Friday, 18 October 2013


As well as being a producer of military security for its citizens, Canada is also a security consumer. In fact, given the important security relationships with both the United States and NATO, it is difficult to determine if Canada is a net producer or consumer in this field. What is certain is that these relationships are very important to Canadian security.

As with any consumer, it is necessary to closely monitor the status of suppliers. By any measure Canada’s most important security relationship is with the United States. This relationship has a long history.

The Ogdensburg Agreement, signed on August 17, 1940, between Prime Minister Mackenzie King of Canada and United States President Franklin Roosevelt, outlined a permanent plan for mutual defence between the United States and Canada.

Previously Canada had always considered Great Britain as its primary military partner. The strength of the British Empire, and the historic and cultural ties between them made a military alliance with the United States seem unnecessary. Most Canadians believed that Britain could provide for all of Canada's defense needs. This changed, however.

Germany's military successes early in the war, along with its neutrality pact with the Soviet Union, raised the possibility that Britain could be invaded or forced to surrender. In addition to transferring its gold reserves to Canada at the beginning of the war, the British government had also prepared a contingency plan to evacuate the Royal family, the government and as many critical military and scientific personnel to Canada as possible if the British Isles fell to Germany. These factors increased concerns that Britain would indeed fall and that Canada, with its small population and abundant natural resources, would become Germany's next target.

It was the United States that initiated preliminary military discussions that became formative in July 1940. On August 18, Roosevelt and King met in the border town of Ogdensburg, New York. Roosevelt outlined his plan to create a joint board to oversee the defence of both nations, not just for the duration of the current crisis, but as a permanent body. King immediately agreed, and the Permanent Joint Board on Defence was created.

Although Canadians supported the agreement, as they deemed it necessary for security purposes, Canadian negotiators did not give the United States control of Canada's forces, and rejected proposals to integrate much of the country's defences into Washington's Northeast and Northwest Defence Commands. King's approach satisfied most Canadians who believed that although co-operation with the United States was essential, it did not mean abandoning Canada's national interests.

Those who opposed the Ogdensburg Agreement argued that it involved Canada abandoning Britain in favour of the United States on matters of defense. However, the creation of the NATO in 1949, which linked Canada and the United States into a collective security agreement with Britain and Western Europe, helped to alleviate these concerns.

The Ogdensburg Agreement was as much an economic instrument as it was one of national security. The Lend-Lease Act, passed March 1941, provided for the transfer of American war materials to Britain and its allies in return for theoretical deferred payments. Canada's involvement in the war had already caused serious deterioration in the balance of payments vis-à-vis the US, and the Lend-Lease Act threatened to divert all British war orders from Canada to the US. It was partly to avert this economic crisis that on April 20 Prime Minister Mackenzie King and President F.D. Roosevelt issued the Hyde Park Declaration which provided for American war purchases in Canada. American-produced components of war materiel manufactured in Canada for Britain were to be included in the Lend-Lease scheme, an arrangement which alleviated Canada's trade deficit and made it easier for Canada to fill British orders and guarantee financing for them.

This combination of security and economic interests has been the cornerstone, for Canada, of our relationship with the United States for the past seventy two years. The time may be coming to re-evaluate this relationship.

Recent events in the United States which brought the country to the brink of default illustrate the problem. The U.S. economy is on the path to collapse. Essentially, the various levels of government in that country spend more money on goods and services then they raise in taxes. This situation has been going on for so long that the deficit they have created has become larger then their current system of government can handle.

The situation is not unlike that of the so-called “toxic mortgages” which caused the near collapse of the American banking system. The non-performing financial instruments had been a large part of the system for many years, it was the sudden, widespread, understanding that they were of no value and would never pay off that caused the crises. In the same way, at some point, it will suddenly become obvious to everyone who should have known before that the Americans are never going to pay off their massive debts with inevitable consequences.

There are those who will argue that the sheer size and scope of the U.S. economy makes these dire predictions less credible. In fact, like a massive super tanker which can not easily slow down or change course, so the large U.S. economy has a momentum all its own, and as we have seen the powers that be have little influence over it and have lost the ability to change course.

The financial implications of this melt-down are beyond the scope of this paper, however the security implications are immense. When the U.S. looses its position as a leading super power, which it will when its finances collapse, Canada, along with other U.S. allies, will be forced to re-evaluate their own military security in light of the loss of American security guarantees.

With the loss of this security “supply” Canada will be forced to produce more of its own, in the form of greater military spending. However, the factors which lead to Canada’s participation in alliances in the past, things like a limited population base and industrial sector will impose the same restrictions on our ability to provide for all of out own military security in the future. 

As in the past, there are those who will oppose diluting our relationship with traditional military allies. As in the past reality will always trump sentiment and the virtue of being a bridge between allies both old and new will be seen to be a logical step in the evolution of Canadian security.