Canada’s recent assumption of the Chairmanship of the Arctic Council prompted much discussion of Arctic issues, including security, an important element of which is the ongoing tug-and-pull over whether NATO should play a role in the region. Russia is, unsurprisingly, opposed. But there is division within NATO itself: Canada against, Norway and other Nordic states for, and the United States seemingly unsure. These divisions are rooted in the varied nature of the Arctic security challenges that each state or group faces. Therefore Arctic security solutions must be equally tailored.
According to Rob Huebert of the University of Calgary, both Russia and the U.S. are viewing the Arctic in military-strategic terms. Russia aims to maintain its nuclear deterrent, including in the Arctic, through submarine-based missiles to be deployed in its Northern Fleet. Meanwhile the U.S. has bolstered its ballistic missile defence forces in Alaska, and maintains fighter and airlift squadrons as well as a naval submarine presence. Both see their own moves as crucial to national security, but likely view the other with concern, a mindset also prevalent among the Nordic states.
Norway has prioritized Northern defence, moving its operational headquarters to the High North in 2009 and working closely with other circumpolar states, including Russia. But Norway has also been pushing for a NATO presence there because of the importance of the Arctic and increasing interest around the world. It has likewise made clear that as Russia continues its military modernization, Norway sees an Arctic presence of NATO as crucial to continued Norway-Russia cooperation.
Norway’s concerns are similarly felt by Sweden and Finland, which have hosted U.S. and NATO training exercises and deepened ties with the Alliance, as well as by the Baltic states (Latvia, Lithuania, Estonia). This has lead to talk of a Nordic-Baltic alliance or perhaps even of British involvement. Regardless, it is clear that real deterrence of the interested countries’ more powerful neighbour depends on the wider NATO organization.
These actions have caused concern in Russia where NATO, not to mention its expansion, has historically been viewed with suspicion. It is important that after a recent visit to Norway, NATO Secretary-General Anders Fogh Rasmussen said that NATO would not increase its presence in the region. He also noted, though, the legitimacy of Norway’s expectation that NATO principles apply to all NATO territory, including its northern reaches. So it seems that while no increase in activity is imminent, neither is a reduction, and the Nordic states will almost certainly continue to seek greater NATO involvement. But while Norway and others have good reason to look to NATO, Canada has good reason to not want an Alliance presence.
With boundary disputes set to be resolved through the U.N. Convention on the Law of the Sea and all Arctic states saying that military activities are mainly to support of commercial and other civilian priorities, Canada’s desire, especially under the current government, is to see Arctic states focus primarily on economic development. Furthermore, despite sometimes harsh public rhetoric, Canada has a good economic working relationship with Russia it wishes to maintain, as the two countries have much to offer one another. Burgeoning NATO-Russia competition in the Arctic would undermine both those goals. But Canada cannot block U.S., Russian, or Nordic strategic aims, and so it must simply do what it can to defuse Arctic tensions: work to influence the means by which security is organized in the Arctic.
Whether or not the Nordic states achieve their goal of a greater northern NATO presence will depend on the keystone of the Alliance, the United States. In some ways NATO is an attractive option for the Americans, as five of the eight circumpolar states (Canada, Norway, Denmark, Iceland, the U.S.) are member states and the Nordic-Baltic states seem fully willing to contribute to the extent of their (relatively limited) capabilities. But, as its National Strategy for the Arctic Region indicates, the United States is no more interested in de-stabilizing the region than is Canada. Therefore a tension-creating NATO presence is neither ideal nor a foregone conclusion.
This presents Canada with an opportunity to promote an alternative to NATO: NORAD, the North American Aerospace Defence Command. The NORAD option is attractive for several reasons. In concrete terms, NORAD boasts a North America-specific defence architecture (NATO does not), a connection to ballistic missile defence, and an emerging focus on the maritime domain. Through these capacities, it can support both military-strategic and economic activities. In terms of perceptions, NORAD, while closely linked to NATO, is a separate organization. Whereas a NATO presence would stretch solidly from Alaska to the Nordic region, a degree of separation between northern North American and northern European security may present a less anti-Russian and less threatening posture. In the same vein, although it was established during the Cold War NORAD lacks some of the legacy of NATO, which for decades stood at the symbolic heart of East-West competition.
It is important to remember that warfare among the Arctic states is highly unlikely. And, while there will always be disagreements and competition among all states, much of the current Arctic tension is the result of uncertainty about the shape of the Arctic security structure going forward. The task for now is to ensure that the final shape settled on is the best one to calm existing tensions and manage future disputes.
Andrew Chisholm is a Junior Research Fellow at the Atlantic Council of Canada. He recently graduated from the University of King’s College with a B.A., Combined Honours, in Political Science and History, and studied Conflict Resolution at the Rothberg International School at Hebrew University in Jerusalem. Andrew focuses his writing on contemporary Canadian foreign, defence, and security policy. His wider interests include sovereignty and governance, international diplomacy, and emerging security threats. Contact:firstname.lastname@example.org
This article was cross-posted by permission from and appeared in its original form at the Atlantic Council of Canada. Any views or opinions expressed in this article are solely those of the authors and the news agencies and do not necessarily represent those of the Atlantic Council of Canada.
What maritime dispute is most likely to lead to armed conflict in the next 5/10/20 years?
This is the seventh in our series of posts from our Maritime Futures Project. For more information on the contributors, click here. Note: The opinions and views expressed in these posts are those of the authors alone and are presented in their personal capacity. They do not necessarily represent the views of their parent institution U.S. Department of Defense, the U.S. Navy, any other agency, or any other foreign government.
LT Scott Cheney-Peters, USNR:
I’m going to confine my thoughts here to the most likely to spill over into conflict and save the rest for Question 9. I expect that I will of course get most of this wrong. There’s a reason I’m not a betting man.
0-5 Years: As we’ve been arguing on this site since last year, the numerous maritime disputes in which China is involved, China’s seeming unwillingness to seek a diplomatic resolution to these disputes, and China’s unilateral moves to change the situation on the ground (sea) means that there is an alarming risk of miscalculation and escalation in any of a number of conflicts (the Senkakus/Diaoyus; the Spratleys, the Paracels, etc). This is not to lay the blame solely in China’s lap, however. The recent (re-)election of Shinzo Abe in Japan at the head of a nationalist LDP government will perhaps be just as unwilling to make concessions in the Senkakus dispute, for example. And as we saw with the protest voyage to the Senkakus of the Kai Fung No. 2, non-state actors can just as easily force a government’s hand. All of this is despite the incredibly complex and large economic ties which bind all of the participants. Further, there is the possibility in any of these conflicts that a “wag-the-dog” component might come into play as the Chinese, Japanese, or another government seeks to distract from political or economic domestic problems through foreign adventurism.
5-10 Years: The collapse of North Korea is something of a continuously looming catastrophe. Any prediction attempting to nail down a date has, of course, thus far been proved wrong. But the likelihood that it will happen at some point and the magnitude of follow-on effects requires robust contingency planning.
The reason I bring it up is that many of these potential follow-on effects dangers involve the possibility of maritime conflict – from a starved North Korea launching a land and sea invasion across the Demilitarized Zone and Northern Limit Line, or a combustible mix of Chinese and South Korean troops flooding into a post-regime North Korea, “disagreeing” over the terms of administration and reconstruction.
In a Naval War College class last year we presented a scenario in which the collapse of the North precipitated a potential humanitarian disaster, prompting a Chinese move across the border to stem the flow and the grave danger of miscalculation leading to conflict between some combination of American, South Korean, Chinese, and ex-regime ground and/or naval forces. We argued contingency planning (and regular multinational Humanitarian Assistance/Disaster Response exercises) for such a possibility needed to begin now between the U.S., South Korea, and China. More on this will follow in my oft-delayed post “Thinking About Prevention, Part III.”
Runner-up: Iran – because, well, the IRGCN sometimes seems like it requires individual units to bring foreign vessels to the point of batteries release as part of a bizarre initiation process.
10-20 Years: The long-range forces likeliest to lead to maritime conflict in this timeframe and beyond may be urbanization, bringing more people to the cities, and climate change, bringing the seas closer to the cities. These won’t necessarily lead to a specific conflict, but could create a greater possibility of some new forms (in a tactical sense) of maritime insurgencies or require new/improved abilities to fight in maritime urban environments.
Simon Williams, U.K.: The disputes raging between China and its South East Asian neighbours over islands and influence in the energy reserve rich South China Sea, I believe, has the greatest potential to escalate into armed conflict with many regional powers flexing their military muscles. The standoff also has the potential to draw in other global powers, with America and India waiting in the wings to defend their interests should they deem it necessary. Moreover, options for a diplomatic solution are slowly contracting; last year ASEAN nations failed to agree on a ‘code on conduct’ at the annual summit meeting. Tensions also have the inherent risk of drawing in other powers due to the globally vital trading routes passing through the region. America has already announced an increased focus on the wider Pacific region, a strategic shift which has caused some chagrin in Beijing, which contends the Americans are interfering and in effect staging an attack on China.
The increasing size of the Indian Navy and the ambitions of China to build a credible fleet, demonstrated by the recent launch of their first aircraft carrier, are likely to lead to a further increase in tensions. History demonstrates that two nation’s with large navies and divergent regional interests rarely get along.
LT Drew Hamblen, USN: The Senkaku Islands, the Spratlys, or Taiwan itself.
Marc Handelman, U.S.: Unchecked African-based oceanic piracy. Polar (Northern) national territorial & natural resource exploitation.
Felix Seidler, seidlers-sicherheitspolitik.net, Germany:
Definitely the South China Sea, not the Persian Gulf. The Iranian naval threat is over-hyped. The U.S. Navy would sink most of Iran’s vessels within a few hours. However, in the South China Sea, the interests of the U.S., China, and India clash. With rising 1) population numbers, 2) regional economies, 3) nationalism/nation self-confidence, 4) resource demand, and 5) Armed Forces capabilities, armed conflict between two or more states is more likely in the South China Sea than anywhere else. These five points create a dangerous cocktail, because any conflict, from whatever cause, could quickly escalate.
Dr. Robert Farley, Professor, University of Kentucky: I would not be at all surprised to see conflict between China and one or more ASEAN states over island control and access in the South China Sea. The game is extremely complicated, ripe for miscalculation, and prone to a variety of principal-agent problems. States that don’t want to be in an armed dispute could easily find themselves embroiled if they miscalculate the intentions of others.
Bryan McGrath, Director, Delex Consulting, Studies and Analysis: Cliché, but one of the ongoing South China Sea scenarios seems most likely.
YN2(SW) Michael George, USN: Within the next 2 decades, the only legitimate threat from a maritime perspective I can foresee is China. From various disputes with Japan to burgeoning naval capabilities, such as its new aircraft carriers, China seems to be a force to be reckoned with.
LCDR Mark Munson, USN: I don’t see the various disputes that China has with neighbors in the East and South China Seas as being the seeds for future armed conflict. One possibility that could snowball into something worse would be the various Persian Gulf states reacting in response to further efforts by Iran to assert its control over the Straits of Hormuz. My most likely scenario, however, would be a fight between North and South Korea over encroachments across the Northern Limit Line.
Sebastian Bruns, Fellow, Institute for Security, University of Kiel, Germany: Until 2018: South China Sea; Strait of Hormuz/Persian Gulf. Until 2023: China’s rise (in general); Northwest & Northeast Passage; South America undersea resources; and/or any of the above. Until 2033: China’s rise (in general); and/or any of the above.
CDR Chuck Hill, USCG (Ret.):
China and Iran are the most obvious candidates. Today’s Navy seems geared to those threats. Looking elsewhere, we are likely to see some asymmetric conflicts where insurgents attempt to exploit the seas.
China will continue to push its claims in the South and East China Seas by unconventional means, or perhaps we may wake up some morning and find that every tiny islet that remains above water at high tide has been occupied. They are building enough non-navy government vessels to do that. They may also sponsor surrogates to destabilize the Philippines, Indonesia, and other Asian Nations that don’t willingly accept Chinese leadership.
We may also see conflicts: – in Latin America, e.g. Venezuela vs. Colombia; – between the countries surrounding the Caspian Sea over oil and gas drilling rights; – over water resources on the great rivers of Asia.
There are always wars in Africa. They may become more general. Wherever there is both oil and weak governments, there may be conflict – Nigeria and Sudan come to mind. The entire Maghreb is at risk with Libya unstable, an ongoing arms race between Morocco and Algeria, and a growing Al-Qaeda franchise.
Bret Perry, Student, Georgetown University 5 Years: Nigerian Piracy. Although not necessarily a maritime dispute, this is a serious maritime security issue that could get ugly. Piracy is on the rise again in Nigeria but unlike previous periods of piracy in the country the current episode appears less political and more criminal making it more threatening and difficult to combat. Although Nigeria does not see as much commercial shipping traffic as Somalia, it still is a significant oil exporter via sea. This, combined with the increase in offshore oil facilities in the area, make piracy a serious threat to the area.
10 Years: Persian Gulf Conflict. There is so much military activity among multiple countries in this region that conflict is likely. Although the US Navy and IRGCN have both displayed discipline thus far, if either side makes a mistake, or is pushed by another party, then the Gulf could experience some maritime conflict.
20 Years: The South China Sea. Tensions in this region between the different parties involved will continue to fluctuate, but it will be some time until China possesses the confidence to decisively act militarily.
LT Alan Tweedie, USNR: Both Iran and North Korea are unpredictable enough to start an armed conflict which would spill into the sea. The two also have enough land-based anti-ship cruise missiles (ASCMs) and ballistic missiles to put AEGIS/BMD to work for its intended purpose. India and Pakistan could also heat up their cold war, although I highly doubt the U.S. would get involved militarily in such a dispute.
LT Chris Peters, USN: 5 Years: Iranian maritime claims in conjunction with their nuclear development. 10 Years: North Korea vs South Korea OR China vs Japan re: disputed islands. 20 Years: Access to Arctic waterways and seabed resources.
CDR Chris Rawley, USNR: I’ll answer this question in the broader context of defense strategy. The U.S. DoD is making a deliberate pivot to East Asia, but changing global demographics don’t necessarily support such a shift. At the Jamestown Foundation’s recent Terrorism Conference, insurgency-expertDavid Kilcullenspoke to four global trends:
1) Population growth – By 2050, there will be over 9 billion people on earth. Much of this rapid growth will continue in less-developed regions of the world, with the “youth bulge” more prominent in the Middle East and Africa. Meanwhile the populations of industrialized countries, including China, will remain stagnant, or even shrink. 2) Urbanization – The trend of people moving to cities will continue, especially in Africa and South Asia. Urbanization brings with it higher rates of crime, pollution, and sprawling slums. The problems associated with these issues will often spill outside of a city’s borders, sometimes even becoming transnational. 3) Littoralization – Mega-cities (those with more than 10 million people) appear mostly in coastal regions. Poverty-stricken mega-cities in littoral areas such as Mumbai, Karachi, Dhaka, and Lagos are growing the fastest. 4) Connectedness – People and financial sectors are increasingly linked together globally with networks, cell phones, and satellites communications. These technologies provide constant global reach to anyone, anywhere.
The demographic trends are global, but the first three are most pronounced in coastal Africa and the Indian Ocean rim countries. Kilcullen primarily discussed these trends in the context of al Qaeda’s future. As an example, he believes (as do I) we will see more Mumbai-style attacks, with the terrorists infiltrating from the sea and command-and-controlling their operations in real time with smart phones and social media. But these four trends have greater implications for national security than the terror threat alone. Importantly, they indicate that irregular, people-centric threats will continue to create a disproportionate share of crises most likely to precipitate military intervention. It makes sense to array higher-end forces in areas where higher-end, state-centric threats are possible. But before we realign too much force structure to counter a blue-water fight in East Asia, we should consider that the types of missions these ships have been doing in the Indian Ocean and Persian Gulf the past two decades is what they will likely continue to do for the next two decades.
Moreover, the trends revalidate the importance of sea power to our nation’s security and support disproportionate defense spending on the Navy/Marine Corps team. From an acquisition stand-point, the Navy will need more platforms and weapons optimized to operate in the littorals and a continued focus on expeditionary logistics. Doctrinally, the Marine Corps will need to develop and practice new concepts for fighting in urban terrain.
LCDR Joe Baggett, USN: Melting of the Polar Ice caps – Creating a race for claim and sovereignty over resources. Climate change is gradually opening up the waters of the Arctic, not only to new resource development, but also to new shipping routes that may reshape the global transport system. While these developments offer opportunities for growth, they are potential sources of competition and conflict for access and natural resources.
Increased competition for resources, coupled with scarcity, may encourage nations to exert wider claims of sovereignty over greater expanses of ocean, waterways, and natural resources—potentially resulting in conflict.
LTJG Matt Hipple, USN: In the specific realm of dispute over the maritime domain, as opposed to just armed conflict in the maritime domain (in which case, Iran), the Senkakus are the most likely candidate. It wouldn’t be a full-blown war, but certainly there is a likelihood of shots being fired in misguided anger or accident with the increased level of friction contact between multiple opposing navies and fanatical civilians.
LT Jake Bebber, USN: If history teaches us anything, it is that the next major conflict will occur in an area we will not expect and involve parties and issues that will surprise us (how many of us could point out Afghanistan on a map on September 10, 2001?). We will likely not be prepared. That being said, if I had to bet money, I would suggest that the maritime dispute between Japan and China over the Senkaku Islands is the one most likely to lead to a maritime conflict, drawing in a reluctant United States.
OnAugust 16, 2011, the Canadian government announced the re-naming of Canada’s naval forces from “Maritime Command (MARCOM)” to its original designation, the “Royal Canadian Navy (RCN).” The last time Canada’s naval forces were known as the RCN was in 1968, when Lester B. Pearson amalgamated the three branches of the Canadian military under one command, named the “Canadian Forces.” Whatever name they operate under, Canada’s naval forces will continue to prove their importance in decades to come by playing a key role within NATO in increasingly critical waters.
Canada is proving its maritime mettle in a number of NATO operations around the world. Canadian vessels have played an active role in the NATO operation Active Endeavour. The operation was initiated on October 6, 2001, as a response to the September 11th attacks, which invoked NATO’s collective-security defence clause – Article 5. The aim of Active Endeavor is to keep the Mediterranean trade routes open and safe from pirates or terrorists, and to track and control vessels suspected of transporting weapons of mass destruction (WMDs).
Among the Canadian vessels that have participated in Canada’s portions of Active Endeavour, operations Sirius and Metric, are the Halifax-class frigates HMCS Charlottetown (FFH 339) and HMCS Vancouver (FFH 331). Most recently, Charlottetown returned to the Mediterranean in January 2012, continuing to patrol the area for suspect vessels until re-tasked to join Operation Artemis in April as part of Combined Task Force 150 (CTF-150) in the Arabian Sea. To date, Active Endeavour operations have hailed over 100,000 vessels and boarded some 155 suspect ships. Continued RCN participation in this operation not only gives Canada the capability to respond to crises in the immediate region but offers security to a region where a tremendous amount of world trade is conducted.
Another recent Canadian effort has been as part of Standing NATO Maritime Group One (SNMG1). SNMG1 is an integrated maritime force, consisting of four to six destroyers and frigates from different NATO Member and Partner countries, that plays an important part in maritime security. It normally operates in the eastern Atlantic Ocean during peace time. However since August 17, 2009, SNMG1 has been operating in and around the Gulf of Aden, a body of water that lies between the southern coast of Yemen and Somalia. The current operation, Ocean Shield, has made significant contributions to international efforts aimed at combating piracy off the Horn of Africa.
Within Ocean Shield Canadian vessels have played crucial roles. Among them, Charlottetown helped disrupt the movement of illicit cargo off the coast of Yemen. On May 5, 2012, for instance, Charlottetown successfully intercepted 600 pounds of hashish. Speaking at the changeover of Charlottetown with HMCS Regina (FFH 334) on August 19, Canadian Minister of National Defence, Peter Mackay stated, “Regina’s deployment continues our strong tradition of participation in overseas operations with our allies, while making meaningful contributions to international security and stability.” Ocean Shield is expected to end in 2014, but until then the Canadian Navy will no doubt continue to take an active role in the operation.
On March 23, 2011, NATO initiated Operation Unified Protector, under the command of Canadian Lt. General Charles Bouchard, to enforce UN resolutions 1970 and 1973 concerning Libya. The resolutions authorized NATO forces to maintain a no-fly zone and arms embargo against the Libyan government.
Both Vancouver and Charlottetown participated in the operation. On May 12, 2011, Charlottetown, along with French and British warships, engaged several Qadhafi regime small boats involved in an attack against the port of Misrata, and 18 days later came under fire from BM-21 rockets launched from shore. Meanwhile Vancouver worked alongside NATO allies to enforce the arms embargo placed against the Libyan government until its fall. As shown, Canada can and does play a leading role in NATO operations on the seas and oceans of the world.
NATO’s Arctic Future
In addition to its involvement in NATO operations abroad, Canadian vessels can perhaps play a key role in shaping NATO’s Arctic policy. As the Arctic becomes more navigable, there will be much more traffic in the region, commercial and military, which will necessitate a stronger RCN presence. On June 3, 2010, the Canadian government announced its new National Shipbuilding Procurement Strategy (NSPS). This strategy will see $35 billion dollars spent to construct both large and small combat vessels. Among the first batch of vessels slated for delivery are the Arctic Offshore Patrol Ships in 2018. These vessels are seen as fundamental to securing Canada’s security and sovereignty in the Arctic.
The Canadian government was initially quite bellicose in its rhetoric regarding Arctic sovereignty, but more recently that stance has softened. The number of speeches mentioning new science and economic endeavours are outnumbering those proposing military bases, for example. However, in leaked US cables dating from 2010, Canadian Prime Minster Stephen Harper apparently cautioned NATO Secretary General Anders Fogh Rasmussen that NATO had no role in the Arctic and any such moves would only serve to increase tensions with Russia. According to the cable the PM commented that there is, “no likelihood of Arctic states going to war, but that some non-Arctic members favored a NATO role in the Arctic because it would afford them influence in an area where they don’t belong.”
In fact, there are plenty of reasons to get NATO involved. While a war among Arctic nations is indeed a far-fetched and unlikely event, there are other considerations to take into account. First, as the Northwest Passage becomes more easily navigable, experts predict the route may become the busiest waterway in the world. As the passage sees increased commercial traffic, a greater military presence will be required to inspect passing vessels for illicit or dangerous cargo, and to enforce possible environmental regulations.
Furthermore, Russia, the other major player with a massive interest in the Arctic, is already militarizing the region. Over the past few years, Russian air and submarine activity in the Arctic has reached levels not seen since the Cold War. It has even re-opened its old airbases on frozen archipelagos located above the Arctic Circle. Since Canada’s Arctic forces at current can’t hold a candle to Russia’s, a simple solution would see Canada include all NATO allies in current discussions taking place in the Arctic Council. This would be followed by working closely with all NATO allies to establish a new force primarily dedicated to the Arctic. This new force would naturally include the new Canadian vessels being built to operate specifically in the region. Such a move would no doubt give Canada a leading role in the matter considering the country’s proximity and forward position in the region. Why wait until Russia has moved deeper into the region and takes advantage of slow-moving talks in the Arctic Council?
Canada has already proven that it is a power on the oceans and seas of the world by aiding in counter-terrorism operations, anti-piracy operations, and naval warfare operations. It can be proud of its RCN and the contributions and leadership it provides to both past and present NATO operations. Now, however, is the time to codify a new role for the RCN for the new century – the Arctic. This of course, is solely in the hands of the Canadian government. All it has to do is reach out and include its NATO allies.
The Canadian navy’s recent rebranding back to its “royal” roots constitutes one in a series of initiatives best described as a “renaissance” for the Canadian armed forces. The navy is set to replace aging vessels and fundamentally alter Canada’s power projection on the high seas – most notably, taking a definitive step into the mineral and energy-rich – and increasingly accessible – High Arctic.
With one the longest navigable coastlines of any other nation, a changing climatic reality in the North, bold moves challenging Canada’s sovereignty from maritime neighbours, and increased interest in northern development makes the timing and scale of Ottawa’s move hardly a coincidence.
On October 19th, 2011, the Harper Government announced a 35-billion dollar plan to revamp Canada’s naval hardware as part of the “National Shipbuilding Strategy”, with around 25 billion going to Halifax’s Irving Shipbuilding for twenty-one combat vessels, and an 8 billion going to Vancouver’s Seaspan Marine for eight non-combat vessels.
The losing party is Davie Shipbuilders located in Lévis, Québec, marred by bankruptcy protection well before the October 2011 announcement.
Initially, focus fell on the supposedly politics-free pledge for awarding the contracts (which turned out to be merit-based and transparent according monitors) accompanied by demands for more information from the NDP opposition critic Peter Stoffer, few could deny that the announcement was also very favourable for CEO Jim Irving and Defence Minister Peter MacKay.
2012 is the year in which each of the shipbuilders finalize their contracts with Ottawa. Without a doubt, those same businessmen and politicians which celebrated in October of 2011 are now faced with a belt-tightening reality in Ottawa which could delay the delivery of Canada’s new fleet of combat ships. This makes 2012 the year in which the greatest revisions to the deal could occur.
Arctic offshore patrol ships, the first scheduled to be completed under the contract are seen as critical to securing Canada’s Arctic security and sovereignty. Melting sea ice and increased traffic in Canada’s arctic is a key catalyst for the move.
The ships will help enforce laws, and above all, will constitute a very real practice of territorial sovereignty challenged by other custodians of the high Arctic. Patrol craft, new coast guard vessels, and a new polar icebreaker constitute only a small part of the grand total, the replacement of aging destroyers and frigates is expected to consume the lion’s share of the money.
However, timeline projections have already been beset by a series of revisions, with the first announcements pegging the arrival of the first batch of ships first for 2015, then moved to 2016, and now expected three years after that, for 2018.
The Burn of the Not-too-Recent Past
While it may be easier to buy military hardware than actually building it, the Royal Canadian Navy has had to face disappointment and moves for trans-Atlantic litigation stemming from past procurement deals – best exemplified by the United Kingdom’s sale to Canada of four Upholder/Victoria Class diesel-electric submarines in a 1998 deal, for a supposed bargain of $750 million.
The F-35 jet deal is another example of procurement policies gone awry, according to the Parliamentary Budget Officer Kevin Page. However, the F-35 deal was likely informed by overriding continental strategic considerations, pressure and geographic proximity to the United States. In the end, both the Harper Government and the Canadian public continue to watch closely as the issue develops, each hoping that the jets will live up to their high promises at, or at least near, to their productions, delivery, outfitting and servicing costs.
The procurement policies of the F-35 aircraft have also faced setbacks.
In July of 2012, Ottawa announced an initial 9.3-million dollar contract for Irving Shipbuilder to undertake the initial steps of ship design as part of a related “Canada First” defence strategy.
It should be emphasized that the 35-billion dollar figure is at best an estimate that will be subject to change and revision. The final monetary scale of the project could range from anything between 30 billion to the 35-billion dollar marked.
If the 1980s procurement for Halifax-class frigates is any indication of evolving shipbuilding deals (an original deal where twelve of eighteen frigates were built), the 35-billion dollar announcement is unlikely to remain without a downward reassessment.
British Columbia’s Seaspan Marine Corporation will construct vessels totalling 8-billion for eight non-combat vessels. On the other hand, Halifax’s Irving Shipbuilding was awarded about 25-billion of the total for twenty-one combat vessels; considering the history of shipbuilding financing and the post-2008 budget deficit reality, it is likely that of the two, it will be Irving Shipbuilders which will feel revisions most sharply.
Addressing Sector-Specific Boom-Bust Cycles and Investing in Skilled Jobs
Shipbuilding in Canada has experienced a classic boom and bust cycle since time immemorial. With the last national shipbuilding enterprise dating back to the 1990s, the 2012 announcement has been touted as an attempt to address swings in coastal economies and their respective labour markets. The Minister of Public Works and Government Services estimated that the deal should produce around 15,000 new jobs nation-wide over a period of twenty to thirty years. More importantly, the jobs will be of the high-skill variety, which more often than not, comes with a lot more than a living wage.
However, the supposed predictability of monetary inflows into the Maritime and coastal British Columbian communities is likely to turn out to be an illusion. Assuming that no external developments in the foreign affairs sphere spurs on a sudden expansion of the Royal Canadian Navy, thus sustaining the 35-billion mark if not resulting in new deals, the 35-billion deal will remain at the mercy of exogenous shocks in the world economy, the nation’s fiscal reality, and Ottawa’s political will.
It is in 2012, when the dividends of the October 2011 announcement have been cashed in, both for the Conservative Party and the affected politicians, the incentive to renege, renegotiate, and adjust – especially under conditions of uncertainty and weak growth – become increasingly greater. Although this dynamic does not guarantee downward adjustments, it does point out that robust, long-term national strategies are inevitably beset by an ever-changing fiscal and economic reality, to say nothing of developments in foreign affairs.
Milosz Zak is an MA ERES candidate at the University of Toronto’s Munk School of Global Affairs, with a BaH in Political Science from the University of Guelph and the Jagiellonian University in Krakόw, Poland. He works closely with the Toronto Chapter of the Canada Eurasia Russian Business Association, the Canada-Poland Chamber of Commerce of Toronto, and the G8/G20 Research Group, writing on financial and economic issues facing the G20, European Union member states, the Russian Federation and the countries of the CIS.
Any views or opinions expressed in this article are solely those of the authors and the news agencies and do not necessarily represent those of the Atlantic Council of Canada. This article is published for information purposes only.