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Chapter 6 
Meeting our Global Responsibilities

Highlights

International Assistance

• An increase of $3.4 billion over the next five years for international assistance with the goal of doubling assistance by 2010–11 from its 2001–02 level.

• Double aid to Africa by 2008–09 from its 2003–04 level.

• $172 million for a new Canadian debt relief initiative for the world’s poorest countries plus an additional $34 million contribution to the Heavily Indebted Poor Countries (HIPC) debt relief initiative.

• $425 million to support the immediate humanitarian response to the tsunami disaster and long-term reconstruction, including approximately $200 million to match donations made by individual Canadians.

• $342 million in additional funding to combat diseases in developing countries. This includes funds for The Global Fund to Fight AIDS, Tuberculosis and Malaria, the Global Alliance for Vaccines and Immunization (GAVI), and the Global Polio Eradication Initiative, with the goal of eradicating polio worldwide in 2005.

• A new approach for international assistance funding designed to better deal with diverse international commitments and unforeseen events, while providing greater stability to core spending.

Foreign Policy

• $500 million over five years to fund global peace and security initiatives, from the $3.4-billion increase in international assistance, to promote international security.

• $42 million over five years for increasing the diplomatic staff of Canada’s diplomatic missions abroad to strengthen our capacity to pursue a more engaged foreign policy and to represent Canada’s interests more effectively.

• $59 million to address the most pressing security needs at Canadian diplomatic missions abroad.

Defence and Security

• Over $12 billion in new money for defence ($7 billion in budgetary funding) over five years—the largest increase in a five-year period in the last 20 years.

• Delivers on the Government’s commitment to expand the Canadian Forces (the Forces) by 5,000 troops and the reserves by 3,000.

• Important investments in the operational sustainability of the Forces.

• More than $2.5 billion for new medium capacity helicopters, utility aircraft, military trucks and specialized facilities.

• $3.8 billion for capital and other projects to support new roles for the military identified in the upcoming defence policy review.

• $1.0 billion over five years in support of key national security initiatives.

Trade and Investment

• A renewed commitment to enhance our presence in fast-growing emerging markets, while strengthening our access to North American markets.

• New support for enhanced science and technology cooperation with other countries.

Introduction

As a nation composed of people from every part of the globe, Canadians have a keen sense of the world beyond their borders. A strong sense of responsibility to support less fortunate areas of the world was most recently demonstrated by Canadians’ unprecedented outpouring of generosity towards the victims of the tsunami disaster in South Asia.

Canadians want their country to play an active role in global affairs and take great pride in Canada’s international influence. This reputation was not a birthright. It has been earned over many years of active and constructive foreign policy engagement. Budget 2005 provides resources to strengthen Canada’s capacity to promote our international interests and meet our global responsibilities.

This budget makes substantial progress in delivering on Canada’s 2002 pledge at Monterrey to double international assistance by 2010–11. In addition, Canada will strengthen its partnership with Africa through debt relief, aid to foster private sector development, and key investments to address the serious health issues afflicting that continent. Budget 2005 also introduces a new approach to international assistance that will better ensure money goes where it is most effective and will do the most good.

In an increasingly interdependent world, Canada is called upon more than ever to respond to conflict situations, natural disasters, and other international crises. Budget 2005 provides $7 billion in budgetary funding to support a $12.8-billion investment in Canada’s military as it undertakes new contributions to national and global security. In response to emerging security threats, the Government continues to direct significant new funding to ensure the safety and prosperity of Canadians. Finally, Budget 2005 builds on Canada’s tradition as a trading nation by embracing new trade and investment opportunities in fast-growing emerging markets while strengthening Canada’s relationship with traditional partners.

Responding to the South Asia Tsunami

When the tsunami struck South Asia on December 26, 2004, lives and livelihoods were lost. Canadians were deeply affected by this tragedy, and responded generously with personal donations of approximately $200 million to help the victims begin to rebuild their shattered lives. Immigrant communities in Canada were also galvanized into action, and the money remitted to relatives and friends in the region has played an important role in early efforts to build new homes, schools and businesses.

The Government of Canada recognizes that these recovery efforts will require both immediate and long-term commitments of resources and has responded with a disaster relief and rehabilitation assistance package totalling $425 million. The assistance package consists of:

• $265 million for humanitarian and rehabilitation assistance to the region, including:

• Government matching of contributions made to eligible organizations by Canadian individuals and groups up to January 11, 2005.

• Accelerated tax assistance for charitable donations to these organizations, by allowing donations—made up to January 11, 2005— to be claimed on 2004 tax returns.

• Deployment of the National Defence Disaster Assistance Response Team (DART) to Ampara, Sri Lanka.

• An offer of a debt moratorium on the approximately $1 billion owed to Canada by tsunami-affected countries.

• An additional amount of up to $160 million from the International Assistance Envelope for ongoing rehabilitation assistance to the affected region.

Helping the Poorest of the World

Some tragedies, such as the tsunami in South Asia, are immediate and unpredictable. Others have long been apparent, and require ongoing commitment to overcome. Canada supports the United Nations (UN) Millennium Development Goals, which represent an ambitious agenda for halving global poverty by 2015.

To reach this objective, the Government re-affirms its 2002 Monterrey pledge to double international assistance by 2010–11. Budget 2005 provides an extra $3.4 billion in international assistance over the next five years, allocated as follows:

• $100 million in 2005–06 (in addition to the $248 million for international assistance in 2005–06 provided in Budget 2004).
• $368 million in 2006–07.
• $657 million in 2007–08.
• $970 million in 2008–09.
• $1.3 billion in 2009–10.

Canada will also help poor countries keep the resources they need to improve the lives of their citizens. A key component of the Government’s international assistance effort is to provide debt relief to the poorest countries so that their resources can be freed up for needed social investment to improve the lives of their citizens. The existing Heavily Indebted Poor Countries (HIPC) Initiative—the backbone of the international debt strategy that Canada played a key role in creating—continues to provide significant benefits to poor, mostly African countries. Budget 2005 allocates an additional $34 million to support the HIPC Initiative.

Despite the success of the HIPC Initiative in providing much-needed debt relief, it is now clear that greater efforts are needed. In many poor countries, the costs of servicing debts, particularly those owed to the international financial institutions, continue to crowd out needed resources for social priorities, such as the need to combat the ongoing AIDS crisis in Africa. Budget 2005, therefore, continues a long-standing tradition of Canadian leadership on international debt relief by dedicating resources from planned increases to the International Assistance Envelope to Canada’s "Beyond HIPC" debt relief proposal.

Canada’s initiative, launched on February 2, 2005, advocates 100 per cent multilateral debt-service relief for poor countries through to 2015, affecting payments owed to the International Development Association of the World Bank and to the African Development Fund of the African Development Bank. Budget 2005 allocates approximately $172 million from the International Assistance Envelope over the next five years to pay for Canada’s traditional share of eligible countries’ debt service costs to these institutions. Eligible countries are those that have completed the HIPC process as well as other poor countries that have sufficiently strong public expenditure management systems to use these savings appropriately for development. Countries must also have an acceptable human rights record.

In addition, Canada is prepared to finance further relief for debts owed by these countries to the International Monetary Fund (IMF) once multilateral agreement is reached. Canada has called on other donors to come together to provide further IMF debt relief and to identify the best ways to finance this effort.

Canada’s Commitment to Africa

Africa continues to face critical challenges, especially in the areas of health and economic development. Canada will strengthen its support for Africa in its struggle to overcome the burden of poverty. Budget 2005 commits to doubling 2003–04 aid to Africa over the next five years. Over the coming months, Canada will contribute to solutions for Africa through the Minister of Finance’s role in the Commission for Africa, established by British Prime Minister, Tony Blair.

Many Africans suffer from treatable diseases because of chronic shortages of medical funding. Budget 2005 strengthens Canada’s leadership in combating global health issues by announcing $300 million in additional funding for The Global Fund to Fight AIDS, Tuberculosis and Malaria ($140 million), and the Global Alliance for Vaccines and Immunization (GAVI) ($160 million). These initiatives address the world’s most serious communicable diseases—diseases that affect children most of all—and do so through innovative and effective public-private partnerships.

On January 17, the Government announced $42 million in funding to support the Global Polio Eradication Initiative (GPEI). Eighty-six per cent of the world’s polio cases are in Africa, and Canada’s timely funding put the eradication initiative back on track toward its goal of eliminating polio, worldwide, by the end of this year. In response to the Canadian announcement, Dr. Bruce Aylward, program director of the World Health Organization (WHO) polio eradication program, said: "The prospects [for eradicating polio] in Africa are much more positive given this contribution from Canada." On January 27, the United Nations Foundation presented an award to Canada in recognition of its long-established role in the fight against polio and Canadian donations that are among the highest from contributing countries.

Additional Funds for Peace and Security

Development cannot occur where there is conflict and threats to security. An additional $100 million annually over five years will be allocated to peace and security initiatives. In keeping with the International Policy Statement, the additional funds will support the renewal of the Human Security Program and provide security assistance to failed and failing states, as well as resources for post-conflict stabilization and recovery. An important example is the $20 million in assistance being provided to the African Union mission in Darfur. Other activities supported by this funding could include: the deployment of civilian specialists—including legal, judicial, forensic and human rights experts; the deployment of police officers; the operations of reconnaissance missions; and assistance in elections.

Canada Corps, announced in Budget 2004, is one vehicle for these activities. Canada Corps will engage Canadians in helping to improve governance in fragile or failed states—a vital component in improving stability and reducing poverty. Canadians can make a difference as was recently demonstrated by Canada Corps in election monitoring in the Ukraine.

Nurturing a Prosperous Private Sector in Developing Countries

Achieving the Millennium Development Goals requires mobilizing the private sector—and the contributions it can make to economic growth, job creation and incomes of the poor. Entrepreneurs are emerging throughout the developing world, but many of them are locked into informal micro and small enterprises. They must cope with weak policy and regulatory environments, poor governance, and inadequate infrastructure.

More must be done to help developing countries to build their private sectors and compete globally. Prime Minister Paul Martin and former Mexican President Ernesto Zedillo recognized this, and called on the global community to act in their UN report, "Unleashing Entrepreneurship."

Canada will do more to enable developing countries, particularly African countries, to build their private sectors, make markets work for the poor, and to compete globally. The Government will also encourage additional incentives for Canadian firms to do business in Africa in a way that better considers each community’s social and economic development issues. The Martin-Zedillo report provides a solid foundation upon which to build support and determine the approaches that will best help African entrepreneurs. An important example is the Canada Investment Fund for Africa (CIFA), which aims to channel at least $200 million in private investment into Africa. An initial $100 million allocation was set aside for this initiative, designed to provide risk capital for investment in Africa.

The Forum of Federations

In 1999, the Government established the Forum of Federations to bring together countries with federal systems to exchange ideas and help developing countries design and implement federal models. The Forum has established a strong reputation, has provided valuable advice to numerous countries and has contributed to conflict resolution. Budget 2005 will provide an endowment of $20 million to support the Forum’s operations and activities over the next six years.

Better Management of Canada’s International Assistance

In addition to boosting international assistance and Canada’s investments in global health, this budget establishes a new framework to better manage Canada’s international assistance. This new framework restructures the International Assistance Envelope into five distinct pools, devoted to development, international financial institutions, peace and security, crises, and development research. The bulk of resources will be dedicated to a development pool.

This management framework is designed to provide a coordinated and flexible approach to Canada’s international assistance and introduces a transparent process for the allocation of new resources. By recognizing that effective international assistance involves long-term relationships with development partners, this management framework also provides for greater predictability in budgeting and stability in programming while enabling Canada to respond to unforeseen crisis events such as the South Asian tsunami.

Strengthening National Defence to Meet New Commitments

In recent years, Canada’s military has provided much-needed security and humanitarian assistance in a number of difficult situations, including:

• Leading Canada’s military efforts in the war on terrorism as well as in re-establishing peace and security in Afghanistan and Haiti.

• Providing vital engineering, medical and basic life support and relief to tsunami victims in Sri Lanka.

• Assisting Canadians in emergencies and natural disasters, such as Hurricane Juan’s impact on the East Coast and forest fires in British Columbia.

Canadian Forces Contributions to International Security

International missions have placed considerable demands on the Forces’ resources and personnel in the last three years. Operation Apollo, Canada’s contribution to the international coalition against terrorism, ran from October 2001 to October 2003 and involved significant contributions from all service branches. Fifteen Canadian naval vessels were deployed to the Arabian Sea over the course of Operation Apollo. At its peak, the Canadian Naval Task Group consisted of six warships and 1,500 Navy personnel. Canadian ground forces took part in security, combat and reconnaissance operations in Afghanistan—in particular during the six-month deployment of Canada’s Princess Patricia’s Canadian Light Infantry. Throughout the mission, Canada’s air force provided strategic airlift, long-range patrol and reconnaissance, and tactical air support to coalition forces.

Operation Apollo overlapped with Operation Athena, Canada’s current NATO-led International Security Assistance Force (ISAF) mission in Kabul. Athena commenced in August 2003, with the deployment of 900 Canadian Forces members. Operation Athena has been one of the most expensive international missions ever undertaken by Canada’s military, with incremental costs approaching $900 million. These operations were funded in previous budgets, including Budget 2004, when the Government provided the Department of National Defence an additional $250 million for missions in Afghanistan. Budget 2004 also provided $50 million to support Canada’s short-term mission to Haiti, called Operation Halo. That mission involved roughly 500 Canadian Forces personnel and six Griffon helicopters, deployed to Haiti to assist the UN-sanctioned multinational force tasked with bringing stability to that country.

As demonstrated by its recent experiences, Canada’s military has a proud tradition and history of responding to international and domestic crises. By answering this call, it has ensured safety, stability and security in times of international political unrest or unpredictable natural disasters. In such situations the Forces reinforce Canadian values with action wherever it is needed in the world. However, the recent chapters in this proud history have involved the Forces in activities that were not envisaged when Canada’s current defence policy was reviewed in 1994. As the world changes, the role of the military continues to change with it. Canada’s defence policy is adapting to fulfill its evolving responsibilities.

Recent support for the Canadian Forces

Funding provided in the last several budgets is helping the Forces adapt to these challenges. Budget 2001 provided funding to augment the capacity of Joint Task Force 2, the military’s elite anti-terrorist unit, as well as additional capital funding to deal with short-term capital issues. Other measures in Budget 2001 enhanced the Forces’ capacity to respond to chemical, biological, radiological or nuclear threats and emergencies.

Budget 2003 increased the Forces’ annual funding levels by $800 million, a measure that assisted the Forces in dealing with its longer-term sustainability issues. Increased funding allowed the Canadian Forces to move ahead with its multi-year capital program by initiating the acquisition of 28 maritime helicopters, 800 new Mercedes G-wagons (to replace the aging fleet of Iltis vehicles), tactical unmanned aerial vehicles and counter bombardment radars and 66 Mobile Gun Systems. In the last year, the Government began the process of replacing the navy’s replenishment ships, which will improve the Forces’ capacity to sealift personnel and equipment en route to international missions, as well as to support naval task forces at sea.

New Challenges

A number of recent policy initiatives will contribute to defining Canada’s defence policy for the future. One is the new National Security Policy (NSP), released in April 2004. Another is the forthcoming International Policy Statement outlining the key objectives for Canada’s future defence and security policies and recommending how Canada’s defence policy should be adjusted or reformulated.

Some aspects are already clear: Canada’s military requires more personnel. The expanding demands of international operations in the new millennium have illustrated that vividly.

Other pressures have also emerged affecting the capacity of the Forces to provide specialized health services to its personnel as they return from these demanding missions, and to deal with the consequences of extended tours of duty away from Canada. Similarly, the process of training and maintaining operational readiness among personnel not engaged in missions has been under stress because of the high tempo of operations. Supplies of spare parts and military equipment have been depleted, and repairs, overhauls and upgrading of equipment have been delayed or missed to support the high operational demands. Similarly, the Forces’ infrastructure has become run-down.

Capital pressures and gaps have also become apparent. Canada’s military lacks medium capacity helicopters that are capable of moving teams of personnel and their equipment around in-theatre, whether dealing with international crises or domestic emergencies. The Forces are relying on an aging fleet of logistics trucks, and need to replace the utility aircraft that are employed in the Arctic. Finally, Canada’s elite anti-terrorist troops, Joint Task Force Two (JTF2), have expanded to the limit of the capacity of their current facility in Ottawa.

Budget 2005

In the Speech from the Throne, the Government said it would increase Canada’s regular forces and its reserves—a $3 billion commitment over the next five years. Budget 2005 does that and more. It provides Canada’s military with $7 billion in new budgetary funding over the next five years, which will support $12.8 billion in additional expenditures by the Forces in that period.

This funding will allow National Defence to address the following issues that were described earlier:

• To expand the Canadian Forces by 5,000 troops and the reserves by 3,000, as announced in the Speech from the Throne.

• To increase operating budgets for improved training and operational readiness, to enhance military medical care, to address critical supplies and repairs shortages, and to repair infrastructure.

• To acquire new medium capacity helicopters, logistics trucks, utility aircraft and specialized facilities for JTF2, potentially more than $2.5 billion worth of capital in total.

The $12.8-billion increase over five years in defence funding is the largest such increase in the last 20 years. It will cover the full costs of the activities described above, including the additional annual personnel and operating and maintenance costs associated with any capital that is acquired. In the budgetary funding estimates shown in the summary table at the end of this chapter, the actual cost of the capital is spread over its life, and the annual budgetary amounts include only a fraction of the full capital cost. However, DND will have to pay the full costs of the capital in cash in the years that it is acquired. The Government will make that cash available to DND as it is needed.

The timing and size of DND’s cash requirement will depend on how the military allocates its new funding to its various needs, and in particular on the timing and nature of the specific projects it initiates. Some projects are known—the helicopters, trucks, airplanes and new facilities referred to above; but their timing remains to be determined. Other projects, and their timing, will depend on how DND determines its response to the new priorities that the Government will establish for the Forces following the International Policy Statement and defence policy review. The following table sets out an illustration of how the new budget funding might flow out over time on a cash basis.

Table 6.1
Budget 2005 Defence Funding (cash basis illustration)

Ensuring the Security of Canadians

Since the events of September 11, Canada has taken significant steps to counter terrorist threats and improve the security of Canadians while ensuring the safe movement of people and goods. The past three federal budgets have allocated more than $8.3 billion to this effort, beginning with $7.7 billion provided in Budget 2001 for a range of new security measures. Improvements have been made in air and marine security, intelligence and policing, emergency preparedness and response, and border security and border infrastructure. Budgets 2003 and 2004 together provided an additional $680 million for the security reserve created in Budget 2001. These additional funds have supported a number of measures, such as the Smart Border Action Plan and other projects identified in Canada’s National Security Policy.

National Security Policy

Security threats facing Canadians require a concerted response, which is why the Government introduced a comprehensive and integrated National Security Policy (NSP) in April 2004. The NSP focuses on protecting Canadians both at home and abroad, ensuring Canada is not a base for threats to our allies and contributing to international security. This announcement was accompanied by $690 million in new investments to enhance the Government’s capacity in intelligence gathering and the protection of critical government systems and infrastructure. Other key NSP initiatives include the establishment of an integrated threat assessment centre and a government operations centre, the creation of health emergency response teams, and measures to enhance marine security.

Budget 2005 builds on the significant progress that the Government has made towards implementing the National Security Policy. This budget provides over $1 billion to support further investments in the areas of emergency planning and response, transportation and border security, and in increasing Canada’s international presence.

As a complement to these initiatives, the Government is also taking steps to improve national readiness in the event of a pandemic influenza emergency. Building on the Pandemic Influenza Plan announced in February 2004 and the $24 million recently announced to purchase antivirals, a further $34 million, over five years, will be invested in pandemic influenza preparedness (see Chapter 3).

Emergency Management

The Government has bolstered its capacity to manage emergencies through improvements in strategic coordination, critical infrastructure protection and cyber security. With the proposed integration of the Office of Critical Infrastructure Protection and Emergency Preparedness (OCIPEP) into the new Department of Public Safety and Emergency Preparedness Canada (PSEPC), Canada would have a single organization that can respond to both terrorist and other emergencies. The ongoing implementation of Canada’s National Security Policy, as well as the evolving demands on Canada’s security, would have a significant impact on the future direction of PSEPC. With the proposed integration of OCIPEP’s expertise within PSEPC, and as work proceeds with the provinces, territories and other key stakeholders, PSEPC would be in a better position to assess Canadian emergency response and management capacity requirements. In the interim, Budget 2005 provides necessary resources to begin work on initiatives that are key to the effective emergency management of the future.

Budget 2005 provides $56 million in funding over five years for emergency management initiatives, such as the federal-provincial-territorial forum on emergencies. It also provides resources for the Cross-Cultural Roundtable announced in the National Security Policy and to test the effectiveness of a system of secret communications between disparate players that could be required to inter-operate in emergencies. The budget provides short-term funding to enable auditing of federal department business continuity plans to begin, and more exercises to assess the capacity of Canada’s emergency response system to be undertaken. Budget 2005 also provides Natural Resources Canada with short-term funding to continue work with U.S. officials on the Canada-U.S. action plan for assessing the vulnerability of critical cross-border energy facilities, and to implement the recommendations of the Canada-U.S. Task Force on the 2003 Power Outage. Longer-term funding requirements for these emergency management priorities will be assessed in the coming years. A vital contribution to improving our security will come from the collaboration among researchers in the government, academic and private sectors on science and technology as it relates to critical infrastructure vulnerability and protection against chemical, biological, radiological or nuclear threats. Budget 2005 provides $16 million over five years to develop a capacity to lead this collaboration and align federal, industry and academic science and technology (S&T) activities.

Financial Crime and Terrorist Financing

Canada’s leadership in the fight against money laundering and terrorist financing sends a strong message to G-7 and other international partners of this country’s continuing determination to combat financial crime and terrorist activities. In this regard, Canada intends to seek the presidency of the Financial Action Task Force (FATF), the key international standard-setting body in this area, and will actively participate in other regional bodies such as the Asia-Pacific Group on Money Laundering and the Caribbean Financial Action Task Force. The Government will ensure adequate and ongoing funding for membership in these international bodies and for necessary evaluations of the effectiveness of our national regime. This is expected to cost about $3 million over the next five years.

As part of its commitment to protect the strong reputation of Canada’s anti-money laundering and anti-terrorist financing regime, the Government will shortly be releasing a consultation paper proposing legislative and regulatory changes to implement recent revisions to the Financial Action Task Force (FATF) standards. The Government is committed to ensuring that Canada’s anti-money laundering and terrorist financing regime remains world class and that the Financial Transactions Reports Analysis Centre of Canada (FINTRAC) and other government agencies continue to operate effectively and efficiently in this important area.

Through the Integrated Proceeds of Crime (POC) initiative, RCMP investigators and the Department of Justice Canada legal counsel—as well as investigators from several federal departments and agencies—work with municipal, provincial and international partners in integrated teams across the country. These teams help to seize profits and assets from criminal organizations, and are an important tool in the federal government’s efforts to combat organized crime. This budget renews the Integrated Proceeds of Crime initiative on an ongoing basis and provides funding of $117 million over the next five years for this purpose.

Transportation Security

Following September 11, the Government acted to improve air security in Canada, providing $2.2 billion in Budget 2001 for an enhanced Canadian air travel security system, the creation of the Canadian Air Transport Security Authority, and the strengthening of Transport Canada’s regulatory, monitoring and inspection capacities. The Public Safety Act (2002) is an additional tool for detecting, assessing and responding to air security threats. Budget 2005 allocates $16 million over the next five years to this measure for the assessment and development of systems to collect information about air travellers for national security purposes.

To fund the Budget 2001 enhanced air travel security initiative, the Government established the Air Travellers Security Charge (ATSC) and pledged to review the charge to ensure that revenue remains in line with costs over a five-year period. Budget 2005 presents the findings of the third review of the charge. Based on updated information for revenue and costs, the following reductions are proposed: for air travel within Canada, to $5 from $6 for one-way travel and to $10 from $12 for round-trip travel; for transborder air travel, to $8.50 from $10; and for other international air travel, to $17 from $20.

These proposals represent the third consecutive reduction to the level of the charge, at a time when air travel security enhancements have been and continue to be implemented across Canada for the benefit of air travellers. Additional details concerning the review are provided in Annex 7 of the Budget Plan.

The Government of Canada is committed to maintaining a strong economy and excellent trading relationships through a secure marine transportation system. Since 2001, the Government has dedicated $630 million for projects improving marine security in Canada, including measures to protect marine infrastructure, increase the surveillance of maritime traffic, and improve Canada’s capability to respond to emergency situations.

Building on past investments and the National Security Policy, Budget 2005 provides an additional $222 million over five years to further enhance the security of the country’s marine transportation system. Funds will go towards a series of initiatives, including new mid-shore patrol vessels for the Great Lakes and the St. Lawrence Seaway, additional regulatory inspections, the creation of Emergency Response Teams for the Great Lakes and the St. Lawrence Seaway, and an increased police presence in ports.

Budget 2005 also provides $88 million over five years for Canada to work with the United States in the Container Security Initiative (CSI), as well as to increase the compatibility of our systems for automated targeting and sharing of information on high-risk cargo destined for North America. The CSI is a U.S. program enabling U.S. customs officers to work with their counterparts in other countries to develop intelligence, share critical information and verify inspections on containers bound for the U.S. Budget 2005 will enable Canada to participate in, and benefit from, the CSI through the deployment of officers to overseas ports.

Security of Embassies and Consulates

The Government remains committed to ensuring the security of Canadians whether at home or abroad. New security threats in the post-9/11 world call for enhanced security measures at Canada’s foreign embassies and consulates. The Government will invest $59 million over the next five years to address the most pressing security needs at missions abroad.

Border Security

Since signing the Canada-U.S. Smart Border Declaration on December 12, 2001, Canada has made considerable progress on improving border security. Building on the success of the Canada-U.S. Smart Border Action Plan, Canada will work with the United States and Mexico to increase the security of critical transportation and communications networks, and will take further steps to secure the Canada-U.S. border without impeding the legitimate flow of people and goods. To continue building a stronger border for the 21st century, Budget 2005 provides an additional $433 million over five years to strengthen the Government’s capacity to deliver secure and efficient border services.

Strengthening the Capacity of the Foreign Service

Canada needs a strong network of highly skilled diplomatic officers in its embassies and consulates to enhance Canada’s competitiveness, contribute to a more equitable, sustainable, and democratic world, and help protect Canadians from current and emerging security threats. The budget provides $42 million over five years to begin deploying more foreign service officers from Canada to embassies and consulates abroad. It also provides $40 million over five years to renew the Public Diplomacy Program, an important instrument to gain greater influence for Canada internationally.

Setting New Trade and Investment Priorities

Canada’s prosperity is built on trade and Canada’s most important market is the United States. With almost $2 billion in goods and services crossing the border daily, Canada and the United States have the world’s most successful commercial relationship. The continued growth of this trade will require further investments in our border infrastructure, including Windsor, in order to ensure the seamless flow of people and commerce. The United States is also Canada’s most important investment partner, with 43 per cent of Canadian direct investment abroad going south and 64 per cent of total foreign direct investment in Canada coming from the United States.

In order to build on the success of the North American Free Trade Agreement, Canada has entered into new partnerships with the United States and Mexico. The three governments will examine a broad range of security, economic and quality-of-life issues to increase mutual prosperity. For example, the three nations are considering proposals to enhance regulatory cooperation to improve efficiency while protecting the health and safety of their citizens, and to encourage further trade that promotes the use of clean energy technologies.

Canada’s economic interests extend well beyond North America, however. The nation’s future prosperity will depend on working with its partners to open up markets with strong potential. Recognizing the importance of multilateral trade liberalization—not just for the growth of developed countries such as Canada, but also for the economic potential of developing nations—Canada has played an active and constructive role in the Doha Development round of World Trade Organization trade negotiations. Over the past year Canada has worked hard to advance WTO negotiations on issues ranging from the removal of agricultural subsidies to the elimination of tariff barriers.

Increased investment, both by foreign investors in Canada and by Canadians in growing world markets, generates jobs and growth and benefits all Canadians in the process. This Government is dedicated to attracting increased investment in Canada, as well as enhancing opportunities for better market access and investment opportunities for Canadians abroad.

Overseas Markets

As Canadians look for new trade opportunities, their focus is progressively turning to the emerging giants of the global economy: China, India and Brazil. Canada is not waiting for future opportunities to unfold—it is forging strong partnerships today with these countries in such areas as trade, science and technology, and the environment. The new initiatives, announced by the Prime Minister in India and China are recent examples. The dividends of these partnerships for Canadian entrepreneurs are open doors, rising profits, and more durable international business relationships. At the same time, the Government of Canada will also pursue free trade arrangements with countries such as Korea, to expand existing partnerships with valuable markets.

Budget 2005 provides $20 million over five years to support new international science and technology (S&T) initiatives such as those contained in the recently signed Joint Declarations with India and China. These S&T initiatives will promote collaborative research between Canadian and foreign scientists and technologists in a variety of areas such as the use of cleaner and more efficient forms of energy. This is an area in which Canada has considerable expertise, helping brand Canadian environmental technology abroad.

Asia Pacific Foundation of Canada

The rapid growth of Asia provides enormous economic opportunities for Canada as a Pacific Rim nation, reinforcing the importance of the Pacific gateway. An existing example of Canadian collaboration with emerging markets is the work of the Asia Pacific Foundation of Canada. This budget provides the Asia Pacific Foundation of Canada with an endowment of $50 million to continue its work to build networks between Canadian and Asian business leaders, and to unearth potential market opportunities that will benefit both regions. In order to improve and reflect modern governance and accountability practices, the Government will undertake to amend the 1984 Asia-Pacific Foundation of Canada Act.

* * *

Budget 2005 makes significant investments to advance Canada’s interests and project Canadian values around the globe. It delivers on commitments to double international assistance by 2010–11 and takes immediate action to alleviate the debt burden of poor countries and to combat global poverty and health challenges. In particular, the Government has increased its focus on Africa, where the development challenges are the greatest.

Budget 2005 goes beyond the commitment made in the Speech from the Throne to increase military personnel by making additional investments in the military, including equipment. These investments will ensure that Canada is well protected and will continue to play an active role in global peace operations and crisis response. This budget also builds on the initiatives introduced in the National Security Policy. The Government has no greater responsibility than to ensure the safety and security of its citizens. Finally, this budget affirms the importance that Canada places an increasing trade and investment in key emerging economies.

With this range of international initiatives as a foundation and Canadian values as a guide, Budget 2005 ensures that Canada will meet its global responsibilities now and in the future.

Table 6.2
Meeting Our Global Responsibilities

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