This Week in Canada: Analysis and Implications by Catherine Girard and Roger Hilton

Prime Minister Justin Trudeau has been busy. In the span of a week, he welcomed German Chancellor Olaf Scholz, participated in the Crimea Platform, celebrated Ukraine’s Independence Day, and received NATO Secretary General Jens Stoltenberg. Given the foreign and security events that transpired this week, we share our assessments and outline potential future implications for Canada at home and abroad.

On Chancellor Scholz’s Visit

• As Germany attempts to become independent of Russian gas, Canada is emerging as a potential new supplier. Despite being the world’s fifth-largest natural gas producer, there is a lack of infrastructure to bring energy to the market. Canada does not have even one liquid natural gas (LNG) export terminal.
• Germany’s 2024 target to wean itself off Russia is ambitious, but it would take Canadian industry at least that long to build the necessary infrastructure to become a reliable supplier. This delay will undoubtedly open lucrative opportunities for the American industry that has been exporting LNG since 2016, with more ready-to-go facilities to be set up soon.
• As an example of the geopolitical success of America’s LNG delivery to Europe, Lithuania has been receiving monthly shipments from the US that played an instrumental role in helping Vilnius achieve its goal to be fully independent of Russian gas imports.
• While LNG is a proven energy source, Trudeau also used the Chancellor’s visit as a catalyst to explore more hydrogen production, which is a considerably small and underdeveloped market in Europe. This move makes domestic political sense, especially with the Conservative leadership race coming to an end. However, it is by no means a viable energy or geopolitical turnkey for Canada in Europe.
• When taken together, Trudeau is in a contradictory position as he finds himself between helping Europe with energy and reasserting the country as a reliable partner and keeping domestic electoral promises to fight and lead on climate change. Either way, future decisions are sure to upset many.

 

 On Celebrating Ukraine

• Canada ranks 9th regarding aid donors to Ukraine by % of GDP, between Slovakia and Czechia, as Ottawa continues to primarily channel its support to Kyiv through financial means.

• Although the announcement of a new set of sanctions, additional funding for peace and stabilization operations program, and a contribution to the Food and Agriculture Organization’s Grain Storage Support Strategy is positive, the support is underwhelming as it lacks any prospective military aid, which is Ukraine’s most urgent request.

• Canada has committed or delivered $626 million in military aid. Yet, given the current state of the conflict and Russia’s precarious position, Kyiv could have profited from more advanced heavy weapons or tactical equipment. Indecisiveness or an absence of military material reserves are two options that could explain Ottawa’s inaction in the military realm.

• While Canada has previously initiated programs to educate its citizens on disinformation, the creation of a new national team to offset Russian state-sponsored disinformation is another step in the right direction. Still, it demonstrates a lack of strategic foresight, as such a program should have existed long before February 24th. Canada is playing catchup on Russian disinformation but are at least now at the party.

 

On Secretary General Stoltenberg’s visit and NATO

• While Trudeau, like PMs before him, has attempted to avoid the international securitization of the Arctic, Putin’s invasion of Ukraine and the melting of the Arctic is changing the policy calculus in the military and commercial realms.

• Jens Stoltenberg is the first NATO Secretary General to visit the Arctic and has emphasized Russia’s prioritization of the region, backed by a new Arctic Command and the revitalization of former Soviet Arctic outposts in concert with an aggressive naval strategy. Although sabre rattling is common practice for the Kremlin, Moscow has been prioritizing the region and has the power to prove it.

• Despite Russia’s icebreaker superiority, as Moscow operates 40 icebreaking operational vessels compared to Canada’s 18 vessels, Russia’s economic collapse due to international sanctions will impede its ability to bring its projects to fruition.

• No longer able to fly under the radar is China’s self-declared ambition as a “near-Arctic state” and desire to create a “Polar Silk Road”. The latter should be taken with a grain of salt by Ottawa’s policymakers as the current Belt and Road initiative has largely not met expectations and exposed Beijing’s predatorial lending.

• In response to this new environment, Ottawa announced plans to spend nearly 5 billion CAD over the next six years to modernize continental defence. For context, Canada hasn’t modernized the North Warning System since 1985, its main contribution to NORAD.

• As Canada and Russia are two of the five countries disputing territory in the Arctic and as the countries that have the most land in the Arctic (40% and 53%, respectively), Canada’s actions in the Arctic during the Russian invasion of Ukraine speak volumes about how it views its relationship with Russia. It could also set the tone for future Arctic disputes.

• Investments in defence and the establishment of the NATO Climate Change and Security Centre for Excellence are significant springboards that will raise Canada’s presence and allow it to react more agilely. Despite this, Ottawa must not return to complacency regarding the Arctic.

*The views expressed in this piece are of the authors alone and do not necessarily represent the official position of GLOBSEC.