little bit more.”

“$36 million over 11 years [for housing] will benefit us significantly… plus we can also apply to access that national housing funding that was announced,” McLeod told CBC News.

Jobs and infrastructure

Still, Huebert argued the budget has no money specifically earmarked for infrastructure and employment creation in the North.

“And then you doublelayer that over the fact that they [the Liberal government] have removed one of the largest potential sources of income for northerners and that is, of course, the offshore oil and gas industry,” Huebert said, referring to the five-year ban on oil and gas exploration in all of the Canadian Arctic announced by Trudeau in December in conjunction with the outgoing Obama administration.

The Liberal focus on helping middle class families also misses the mark for many families in northern Canada struggling with poverty and unemployment, Huebert said.

“They got themselves in the straightjacket by all the spending that they did in the first budget, so there is a limited capacity to move,” Huebert said.

Related stories from around the North:

Canada:  Trump’s election a cold reality check for Arctic, Blog by Mia Bennett

Denmark:  Obama and Nordic leaders pledge Arctic cooperation, Alaska Dispatch News

Finland: Finland talks Arctic with Trump, YLE News

Greenland:  Greenland, Alaska elections bolster Arctic resource extraction, Blog by Mia Bennett

Sweden: Sweden’s climate minister worried about Trump’s stance on global warming, Radio Sweden

SwitzerlandArctic climate (anti-)Trump card in Davos, Blog by Irene Quaile, Deutsche Welle

United States: Trump budget cuts deeply into Alaska’s federal funding, Alaska Dispatch News

Levon Sevunts, Radio Canada International

Born and raised in Armenia, Levon started his journalistic career in 1990, covering wars and civil strife in the Caucasus and Central Asia. In 1992, after the government in Armenia shut down the TV program he was working for, Levon immigrated to Canada. He learned English and eventually went back to journalism, working first in print and then in broadcasting. Levon’s journalistic assignments have taken him from the High Arctic to Sahara and the killing fields of Darfur, from the streets of Montreal to the snow-capped mountaintops of Hindu Kush in Afghanistan. He says, “But best of all, I’ve been privileged to tell the stories of hundreds of people who’ve generously opened up their homes, refugee tents and their hearts to me.”

Do you want to report an error or a typo? Click here!

Leave a Reply

Note: By submitting your comments, you acknowledge that Radio Canada International has the right to reproduce, broadcast and publicize those comments or any part thereof in any manner whatsoever. Radio Canada International does not endorse any of the views posted. Your comments will be pre-moderated and published if they meet netiquette guidelines.
Netiquette »

Your email address will not be published. Required fields are marked *