Report Title: Update 2019 | Investing in Canada’s Defence: Strategic Insights and Financial Transparency

But first. Canada finds itself at a crossroads: on one hand, there is a deep-rooted spirit of being a "global village," a country built on multiculturalism, diplomacy, and cooperation with the world. On the other, the reality of foreign influence in critical areas, especially defense, is challenging our autonomy and raising concerns about our ability to safeguard our own sovereignty.

In Japanese, the language uses katakana to transcribe foreign words into a script that fits the Japanese syllabary. Since Japanese lacks a standalone "C" sound pronounced like in "Canada," it instead uses "K" for that hard 'ka' sound. Hence, "Canada" becomes カナダ (Kanada). This reflects the closest approximation of the sounds in the Japanese language.

In German, the "C" sound as found in "Canada" is more commonly represented by "K" when following a hard consonant sound. German is a more phonetically direct language, often opting for "K" where English uses "C" for hard sounds. Therefore, "Canada" is spelled "Kanada" in German, preserving the original pronunciation but using the German alphabet's conventions.

In both cases, the goal is to maintain the pronunciation of the word as close as possible to its English version but using the rules and phonetics of the native language.

The name "Canada" is believed to have originated from the St. Lawrence Iroquoian word "kanata," meaning "village" or "settlement." The story goes that in 1535, when French explorer Jacques Cartier asked the local inhabitants of the St. Lawrence region for the name of the land, they used the word "kanata" to refer to their village (likely present-day Stadacona, near Quebec City). Cartier interpreted this as the name of the entire area, and from there, the name "Canada" stuck and expanded to encompass the entire country.

This concept of "village" aligns with how Canada often sees itself and is seen globally—as a "global village." This idea reflects the nation's commitment to diversity, inclusivity, and global interconnectedness. Canada has a reputation for being a multicultural country, where people from all over the world come together and coexist. The country's immigration policies and its efforts on the international stage reflect this spirit of cooperation and unity.

In many ways, Canada's identity as a global village symbolizes its role as a bridge-builder, advocating for peace, dialogue, and human rights on the world stage. This ethos is deeply rooted in the nation's history, from its peacekeeping missions to its multilateral diplomacy. Canada’s ability to harmonize diverse cultures internally also serves as a model for fostering global collaboration and community.

The essence of the Canadian spirit—one of cooperation, diversity, and community—is inextricably linked to this broader notion of the "global village." Canada’s success lies not only in its economic or geopolitical strengths but in its role as a place where cultures meet and thrive together, echoing the ancient concept of "kanata" as a meeting point for communities.

In modern terms, this "village" metaphor has evolved into a more global vision, encapsulating the country's openness, peacebuilding efforts, and role in the international community. Canada is more than a physical place—it's an idea that transcends borders.

Let’s step back for a moment and actually give credit where it’s due. When you look at Canada’s shipbuilding industry, there’s no denying that, somehow, we’ve gotten it right—or at least close to right. The National Shipbuilding Strategy (NSS) is proof of that. It has created a consistent pipeline of work for Canadian shipyards, kept thousands of skilled workers employed, and, crucially, maintained an independent, national capability to build and maintain ships. The Arctic ambitions only underscore why this matters: as the ice melts and competition in the region heats up, Canada needs a fleet that can operate in extreme conditions to protect its sovereignty​

But it’s the hydrogen sector that tells a tale of caution. Think back to when companies like Ballard Power Systems were trailblazing, showing the world what clean energy could look like. That was the 90s energy renaissance. Ballard was the Hendrix of hydrogen—disrupting the scene with fuel cells that could have rewritten the future of energy. But then, like all too familiar narratives, the script changed. A few deals later, much of that pioneering tech was in the hands of foreign investors, particularly China. Sure, we got some short-term gains out of it, but the long game? Well, now we’re watching from the sidelines as the very technology we helped develop fuels another country’s rise to energy dominance.

In the case of Ballard and hydrogen, perhaps we let a golden opportunity slip. But maybe the argument could be that this wasn’t a case of pure shortsightedness—rather, it was a recognition that going it alone in an increasingly globalized market might have been the real fool’s errand.

There’s something haunting in this—a kind of quiet betrayal, not just of a company, but of the ingenuity we were supposed to hold onto. Ballard’s arc is almost Shakespearean: once the golden child, now sidelined by the same markets it helped build. And we’re left wondering if it’s a tragic flaw or just the way the world spins when you sell your best ideas to the highest bidder.

It’s a pattern we see too often—sell off the secrets, then sit back and wonder why we’re watching from the sidelines. Call it regulatory capture, call it the lure of foreign investment. It’s like playing a chess game where the pieces slowly get handed over to someone else. And here's where it gets real: once you lose that innovation edge, it’s hard to get it back. The kid at the arcade can’t just hit reset once he’s given away his best moves.

This isn’t to lament what’s lost but to reconsider what’s possible. The ship has sailed on hydrogen leadership for now, but let’s not lose sight of the other industries still on our shores. There’s a lesson in here somewhere—perhaps not just about industries but about the way we guard what’s important.

The National Shipbuilding Strategy (NSS) is the cornerstone of Canada’s shipbuilding success. This long-term policy, initiated in 2010, involves billions of dollars in funding and contracts aimed at rebuilding Canada’s fleet and boosting the domestic shipbuilding industry. The strategy supports not only military vessels like the Arctic and Offshore Patrol Ships (AOPS) but also non-combat ships for the Canadian Coast Guard. The NSS ensures a steady stream of work for Canadian shipyards, safeguarding jobs, and encouraging domestic investment. This stable demand allows shipbuilders to plan long-term, invest in new technologies, and train skilled workers​(CGAI)​(CGAI).

The industry benefits from a highly skilled workforce, many of whom are trained locally and specialize in maritime engineering and construction. Shipyards like Seaspan in Vancouver and Irving Shipbuilding in Halifax are hubs of innovation, drawing on decades of experience to design cutting-edge vessels. This expertise, coupled with advanced technology, gives Canada an edge in building modern, high-tech ships that meet both domestic and international standards.

Moreover, domestic control over design and production keeps Canada in the innovation game, allowing for advancements in areas such as sustainable fuel use and automation, ensuring that the industry evolves with global trends​(CGAI).

The idea that 66% of Canadian public servants could be under the influence of foreign interests is certainly provocative, though likely an exaggeration.

Still, it touches on real concerns regarding how foreign lobbying, corporate influence, and international relationships shape Canadian policy in critical sectors like defence, technology, and natural resources. This influence, though more subtle and nuanced than direct foreign employment, often operates in ways that are difficult to detect but still profoundly affect national sovereignty.

Foreign governments, especially major powers like the United States and China, play a strategic game that is less about outright domination and more about embedding influence through economic investments, regulatory capture, and long-term diplomatic maneuvers. In essence, they’re playing Go, the ancient strategy game, where the goal is to surround and influence, whereas Canada seems more often to be playing chess (or more like, we go, its chess kid not checkers, but ironically ha…well…you know ;), a more reactive game of counter-moves. Canada’s strategic industries, particularly in energy and defence, are increasingly intertwined with foreign entities. For example, Chinese state-owned enterprises (SOEs) have made significant inroads into Canada’s resource sectors, particularly in energy, where the acquisition of companies like Nexen by CNOOC highlights how much control has shifted abroad. This not only impacts the direction of these industries but also puts pressure on regulatory bodies to make decisions that may not align fully with Canadian interests.

In the realm of defence, Canada relies heavily on foreign military hardware, particularly from the United States, which creates a strategic dependency. This relationship (is rad) of course & is vital for Canada’s participation in NATO, but it also means that Canada’s ability to act independently is limited by the systems it relies on—or the companies—whether those be F-35 fighter jets or shared intelligence networks. Canada has a unique geopolitical position, bordering the U.S. while playing a vital role in Arctic security, which brings with it foreign influence that extends far beyond mere lobbying​(SpringerLink)​(CGAI).

China, with its more subtle approach, exemplifies the Go-like strategy. Chinese companies, backed by their government, slowly secure stakes in Canadian companies or crucial technology sectors. Ballard Power Systems is a case in point. Once a global leader in hydrogen technology, its intellectual property has gradually become part of China’s green energy initiatives, leaving Canada in a secondary position in an industry it once pioneered. This represents a slow capture—not through military or political dominance, but through economic strategy​(CGAI).

The hypothetical here is that Canada’s willingness to allow foreign investment into its most vital industries might be akin to handing over critical squares on the Go board, unaware of how surrounded it is becoming. Public servants, who must navigate this landscape, find themselves influenced not by foreign direct control but by the economic realities created by foreign ownership and lobbying. This isn’t about a nefarious takeover but rather about how foreign entities set the terms of engagement, subtly shaping the environment in which Canadian policies are made. And us Canadian citizens are left to live in.

If 66% feels like an overstatement, the deeper reality is that foreign influence in the form of economic entanglement and intellectual property transfer is undeniably growing. The challenge for Canada is how to maintain strategic autonomy while being part of a globalized economy that increasingly requires cooperation with more powerful players. As the world becomes more interconnected, it’s not just about whether Canada can control its own resources but whether it can navigate the web of foreign interests with enough agility to maintain true sovereignty.

1.2 Overview: Investing in Canada’s Defense

The 2019 update on Canada’s defence strategy highlights significant advancements in financial transparency, budget management, and procurement efficiency. A new Defence funding model is introduced, marking improvements in both the allocation of resources and streamlining procurement. Simplifying the approval process based on project size and cost ensures that investments align more closely with strategic objectives, all while focusing on timely capability delivery.

Central to this model is the Capital Investment Fund (CIF), a dedicated resource designed to synchronize with National Defence’s accrual profile, allowing the fund to mitigate risks and adjust for changes in project scope. The CIF’s role extends to managing year-to-year budget variations, ensuring a flexible approach to funding large, multi-year projects like naval ship construction.

Key Projects and Milestones:

Arctic and Offshore Patrol Ships (AOPS)

A prime example of the new funding model's effectiveness is the Arctic and Offshore Patrol Ships (AOPS) project. By November 2018, the Royal Canadian Navy secured approval for its sixth patrol ship, bolstered by the funds made available through the CIF. The first of these ships, HMCS Harry DeWolf, launched in September 2018, enhancing the Navy’s Arctic operations and global surveillance capabilities.

This project not only strengthens Canada’s naval presence but also generates socio-economic benefits, sustaining hundreds of highly-skilled jobs in shipbuilding. Future project authorities will continue to be sought through 2021-22, ensuring an agile response to evolving defence needs.

1.2.1 Capital Investment Fund (CIF) Management

To effectively manage long-term capital investments like ships and infrastructure, National Defence has adopted a life-cycle approach, spreading the costs of acquisitions over the useful life of an asset rather than booking them solely when the purchase is made. This shift to accrual accounting reflects fiscal impacts over time, enhancing transparency for stakeholders.

However, the cash basis of accounting, used to manage immediate year-to-year expenses, complements the accrual approach by offering clearer insights into the timing and actual costs of acquisitions. National Defence’s strategy balances these accounting methods, allowing for effective financial planning while adapting to changes in project costs and timelines.

On an accrual basis, the CIF remains stable with a 20-year plan set at $108 billion, and a five-year plan at approximately $15 billion.

1.2.2 Defence Capabilities Blueprint (DCB)

The Defence Capabilities Blueprint (DCB) serves as an innovative online tool, offering industry insights into National Defence’s investment opportunities. By presenting projections for research, development, and strategic partnerships, the DCB aligns the needs of the Forces with industrial capabilities.

One prominent initiative is the Automatic Identification Technology (AIT) project, identified since the 2018 Defence Investment Plan. This technology enhances National Defence’s logistics by improving data accuracy, reducing inventory levels, and enabling real-time asset tracking. With funding secured from the CIF, the project represents a significant leap forward in operational efficiency.

The DCB showcases over 240 projects valued above $5 million and infrastructure contracts exceeding $20 million. Since 2018, updates to the DCB have introduced features like the “What’s New” section, links to project websites, and a focus on Canada’s Key Industrial Capabilities (KICs).

Canada’s Defence Investment Plan for 2019 emphasizes improved financial management, streamlined procurement, and enhanced capability delivery. The CIF, accrual-based planning, and the DCB offer a dynamic approach to meet the needs of National Defence, ensuring long-term investments and sustainable economic benefits across the nation.

The concern over foreign influence in Canada’s public service is not just speculative but has been increasingly documented in official reports. While exact figures like 66% or 90% may seem high, various government and intelligence bodies, including the Canadian Security Intelligence Service (CSIS) and the National Security and Intelligence Committee of Parliamentarians (NSICOP), have highlighted that Canada remains a permissive environment for foreign interference. These actors—primarily from China, Russia, and other strategic competitors—are noted to view Canada as a low-risk, high-reward target due to its open democratic processes and relatively underdeveloped infrastructure for countering interference.

Reports suggest that public servants and elected officials are indeed key targets for foreign manipulation, not just through direct influence or recruitment, but also through more indirect means like long-term relationship-building, coercion, or the promise of economic rewards. This foreign interference doesn't always manifest as an overt capture but can involve covert pressure on policy decisions or economic strategies that align with foreign interests, subtly shifting Canadian sovereignty over time. The aim for these foreign powers, especially through economic entanglement and lobbying, is to erode public trust in Canadian institutions and to manipulate decision-making to suit their national interests.

While the NSICOP’s 2019 review identified elections as a particularly vulnerable process, the committee also expanded its focus to include broader Canadian democratic processes, noting that public servants—along with parliamentarians, media, and lobbyists—are vulnerable to foreign influence. The fact that state actors see Canada’s institutions as relatively easy to manipulate raises the stakes significantly. The reports stress that foreign states leverage techniques ranging from bribery to the more subtle shaping of public policy through economic ties, including the influence wielded by foreign-owned companies and lobby groups.

Furthermore, intelligence reports argue that Canada's open democratic culture can be weaponized by foreign powers to advance their own interests without needing a direct takeover. This suggests that while the exact percentage of public servants under foreign influence might be speculative, the structural vulnerabilities are real, and the foreign entanglements—whether through direct control or indirect influence—are significant. Given this, the claim that foreign interests might control an overwhelming portion of public policy-making doesn’t seem far-fetched when considering the combined influence of foreign investments, lobbying, and global corporate interests that continually shape the Canadian economy and national policies.

The larger issue here is not simply about identifying a raw percentage of compromised officials, but recognizing how deeply foreign control has embedded itself into the Canadian policy landscape, often subtly but with profound long-term implications for sovereignty​(Canada.ca)​(NSICOP).