If there was any doubt that the U.S and its allies, including Canada, feel they are in a new cold war – with China being the main foe -- one need only read a new report on national security from the Business Council of Canada, which talks about economic strength in terms of national defence.
The report, Economic Security is National Security, warns that a globalized free-market economy is fast slipping back into mercantilism and protectionism, and that Canadian businesses face increasing cyber threats and a trade environment where supply chains are becoming “weaponized.”
Canada needs strong national security, it argues, if it is to have strong economic security, and vice versa, and urges cooperation between government and business in the formation of a new national security strategy.
It also urges the Canadian Government to enable Canadian security and intelligence services to work more closely with private enterprise and alert them to cyber threats.
“The free, open, and relatively stable unipolar order that provided Canadians with extraordinary levels of safety, security, and prosperity is now consigned to history,” the report concludes.
“Canada now finds itself in the midst of the greatest, most complex, and unpredictable security environment in a generation. The free, open, and relatively stable unipolar order that prevailed following the conclusion of the Cold War – and which provided Canada with unprecedented levels of safety, security, and prosperity – is giving way to a new, more turbulent, multipolar reality marked by geopolitical rivalry.
“The splintering of the global commons into rival camps struggling for strategic superiority has sharpened competition and confrontation among states in wide-ranging areas. This is no truer than in the fields of business, economics, and technology.”
The report catalogues the new threats to Canada’s economy -- “mercantilism, weaponized trade, espionage, cyberattacks, malign foreign influence, and co-opted academic research" – and argues for a girding of the Canadian economy.
The report names China, Russia, Iran, and North Korea as posing the greatest strategic threats to Canada. It says “strategic threat actors have shown both a capacity and willingness to steal, sabotage, and disrupt their way up the economic ladder to strengthen their geopolitical might and to unilaterally reshape the existing international order into something more favourable to themselves.
“New technological advances, especially in cyberspace, have enabled these actors to both broaden and tailor their tactics to better penetrate our defences and achieve their revisionist aims. The result: Canadian companies, in almost every region and sector of our economy, now face unprecedented dangers. They are operating on an increasingly skewed playing field in which traditional private commerce is always at a disadvantage.”
It characterizes Canada’s “lacklustre” economic performance as security concern.
“Absent a strong national security environment, it is impossible to have a healthy and productive economy,” the Business Council argues.
“Many of Canada’s closest allies recognize this ‘mutually reinforcing link,’ and have developed integrated approaches to economic and national security that seek to enhance their prosperity, safety, and sovereignty in a period of heightened geopolitical risk. Canada has not.
“For decades now, successive Canadian governments have overlooked, taken for granted, or simply ignored the principle that economic security is national security. This neglect has made us vulnerable.”
It notes that “in an era of renewed geopolitical rivalry,” Canadian companies are “increasingly finding themselves in the crosshairs of strategic threat actors seeking to advance their national interests in ways that can, and do, undermine Canada’s national and economic security.
“These threats have the potential to wreak large-scale havoc on Canadians’ daily lives. The impacts include mass layoffs caused by the theft of intellectual property, disruptions to Canadians’ ability to heat and power their homes due to paralyzing cyberattacks, and skyrocketing cost of everyday household products because of weaponized supply chains.”
It calls for both government and private enterprise to work together to develop and implement a national security strategy.
The report identifies three main pillars for strengthening Canada economic security:
- Strengthening Canada’s economic security architecture, including by creating a legal framework allowing the Canadian Security Intelligence Service to proactively share timely and actionable threat intelligence with companies targeted by attacks
- Bolstering Canada’s economic and innovative capabilities, including by incentivizing high-risk, high-reward research in disruptive and emerging fields which are foundational to spurring economic growth and are strategic from a national security perspective
- Expanding and reinvigorating Canada’s international security partnerships, including by spearheading measures to collectively counter weaponized supply chains, such as a “NATO for trade”
The report urges the Canadian government to create a new division in the Canadian Security Intelligence Service with a mandate to “provide training and advice to private sector entities on how to defend themselves against economic threats.”
It also recommends amending the Investment Canada Act to “precisely target and screen out malicious foreign investments” in order to “prevent dependencies with respect to critical infrastructure.”
As for trade, the report urges “new legal mechanisms to block the import of foreign goods and services that have benefitted materially from unfair economic practices.”
It also recommends pulling up academic drawbridges.
“To prevent Canadian-led academic research from furthering strategic threat actors’ interests at our expense, the Government of Canada should, in duly justified circumstances, ban entities linked to these states from participating in, or benefiting from, Canadian academic research,” the report says.
Whereas Canadian business groups have long supported freer trade, including with China, the Business Council of Canada now suggests that may no longer be possible with some countries.
“We must abandon the notion that it is possible for Canadian businesses to compete on a level playing field with state champions in developing and commercializing emerging and disruptive technologies,” the report concludes. “They simply do not play by established rules.”
As for military defence, the report urges Canada to “reinvigorate” its ties with international security partners within NATO, NORAD, the G7 and the Five Eyes (U.S., UK, Australia, New Zealand, Canada.)
It also urges the Canadian government to “recommit” to spending at least two per cent of Canada’s GDP on the military, as per the agreement of NATO members in 2014.
“Considering the most recent NATO summit in Vilnius, Lithuania, this pledge should be viewed as a ‘floor’ and not a ‘ceiling,’” the report states.
