Matt Malone — Research Director, Digitalization, Security and Democracy
Much of Canada’s recent economic security policy has been defined by reactivity to the Trump administration. We saw that before in concessions to the Americans on border security, digital taxes and border-crossing revenue-sharing agreements. So much of the policy thinking now — and the massive boost in defence spending in the name of Canadian sovereignty — has been guided by our reaction to the Americans. For more than two decades, successive Canadian governments have ignored calls from Canadian experts to develop a national security strategy. It is the Trump administration that has finally catalyzed policy makers to take up the challenge.
Moving from reaction to action, it will be critical to see how the strategy delivers on its aspiration to modernize Canada’s economic security tool kit. This is a vital challenge in today’s security environment. While Canada’s export controls, investment reviews and sanctions regimes have fallen into desuetude, in recent years China and the United States have both used export controls to throttle access to critical minerals and emerging technologies such as artificial intelligence (AI). Over the summer, US sanctions forced a Canadian company to suspends its operations in Cuba. Today, Canada’s investment review mechanisms are facing a stress test with steel manufacturer Cleveland-Cliffs’ decision to lay off Canadian workers in defiance of its undertakings.
The National Security Strategy recognizes that Canada should be engaging in a much-needed governance cleanup of its economic security policy tool kit. When investment review policy, import and export controls, and critical supply chain strategies are set by different ministries with different mandates, bolstering Canada’s economic security becomes challenging. As great powers increasingly demand alignment with these tools, Canada will also need to work quickly to build the capabilities to reserve the right to decide for itself who and what is a threat.
What Our Experts Are Saying
Paul Samson — President & Chief Executive Officer (CEO)
Canada’s new National Security Strategy is timely, and provides a vision that aptly underscores technology and economic security. Now comes the hard part: putting in place all the pieces needed to implement and sustain huge new spending on defence and security, while weighing it against other federal spending such as health transfers.
And because Canada can’t do it all, perhaps the trickiest task will be deciding which key technologies to build and control at home, and which to outsource to partners.
Odun Olowookere — Research Director, Digital Economy
The new security strategy’s focus on economic security extends to Canada’s financial system, and several measures are already under way to make payments more reliable. The Real-Time Rail is set to launch in stages starting by year-end, and Canada and the European Union have agreed to negotiate linking it with Europe’s TARGET Instant Payment Settlement system. This means more efficient domestic and cross-border payments, and promises a more resilient financial system. In addition, the draft stablecoin regulations add a regulated tokenized option to Canadians’ available payment solutions.
Taken together, the strategy shows that Canada is addressing domestic needs by strengthening its economic sovereignty and its international priorities by building partnerships on its own terms.
Tracey Forrest — Research Director, Transformative Technologies
The plan’s focus on AI, quantum computing, space technology and energy signals that Canada is ready to make difficult choices and take greater risks to become a global technology leader. For Canadians, success could mean a more attractive job market, stronger protection against threats, and more reliable access to the energy and technologies we use every day. As we heard at CIGI’s recent Foresight in Defence panel, shaping our own future will also mean choosing partners carefully, understanding what each brings to the relationship and building on Canada’s reputation as a trusted, reliable ally. To turn this ambition into results, Canada must be willing to invest before all the answers are clear, and to be agile in the face of abrupt technological and geopolitical shifts.
