Minister of Foreign Affairs - Briefing book

2019-11

Strategic Overview

Issue

• The growing intensity of great power competition and regional rivalries, the emergence of new centres of influence, and the evolution of complex transnational problems, including climate change, is transforming the global landscape.
• These dynamic circumstances often demand an urgent Canadian response, whether because its citizens are impacted, or because other core Canadian interests are affected. Recent examples include the ongoing conflict in Syria, the political and humanitarian crisis In Venezuela, and civil unrest in Hong Kong, home to a large number of Canadians.
• These events, uneven global economic growth, and disruptive technologies, require innovative approaches to foreign policy. Canada needs to position itself so that it can contribute to framing the global order to come, and protect and pursue its national interests.

Context

As Minister of Foreign Affairs, you are responsible for defining, advancing and representing Canada’s interests and values abroad. You do so by directing a department of Global Affairs that brings together foreign policy, trade, and international assistance capabilities in an integrated way to Canada’s advantage. As the country’s chief diplomat, you manage international negotiations on a host of subjects, advance international law, respond to complex international crises, and play a role in expanding economic opportunities for Canadians. The Minister is responsible for consular relations, including helping Canadians in distress. S/He also plays a key role in the allocation of Canada’s international assistance budget and directly oversees peace and security related programming.

To advance your portfolio, you are supported by the Deputy Minister of Foreign Affairs, and the Associate Deputy Minister of Foreign Affairs. You can also rely on the Deputy Ministers of International Trade and of International Development, who directly support the Ministers of International Trade and International Development.

Shifting Global Landscape

Several decades of economic development in much of the world alongside rapid technological advancement, has lifted millions of people out of poverty and created new opportunities for socio-economic progress. And yet, this is also a period of profound disruption in the international system. Traditional alliances and institutions are strained, new actors are emerging, and foreign policy challenges are interconnected not just with each other but with domestic cross-currents. While important elements of the international system continue to function adequately, there is no doubt that innovation and adaptation are required in a wider global context that is destabilizing.

Canada is a trading nation, and one whose interests are inexorably linked to those of our allies. The United States is and will remain an irreplaceable partner for the prosperity and security of Canadians. [REDACTED]

[REDACTED] China’s rise has contributed to greater prosperity in Canada and across the globe through enhanced trade and investment linkages, [REDACTED] Canada’s arrest of Huawei CEO Meng Wanzhou in December 2018.

[REDACTED]

These developments should be seen alongside other trends, such as a proliferation of malevolent non-state actors (including cyber criminals, “hacktivists,” and terrorist groups) who use a variety of methods to undermine citizen confidence in their national institutions, and to disrupt international action. This includes, for example, non-state actors who target liberal democracies through misinformation campaigns.

Finally, we are also seeing growing concerns about the representativeness of some global institutions [REDACTED] and concerns about the performance of others in bringing solutions to long-standing crises [REDACTED].

These events influence the manner in which we can work with our international partners to pursue our interests and values across a wide variety of files.

Global Affairs Canada’s tools

While this global environment is complex, Canada benefits from a strong and diverse toolkit to advance its objectives.

A key asset is Canada’s membership in multilateral institutions such as the UN, G7, G20, NATO, NORAD, the OECD, the OAS, APEC, Arctic Council, the Commonwealth and the Francophonie, which enables it to engage multiple and diverse stakeholders, and provides a platforms to influence the views of international partners, and to take joint action to address difficult problems, from cyber security to climate change, and from missile defence to economic stability. Canada’s ongoing campaign for a seat on the United Nations Security Council for the 2021-22 term is linked to these efforts, and would provide it with a privileged vehicle within which to shape pressing global events and demonstrate commitment [REDACTED].

Canada possesses important natural resources, defence and security assets, and human capacities. The latter includes those that can be drawn upon from the federal level related to science and technology, and governance and effective public sector management, as well as those skills and assets that come from Canada’s parliament, other orders of government, the judiciary, Canadian civil society, research institutions and the private sector.

From its vantage, Global Affairs Canada provides an integrated platform from which these various Canadian assets can be leveraged and deployed. The department advances a coherent approach to Canada’s foreign policy, international trade and international assistance goals.

In this context, diplomats advance bilateral relationships, secure multilateral agreements, and respond to complex international crises around the world, all while promoting key Canadian values including the rule of law; the Trade Commissioner’s Service supports Canadian exporters and attracts investment to Canada; and international assistance resources managed by the department help reduce poverty, support peace, security and governance, combat violent extremism, prevent trafficking of people and terrorism, eliminate weapons of mass destruction, and stabilize economies of developing countries to generate opportunities for mutually beneficial trading partnerships in future. Global Affairs Canada also leads on coordinating Canada’s use of sanctions and further to Canadian law, can also impose export and import controls on goods which are contrary to Canada’s domestic and international interests. The Global Affairs Canada platform also serves some 37 Canadian partner along with provinces and territories, which is also a tremendous asset to Canada.

An incontrovertible reality of international affairs is that, despite meticulous planning, unanticipated developments occur. Natural disasters strike, conflicts spill across borders, and new technologies generate opportunities and threats. At the moment, for example, there are several crises and conflicts that will require a significant amount of attention. There is unrest across Latin America, including Chile and Peru, and the pro-democracy protests in Hong Kong underway since June are the largest in its history, with implications for Hong Kong’s relationship with Beijing, and for the large number of Canadian citizens living in Hong Kong and who would be impacted by a sharp deterioration in the situation. The conflict in Syria is now in its eighth year. An estimated 5.5 million Syrians having fled the conflict, another 6.2 million internally displaced, and there have been deleterious effects on regional peace and security, and the threat of further radicalization, conflict and enormous human suffering. As with many conflicts, minority groups are often disproportionately affected. The crisis in our own hemisphere, in Venezuela, has now become a direct threat to the peace and security of the Americas. More than 90 percent of the population lives below the poverty line, a quarter of the population will have fled by 2020, and despite this the regime still enjoys the support of the military, profits from criminal activity and counts upon the support of [REDACTED] for its political and economic survival.

Global Affairs Canada supports the Minister of Foreign Affairs in responding to these crises, working in lockstep with our partners and allies to push for political solutions to conflicts, in deploying humanitarian assistance to address human suffering, and in carefully planning to minimize the impact on Canadian citizens in these regions, and in providing them with consular assistance if they are impacted.

These issues, and others that will inevitably arise during your term as Minister, will have an important impact on your work. At times they risk dividing your attention, and requiring you to focus on issues which were not previously identified as priorities. The department will be constantly monitoring these developments, assessing their implications for the pursuit of your mandate, connecting these implications to our work in other areas, and ensuring that you are supported by evidenced-based policy advice at all times. This agility is essential to advancing Canadian priorities, and to shaping an international environment that is conducive to the economic prosperity, health and security of all Canadians.

Global Trends

Issue

International relations have entered a period of heightened uncertainty and instability, with established institutions, alliances, and practices being challenged by a shifting balance of power, new economic and social forces, and renewed ideological competition.

Context

An historic shift of geopolitical and economic power from the Atlantic to the Pacific is underway, and as a multi-node world emerges, new and established powers, as well as non-state actors, are seeking to recast the international system to their benefit. Innovations and globalization over the past 25 years helped to bring millions of people out of poverty. But the optimism that accompanied these developments has been tempered more recently by growing inequality, a resurgence of ethno-nationalism, and a return to great power rivalries and proxy warfare.

The consequences of this dynamic evolution impose strategic choices on Canada’s foreign policy.

In promoting its interests abroad, Canada has contributed to developing and strengthening an evolving international system based on rules in which parameters for inter-state behaviour were largely collectively shaped and mutual accountability was expected. In this context, Canada has benefitted from U.S. support and Washington’s position as the world’s leading power, with its vast network of alliances and partners, including NATO and NORAD, which underpin Canada-U.S. security and defence cooperation. [REDACTED] International development and economics have also emerged as domains for geopolitical influence and competition. [REDACTED]

Not surprisingly, these shifting geopolitical realities are straining the existing system of international laws, norms, alliances and institutions. [REDACTED] and in cyberspace, which has become an active domain for geopolitical rivalry and the nefarious activities of non-state actors. [REDACTED]

This shift is increasingly apparent with regards to debt financing. The composition of public debt in Low Income developing Countries (LICs) continues to shift from traditional sources (largely the Paris Club, including Canada) towards non-traditional bilateral lenders [REDACTED] In 2007, 66 percent of public external debt in LICs was held by multilateral development banks or Paris Club members, with just 19 percent held by Non-Paris Club lenders. By 2016 fully 37 percent of public debt in LICs was held by Non-Paris Club, with combined MDB and Paris Club debt down to just 33 percent. Moreover, this presents an incomplete picture of the global debt shift since it only focusses on LICs, and does not account for other forms of financing, including non-governmental foreign direct investment, public funding through non-governmental organizations, or investments through state-owned enterprises with close links to the central government, [REDACTED]

On the security front, several pressures are apparent. Nuclear non-proliferation faces sustained challenges, particularly from Iran, North Korea, [REDACTED] Violent extremism, including in the form of pernicious terrorist groups (e.g. Daesh, Boko Haram, Al-Qaida), white supremacists, and anti-immigrant movements, threaten people around the world. And protracted crises, such as Syria, are extremely costly in terms of lives and livelihoods, and for their regional and international implications.

Change in Creditor Composition of LIDC's Public External Debt 2007 to 2016

In parallel to these specific preoccupations, globalization continues to reshape economic and social life and has contributed to the shifting balance of power. Freer trade, technological innovation and transnational value chains have raised global standards of living. Between 2000 and 2017, emerging Asian countries (including China and India) increased their share of world GDP from approximately 7 percent to 22 percent and are projected to grow at a much faster rate than advanced economies – [REDACTED] Developing countries are also increasingly urbanized, and some face demographic “youth bulges” in their fast-growing populations – offering the potential for continued growth, especially if jobs can match success in extending life expectancy, but also threatening social stability if they cannot. This speaks to the urgent need to accelerate the achievement of the sustainable development goals.

While increased growth and interconnectedness have created a growing global middle class, the momentum to liberalize international trade has stalled, as evidenced by protracted disagreements over the WTO and rising protectionism. This stems partly from the recognition that the benefits of globalization have been unevenly shared. From 2005 to 2014, 65-70 percent of households in advanced economies, on average, were in income segments whose real market incomes were flat or falling (McKinsey).

International migration, regular and irregular, is expected to increase, with competition for jobs and resources in less-developed regions and labour shortages in developed economies.

Emerging markets, including countries where Canada currently invests significant development assistance, present new economic opportunities, although geopolitical, security and governance-related concerns can limit the scope for engagement in the very near term. These and other complex transnational challenges – including climate change and pandemic diseases – affect Canada directly, and Canada can most effectively protect its prosperity and stability by working alongside new and traditional allies and partners.

Canada faces an international environment of growing great power competition, rising trade protectionism, complex transnational challenges, traditional partners who are distracted or disengaged, and resurgent authoritarianism. Yet amid these challenges are opportunities to shape the evolving international system, embrace new markets and non-traditional partners, regroup with like-minded countries and leverage Canada’s deep people-to-people ties around the world. [REDACTED]

In the context of growing international volatility, Canada’s efforts will require close collaboration between Global Affairs Canada and other government departments and agencies to coordinate a whole-of-government approach. But Canada is equipped with an international policy toolkit to meet many of these challenges: its membership in key institutions such as the UN, G7, G20, NATO, NORAD, APEC, the OECD, the Commonwealth and La Francophonie offers comparative leverage; it sustains a positive global reputation for freedom, tolerance, diversity, gender equality, and good governance, including through our leadership of issue-based alliances; it has trade agreements with all G7 members and has solidified the Comprehensive Economic and Trade Agreement (CETA) with the EU, as well as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP); and Canada still possesses hard-won, though transient, credibility on issues of peace and security and international development. In this new era of international relations, Canada will need all the tools at its disposal to navigate difficult strategic terrain ahead.

State of the Global Economy / Trade

Issue

• Global growth is softening as geopolitical and trade tensions are disrupting supply chains and have led to a worsening of business sentiment.
• Despite rising concerns of the risk of recession, most projections call for global growth to rebound in 2020, due to stronger performance by emerging markets and developing economies.
• The Canadian economy is expected to grow by 1.5 percent in 2019 and 1.8 in 2020, but weak global trade is expected to moderate business investment and exports.

Context

Global growth is expected to be weak in 2019 in both advanced and emerging economies. Several factors have contributed to this slowdown:

(1) the ongoing trade and technology conflict between the world’s two largest economies (United States and China); (2) Brexit-related uncertainty; (3) rising geopolitical tensions; and (4) business conditions decelerating after years of steady expansion.

Chart 1: Real GDP Growth projections

[REDACTED due to copyright]

The global economy has experienced a long period of growth since the 2008 financial crisis, but this growth is decelerating in 2019. While the global services sector has held up, manufacturing activities have either contracted or decelerated in many major economies in the first half of 2019, as indicated by manufacturing industrial production.

Given the uncertain outlook, it appears that firms and households continue to hold back on long-range spending as shown by weak business spending (machinery and equipment) and consumer purchases of durable goods, such as cars and appliances. The IMF and OECD project global growth to rebound in 2020 due to stronger performances by emerging markets and developing economies, but these projections are for modest growth, and outlooks have been revised downward repeatedly over the last 18 months.

Trade Tensions

[REDACTED]

Global trade growth in volume terms has declined sharply in recent quarters. Escalating trade conflicts and related uncertainty have given rise to concerns about a potential recession, reflecting unease in the global economy.

Uncertain Growth

The U.S. economy is steady for the moment but is sending increasingly mixed signals. Europe is losing momentum as its largest economy, Germany, has contracted in two of the last four quarters. At the same time, China is showing its weakest growth since 1992, a situation that is set to worsen unless the United States and China resolve their trade conflict. There are also concerns about debt sustainability in developing economies, as growing debt burdens, particularly in Latin America and East Asia, have the potential to quickly become unsustainable.

In response to uncertain growth prospects, many central banks, including the United States Federal Reserve, have cut interest rates to provide economic support, but the lower interest rates can also foster financial vulnerabilities as financial markets move to riskier assets. For its part, the Bank of Canada has maintained its rate unchanged since October 2018 (1.75 percent) as core inflation remained around its 2 percent target, but it has flagged that it will continue to watch developments closely.

Regional Update

Canada

In 2018, Canada’s exports of goods and services increased 6.2 percent to $706 billion, while imports rose 5.4 percent. The total value of trade in goods and services reached a record high of $1.5 trillion. However, GDP growth for 2018 as a whole was 1.9 percent, down from three percent in 2017. The slower rate of growth in late 2018 and early 2019 has been attributed to weakness from the goods producing sectors, uncertainties generated by trade tensions between the United States and China and by American tariffs on steel and aluminum (lifted in May 2019). Despite a frail start in 2019 and ongoing weaknesses in the oil-producing sector and corresponding regions, economic growth rebounded to 3.7 percent in Q2 after growing only 0.5 percent in Q1, driven by strong performance in goods exports, although domestic demand was weak. Canada has seen a trade deficit since the global financial crisis. The IMF projects that Canada’s GDP growth will be at 1. 5 percent in 2019 and 1.8 percent in 2020 – both below the 2018 level.

Overall, the Canadian economy remains sound. The strong national labour market, with close to record low unemployment (5.5. percent in September), should bolster household income and support steady growth in household consumption.

Key factors that could affect the short-term outlook are global trade and geo-political tensions, persistent transportation and production constraints in the oil and gas sector, and an elevated level of household indebtedness. Given interconnectedness with the U.S. economy, economic trends in the United States will also impact the Canadian economy.

United States

The current U.S. economic expansion is the longest on record, though talk of a U.S. recession in the next 18 months has risen following the publication of a string of weak leading economic indicators over the summer.

In response, the United States Federal Reserve has cut its interest rate three times this year, the first cuts since the 2008 financial crisis. U.S. GDP is projected by the IMF to continue growing next year but growth is expected to fall from 2.9 percent in 2018 to 2.4 percent in 2019 and 2.1 percent in 2020, as the effects of past fiscal stimulus unwinds and the impacts of tariffs counter measures by other countries make their mark.

Europe

Euro area growth declined to 1.9 percent in 2018 and is projected to further decline to 1.2 percent in 2019, before rebounding to 1.4 percent in 2020. Export-reliant Germany, Europe’s largest economy, has contracted in two of the last four quarters. Growth in the Italian economy has been tepid since the recession that occurred last year, due to business and political uncertainty. In the second quarter of 2019, the U.K. economy contracted for the first time since 2012, as the U.K. ’s stockpiling for Brexit reached a peak and the car industry implemented shutdowns. Going forward, the IMF expects the U.K. economy to grow at 1.2 percent in 2019 and 1.4 percent in 2020. Uncertainties from Brexit continue to weigh on economic prospects in the United Kingdom and the Eurozone.

Emerging and developing Asia

GDP is expected to grow at 5.9 percent in 2019 and 6.0 percent in 2020, lower than previous forecasts, largely reflecting the impact of tariffs on trade and investment. Chinas growth (year over year) dipped to 6 percent in the third quarter of 2019, the lowest on record since 1992. Escalating tariffs have added downward pressure on an economy already in the process of a structural slowdown and regulatory tightening to rein in debt. Chinas slowing growth is expected to spill over to other emerging Asian economies that are integrated in its supply chains. Elsewhere, Indias economy is set to grow at 6.1 percent in 2019, due to weaker-than-expected domestic demand, and by 7 percent in 2020, as fiscal and monetary stimulus start to have an impact. Indias economy has decelerated in the past few quarters, fueling concerns of a structural slowdown. [REDACTED]

Other emerging markets and developing economies

As indicated in Chart 1, economic growth projections are higher for emerging markets and developing economies. For example, the IMF projects that Sub-Saharan Africa as a region will grow at 3.2 percent in 2019 and 3.6 percent in 2020. However, the regionwide numbers mask considerable differences in the growth performance and prospects of their constituent countries. Also, while growth rates can be high, it is often from a smaller base, which means that it will take some time for these countries to play a bigger role in the global economy and global trade.

In the meantime, there are opportunities to leverage Canada`s diplomatic and international assistance relationships to position us for the future, as other countries are already doing.

International Horizon Issues (November 2019 - March 2020)

North America

Relations with U.S.:

• CUSMA ratification (timelines TBD)
• [REDACTED]
• [REDACTED]
• [REDACTED]
• [REDACTED]
• [REDACTED]

Mexico:

• [REDACTED]
• Central American migration

Europe

Regional:

• [REDACTED] Middle East and African migration
• Developments [REDACTED]

EU/United Kingdom:

• Brexit negotiations (new bilateral trade agreement)
• CETA ratification by all EU member states
• Follow-up from 17th Canada-EU Summit (June 2019)

Ukraine:

• Military training mission (Op UNIFIER) and other security cooperation
• Ongoing political reforms

Russia:

• Crimea and Eastern Ukraine
• [REDACTED]
• [REDACTED]
• Intermediate-range Nuclear Forces (INF) Treaty
• [REDACTED]
• [REDACTED]

Romania:

• [REDACTED]

Latin America and the Caribbean

• Migration flows and impact [REDACTED]
• Venezuela: ongoing political crisis, LIMA group engagement/leadership
• Caribbean: managing hurricane season
• Latin America: [REDACTED]

Africa

• African Continental Free Trade Agreement and growth opportunities
• Political transitions [REDACTED]
• Security situation [REDACTED]
• Sahel: mitigate terrorism, [REDACTED] G7 and broader coordination of international efforts
• Piracy in the Gulf of Guinea and migration to Europe

Global themes/trends to watch

• [REDACTED]
• [REDACTED]
• [REDACTED]
• Democratic institutions, processes, and freedoms under threat
• [REDACTED] and violent extremism
• Peace, stability and climate change
• Scale and drivers of migration
• Diverging approaches to cyberspace, online platforms, new digital technologies and regulations

Multilateral

G7/G20:

• Signature initiatives from Canada's 2018 G7 Presidency – implementation & follow-up
• G7 transition from France to U.S.
• G20 transition from Japan to Saudi Arabia

UN:

• Canada's UN Security Council campaign (vote in June 2020), related events/interactions
• Secretary General Guterres' vision for UN Reform
• Implementation of Agenda 2030 for Sustainable Development (Decade of Action 2020-2030)
• UN Framework Convention on Climate Change – (COP25, December 2019)

WTO:

• Appellate Body appointment stalemate (December 10 deadline)
• WTO reform initiatives (Ottawa Group: transparency, dispute settlement, rule-making)
• [REDACTED]

NATO:

• Foreign Ministers' Meeting (Nov. 2019) and Leaders Summit (Dec. 2019)
• [REDACTED]
• Contributions to NATO missions in Iraq and Latvia
• [REDACTED]

Plurilateral trade agreements:

• CPTPP (Canada ratified Dec 2018)
• [REDACTED]
• [REDACTED]

Treaty on the Non-proliferation of Nuclear Weapons (NPT):

• 2020 Review Conference

Global Replenishments:

• Global Fund (October 2019)
• Green Climate Fund (October 2019)

International Development:

• Nairobi Summit (Nov 2019): 25th anniversary of Int'l Conference on Population and Development
• "Beijing 25+" (March 2020, New York): 25th anniversary of Fourth World Conference on Women

Legal/Regulatory

• [REDACTED]
• [REDACTED]
• [REDACTED]

High profile consular cases

• [REDACTED]
• [REDACTED]
• [REDACTED]
• [REDACTED]

Middle East

Turkey/Syria:

• [REDACTED]
• White Helmets (civilian volunteer group), government as gatekeeper of aid operations

Regional:

• Instability in the Strait of Hormuz
• Regional spillover [REDACTED]
• Global Coalition against Daesh
• Political transitions [REDACTED]

Israel/ Middle East Peace Process (MEPP):

• [REDACTED]
• [REDACTED]
• [REDACTED]

Gulf States:

• Bilateral relations with [REDACTED]
• [REDACTED] humanitarian situation, peace talks
• Human rights concerns [REDACTED]
• [REDACTED]

Iran:

• [REDACTED]

Libya:

• Escalating civil conflict, political and institutional backsliding

Asia

Regional:

• [REDACTED]
• [REDACTED]

China:

• [REDACTED]
• [REDACTED]
• [REDACTED]
• [REDACTED]
• [REDACTED]
• [REDACTED]

Northeast Asia:

• [REDACTED]

North Korea:

• Nuclear negotiations [REDACTED]
• Multilateral efforts [REDACTED]
• Human rights and humanitarian situation

South Asia:

• Situation [REDACTED]
• [REDACTED]

Afghanistan:

• [REDACTED]
• Peace process

Myanmar:

• Rohingya crisis [REDACTED]
• Reinforce democratic transition

The Department at a Glance

Issue

Global Affairs Canada is responsible for shaping and advancing Canada’s integrated foreign policy, international trade and international assistance objectives, and supporting Canadian consular and business interests. We have 10,707 employees working in Canada and in 178 missions in 110 countries around the world with a total budget of $6.7 billion.

Who We Are

Canada’s first foreign ministry was established in June 1909. Since then, the department has progressively transformed itself to reflect the changing international environment. The most significant transformations include its amalgamation with the Department of Trade and Commerce in 1982 and with the Canadian International Development Agency in 2013.

While the legal name of the department (pursuant to the Department of Foreign Affairs, Trade and Development Act of June 26, 2013) remains the Department of Foreign Affairs, Trade and Development, its public designation under the Federal Identity Program is Global Affairs Canada.

What We Do

Global Affairs Canada manages Canada’s diplomatic and consular relations with foreign governments and international organizations, engaging and influencing international players to advance Canada’s security and prosperity in a dynamic global context.

The department develops and implements Canada’s political, trade and international assistance policy and programming priorities based on astute analysis, consultation and engagement with other government departments, Canadians and international stakeholders.

The department’s work is focused on five core responsibilities:

1) International Advocacy and Diplomacy:

Promote Canada’s interests and values through policy development, diplomacy, advocacy, and engagement with diverse stakeholders. This includes building and maintaining constructive relationships to Canada’s advantage, primarily through our network of missions; taking leadership on select global issues; and efforts to build strong international institutions and respect for international law.

2) Trade and Investment:

Support increased trade and investment to raise the standard of living for all Canadians. This includes building and safeguarding an open and inclusive rules-based global trading system; support for Canadian exporters and innovators in their international business development efforts; negotiation of bilateral, plurilateral and multilateral trade agreements; administration of export and import controls; management of international trade disputes; facilitation and expansion of foreign direct investment; and support to international innovation, science and technology.

3) Development, Humanitarian Assistance, Peace and Security Programming:

Contribute to reducing poverty and increasing opportunity for people around the world. This includes alleviating suffering in humanitarian crises; reinforcing opportunities for sustainable and equitable economic growth; promoting gender equality and women’s empowerment; improving health and education outcomes; and bolstering peace and security through programs that counter violent extremism and terrorism, support anti-crime capacity building, peace operations and conflict management.

4) Help for Canadians Abroad:

Provide timely and appropriate travel information and consular services for Canadians abroad, contributing to their safety and security. This includes visits to places of detention; deployment of staff to evacuate Canadians in crisis situations; and provision of emergency documentation.

5) Support for Canada's Presence Abroad: 

Deliver resources, infrastructure and services to enable Canada’s whole-of-government presence abroad. This includes the management of our missions abroad and the implementation of a major Duty of Care initiative to ensure the protection of Government of Canada personnel, overseas infrastructure and information.

Legal Responsibilities

The Department is the principal source of advice on public international law for the Government of Canada, including international trade and investment law. Global Affairs Canada lawyers develop and manage policy and advice on international legal issues, provide for the interpretation and analysis of international agreements, and advocate on behalf of Canada in international negotiations and litigation. There are also a number of Department of Justice lawyers at the Department, who provide legal services under domestic law, including on litigation and regulations such as sanctions implementation.

Our Workforce

To deliver on its mandate, the Department relies on a workforce that is flexible, competent, diverse and mobile.

The department counts 10,707 active employees. The majority of them (6,875 – 64 percent) are Canada-Based Staff (CBS), serving either in Canada or at our missions abroad. The remaining 3,832 employees (36 percent of our workforce) are Locally Engaged Staff (LES), usually foreign citizens hired in their own countries to provide support services at our missions. Currently, 56 percent of Canada-based staff are women (compared to 54 percent of LES) and 60 percent have English as their first official language (40 percent French).

A distinctive human resources system allows the Department to meet its complex operational needs in a timely manner. Our staff work in some of the most difficult places on earth, including in active conflict zones. Among the various occupational groups and assignment types, a cadre of rotational employees supports delivery of the Department’s unique mandate through assignments typically ranging between two to four-year periods, alternating between missions abroad and headquarters. They are foreign service officers (in trade, political, economic, international assistance, and management and consular officer streams), administrative assistants, computer systems specialists and executives, including our Heads of Mission.

Heads of Mission serve the Minister further to a cabinet appointment. They develop deep expert knowledge of their countries of accreditation, establish wide networks, and provide advice and guidance on pressing matters of bilateral and international concern. The Head of Mission is responsible for Canada’s “whole of government” engagement in their countries of accreditation and for the supervision of all federal programs present in their mission.

Global Affairs Canada personnel work in Canada and abroad to advance Canadian interests through creative diplomacy ranging from formal negotiations and network building to stakeholder engagement and capacity building. Canadian officials take part in thousands of international meetings every year on a multitude of topics, advancing Canadian interests through formal and informal interactions with representatives from virtually every country on earth. These efforts are aligned carefully with the priorities of the department and are amplified through targeted public diplomacy, including on social media.

The department is also supported by a 24/7 Emergency Watch and Response Centre in Ottawa which is always on guard to assist Canadians in need of consular assistance abroad or to respond in real time to natural disasters and complex emergencies around the globe.

Our finances

The Departments total funding in the 2019-20 Main Estimates was $6.7 billion. This amount is broken down as follows:

• Vote 1 (Operating): $1,743.4 million
• Vote 5 (Capital): $103.1 million
• Vote 10 (Grants and Contributions): $4,192 million
• Vote 15 (LES pension, insurance, social security programs): $68.9 million
• Budget Implementation : $269.5 million
• Statutory items (e.g. direct payments to international financial institutions; contributions to employee benefit plans): $342. 8 million.

The budget distribution by core responsibility of the Department in the 2019-20 Main Estimates was reported as follows:

2019-20 Core Responsibilities and Planned Spending (in millions)

Our network

The departments extensive network abroad counts 178 missions in 110 countries (see attached placemat for an overview of the network). They range in type and status from large embassies, to small representative offices and consulates.

The departments network of missions abroad also supports the international work of 37 Canadian partner departments, agencies and co-locators (such as Immigration, Refugees and Citizenship Canada; National Defence; Canada Border Services Agency; Public Safety; Royal Canadian Mounted Police; Export Development Canada; several provinces).

The departments headquarters offices are located in the Ottawa-Gatineau region. Most staff are located in the first three buildings:

• Lester B. Pearson Building (125 Sussex)
• John G. Diefenbaker Building(111 Sussex)
• Place du Centre (200 Promenade du Portage)
• Queensway Corporate Campus (4200 Labelle)
• Cooperative House (295 Bank)
• National Printing Bureau(45 Sacré-Coeur)
• Fontaine Building (200 Sacré-Coeur)
• Bisson Centre (the Canadian Foreign Service Institute Bisson Campus)

The department also has six Canadian regional offices to engage directly with Canadians, notably Canadian businesses:

• Vancouver
• Calgary
• Winnipeg
• Toronto
• Montréal
• Halifax

Senior leadership and corporate governance

In support of Ministers, the department’s most senior officials are the Deputy Minister of Foreign Affairs (USS); the Deputy Minister of International Trade (DMT); the Deputy Minister of International Development (DME); the Associate Deputy Minister of Foreign Affairs (DMA); and the Coordinator for International Economic Relations (DMX). Sixteen Branches, headed by Assistant Deputy Ministers, report to the Deputy Ministers and are responsible for providing integrated advice across various portfolios, ranging from geographic regions to corporate and thematic issues. (See separate bios)

Canada’s Heads of mission abroad are responsible for the management and direction of mission activities, and the supervision of the official activities of the various departments and agencies of the Government of Canada in the country or at the international organization to which they are appointed.

The department has a robust corporate governance framework with specific committees for audit, evaluation, resource and corporate management, policy and programs.

Senior managers from headquarters and the mission network manage and integrate the department’s policies and resources in this context to maximize our assets, and ensure accountability for the delivery of departmental programs and results. The amalgamated approach in the Department results in more coherent and cohesive international engagement, supported by an integrated organizational structure.

2019-2020 Corporate Governance Committee Structure

Planning and reporting

The department’s annual planning and reporting process is structured around its Departmental Results Framework.

A Departmental Plan establishes the Government’s foreign affairs, international trade and development agenda for the coming year. It provides a strategic overview of the policy priorities, planned results and associated resource requirements for the coming fiscal year. The document is approved by the Ministers and tabled in Parliament (usually in March-April). The Plan also presents the performance targets against which the department will report its final results at the end of the fiscal year through a Departmental Results Report, typically tabled in Parliament in late fall.

A Corporate Plan acts as a companion piece, and is the Department's operational plan, aligning the work of branches and missions with the strategic plans and priorities established by the Departmental Plan and financial and human resources. The Corporate Plan ensures the integration of key enabling functions, such as human resources, IM/IT, communications, business continuity and risk management, into one operational planning process. The Corporate Plan is finalized in time for the start of each fiscal year in April.

Annex

Global Affairs Canada Network Placemat

Global Affairs Canada Organizational Chart

Biographies of senior officials

Deputy Ministers

Marta Morgan, Deputy Minister of Foreign Affairs

On April 18, 2019, Prime Minister Justin Trudeau appointed Marta Morgan to the position of Deputy Minister of Foreign Affairs, effective May 6, 2019.

Prior to joining Global Affairs Canada, since June 2016, Ms. Morgan was deputy minister of Immigration, Refugees and Citizenship Canada. In that previous role, she led the development of immigration policies and programs to support Canada’s economic growth, developed strategies to manage the significant growth in asylum claims and improved client service.

Before that, Ms. Morgan acquired extensive leadership experience in a range of economic policy roles both at Industry Canada and the Department of Finance Canada. In those departments, as assistant deputy minister and associate deputy minister, she provided leadership in telecommunications policy, spectrum policy, aerospace and automobile sectoral policy, and in the development of two federal budgets.

Prior to her time at Industry Canada, Ms. Morgan held positions at the Forest Products Association of Canada, the Privy Council Office, and Human Resources Development Canada.

She has also been a member of the board of the Public Policy Forum since 2014.

Ms. Morgan has a Bachelor of Arts (Honours) in economics from McGill University and a Master in Public Policy from the John F. Kennedy School of Government at Harvard University.

John Hannaford, Deputy Minister of International Trade

On December 7, 2018, the Prime Minister appointed John Hannaford Deputy Minister of International Trade at Global Affairs Canada, effective January 7, 2019.

From January 2015 to January 2019, Mr. Hannaford was the foreign and defence policy adviser to the Prime Minister and Deputy Minister in the Privy Council Office of the Government of Canada. Until December 2014, Mr. Hannaford was the assistant secretary to the Cabinet for foreign and defence policy in the Privy Council Office. Prior to December 2011,

Mr. Hannaford was Canada’s ambassador to Norway. Before that, for two years, Mr. Hannaford was director general of the Legal Bureau of the Department of Foreign Affairs and International Trade. As a member of Canada’s foreign service, he had numerous assignments in Ottawa and at the Canadian embassy in Washington, D. C. , during the early years of his career.

Mr. Hannaford graduated from Queen’s University in Kingston, Ontario, with a Bachelor of Arts in history. After earning a Master of Science in international relations at the London School of Economics, he completed a Bachelor of Laws at the University of Toronto and was called to the bar in Ontario in 1995.

In addition to his work as a public servant, Mr. Hannaford has been an adjunct professor in both the Faculty of Law and the Graduate School of Public and International Affairs at the University of Ottawa.

Vincent Rigby, Associate Deputy Minister of Foreign Affairs

On July 31, 2019, the Prime Minister appointed Vincent Rigby as Associate Deputy Minister of Foreign Affairs at Global Affairs Canada, effective August 12, 2019.

Prior to this appointment, Mr. Rigby was Associate Deputy Minister of Public Safety Canada from July 2017 until August 2019.

From 2013 to 2017, Mr. Rigby was Assistant Deputy Minister of Strategic Policy at Global Affairs Canada, where he was responsible for providing integrated strategic policy advice reflecting the foreign policy, international assistance and international trade streams of the Department. In this capacity, Mr. Rigby also served as the Personal Representative (Sherpa) to the Prime Minister on the G20, supporting three G20 Leaders’ Summits. Mr. Rigby carried out a number of additional roles as Assistant Deputy Minister, including as the Department’s Chief Results and Delivery Officer, G7 Sous-Sherpa, Chief Negotiator for the Post-2015 Development Agenda, and Chair of the Arctic Council’s Senior Arctic Officials.

Before the creation of Global Affairs Canada, Mr. Rigby was Vice-President of the Strategic Policy and Performance Branch of the former Canadian International Development Agency (CIDA). In this role, Mr. Rigby was responsible for developing and coordinating Canada’s international assistance policy as well as overseeing the performance management and evaluation of Canada’s development programme.

From 2008 to 2010, Mr. Rigby was the Executive Director of the International Assessment Secretariat (IAS) at the Privy Council Office (PCO). Mr. Rigby was also Afghanistan Intelligence Lead Official while at PCO, responsible for coordinating the Canadian intelligence community in support of Canada’s Afghanistan mission.

Before arriving at PCO, Mr. Rigby was Assistant Deputy Minister (Policy) at the Department of National Defence (DND) from 2006 to 2008. Over his 14 years at DND, Mr. Rigby held a number of other positions within the Policy Group, including Director General Policy Planning, Director of Policy Development and Director of Arms and Proliferation Control Policy. Prior to joining DND, he was a defence and foreign policy analyst at the Research Branch of the Library of Parliament, from 1991 to 1994.

Mr. Rigby holds an MA in diplomatic and military history from Carleton University in Ottawa.

Jonathan T. Fried, Coordinator, International Economic Relations

Mr. Fried is the Personal Representative of Prime Minister Justin Trudeau for the G20 and Coordinator for International Economic Relations at Global Affairs Canada, with a horizontal mandate to ensure coherent policy positions and government-wide strategic planning in international economic organizations and forums regarding, for example, Canada-Asia and other international trade and economic issues.

He served as Canada’s Ambassador and Permanent Representative to the WTO from 2012 to 2017, where he played a key role in multilateral trade negotiations, including as Chair of the WTO’s General Council in 2014 and chair of the Dispute Settlement Body in 2013. He was the co-Chair of the G20’s Trade and Investment Working Group with China in 2015, and the “Friend of the Chair” for Germany in 2016. Formerly Canada’s Ambassador to Japan; Executive Director for Canada, Ireland and the Caribbean at the International Monetary Fund; Senior Foreign Policy Advisor to the Prime Minister; Senior Assistant Deputy Minister for the Department of Finance and Canada's G7 and G20 Finance Deputy. Mr. Fried has also served as Associate Deputy Minister; Assistant Deputy Minister for Trade, Economic and Environmental Policy; Chief Negotiator on China’s WTO accession; Director General for Trade Policy; and chief counsel for NAFTA.

Mr. Fried is a member of the World Economic Forum’s Global Agenda Council on Trade and Investment and of the Steering Committee of the e15 initiative on Strengthening the Global Trading System. He serves on the advisory boards of the Columbia Center on Sustainable Investment, the World Trade Symposium and the Central and East European Law Institute. Mr. Fried was named in 2015 as the inaugural recipient of the Public Sector Lawyer Award by the Canadian Council on International Law to honour his service and contribution to public international law.

Organizational Structure

Mission Network

Litigation Update

Issue

A dedicated unit of the Department of Justice Canada (JUS), embedded within Global Affairs Canada, provides legal advice and litigation support on all matters concerning Canadian laws and regulations that apply to the Department’s activities. A summary of some of the ongoing cases is provided in this brief.

Context

JUS provides domestic legal advice and representation in litigation to Global Affairs Canada relating to:

1. Corporate law, contract law, assistance programming and government procurement, including litigation support on procurement challenges brought before the Canadian International Trade Tribunal;
2. Consular cases, emergency evacuations and on national security matters, as well as litigation support when Global Affairs Canada is named in litigation, including judicial reviews, civil claims and other litigation-related matters;
3. Labour and employment law involving Canada-based staff and locally engaged staff;
4. Real estate operations and construction projects, including in matters of negotiation, litigation, government procurement, contract law and real property law;
5. Operational and consular policy issues pertaining to the application of the Hague Convention on the Civil Aspects of International Child Abduction; and,
6. Information sharing, access to information and privacy, and the Charter.

JUS also provides: support with regards to statutory interpretation and legislative and regulatory drafting; and, legal advice on the potential implications of trade negotiations for Canada’s domestic legal regime.

The following table summarizes some of the ongoing cases on which JUS is providing the Department with legal services.

Minister of Foreign Affairs – Early Events, Key Decisions, the Department

High-Profile International Events

• NATO Foreign Ministers Meeting, Brussels, Belgium (November 20-21, 2019)
• G20 Foreign Ministers' Meeting, Nagoya, Japan (November 22-23, 2019)^*
• Non-Proliferation and Disarmament Initiative (NPDI) Ministerial, Nagoya, Japan (November 22 on the margins of the G20 Foreign Ministers' Meeting)^*
• OSCE Ministerial Council, Bratislava, Slovakia (December 5-6, 2019)
• [REDACTED]
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Leader-Level Events

• NATO Leaders Meeting, London, United Kingdom (December 3-4, 2019)
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Additional Travel for Consideration

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Bilateral Travel Options

• Japan (margins of G20 FMM, November, 2019)^*
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^* = recommended

Top Issues

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Platform Commitments

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Early Decisions

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Parliament

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Key Facts about the Department

• 10,707 employees in Canada and in 178 missions in 110 countries
• GAC's most senior officials are:
  • Deputy Minister of Foreign Affairs (USS)
  • Deputy Minister of International Trade (DMT)
  • Deputy Minister of International Development (DME)
  • Associate Deputy Minister of Foreign Affairs (DMA)
  • International Coordinator for International Economic Relations (DMX)
• 178 Heads of Mission abroad responsible for the management, direction and supervision of the official activities of the Government of Canada in the country or at the international organization to which they are appointed.
• 16 branches, headed by Assistant Deputy Ministers, report to the Deputy Ministers, and provide integrated advice across various portfolios
• Total budget of $6.7 billion

Key Ministerial Responsibilities

• Conduct of diplomatic and consular relations on behalf of Canada, including international negotiations and economic relations
• Official communication between Canada and the government of any other country or international organization
• Expansion of Canada's international trade and commerce
• Sustainable international development and poverty reduction in developing countries and humanitarian assistance
• Management of the foreign service, Canada's diplomatic missions and Heads of Mission abroad Early Decisions Decision Point
• Development of international law and application in Canada's external relations

Communications

• Actions/decisions for the first days will have communications implications
• First international visits will send signals on Canada's foreign policy priorities
• Frequency of statements is a personal decision for each minister
• Communications team in the department is there to support you with many departmental tools including media releases, Twitter accounts and websites.

Treasury Board

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Minister of Foreign Affairs Key Portfolio Responsibilities

Issue

• The Minister of Foreign Affairs presides over the Department of Foreign Affairs, Trade and Development (DFATD),also known as Global Affairs Canada and is assisted in this effort by the Minister of Trade and the Minister of International Development.
• The Minister of Foreign Affairs is responsible for Canada’s foreign policy, diplomatic relations and consular services for Canadians. S/he also co-manages the International Assistance Envelope, and provides oversight for Global Affairs Canada’s peace and security programming.

Context

Pursuant to the Department of Foreign Affairs, Trade and Development Act (DFATD Act) of June 26, 2013, the Minister of Foreign Affairs is responsible for the management and direction of the department in Canada and abroad, assisted by the Minister of International Trade and the Minister for International Development. While not a legislative requirement, there is usually a Minister for La Francophonie who manages Canada’s engagement in the Organisation internationale de la Francophonie.

The department counts 10,707 active employees, Canada-Based Staff and Locally Engaged Staff in 178 missions, who work hard, in some of the most difficult places in the world, to advance the department’s mandate.

Key Responsibilities of the Minister of Foreign Affairs

• the conduct of diplomatic and consular relations on behalf of Canada;
• official communication between the Government of Canada and the government of any other country or international organization;
• international negotiations;
• international economic relations;
• the expansion of Canada’s international trade and commerce;
• sustainable international development and poverty reduction in developing countries and humanitarian assistance during crises;
• the administration of the foreign service, management of Canada’s diplomatic missions, and coordination of direction given by the Government of Canada to heads of missions abroad;
• the development of international law and its application in Canada’s external relations.

The DFATD Act does not confer powers or authorities to the Minister. The main source of your authority is the Royal (or Crown) Prerogative, the powers and privileges accorded by the common law to the Crown and nowadays resting with the Canadian executive branch. Additional important statutes conferring you authority on specific issues include: the Foreign Missions and International Organizations Act (FMIOA), implementing in Canadian law the Vienna Conventions on Diplomatic Relations and on Consular Relations; the Canadian Security Intelligence Service (CSIS) Act, giving you authority to request that CSIS collect, within Canada, information or intelligence relating to foreign capabilities, intentions or activities; and the Communications Security Establishment (CSE) Act, giving you the authority to approve active cyber operations and to be consulted for defensive cyber operations. Though you are the Minister responsible for the whole Department, in practice, management of files related to Canadas international trade interests and development assistance is customarily executed by the Minister of International Trade and the Minister of International Assistance respectively.

You are responsible for expanding Canadas global leadership and influence and advancing Canadian interests and values, by engaging constructively with other countries, regional partners, and by building and maintaining relationships with international organizations such as the United Nations, NATO, the G7 and the G20, La Francophonie, and the Commonwealth. Through advocacy and diplomacy, you will drive positive action on global issues.

In seeking to restore international peace and security, combat corruption and promote respect for norms and values, including human rights, an important tool at your disposal is the application of autonomous sanctions, specifically through the Justice for Victims of Corrupt Foreign Policy Officials Act (JVCFOA) and the Special Economic Measures Act (SEMA). Canada currently imposes sanctions under SEMA on 11 countries, and 70 individuals have been designated under the JVCFOA since 2017.

Canada also imposes export and import controls on a range of goods and technologies, by way of Control Lists under the Export and Import Permits Act. The Act delegates to you, as Minister of Foreign Affairs, wide discretionary powers to control the flow of goods listed on the Control Lists, with the objective of: ensuring that exports are consistent with Canadas foreign and defence policies and do not cause harm to Canada and its allies; do not undermine national or international security; do not contribute to national or regional conflicts or instability; do not contribute to the development of weapons of mass destruction, or of their delivery systems; are not used to commit human rights violations, and are consistent with existing economic sanctions provisions.

The conduct of consular diplomacy is a cornerstone of Canadas foreign policy and a key responsibility for the Minister of Foreign Affairs. The Department is focused on serving Canadians through a modernized Canadian consular program, including a refreshed consular strategy, new digital tools and the implementation of new service standards. The department collaborates with partners, bilaterally and multilaterally, on issues such as the treatment of dual nationals, emergency management, complex family cases, treatment of prisoners and cooperation and sharing of resources. The department also maintains a network of Honorary Consuls abroad who provide representation and services in locations without a Canadian diplomatic or consular mission.

The provision of travel advice to Canadians is an important pillar of consular services. The travel.gc.ca website is the second most visited Government of Canada website. Passport and citizenship services abroad, on behalf of Immigration, Refugees and Citizenship Canada (IRCC), represent approximately 90 percent of consular interactions with Canadians abroad and the department collaborates closely with IRCC on their Passport Modernization Abroad (PMAP) project, [REDACTED]

In delivering your statutory duties, under the DFATD Act, to develop, foster and apply public international law for Canada, you can count on the support of the Legal Branch of the Department, the principal source of advice on public international law for the Government of Canada.

The Departments lawyers will assist you in your efforts to advocate on behalf of Canada in international negotiations and litigation, and to support the rule of law at the international level and maintain a strong and coherent set of international rules and institutions.

The administration of Canada’s foreign service and extensive network of missions abroad (178 missions in 110 countries) is also one of your key responsibilities. This platform supports the international work of the Department and 37 partner departments, agencies and co-locators abroad. The safety and security of Canadian and locally engaged staff is a top priority in the context of a complex, dynamic and often dangerous international environment. Security environments can change suddenly and significantly as a result of natural disasters, political instability, armed conflict, terrorism/extremism, criminality or health crises.

In response to increasing security threats, you are responsible for the implementation, [REDACTED]

You are also responsible for the co-management of the International Assistance Envelope (IAE), the Government of Canada’s dedicated pool of resources and main budget planning tool to support international assistance objectives. In this context, you provide direct oversight for the peace and security pool, within which four complementary Peace and Security Programs (over $300 million per year) fund activities to address international peace and security challenges; promote human rights, freedoms, inclusion and democracy; and strengthen Canada’s leadership in the international security arena:

1. The Peace and Stabilization Operations Program (PSOPs) delivers conflict prevention, stabilization and peacebuilding programming, serves as the Department’s centre of excellence on effective engagement in fragile and conflict-affected states and acts as the lead implementer of the Women, Peace and Security Agenda. The program also deploys police and civilian experts in institutions around the world where a niche for Canadian capacity is requested.
2. The Weapons Threat Reduction Program (WTRP) is Canada's primary mechanism for the delivery of concrete weapons threat reduction projects.
3. The Anti-Crime Capacity Building Program (ACCBP) seeks to prevent and respond to threats posed by transnational criminal activity, with a focus on Canada and the Americas. It has six thematic priorities: security system reform; illicit drugs; corruption; human trafficking and migrant smuggling; money laundering and proceeds of crime, and crime prevention (including cybercrime).
4. The Counter Terrorism Capacity Building Program (CTCBP) was created to combat significant ongoing threats from international terrorist networks and supports a wide range of programming interventions, including countering violent extremism; effective border management; addressing foreign terrorist fighters; aviation security, and addressing prison radicalization.

In addition to these programs, you are responsible for the Office of Human Rights, Freedoms, and Inclusion, which covers two thematic funding envelopes: the Promoting and Protecting Democracy Fund and the Inclusion, Diversity and Human Rights Envelope.

1. The Promoting and Protecting Democracy Fund focuses on supporting electoral processes and reinforcing democratic practices such as combatting disinformation, strengthening civic engagement, building societal resilience, and creating inclusive and gender-sensitive public institutions.
2. The Inclusion, Diversity and Human Rights Envelope serves to promote inclusion, diversity and human rights by providing rapid and targeted support, including projects that address the erosion of civil society space, threats to human rights defenders, he exclusion of vulnerable and marginalized minorities and digital risks to human rights.

Canada – U.S. Relations

Issue

• Constructive relations with the United States remain essential to Canada’s prosperity and security, irrespective of political dynamics in Washington, D.C.
• In the lead up to 2020 elections,U.S. attention will be focused domestically. CUSMA is Canada’s top priority, in addition to continuing to pursue collaboration in areas of mutual interest.

Context

Canada and the United States benefit from a unique relationship, built on many shared values and interests, the close personal and professional ties of our citizens and a deeply integrated economic relationship. Some 385,000 people cross the Canada-U.S. border daily, the longest shared and demilitarized border between any two nations.

Thanks to NAFTA, Canada and the United States enjoy one of the largest trading relationships in the world. In 2018, $499 billion worth of Canadian goods and services exports (71 percent of Canada’s total exports) went to the United States. Canada imported $470 billion of goods and services (62 percent of total imports) from the United States, making Canada its largest single export market (Statistics Canada). Canadian foreign direct investment (FDI) in the United States amounted to $595 billion, making Canada the second largest source of cumulative FDI in the United States (12 percent of total FDI into the United States). U.S. investment in Canada is worth $406 billion, the largest source (46 percent of total) of FDI in Canada. Canada is the largest, most secure, foreign source of energy for the United States (including oil, natural gas and hydro-electricity).

Canada and the United States have traditionally enjoyed a close, positive and integrated relationship, despite irritants (e.g. softwood lumber). [REDACTED] Canada to create an augmented standard for engagement at all levels with U.S. opinion shapers. [REDACTED] Canada has engaged on priority issues with key influencers, including from both parties in Congress and at the state and local levels. [REDACTED]

President Trump is intensifying his focus on his re-election in November 2020 and [REDACTED]

[REDACTED]

In the meantime, Canada is focused on five priority areas:

1. Trade:

The Administration is pushing Congress to ratify the CUSMA. House Democrats, led by Speaker Pelosi, have however demanded changes to the Agreement, in particular on enforceability, worker protections, environmental protections and access to affordable medicines, leaving timelines for ratification uncertain. CUSMA ratification is also pending in Canada.

Trade irritants continue to pose challenges to the bilateral relationship, especially duties on softwood lumber and the threat of Buy American measures. [REDACTED] The United States has stepped up historic grievances (e. g. with regard to the dispute settlement system’s Appellate Body), and believes that the WTO rule book has not kept pace with geo political/economic developments and does not effectively address Chinas non-market economy practices. It is therefore pushing for significant reforms to the organization that it believes will help correct perceived imbalances. While it has tabled proposals in some areas that Canada supports (e.g. proposal on transparency to improve WTO members compliance with WTO obligations to notify measures), its approach in other areas (e. g. blocking appointments to the WTO Appellate Body and unilateral declarations challenging the practice of differential treatment for developing countries) risks further cleaving the WTO membership and delaying progress in a variety of areas.

2. Defence and Security:

Canada and the United States were both founding members of the North Atlantic Treaty Organization (NATO) in 1949 and have worked side by side in the North America Aerospace Defense Command (NORAD) since 1958. Canadas deployments and military cooperation, including our participation in NATOs Enhanced Forward Presence in Latvia, have been welcomed by the United States. [REDACTED] the United States has long sought to rebalance defence burden-sharing with allies, including under the Bush and Obama administrations, [REDACTED] While Canada takes a broader view of what constitutes burden-sharing, defence spending is projected to reach 1.4 percent of GDP by 2024.

NORAD policy and modernization is a strategic priority for Canada and an essential part of maintaining its sovereignty. [REDACTED]

Canadas Arctic and Northern Policy Framework commits Canada to empower Northern communities while protecting the Arctic environment, and maintaining the Arctic as an area of peace and stability. However, we cooperate with the United States on North American Arctic security through NORADs integrated command structure, including through the North Warning System which monitors the air approaches of North America.

The Canadian and U.S. Coast Guards also work together on public safety, search and rescue, and other operational activities.

Arctic security is becoming an area of focus of the U.S. Administration, including great power competition for resources.

The United States has warned of Chinas increased presence and interests in the Arctic, particularly Chinese investments and infrastructure development, some of which seek to establish a permanent security presence in the North, according to the United States. They have also expressed concerns over Russias sovereignty and jurisdiction claims in relation to the Northern Sea Route and Russian military buildup in the Arctic (e.g. new icebreaker fleet).

3. Borders and Transboundary Issues:

Regardless of political affiliation of national governments, line departments in both countries work closely to improve management and security of our shared border to facilitate the secure movement of people and goods. This includes preclearance, used by nearly 15 million travellers annually and the implementation of the entry-exit initiative, involving the exchange of arriving traveller information through a land border crossing. Canada also works with the United States to address the influx of irregular migrants arriving in Canada via the U.S. northern border. [REDACTED]

Canada has also cooperated closely with the United States to combat the opioid crisis which claimed the lives of 4,100 Canadians (11.2 per 100,000) and 47,600 Americans (14.9 per 100,000) in 2017.

The United States has declared the opioid crisis a Public Health Emergency.

In June 2019, Canada and the United States agreed to work more closely together to find solutions to the opioid crisis.

Canada and the United States have a number of maritime boundary disputes (e.g. Beaufort Sea, Dixon Entrance) and hold divergent views regarding the legal status of the Northwest Passage (NWP). Canada considers the NWP as part of its sovereign internal waters, whereas the U.S. views it as a strait where international freedom of navigation applies. [REDACTED]

Canada is also concerned about a U.S. oil and gas leasing program in the Coastal Plain of the Arctic National Wildlife Refuge in Alaska which is a habitat for a number of shared species and populations including the Porcupine Caribou herd, polar bears and migratory birds. Given the complexities and costs associated with drilling in the Arctic Refuge, together with high profile opposition from Democrats and environmental non-government organizations, the likelihood of judicial challenges delaying and/or preventing development in the area is high.

Despite the challenges on the Arctic file, collaboration on Arctic science continues. For example, Polar Knowledge Canada and the U.S. National Science Foundation are in discussions to enhance research collaboration.

4. Energy and resource security:

Canada is by far the largest and most secure energy exporter to the United States. While the Trump Administration has made energy security a key priority, significant opposition in the U. S. has caused delays to new energy infrastructure, such as Keystone XL, and Enbridge Lines 3 and 5, and Hydro-Qubec/New England project.

The United States is looking to reduce its reliance on foreign imports of minerals critical to its defence, manufacturing, and high tech industries. In June 2019, Canada and the United States agreed to develop a joint action plan on critical minerals to improve mineral security, future competitiveness of our industries and ensure secure and reliable supply chains. Canada is a leading supplier of 13 of the 35 minerals the United States deems critical, including aluminum, potash, and uranium.

In 2017, the minerals sector generated 634,000 jobs across Canada.

5. Global Action:

The United States historically has played a vital role shaping the institutions of the postwar multilateral system (the UN, the IMF, the World Bank and the WTO). The Trump Administration has taken a more skeptical approach to some multilateral efforts, such as the Paris Agreement on Climate Change, and security arrangements, such as the Joint Comprehensive Plan of Action (Iran nuclear deal). [REDACTED] Canada has an interest in sustaining constructive U.S. engagement on international issues and within multilateral institutions.

Canada and the United States collaborate on a broad range of shared foreign policy priorities such as support for Interim President Juan Guaido in Venezuela, upholding Ukrainian sovereignty, working toward denuclearization of the Korean Peninsula, and coordinating, when appropriate, on imposing new sanctions measures (i.e. Russia, Venezuela, Nicaragua and Myanmar).

U.S. competition with revisionist powers (i.e. Russia, China) increasingly frames its policies. [REDACTED]

The United States is the worlds largest bilateral donor (US$34.7 billion) of overseas development assistance (0.18 percent of Gross National Income or GNI). Canadas overseas development assistance amounts to US$4. 6 billion (0.26 percent of GNI). We share common development priorities such as supporting maternal and newborn health, combatting infectious diseases and epidemics such as AIDS/HIV and encouraging the private sector to play a greater role in development financing. While the Trump Administration has cut health funding to organizations which provide abortion-related information and services, we continue to collaborate closely on promoting womens economic empowerment in development.

Canada-China

Issue

• The current bilateral crisis highlights inherent and emerging challenges to Canada-China relations in an unsettled and uncertain geostrategic context.
• One year ahead of the 50th anniversary of diplomatic ties (October 2020),the relationship is at a fundamental juncture: while Canada has long framed its China policy through the lens of economic opportunity, it now needs to take account of Beijing’s long-term strategic challenge to Canadian interests and values.

Context

The bilateral relationship with China is in unprecedented crisis, with relations at their lowest ebb since formal ties established in 1970. Following the December 1, 2018 arrest of Huawei’s Meng Wanzhou, [REDACTED] by arbitrarily detaining and sentencing Canadian nationals, significantly disrupting canola seed exports and suspending all normal high-level bilateral dialogue mechanisms. Measures against canola in particular have led to a 1.4 percent decline of Canadian merchandise exports to China in the first half of 2019. The situation has been complicated by Beijing’s response to recent tensions and violence in Hong Kong^{Footnote 1} – home to a large Canadians diaspora.

As the PRC continues to bolster its assertive foreign policy demeanour, Canada must promote and defend its values in close partnership with like-minded allies and coalitions.

Despite recent developments (one formal bilateral meeting between foreign ministers, and the respective nominations of Ambassadors) the Chinese government’s position remains unchanged. China’s public [REDACTED] messaging remains that Canada must correct its “mistake” and release Meng, or relations will remain poor, if not deteriorate further. As the extradition process is likely to continue for months if not years, [REDACTED]

Meanwhile, Michael Spavor and Canadian Foreign Service Officer (on leave) Michael Kovrig continue to be detained on national security grounds. Information on their cases is extremely limited [REDACTED] In 2019, Robert Schellenberg [REDACTED] Canadians received death sentences, [REDACTED]

Since December 2018, Canada has raised these and other bilateral issues at the highest levels of the Chinese government. Behind-the-scenes Canada has pursued more than 1,000 diplomatic engagements with a wide range of foreign interlocutors.

Inflection Point

Canada is at a fundamental juncture in its relationship with the PRC as the latter asserts its economic and geopolitical strength to harden its resolve. The crisis has demonstrated Beijing’s readiness and ability to use aggressive political and economic levers to punish Canada (a pattern observed in China’s other bilateral relationships), and to propagate norms of international relations inimical to Canadian interests.

Over the past four decades, our sustained commercial engagement of China has resulted in it becoming Canada’s third largest trading partner (four percent of total exports vs. 75 percent to the United States and 8 percent to the EU). While business continues, recent Chinese discriminatory trade policies against Canada have contributed to an increase in Canada’s trade deficit with China (for the first half of 2019) as some Canadian exports have been restricted while Chinese imports continue unabated.

The PRC’s [REDACTED] market presents a strategic challenge to Canadian trade policy, and the direction of bilateral relations going forward. In 2018, eight of our top ten exports to China were agricultural or natural resources. Canadian commercial interests that are dependent on the Chinese market are vulnerable to sudden and arbitrary trade disruptions. This is primarily true of commodities, but China is also Canada’s second largest source of international students (24 percent) and tourists (more than six percent). [REDACTED]

While opportunities exist, Canadian exporters and investors continue to experience problems in accessing and participating in the Chinese market by both formal and informal barriers. Many sectors are limited by restrictions to foreign participation (e.g. digital economy and advanced manufacturing).

Exploratory discussions on a potential FTA with China suggest that achieving satisfactory outcomes in all areas of interest to Canada would be challenging [REDACTED] While China’s economy drives a large proportion of global growth, FTA negotiations with China are off the table for many like-minded partners, some of whom see pressure at the WTO as the best means of securing rules-based trade with China.

Other Canadian Interests and Values

[REDACTED]

[REDACTED] The Chinese government has been pushing for reforms to the global governance structure to reflect its rising status. China is no longer a rules-taker, but increasingly a rules-maker in the global arena, as exemplified by its establishment of the AIIB. The PRC promotes perspectives on governance, economic security, and human rights that diverge in fundamental ways from Canada’s. For example, Canada, along with several like-minded, continues to call out Chinese authorities on grave human rights abuses against ethnic Uighur and other minorities in Xinjiang, while China applies pressure to support its narrative and governance model in Xinjiang.

[REDACTED]

With respect to the current international rules-based system, the PRC tends to: endorse aspects [REDACTED] (climate change initiatives, asymmetrical access to advanced markets); redefine others to advance [REDACTED] interests (WTO reform); and to flout them where irreconcilable (South China Sea, human rights). The Chinese government also seeks to promote its ideology by inserting Communist Party of China (CPC) language in multilateral documents, challenging universal human rights with appeals to sovereignty and majoritarianism.

This new-found voice in multilateral forums has allowed China to project its national interests globally and sets a path for the CPC to seek a [REDACTED] place on the world stage.

Meanwhile Canada’s neighbours in the Western Hemisphere have found themselves at the sharp end of China’s international assertiveness – constraining and complicating our engagement.

The Chinese government has established alternative multilateral forums, such as the AIIB and Belt and Road Initiative to provide soft loans and infrastructure investment with fewer conditions. China has utilized these alternative forums to leverage its economic prowess to gain regional influence and export its model of governance around the world. Beijing commands new political leverage over an increasing number of vulnerable democracies in Latin America and the Caribbean, indirectly solidifying its preferred model [REDACTED] in the region [REDACTED].

Stuck in the Middle

The current bilateral crisis has put Canada at the center of a sharpening U.S. -China geopolitical rivalry, [REDACTED] In recent years, China has made a practice, especially in Asia, of driving wedges between the United States and allies to mitigate its potential “containment”. China has deployed variations of this strategy – wielding restrictions on market access and severing diplomatic engagement – against the United Kingdom, Australia, Japan, South Korea, Norway, and Sweden among others. The range of leverage and intimidation towards Taiwan, still considered by the PRC to be a “renegade” province, is even more intense, and is likely to test the limits of the current rules-based system.^{Footnote 2}

The United States, in turn, is deeply concerned with China’s growing economic heft – exemplified in the BRI: a world-spanning push to expand China-centric supply routes by financing transport, communications and extractive infrastructure in partner nations.

While critics have labeled this phenomenon “debt-trap diplomacy,” BRI projects often address longstanding critical infrastructure gaps in developing countries; investments deemed too risky by Western donors and financial institutions. China also has an expansionist plan for its future in the Arctic [REDACTED]

[REDACTED] In the Canadian case, Meng’s arrest was seen by Beijing as a U.S.-directed blow to China’s innovation agenda. Washington, for its part, remains wary of Canada's interest in China-led infrastructure or investment projects – illustrated most vividly by ongoing U.S. efforts to minimize Chinese participation in Canada’s 5G network.

Engaging “Many Chinas”

While China’s foreign policy is to support overarching goals of “national rejuvenation”, legitimizing the CCP’s authoritarian model, and shaping an international environment conducive to these ends, there are “many Chinas”. There is the image of a global juggernaut, but also evidence that Beijing’s assertiveness abroad seeks to compensate for fragility at home. Demographically, China’s population is aging, lacks a functional social safety net (its “social credit” system tends to amplify inequalities), and will likely be overtaken by India’s population in 2022. Similarly, while economic models predict that China’s GDP will overtake the United States by the late 2020s, this growth is expected to level off shortly thereafter. Acute levels of environmental degradation, pollution, corruption, consumer debt, and other financial risks will continue to constrain “best case” economic development scenarios. [REDACTED]

Going forward, [REDACTED] Distance, language, ideology, censorship, an opaque political system and greater CPC restrictions on exchanges compound the situation.

In normal times, China’s transition towards a consumption-driven economy would mean widening opportunities for Canadian exporters in innovative sectors such as clean tech, consumer/health products and life sciences, including via e-commerce. However, these and other opportunities to engage (i. e. on less sensitive files and global issues including climate change, global health security), must be balanced against Canada’s long term interests and core values (without neglecting imperatives under the current crisis).

Rules-Based International System

Issue

• Many of the laws, norms, alliances and institutions that have underpinned international relations in recent decades are under stress, increasingly challenged by both states and non-state actors, with important ramifications for global rule-making, rule-taking and relationships.
• In order to defend and advance its national interests, Canada may require new tools and approaches as it seeks to shape the evolution of the global order to come.

Context

Canada’s prosperity and security have benefited over several decades from a global system composed of institutions such as the WTO; alliances such as NATO, norms such as good governance; and international law such as the Humanitarian Law of Armed Conflicts. This system broadly governs contemporary international affairs. This is often referred to as the rules-based international order (RBIO), in which parameters for inter-state behaviour have largely been collectively shaped and mutual accountability was expected (with some exceptionalism). While the system has regularly evolved, at its core was a desire to foster predictability and non-aggression between states, respect for international law and territorial integrity, economic openness and cooperation, and coordinated responses to shared multi-jurisdictional challenges.

The current system has contributed to the relative peace and expanding prosperity of the last 75 years. It has facilitated, for example, massive trade growth (from 12 percent of global GDP in 1960 to over 30 percent today) and, through a proliferation of complementary treaties, institutions, and cooperation arrangements, it has provided an expanding framework to manage global affairs. For Canada alone, almost 550 multilateral treaties entered into force from 1967 to 2016 (in addition to nearly three times as many bilateral treaties). While the rules governing this dynamic system have not always been applied consistently, notably by large powers, they have nevertheless helped to mitigate the use of hard power between states, facilitated international cooperation, reduced financial instability, and advance global prosperity.

Most states continue to claim support for a rules-based system and to appreciate the benefits it brings, even if they don’t actively work to promote or protect all of its elements. This, plus the tendency for some institutional continuity, suggests the current core attributes of the system are unlikely to be entirely undermined in the short term.

Challenges to the current system

Many of its elements continue to function well, including parts of the global financial system such as the IMF, World Bank and Bank for International Settlements, because states recognize their value in protecting their own economic interests. A large number of technical bodies and standards (e.g. Universal Postal Union, Codex Alimentarius, International Civil Aviation Organization) and development organizations and banks (Inter-American Development Bank, World Food Programme) also continue to largely fulfill their mandates with the support or, at best, acquiescence of global powers. But despite these successes, the current rules-based system and the principles that underpin it are under increasing stress. Several forces are contributing to this state of affairs:

1. A shifting balance of power has encouraged a return to great power competition, growing unilateralism among major powers and a return to proxy warfare. This, in turn, has created openings for countries to disregard those principles and institutions that are inconvenient for them domestically, notably those related to human rights, rule of law and good governance. Some states have worked to undermine elements of the international system, particularly on issues that might involve yielding sovereignty or constraining their regional or global ambitions. This has resulted in transgressions of the most basic rules protecting states from territorial aggression (e.g. Russia's annexation of Crimea), the undermining of important mechanisms such as the UN Convention on the Law of the Sea [REDACTED] and the WTO [REDACTED] and the treaties and institutions that underpin global arms control efforts.
2. Protectionism has grown alongside isolationist and ethno-nationalist domestic politics in several countries. In many instances the populist phenomenon has been coupled with a backlash against globalization, which is not seen to be universally delivering on its promise, notably among those most directly impacted by economic inequality, corruption, environmental degradation or systematic violations of human rights. The proliferation of the purported solutions that grow out of certain populist politics (e.g. those related to trade or migration) may lead to more nationalist policies that create barriers to international cooperation.
3. There has also been a growing problem of legitimacy around the representativeness of some global institutions (e.g. international financial institutions), and concerns about the performance of others (e.g. the WTO). Such concerns spring from citizens who may feel left behind by globalization, from states which regard global economic governance arrangements as unfair and outdated, not taking into account emerging regional powers, and from non-state or sub-state actors which lack agency in existing international forums.
4. Finally, there has been a proliferation of malevolent non-state actors (including cyber criminals, and terrorist groups) who use a variety of methods to undermine confidence in national institutions, and to disrupt international action. These groups rely heavily on ungoverned (or under-governed) spaces and technologies, often operating in cyberspace and/or violating international law with impunity. These and other frontier threats demand new forms of global governance and cooperation (e. g. related to data, and disinformation), with new actors involved.

Canada and the Rules-Based System

The international community will have to address and adapt to these trends by refurbishing the current rules-based system, but there is fundamental disagreement over the nature and extent of the changes required. [REDACTED] there is more space for other actors whose views differ from Canada's. While this offers opportunities for innovation and collaboration, it is also disrupting how international relations have been conducted over the past seven decades, and introduces an element of unpredictability.

For Canada, and for many other states, there are significant implications of any potential degradation of a rules based system, [REDACTED] Given the importance of challenges as diverse as climate change, transnational crime, terrorism, nuclear proliferation, and political and transboundary humanitarian crises, strategic cooperation will be required not merely to protect the current system, but to reform and revitalize it to reflect 21st century dynamics, and serve our citizens’ interests for the foreseeable future.

[REDACTED] The system should be resilient enough to withstand disruptive stresses, while being flexible enough to meet new challenges and address the representativeness and performance challenges listed above. The extent to which this will involve the creation of new rules, norms or institutions, or the reform of older ones, depends on multilateral cooperation efforts involving a wide range of state and non-state stakeholders.

Canada may also have to make tough choices when the views of our closest partners may diverge [REDACTED]

Bilateral relations, including listening to and working with a diverse range of states about how the system can advance their interests, is an important element of any strategy for revitalizing a rules-bases system.

It is of particular interest for Canada to ensure that the international system of the future be not merely ‘cooperative’, or ‘multilateral’ but ‘rules-based’. This means creating, respecting and working towards improved compliance with international law.

Canada is well-positioned to exercise leadership on a range of institutional, thematic, technical, and issue-based initiatives that address an increasingly challenged rules-based system. [REDACTED]

International Trade

Issue

• Canada is an open economy dependent on rules-based international trade and investment.
• Exports remain heavily concentrated towards the United States despite preferential access achieved through Free Trade Agreements with other key markets.
• Canada has worked to facilitate and encourage firms to diversify all aspects of exports: where, what, how and by whom.

Context

Trade accounted for 66 percent of Canada’s GDP in 2018, underlining its vital importance to the economy.

Chart 1: Canadian Goods and Services Trade

[REDACTED due to copyright]

Open markets are critical to Canada’s success as a mid-sized trading nation. In addition to the importance of maintaining access to the U.S. market, Canada has depended on a rules-based international trade regime, with the WTO at its core. Canada is presently facing the challenge of maintaining this trading system in the face of global uncertainty and rising protectionist pressures (See “WTO” brief). Bilateral and regional free trade agreements also facilitate Canada’s participation in international trade by providing Canada with preferential access to a number of key markets. Canada now has 14 free trade agreements in force, covering 51 countries and two-thirds of global GDP (further information on Canada’ trade agreements and promotion efforts are covered in specific briefs).

Trade in Goods and Services

Canada’s exports of goods and services increased over six percent in 2018, while imports rose over 5 percent, both in line with growth since the global financial crisis, although Canada moved from posting annual trade surpluses prior to the crisis to deficits since.

“Where”: The United States is Canada’s largest trading partner. For example, in 2018, the United States accounted for three-quarters of Canada’s merchandise exports (see Chart 2) and more than half of merchandise imports. A large proportion of Canadian exporters sell only to the United States, and of those that move into new markets most export to the United States first. [REDACTED]

At the same time, this overall concentration of trade with the United States is down from two decades ago. While the value of merchandise goods exports to the United States climbed five percent in 2018, exports to non-U.S. destinations grew even faster, up almost 9.8 percent. Among Canada’s major non-U.S. trading partners, exports to China (+16 percent), South Korea (+9.7 percent) and Japan (+9.1 percent) recorded the fastest growth.

Chart 2: Share of Canadian merchandise exports, 2000 vs. 2018

[REDACTED due to copyright]

“What”: Canada’s top merchandise exports include energy (22 percent), automobiles and parts (13 percent) and mechanical machinery and equipment (eight percent). Many other sectors are primarily export-oriented. For example, Canada is the fifth largest agricultural exporter in the world, with a significant number of producers dependent on international trade.

Services also represent an important segment of the Canadian economy, accounting for about 70 percent of GDP and a large share of employment. Canadian services exports grew for the ninth consecutive year, currently account for about 17 percent of direct exports, and contribute to the export of related goods. For example, in 2018, there were more than 572,400 international students in Canada and it is estimated that they spent around $21.6 billion on tuition, accommodation, and other spending. Tourism contributed some $9.7 billion to Canada’s GDP and generated more than 583,000 jobs.

“How”: Expanding Canada’s exports will depend on being part of global value chains and require the support of transportation and infrastructure networks including ports, railways and airports accommodating the flow of goods and people. The ways firms can sell their goods and services are also changing, especially with the Internet and digital technologies facilitating transactions and increasingly being used for the cross-border delivery of digital products. The ability of Canadians to fully capitalize on such opportunities requires that government policies and regulations keep pace.

“Who”: While larger firms account for the bulk of trade, Canada has sought to increase the participation of under-represented groups in international trade, and to ensure that Canadian companies of all sizes are aware of the potential opportunities created by Canada’s trade agreements. For example, SMEs account for 90 percent of private sector jobs in Canada. However, only about 12 percent of SMEs export goods and services outside of Canada. Notably, research shows that the proportion of exporting SMEs that are women-owned in Canada doubled from 7.4 percent of all SME exporters in 2011 to 15 percent in 2017. The results from a survey of Indigenous entrepreneurs show that in 2014, the proportion of Indigenous owned SMEs that exported was twice that of all Canadian SMEs – 24 percent versus 12 percent, respectively.

The role of foreign affiliates in the Canadian economy and international trade also must be appreciated. Foreign affiliates account for over half of Canada’s total merchandise trade (also employing 1.9 million Canadians and 38 percent of total R&D conducted by businesses in Canada). Meanwhile, Canadian foreign affiliates abroad sold more goods and services than was generated by Canada’s conventional exports, helping their Canadian parent firms stay competitive, gain access to technology and other inputs, and concentrate on headquarters activities.

Foreign Direct Investment (FDI)

FDI is an important driver of economic growth and contributes to connecting Canadian industries to global value chains. Indeed, foreign affiliates operating in Canada employ 1.9 million Canadians (representing 12 percent of employment) and export $31 billion of merchandise and services (representing 48 percent of Canada’s exports) in 2016.

Overall, Canada’s FDI stock reached $877 billion in 2018. Top five countries investing in Canada, correcting for FDI transiting through low-tax jurisdictions, are the United States, the United Kingdom, Japan, Switzerland and Brazil.

Chart 3: Share of FDI in Canada, total book value 2018

[REDACTED due to copyright]

FDI flows fluctuate from year to year, with at times sharp increases or drops. Global FDI flows saw such sharp drop in 2018. Many reasons underlie fluctuations; last year’s trends are generally attributed to weaker global economic growth, trade tensions, political uncertainty, and the effects of recent U.S. tax reforms. However, total inflows of FDI into Canada increased by 70 percent in 2018, in contrast to the decrease experienced by most other developed economies. It should be noted that the 2017 flows were affected negatively by the acquisition of two foreign affiliates by Canadian companies in the oil sector and the 2018 flows were back to about the average of levels observed in 2013-16.

To facilitate FDI, Invest in Canada was established in 2018 with the goal of attracting more global investment, which falls within the Minister of International Trade’s portfolio. There are also guidelines for the national security review of investments, administered by the Minister of Innovation, Science and Economic Development (ISED) in close collaboration with the Minister of Public Safety.

Canadian direct investment abroad (CDIA) holdings increased to a total of $1.29 trillion in 2018. Similar to FDI, CDIA is largely dominated by the United States (45 percent of the total stock) then followed by the United Kingdom (8. 4 percent) and Luxembourg (7 percent), although a portion of this CDIA and is probably destined to other countries. Canadian companies heavily invest abroad in the finance and insurance sector (36 percent of the total stock) and mining, oil, and gas extraction (16 percent). In terms of CDIA flows, outflows fell by 38 percent in 2018. This overall decrease masks the diverging trend of a 60 percent contraction of investment in the United States, even as outflows to the rest of the world increased by 48 percent.

United Nations Security Council Candidacy

Issue

In 2016, the Government announced that Canada would run for a non-permanent UN Security Council seat for the 2021-2022 term with elections on June 5, 2020.

[REDACTED]

Context

Canada is competing for one of two UN Security Council (UNSC) seats in the Western Europe and Others Group against Ireland and Norway, who declared their candidacies respectively 10 and 12 years before Canada. A rotational seat on the UNSC offers Canada a voice in the preeminent global decision-making body responsible for international peace and security. Seeking a seat is a tangible example of Canada’s commitment to global burden sharing. Canada would contribute its ideas and expertise to accelerate progress in addressing the world’s most difficult challenges and increase its global influence. Canada would also work closely with the five permanent members of the Security Council (called P5: China, France, Russia, The United Kingdom and the United States), more importantly in the emerging multi-polar world, with other elected members of the UNSC [REDACTED]

[REDACTED]

As there are two seats available, each of the 193 UN Member States can vote for up to two of the candidates. Member states are not obligated to use their votes and may choose to vote for only one or even no candidates. Canada must obtain the votes of 129 countries (two thirds majority) to be elected. If more than one candidate is unable to obtain 129 votes, those below this level will continue against each other in subsequent rounds until two obtain the two thirds threshold.

A breakdown of Canada’s current support levels is as follows:

[REDACTED]

Next Steps:

The department is prepared to offer advice and guidance on next steps, including proposals for the engagement of ministers in the final seven months of the campaign.

International Assistance

Issue

• In an interdependent and turbulent world, international assistance is an important element of Canada’s foreign policy toolkit. Canada contributes to poverty eradication, supports humanitarian action, and reinforces peace and security.
• Canada benefits directly from the prosperity, stability and partnerships its international assistance fosters.
• Canada’s nearly $5.75 billion in international assistance complements its diplomatic, defence and trade activities.

Context

While the last three decades have seen unprecedented global development progress, not everyone has benefitted equally. Some 736 million people still live on less than $1.90/day, and 71 million people have been forcibly displaced due to conflict, violence and human rights violations. Women and girls are more severely impacted by poverty due to gender inequalities. Poverty is increasingly concentrated in fragile states and in low-income countries – those places least able to provide necessary supports without international help.

Canada has been an active donor since the 1950s. Canada’s international assistance contributes to Canada’s broader foreign policy and international trade objectives and advances Canada’s interests. Poverty, inequality, violence and fragility matter for both global and Canadian stability and prosperity. Developing countries are important economic partners and sources of global growth: as economies stabilize and grow, Canada has opportunities to develop mutually beneficial trade relationships.

Canada has committed to implementing the globally adopted 2030 Agenda which includes 17 universal Sustainable Development Goals (to be pursued in all countries), reflecting a global consensus to leave no one behind in the social, economic and environmental dimensions of sustainable development.

Canada’s International Assistance Envelope is nearly $5.75 billion in 2019-20. Global Affairs Canada delivers the majority of these investments (85 percent). Canada’s Official Development Assistance to Gross National Income (ODA/GNI) ratio is currently projected to be 0.27 percent in 2019. (The globally accepted target is 0.7 percent.)

What We Do

Canada takes an integrated approach to addressing poverty, humanitarian crises, and peace and security through its international assistance. Canada targets its international assistance to where it can make a significant difference in the lives of the poorest and most vulnerable, including those living in fragile contexts. The thematic focus of Canada’s international assistance has evolved over the years in response to changing needs, opportunities, and Canadian priorities.

In June 2017, Canada launched its Feminist International Assistance Policy, which outlines the “what, how, and where” of Canada’s international assistance. The policy seeks to eradicate poverty and build a more peaceful, inclusive, and prosperous world. It emphasizes that promoting gender equality and empowering women and girls is the most effective approach to achieve this goal. Building on Canada’s strong leadership on gender equality since the 1980s, the Policy lays out some ambitious targets. For example, by 2020-21, at least 95 percent of Canada’s bilateral development assistance will either target or integrate gender equality and the empowerment of women and girls. Currently, this figure stands at 90 percent.

Some 60 percent of Canada’s international assistance investments are in global health, humanitarian assistance, and environment and climate action. Our remaining funding addresses other critical areas such as economic growth, education, governance, and peace and security.

Some key Canadian results in 2018-19 include:

• Saving or improving the lives of over 135 million people in 62 countries, and responding to 37 natural disasters
• Reaching more than 408,000 people with Canada-funded projects that help prevent, respond to, and end sexual violence
• Training more than 355,000 teachers according to national standards
• Enabling 216,000 women and girls to access justice and public services
• Reducing or avoiding [REDACTED] of greenhouse gas emissions

Where We Work

Canada disbursed Official Development Assistance in 130 countries in 2017-18 though diverse channels and partners. Programs are tailored to respond to specific needs and opportunities in each country. Canada has committed to directing 50 percent of its bilateral international development assistance to sub-Saharan Africa by 2021-22. (Canada’s top ten bilateral recipients are shown in the graph below).

In recognition that developing countries have different needs depending on where they are in their development journey, Canada aims to tailor its country partnerships:

• Partnerships for development impact: Canada provides sustained support to low-income countries to reduce poverty and vulnerability and create the conditions for more inclusive growth.
• Partnerships for peace, security and recovery: In fragile states and countries in crisis, Canada helps meet urgent needs through its humanitarian assistance; and helps build more peaceful and resilient states and societies through its security and development aid.
• Partnerships for transition: In middle-income countries, Canada principally provides targeted assistance to help countries tackle key barriers to progress and transition to more self-sufficient economic partnerships. Global Affairs Canada’s Technical Assistance Partnership will increase the deployment of Canadian experts abroad in response to country needs.
• [REDACTED]: Canada also has the flexibility to provide smaller-scale assistance to a range of countries or regions to address specific local sustainable development challenges in response to a one-time need or to support wider foreign policy interests.

Preliminary 2018-19 Global Affairs Canada Top 10 Bilateral International Assistance Recipients (in $ millions)

Bilateral international assistance is the disbursement of funds where the donor earmarks or controls the funds by specifying the recipient and/or other aspects of the initiative. It includes international humanitarian assistance (shown in orange), which is designed to save lives, alleviate suffering, and maintain and protect human dignity during emergencies and in their aftermath.

How We Work

Canada is committed to internationally agreed development effectiveness principles, based on decades of experience, including the importance of countries leading their own development, focusing on results, working in inclusive partnerships, and transparency and accountability.

Canada's international assistance is delivered through diverse partners including partner governments, multilateral organizations, non-governmental organizations, and private sector entities. Canada chooses the most appropriate partner to achieve its objectives in a given context. Canada is increasingly working in multistakeholder partnerships, because effective development cooperation requires harnessing all potential resources and stakeholders to achieve results.

Partner organizations are selected based on their capacity to deliver impact in country, and an analysis of past performance.

Canada groups its international assistance into three broad categories, which are complementary to other trade and diplomatic assets:

• Long-term Development Assistance: seeks to help partner countries reduce poverty and implement sustainable long-term solutions to development issues and move forward towards self-reliance and inclusive sustainable development.
• Humanitarian Assistance: primarily delivered by providing financial support to experienced humanitarian partners to help save lives, alleviate suffering and maintain dignity in conflict situations and natural disasters.
• Peace and Security Assistance: provides dedicated programming in conflict prevention and stabilization, security capacity building, anti-crime and trafficking, and weapons threat reduction.

Canada also promotes innovative approaches to delivering international assistance, given the international consensus that new approaches are critical to ignite changes needed to achieve sustainable development. Canada encourages experimentation and scaling-up of sustainable solutions, for example using new technologies for health services.

Canada has positioned itself as a leader in helping to unlock additional sources of development finance for the Sustainable Development Goals. Canada is developing new partnerships and expanded its development financing toolkit to more effectively support private sector engagement and resource mobilization to secure more funds globally for sustainable development. For example, in 2018, Canada’s development finance institution, FinDev Canada, was established to support private-sector investment in developing countries.

Canada uses a range of mechanisms in the delivery of its international assistance, including core support to multilateral organizations; grants and contributions; and repayable contributions to better enable Canada to mobilize new streams of finance. Two new programs announced in Budget 2018 – the International Assistance Innovation Program and the Sovereign Loans Program – provide greater flexibility for financing arrangements and partnerships so that Canada remains at the leading edge of development financing. In addition, Canada has committed $300 million to help establish an Equality Fund – an unprecedented collaboration that brings together the philanthropic community, the investing community, the private sector and civil society into a single platform to leverage more than $1 billion in assets to build gender equality in developing countries.

Humanitarian Assistance

Issue

• During political crises, conflict or natural disasters, Canada provides timely and needs-based humanitarian assistance to save lives, alleviate suffering and support the dignity of affected persons.
• Humanitarian needs have nearly tripled in the last decade, largely due to protracted crises like Syria. In response, Canada works within a global system to burden share and enable effective responses. Canada consistently ranks among the top 10 humanitarian assistance donors.
• Humanitarian assistance is grounded in Canada’s obligations under international humanitarian, human rights, and refugee laws and principles.

Context

Humanitarian assistance includes the protection of civilians and those no longer taking part in hostilities, as well as the provision of food, water and sanitation, shelter, health services, and other items of assistance.

The last several years have seen unprecedented humanitarian needs emerge. This is the result of several factors including natural disasters, climate change, and protracted armed conflicts that in the absence of political solutions, have led to the largest movement of internally displaced persons and refugees since WWII.

The 2019 UN Global Humanitarian Appeal requested US$26.7 billion to assist 94 million people. In contrast, five years ago the UN was seeking $16.4 billion to support 57 million people. The international system is struggling to keep up, and there are persistent and sizable funding gaps, and unmet needs. Moreover, notably in conflict contexts, humanitarian actors often find themselves under attack, and international law is flouted.

Humanitarian assistance is a visible and tangible expression of Canadian values, and contributing to global stability is in our national interest. Canadians expect us to respond to international crises with compassion, and our allies assume we will share in these responsibilities. Our contributions to humanitarian action are often complemented by other Canadian investments, including stabilization and long-term development efforts.

Chart 1: Requirements and funding for recent UN annual global appeals (in USD)

International Humanitarian System

Humanitarian assistance is guided by four core principles. They are critical for establishing and maintaining access to affected populations as their application helps organizations build trust and acceptance for their activities, particularly in situations such as armed conflicts.

Humanity: Human suffering must be addressed wherever it is found.

Neutrality: Humanitarian actors must not take sides in hostilities or engage in activities of a political, racial, religious or ideological nature.

Impartiality: Humanitarian assistance must be delivered solely on the basis of need, making no distinctions on the basis of nationality, race, gender, religious belief, class or political opinions.

Independence: Humanitarian assistance must be distinct from the political, economic, military or other objectives that any actor may hold in areas where humanitarian assistance is being delivered.

Canada provides humanitarian assistance within a well-established global system. Support through this system avoids duplication of efforts, and allows for a proportional, timely, coordinated and needs-based response in line with consolidated and prioritized appeals. In recent years, the emergence of new actors and innovative ways of working (e.g. multi-year funding and cash assistance) have increased the complexity of the humanitarian system.

Humanitarian Assistance by the Government of Canada

Canada’s humanitarian assistance is an important foreign policy tool to respond to international crises in order to save lives, maintain human dignity and alleviate suffering resulting from conflict situations, food insecurity and natural disasters in developing countries.

When an affected national government is unable to respond to a conflict, crisis, drought or natural disaster, donors and humanitarian partners respond. The following conditions are required for Canada to provide humanitarian assistance:

1. A request for international assistance by the affected country is made (although sometimes this may be bypassed, for example, with the situation in Syria);
2. A credible needs assessment is undertaken; and
3. Humanitarian appeals are issued.

Canada has a robust toolkit with which to respond to humanitarian crises. Canada’s needs-based response engages multiple actors within Global Affairs Canada and across the Government of Canada. Canada works through experienced partners, notably the UN, Red Cross, and NGOs. Responses consist primarily of cash contributions to experienced partners but can also include sending relief supplies from Global Affairs Canada’s stockpile, and the deployment of civilian experts. Following large-scale natural disasters it can also include, at Global Affairs Canada’s request, the use of Canadian Armed Forces’ unique capabilities such as the Disaster Assistance Response Team (DART).

Canada’s humanitarian assistance has significant reach: Canada is currently responding to humanitarian crises in over 45 countries, the majority of which are in the Middle East and sub-Saharan Africa. As well, with recent annual disbursements averaging over $800 million/year, humanitarian assistance represents a significant proportion of Canada’s official development assistance.

Chart 2: Proportion of Canada's Humanitarian Assistance to Total Official Development Assistance (ODA)

Gender-responsive Humanitarian Assistance

In line with the objectives of the Feminist International Assistance Policy, through its “Gender Equality in Humanitarian Action” sub-policy, Canada supports gender-responsive humanitarian assistance. This approach seeks to address the specific needs and priorities of people in vulnerable situations, particularly women and girls, to support their empowerment and to ensure that our assistance has a greater and more lasting impact.

Canada is taking concrete actions to support gender-responsive humanitarian assistance. This includes dedicated programming and piloting new approaches, such as the “Gender Hub” project in Bangladesh as part of the response to the Rohingya crisis, and through advocacy efforts such as its ongoing leadership of the Call to Action on Gender-Based Violence.

Arctic and Antarctic

Issue

Canada seeks to ensure a prosperous and sustainable Arctic at home and abroad, while exercising Canada’s enduring Arctic sovereignty.

Context

Arctic

Emerging pressures may make existing high levels of Arctic cooperation more challenging in future. Climate change is opening access to the Arctic’s natural resources and waterways, and is leading to shifts in the geostrategic calculus by Arctic and non-Arctic states, who are increasingly pursuing economic and security interests.

Tensions are growing between the United States, Russia and China as each side is developing capabilities to better operate and project their presence. [REDACTED] In May 2019 U.S. Secretary of State Pompeo outlined the perceived economic and security threats posed by Russia and China. For its part, China has claimed it is a “near-Arctic” state, and has expanded its capabilities, interest and engagement with the Arctic in recent years.

While Canada does not perceive immediate military threats in the Arctic, the region is emerging as an area of strategic international importance. The Canadian military cooperates closely with their American partners in NORAD, which operates the North Warning System, a series of early-warning radars which monitors the air approaches of North America via the Arctic. It helps provide Canada and the United States with a shared understanding of aerospace activity in the Arctic, though the system is outdated and in need of upgrading.

Canada is committed to ensuring the Arctic remains a region of peace and stability that is grounded in internationally agreed rules and norms. This goal is advanced through the Arctic and Northern Policy Framework (ANPF), which was co-developed with territorial, provincial and Indigenous partners over more than two years. The ANPF is supported by $700 million (over 10 years) announced in Budget 2019 of which $34 million (over five years) is strictly for international chapter commitments. The ANPF aims to strengthen Canada’s position as a leader and drive international priorities in the region. [REDACTED]

To ensure the continued stability of the Arctic region, Canada works with key partners to enhance interoperability and share information, including in areas such as search and rescue operations, maritime disasters, and oil spill preparedness and response.

The Arctic Council

The Arctic Council is the pre-eminent forum for Arctic cooperation and is a product of Canadian diplomacy. It brings together eight Arctic states (Canada, Kingdom of Denmark, Finland, Iceland, Norway, Russia, Sweden, and the United States) and six international Indigenous peoples’ organizations to advance sustainable development and environmental protection in the Arctic. The Council is notable among international peoples’ organizations that participate alongside Arctic states, in policy discussions and decisions. While the Arctic Council has a strong record of cooperation, it has experienced recent challenges.

The 2019 meeting of Foreign Ministers was the first ever that did not conclude with a Declaration, due to U.S. efforts to weaken environment related text to a point unacceptable to others. It remains unclear whether US positioning will impact working-level cooperation on environmental protection issues during the Icelandic chairmanship of the Council (2019-21).

Arctic Agreements and Disputes

Recent years have seen the conclusion of a number of important legally-binding agreements such as the Agreement to Prevent Unregulated High Seas Fisheries in the Central Arctic Ocean and the International Code of Safety for Ships Operating in Polar Waters (Polar Code). Up next is a potential international ban on heavy fuel oil in the Arctic that is being considered by the International Maritime Organization. [REDACTED]

Canada continues to work towards resolving its three Arctic boundary disputes with the United States and the Kingdom of Denmark. The disputed maritime boundary in Lincoln Sea and sovereignty over Hans Island are being dealt with under the Canada-Denmark Joint Task Force on Boundary Issues, established in May 2017. The Beaufort Sea dispute with the U.S. continues to be well managed and will be resolved in due course, in accordance with international law.

In May 2019, Canada filed its Arctic submission on the outer limits of the continental shelf beyond 200 nautical miles with the UN Commission on the Limits of the Continental Shelf. The submission includes approximately 1.2 million square kilometres of seabed and subsoil and includes the North Pole. The submission overlaps with those of Russia and the Kingdom of Denmark and is expected to overlap with the future U.S. submission. Overlaps are a normal part of the scientific process to define the continental shelf, and Arctic Ocean coastal states have all committed to resolving these in an orderly and peaceful manner in accordance with international law.

With the exception of Hans Island, no one disputes Canada's sovereignty over the lands of the Canadian Arctic archipelago.

Canada considers all waters of the Canadian Arctic archipelago, including the “Northwest Passage,” to be internal waters by virtue of historic title, giving Canada an unfettered right to regulate those waters.

Canada and the United States hold different views regarding the status of the Northwest Passage (NWP) under international law. The U.S. view is that the Passage constitutes a “strait used for international navigation” through which all foreign vessels have a right of unimpeded transit passage. This long-standing difference in views is generally well managed, including through the 1988 Arctic Cooperation Agreement, whereby the United States seeks Canada’s consent for its icebreakers to navigate the waterways. [REDACTED] U.S. Secretary of State Pompeo that Canada’s position on its Arctic waterways is “illegitimate”, [REDACTED]

[REDACTED]

Antarctica

Canada acceded to the Antarctic Treaty in 1998. Canadians are actively contributing to environmental protection, research, tourism and operational activities in Antarctica. For example, Canadian companies transport 10-15 percent of all Antarctic tourists. As in the Arctic, emerging geopolitical pressures may make cooperation more challenging in the future, with potential implications for Canadian prosperity and security.

Canada is currently a non-Consultative Party to the Treaty, which entitles us to attend meetings, but not to vote in the decision-making to which Canada’s activities in the region are subject. [REDACTED]

Venezuela

Issue

• The on-going political, economic and humanitarian crisis in Venezuela has now become a direct threat to the peace and security of the Americas.
• Canada has been very active in attempting to find a political solution to the crisis, through the Lima Group, bilateral actions and sanctions; and has provided support to the Venezuelan population affected by the humanitarian crisis.

Context

The Maduro regime remains firmly in place despite sustained local and international attempts to confront the dictatorship. The regime still enjoys the support of the military, profits from criminal activity and counts upon the support of [REDACTED] for its continuing political and economic survival.

The country’s economic, humanitarian and democratic crisis is worsening. The economy has collapsed and 90 percent of the population now live below the poverty line. The humanitarian crisis is one of the world’s largest: it is projected that by 2020 up to eight million (a quarter of the population) will have fled, doubling the current tally. This poses a threat to regional security and stability, especially for Colombia which is accepting the lion’s share of migrants. The Maduro regime’s support for Colombia’s Fuerzas Armadas Revolucionarias de Colombia (FARC) and Ejército de Liberación Nacional (ELN) has further added to the volatility of the region, straining the already fragile peace accords.

Figure 1: Colombia and Peru – Top Migrant Destinations (2013-19)

The presidential elections of May 2018 were clearly fraudulent and held without the full participation of Venezuela’s main political opposition parties. The Maduro regime has criminalized opposing political views, arresting and harassing opposition political figures. In July 2019 the UN High Commissioner for Human Rights (UNHCR) published a damning report documenting the regime’s gross human rights violations.

Juan Guaidó has been recognized by 58 countries (including Canada) as the Interim President of Venezuela. [REDACTED] and the numbers protesting are diminishing. With the collapse in September 2019 of the Norway-facilitated dialogue between the two sides (the ninth such attempt since 2002), no clear path forward currently exists for an agreement that would lead to free and fair elections. The Lima Group was created in August 2017 in an effort to pressure and isolate the Maduro regime to support a return to democracy in Venezuela. The Group, which has Canada as a founding and leading member, has met 16 times at the Foreign Minister level and remains active and relevant. However, with potential changes in government on the horizon [REDACTED]

Canada has served as a bridge between the Lima Group and other international actors, in particular with the United States and the Caribbean. Canada has fostered an ongoing dialogue with Cuba on Venezuela, encouraging it to play a constructive role in resolving the crisis.

The Rio Treaty, a regional mutual defence pact, was re-activated in September 2019 by the 18 member states (including the United States but not Canada), in a bid to increase international pressure on the regime, an initiative spearheaded by Guaid and the United States. While the Treaty does not preclude the use of force, for the time being at least most countries are focussed on the implementation of its civilian measures (i.e. punitive and diplomatic actions, sanctions).

Canada, the Lima Group and the EU have been consistent in their calls for non-military intervention. However, with the increasing desperation of economic, security and humanitarian conditions in Venezuela and in the region, [REDACTED]

Venezuela is a foreign policy priority for the United States, which has included the country in its regional troika of tyranny (along with Nicaragua and Cuba).

The United States has repeatedly stated that all options are on the table as it searches for solutions to the crisis. President Trump hosted a dedicated meeting on the margins of the United Nations General Assembly (UNGA) at which he re-iterated U.S. support for Guaid and called out Cuba for its support to Maduro. For both domestic political reasons and regional security concerns, Venezuela can be expected to remain firmly on U.S. radar in the year ahead and in the lead up to the 2020 presidential elections.

Sanctions have been an important tool to exert pressure on the regime. Canada and the United States have led the way with targeted sanctions on 112 Venezuelans by Canada and 118 individuals by the United States to date. The United States has also applied sanctions on Venezuelas oil and gold sectors. Collectively, these are designed to deny the regime financial resources to maintain itself in power.

To date, international funding has not matched the huge demands generated by the humanitarian crisis. Canada has dedicated [REDACTED] in program funding for Venezuelans within the past year. Global attention seems to be increasing with numerous dedicated events on the margins of UNGA and a conference on Venezuelan migration in Brussels (October 28-29, 2019) co-hosted by the EU, the International Organization for Migration and the UNHCR. Global Affairs Canadas Assistant Deputy Minister of the Americas led Canada's delegation.

Canada tried to maintain its presence in Caracas, but was forced to temporarily shutter the mission in June 2019 due to our inability to obtain visas from the regime. The Department stands ready to re-open if and when conditions present themselves.

Canada has recognized Guaid and his representatives in Canada; Orlando Viera Blanco presented his Ambassadorial credentials on November 1.

Korean Peninsula

Issue

• North Korea’s weapons of mass destruction (WMD) and ballistic missile programs are among the most significant and intractable security challenges facing the international community.
• Potential conflict on the Korean Peninsula threatens Canada’s regional partners and other security and economic interests, including more than 27,000 Canadian citizens living in South Korea.
• Should North Korea resume nuclear testing, long-range ballistic missile tests, or space launches, the level of tension on the Korean Peninsula and in the region may increase, putting Canadian interests at greater risk.

Context

North Korea’s WMD and ballistic missile programs seriously threaten international peace and security. Pyongyang may possess as many as [REDACTED] nuclear weapons, maintains significant quantities of chemical weapons, and likely has a biological weapons capability. Despite extensive international efforts to isolate North Korea, constrain its economy, and counter its WMD proliferation, Pyongyang has markedly improved its nuclear weapons and ballistic missile capabilities in recent years and is continuing to do so.

In 2017, North Korea conducted roughly two dozen ballistic missile launches, several inter-continental ballistic missile (ICBM) tests, and its sixth and most powerful nuclear test to date. These events, combined with aggressive rhetoric and uncertainty over a possible U.S. military response, were contrasted by North Korea’s shift toward diplomatic engagement in 2018 and 2019, which included summits with the United States, South Korea, China, Russia and North Korea’s participation in the PyeongChang Winter Olympic Games (held in South Korea).

This change in course has coincided with a relative decrease in tensions and a (de facto partial) moratorium on nuclear and missile testing. [REDACTED] The steps North Korea has taken to date have not meaningfully degraded its WMD capabilities.

Recent Developments

Several challenges have emerged in 2019 that will constrain efforts to build an enduring peace regime on the Korean Peninsula, including new missile testing by North Korea and stalled dialogue.

Following an 18 month hiatus, Pyongyang began testing what are widely believed to be short-range ballistic missiles in May 2019. As of November 8, 2019, North Korea has conducted twelve such test-launches. Ballistic missile launches of any kind by North Korea are in violation of UNSC resolutions. Politically, however, Pyongyang’s self-imposed suspension only covers the testing of longer-range ballistic missiles. Notably, President Trump has also downplayed their significance in the context of high-level negotiations with Kim Jong Un. Nevertheless, Canada and several other likeminded partners (including Germany, France and the United Kingdom) have condemned North Korea’s recent tests citing successive UNSC resolutions.

Meanwhile U.S.-North Korea and inter-Korean dialogues remain stalled. The prospect of renewed working-level negotiations between Washington and Pyongyang is a positive step, [REDACTED]

In April, Kim Jong Un stressed that North Korea would only be interested in a “fair” deal beneficial to both countries, setting a deadline of December 2019 for the United States to adopt a more flexible position.

Inter-Korean Relations

South Korean President Moon Jae-in and North Korean leader Kim Jong Un met on three occasions in 2018 and agreed to implement various initiatives to improve inter-Korean relations, including military-to-military cooperation and joint economic projects. Despite progress in some areas, implementation of economic initiatives has stalled as a result of international sanctions. North Korea has criticized the South for failing to adhere to its commitments, citing continuing military exercises and a lack of progress on economic projects. For its part, South Korea is unable to move forward given that sanctions relief is required to advance many of the joint projects envisaged. [REDACTED]

Regional Dynamics

Amid the cooling in inter-Korean relations, South Korea is also engaged in an escalating dispute with Japan. [REDACTED] President Moon announced in August that his government would not renew a bilateral military intelligence-sharing agreement with Japan which has facilitated information sharing on North Korea. Meanwhile Russia and China, both of whom have pursued leader-level dialogue with North Korea since 2018, continue to advocate a step-by-step approach to addressing the nuclear issue, whereby denuclearization activities by the North would be matched by sanctions relief. [REDACTED]

Canada’s Contribution

Canada has devoted considerable diplomatic, financial and military resources to address the threat posed by North Korea, playing an important role in the economic pressure campaign aimed at bringing North Korea to the negotiating table. Canada has implemented robust autonomous sanctions which ban all trade with North Korea, and contributed $12 million (since 2017) to build international capacity to implement UNSC sanctions on North Korea and to detect North Korean sanction evasion activities.

[REDACTED] Canada is also participating in a multinational initiative to bolster UNSC sanctions by detecting and deterring North Korean smuggling. This includes Canada’s period deployment of military assets to the region. Canada’s contribution is slated to continue until May 2021 under Operation NEON. [REDACTED] In addition, 13 Canadian military personnel serve as part of United Nations Command (12 in Korea and one in Japan), which monitors the Korean War armistice.

Canada is also contributing $2 million to the International Atomic Energy Agency to enhance the Agency’s readiness to verify denuclearization activities in North Korea. [REDACTED]

Iran

Issue

Iran is challenging the rules-based international system through deliberate policies to support extremist groups throughout the Middle East and the Assad regime in Syria, targeting and threatening Canada’s partners such as Israel and several Gulf States.

Context

Iran’s top leadership has long held the view that the United States, backed by Sunni Arab states and Israel, seeks to overthrow the regime. To avoid a war on its territory, Iran has pursued an agenda of creating a separate regional security architecture that it can influence and control. This is reflected in its careful cultivation of Shia extremist groups such as Hezbollah and some Iraqi militias, as well as its varying levels of support for non-Shia extremist groups such as Hamas, Palestinian Islamic Jihad (PIJ), the Taliban [REDACTED] It has also supported the Houthis in Yemen who fight Saudi Arabia and the United Arab Emirates (UAE), which are supporting their opponents in Yemen’s civil war. The overall objective of this strategy has been to obtain leverage in the region, to retaliate against the United States and its partners, and to create buffers of resistance around its borders. Religious ideology is a key motivating aspect of Iran’s security doctrine as the purpose of the regime is self-preservation and to continue its Islamic revolution.

Iran believes that it is already at war and does not distinguish between kinetic attacks and economic measures taken by the United States and its partners. Iran believes that U.S. sanctions are designed to pressure the Iranian people to challenge and overthrow the regime. It also believes that Israel could attack it and that its Sunni neighbours such as Saudi Arabia and the UAE may support war efforts against it. Iran generally portrays its actions as defensive rather than offensive, although it is a key proliferator of missile technology to proxies such as Hezbollah, Hamas, PIJ [REDACTED]

The current U.S. Administration has deployed a policy of “maximum pressure” on Iran. This has included the [REDACTION] of the Joint Comprehensive Plan of Action (JCPOA – the Iranian nuclear deal) and imposition of additional sanctions, [REDACTED]The United States is seeking a comprehensive arrangement with Iran which would include Iranian activity not covered by the JCPOA, such as its missile program and support for proxies. [REDACTED] Iran has tactically cooperated with Russia to challenge Western alliances, particularly in multilateral forums.

Canada’s engagement

Canada closed its embassy in Iran in 2012 and expelled Iranian diplomats from Canada after designating Iran a state sponsor of terrorism under the Justice for Victims of Terrorism Act. Canada was pursuing re-engagement with Iran [REDACTED] Canada conditioned re-engagement on progress in the case of Canadian citizen Maryam Mombeini, who was banned from leaving Iran in March 2018 following the suspicious death of her husband in Iranian custody in February 2018. She returned to Canada October 10, 2019. There has been no further engagement between Canada and Iran since her return.

Similar to European countries, Canada favours a multilateral response to Iran’s nuclear ambitions, [REDACTED]

Canada does not believe that withdrawing from the JCPOA is a constructive step and prefers a multilateral approach which keeps Iran’s nuclear activities within the framework of the JCPOA. [REDACTED]

Canada remains committed to holding Iran accountable for its actions, both its support for extremist and proxy forces, and its oppressive human rights practices at home. Canada will lead, for the 17th consecutive year, the UN resolution on the Situation of Human Rights in the Islamic Republic of Iran. The resolution seeks to support improvements of Iran’s human rights record by identifying areas of concern and specifying concrete actions that Iran can take to fully respect its human rights obligations. The resolution is an important component of the international community’s relations with Iran. Engagement requires dialogue on difficult issues, including human rights, and this is resolution, which is widely consulted with states, is a useful part of that dialogue.

Iran’s military actions, or the actions of its proxies and partners, have opened up two theaters of conflict [REDACTED] Iran and Israel are fighting a low intensity war in Syria, while Iran is indirectly engaging the UAE and Saudi Arabia in Yemen. Additionally, Iranian seizure of international ships and the shooting down of a U.S. drone have increased the risk to all international maritime and air traffic. [REDACTED]

In September 2019, in response to media reporting on a recent decision under the Justice for Victims of Terrorism Act (JVTA), senior Iranian officials have threatened to seize Canadian assets and vessels, and have warned Canada that it would be held responsible for its actions.

Five Eyes Intelligence Partnership

Issue

• The Five Eyes (FVEY) partnership is a longstanding and comprehensive multi-country intelligence sharing relationship [REDACTED]
• Managing risks associated with a Chinese presence (Huawei) in5G telecommunications networks is currently a topic of high importance to the FVEY community and a current example of how the community consults and coordinates on intelligence-driven issues.

Context

The post-World War II FVEY intelligence sharing partnership grew out of the vital wartime signals intelligence and cryptographic relationship between the United Kingdom and the United States.

In the post-war period, a number of bilateral and multilateral agreements between Canada, the United States, the United Kingdom, Australia and New Zealand solidified and expanded this partnership.

Today, the intelligence sharing relationship among the FVEY partners includes engagement between allied signals collection entities, militaries, security intelligence agencies, [REDACTED]

The FVEY partnership provides senior decision-makers with intelligence products on thematic topics and geographic areas where Canadian access and analysis is often limited or non-existent. Canada is thus a significant beneficiary of the FVEY relationship, which is a core component of our cooperation with allies to protect national security.

[REDACTED]

The benefit that Canada draws from the FVEY partnership can be considered in terms of intelligence burden-sharing. [REDACTED]

[REDACTED]

Global Affairs Canada (GAC) is part of the Government of Canada’s core security and intelligence community, alongside Public Safety, CSIS, RCMP, CBSA, DND/CAF, CSE, IRCC and Transport Canada.

[REDACTED]

The FVEY relationship also provides the structure for consultation on issues of common concern, such as the 5G discussion, and around response mechnisms, such as hostage taking.

[REDACTED]

Review and Oversight

Global Affairs Canada’s security and intelligence activities are subject to review by two new bodies mandated to review national security and intelligence activities across the Government of Canada.

The National Security and Intelligence Review Agency (NSIRA) was established in July 2019, following the passage of Bill C-59. NSIRA has a broad mandate to review the national security and intelligence activities of any federal department and agency, and Global Affairs Canada is implicated in several ongoing reviews. National security accountability in Canada also benefits from the work of the National Security and Intelligence Committee of Parliamentarians (NSICOP), an all-party statutory committee established in 2017 and authorized to review any national security or intelligence matter. Both of these organizations have broad access rights to classified information held by the department, [REDACTED]

NSICOP is expected to undertake a department-wide review of Global Affairs Canada’s national security and intelligence activities in 2020, and it is expected that reviews from both NSICOP and NSIRA will constitute a major resource burden for the department in the years ahead. Officials are developing a business case for new resources to address future intelligence review and oversight requirements, and continue to liaise with both domestic and international partners to draw lessons on their experiences with review.

Alliances and Security Arrangements

Issue

Political-strategic alliances, defense arrangements, and security partnerships are vital to Canada’s national security and the advancement of its foreign and security policy interests. As these mechanisms evolve and new players test their limits, Canada will need to adapt to sustain its relevance and to support the effectiveness of these partnerships.

Context

Alliances and security partnerships are fundamentally important to our security and our ability to support and benefit from international peace and security. Canada’s participation in multilateral security forums enables us to expand our reach and influence for the advancement of Canadian foreign and security policy objectives.

Canada’s North American (NORAD), transatlantic (NATO, OSCE) and Asia-based security and defence alliances and partnerships are being challenged [REDACTED] Canada can no longer take for granted the unity and continued strength and resolve of its alliances. Thoughtful engagement will be important through the coming mandate to ensure Canada’s continued relevance as a security player and wider alliance unity in the face of periodic internal divisions and significant emerging threats.

Independent of evolving defence arrangements globally, Canadian credibility in NATO, NORAD, and the broader U.S. alliance network will depend on defence budgets, hard power capabilities, willingness to deploy military, police, as well as civilian capabilities, especially in leadership roles, and thought leadership on emerging challenges.

North America: North American Aerospace Defense Command (NORAD)

NORAD is a bi-national Canada-U.S. military arrangement that defends North America by providing aerospace warning and control and maritime warning. NORAD is a key part of a multifaceted defence and security relationship with the United States.

Canada’s partnership with the United States in NORAD provides us with far greater security than could be achieved on our own. With threats to North America becoming more sophisticated and diverse, there is a need to adapt our continental defence to these new realities.

Canada and the United States agree that NORAD will require modernisation and significant new investments to remain effective in the face of new and emerging security threats. Increased defence spending on NORAD modernization would shore up U.S. support for NORAD and contribute to burden sharing in the NATO context.

Europe: NATO and the OSCE

NATO is the foundation of Europe’s security architecture. Membership gives Canada a seat at the table of the world’s premier political and military Alliance and a voice on the most important issues for Euro-Atlantic security.

Russia’s aggression in Ukraine has led NATO to focus on deterrence and defence. While adjusting to increased security threats, NATO has been preoccupied by trans-atlantic tensions over defence spending, expanded geographic reach of operations, and calls for greater European 'strategic autonomy' through more integrated EU defence initiatives. Increasing strains between the United States and Europe threaten the unity of the Alliance and place Canada in a difficult position on key policy issues.

The OSCE is the world’s largest regional security organization, with 57 participating States. Created in 1975 for East-West dialogue during the Cold War, it now works to support peace, democracy and stability in Europe and Eurasia.

Increased tensions with Russia make achieving consensus in the OSCE challenging, but it remains a valuable forum for dialogue. Membership in the OSCE enables Canada to directly engage Russia on European defence and security issues. The OSCE is also a forum for Canada to promote its human rights, democracy and good governance priorities in the Euro-Atlantic region. Canada is making important contributions to an OSCE Special Monitoring Mission in Ukraine, and played a key role in OSCE Election Observation Missions there. These efforts form part of the OSCE’s key role in responding to Russia’s aggression in Ukraine.

Middle East: Global Coalition Against Daesh (Global Coalition)

The U.S. -led Global Coalition against Daesh (ISIS/ISIL) has helped retake all of the territory Daesh controlled in Iraq and Syria. Daesh has had to revert to insurgent-type tactics over its goal of establishing a territorial caliphate. The recent U.S. withdrawal from Syria has raised questions about the future of the Coalition, even as the United States has sought to expand its counter-terrorism mandate beyond Iraq and Syria. Debates among Coalition members on this have sought to situate military engagement in support of political solutions to long-standing instability in Africa and the Middle East.

To address the underlying conditions that allowed Daesh to flourish in the Middle East, Coalition focus has shifted towards civilian-led lines of effort: stabilizing liberated areas, countering terrorist financing, impeding the flow of foreign fighters, and countering Daesh messaging.

Canada supports all these efforts through its $3. 5 billion Middle East Strategy (2016-2021). The mandate of Canada’s military engagement in the Coalition (Operation Impact) extends to March 2021.

Asia: ASEAN Regional Forum (ARF)

With 27 regional members, the Association of Southeast Asian Nations (ASEAN) Regional Forum (ARF) is the primary multilateral security forum in the Asia-Pacific region. The ARF is a valuable forum for dialogue on security issues in a region plagued by tensions and lacking a mature and resilient security architecture.

As a founding member of the ARF, Canada engages on defence and security in a forum that includes China and its neighbours. Canada uses the ARF to advocate for its regional security priorities related to non-proliferation, arms control, disarmament, counter-terrorism and transnational crime, and cyber security.

The ARF is being challenged by the increasing importance of the East Asia Summit (consisting of ASEAN member states and Australia, China, India, Japan, New Zealand, Russia, South Korea and the United States) and the ASEAN Defence Ministers Meeting Plus (ADMM+, consisting of the same membership). Canada is actively seeking membership in both the EAS and the ADMM+, [REDACTED]

Canada's Sanctions Regime

Issue

• Canada has three sanctions regimes that it deploys: the Justice for Victims of Corrupt Foreign Officials Act (JVCFOA), the Special Economic Measures Act (SEMA), and the United Nations Act (UNA).
• Autonomous sanctions are an important complement to Canada’s foreign policy tools for maintaining and restoring international peace and security, combatting corruption, and promoting respect for norms and values, including human rights.

Context

Sanctions place restrictions on the activities permissible between Canadians and foreign states, individuals, or entities, and can encompass a wide variety of measures. Canadian sanctions aim to bring about a change in policy or behavior by the target states, individuals, or entities.

The imposition of sanctions is intended to send a clear signal that a particular policy or behavior will not be tolerated by the Government of Canada. Canada has three separate pieces of legislation authorizing the imposition of sanctions:

Justice for Victims of Corrupt Foreign Officials Act (JVCFOA)

(Sergei Magnitsky Law)

The JVCFOA came into force in October 2017, and allows Canada to directly target foreign nationals responsible for or complicit in gross violations of internationally-recognized human rights or acts of significant corruption in foreign states.

Canadians are prohibited from dealing with listed individuals, effectively freezing their Canadian assets. Listed individuals are inadmissible to Canada under the Immigration and Refugee Protection Act.

Since 2017, Canada has designated 70 individuals from Myanmar, Venezuela, South Sudan, Russia (in relation to the case of Sergei Magnitsky) and Saudi Arabia (in relation to the extrajudicial killing of Jamal Khashoggi) under the JVCFOA.

Special Economic Measures Act (SEMA)

The SEMA came into force in 1992, and allows Canada to impose sanctions against a foreign state, as well as individuals and entities related to that foreign state. SEMA can be used in four types of situations: (1) grave breach of international peace and security resulting in a serious international crisis; (2) when an international organization to which Canada belongs calls on its members to take economic measures against a foreign state; (3) gross and systematic human rights violations have been committed by the state; and, (4) acts of significant corruption.

SEMA measures could include: a dealings ban; restrictions or prohibitions on trade; restrictions or prohibitions on financial transactions or other economic activity between Canada and the target state; and/or restrictions on activities such as the docking of ships or landing of aircraft from the foreign state in Canada.

Canada currently imposes sanctions under SEMA on eleven countries – Iran, Libya, Myanmar, Nicaragua, North Korea, Russia, South Sudan, Syria, Ukraine, Venezuela, and Zimbabwe.

United Nations Act (UNA)

The UNSC may decide what measures member states shall take to restore or maintain international peace and security. Such a decision imposes a legal obligation on UN member states to introduce the measures into domestic law.

In Canada, it is done through regulations under the United Nations Act.

Thirteen countries are currently subject to UN sanctions: Central African Republic, Mali, Democratic Republic of the Congo, Eritrea, Iran, Iraq, Lebanon, Libya, Democratic People’s Republic of Korea, Somalia, South Sudan, Sudan, and Yemen. Canada also imposes UN sanctions against individuals and entities associated with terrorist activities, including Da’esh, Al-Qaida, and the Taliban.

Listing Process

Sanctions are implemented through the regulatory process. Imposing new sanctions requires reliable and credible open-source information that meets the legal threshold included in the acts.

Outlook

Global Affairs Canada is the focal point for coordinating the Government of Canada’s overall approach to sanctions impositions and management, and a dedicated unit was established in 2018 towards this end. Several developments have taken place in recent months:

• Canada is enhancing engagement with public and private stakeholders to facilitate and improve compliance with sanctions, including through outreach events and improved communication and resources.
• Canada is improving whole of government coherence and coordination on sanctions compliance and enforcement, including by increased strategic engagement and through a review of current practices.
• Canada is enhancing collaboration with likeminded countries (in particular the EU, the United Kingdom and the United States), [REDACTED] For example, in March 2019, Canada, the European Union and the United States coordinated an announcement of new sanctions in response to Russian aggression.
• [REDACTED]

Emerging Issues

• Civil society is keen on the active use of the JVCFOA given its association with addressing human rights issues.This high-level interest is likely to continue.
• In March 2019, Senator Ratna Omidvar tabled the Frozen Assets Repurposing Act. The bill proposes using assets frozen by sanctions to help victims of human rights abuses. [REDACTED] Related, the Liberal Party of Canada included a commitment in their 2019 platform to develop a framework to transfer seized assets from human rights abusers to their victims.
• [REDACTED]

Nuclear Issues

Issue

• The current international non-proliferation and disarmament architecture is under pressure.
• Deterioration of arms control between the United States and Russia and nuclear activities in North Korea and Iran risk leading to a new nuclear arms race.
• Canada supports robust nuclear non-proliferation, arms control, and disarmament policies as a means to achieve Canadian and international peace and security.

Context

International Security Environment

Nuclear issues feature prominently in an increasingly tense international security context. Multilateral and bilateral mechanisms for addressing arms control and disarmament are strained, and specific countries present proliferation threats.

North Korea continues to develop its weapons of mass destruction programs and has yet to take tangible steps towards its stated commitment to denuclearize. It is the only country to have conducted nuclear test explosions in the 21st century, and has produced the fissile material necessary for as many as [REDACTED] nuclear weapons. It claims the ability to deliver a nuclear-armed ballistic missile to North America.

The Joint Comprehensive Plan of Action (JCPOA) entered into effect in 2015 with the aim of constraining Iran’s ability to develop a nuclear weapon. The U.S. withdrawal from the deal in 2018 and its reinstatement of sanctions [REDACTED] There is diminishing trust among Russia and the United States, the two nuclear powers with by far the largest arsenals. The United States’ withdrawal from the U.S.-Russia Intermediate-Range Nuclear Forces (INF) Treaty on August 2, 2019 due to Russia’s violation of its terms, combined with the uncertain future of the U.S.-Russia New Strategic Arms Reduction Treaty (New START), risk leading to a situation where there are no numerical constraints on the nuclear arsenals of any state for the first time since the Cold War. China has thus far rejected the idea of joining multilateral disarmament negotiations with the other nuclear powers, arguing that states with the largest arsenals bear a special responsibility.

All of the nuclear weapon states have ambitious nuclear weapon modernization programs. [REDACTED]

2019 Estimated global nuclear warhead inventories

[REDACTED due to copyright]

The Treaty on the Non-Proliferation of Nuclear Weapons (NPT) recognizes five nuclear weapon states: China, France, Russia, the United Kingdom and the United States. [REDACTED] North Korea had been a State Party to the NPT since 1985, but announced its withdrawal in 2003.

The NPT provides the legal framework for Canadian nuclear policy. The Treaty entered into force in 1970 and is organized around three pillars: disarmament, non-proliferation and peaceful uses of nuclear energy. It is in the tense international context described above that the quinquennial 2020 NPT Review Conference (RevCon) of the Parties to the NPT will take place in April-May 2020. The 2015 RevCon ended without a final outcome after Canada, the United States and UK broke consensus on the draft final document over proposed language relating to a Middle East Weapons of Mass Destruction Free Zone.

Frustrations over the slow pace of nuclear disarmament led to the negotiation of the Treaty on the Prohibition of Nuclear Weapons (TPNW), which calls for a total ban on nuclear weapons in an attempt to stigmatize nuclear deterrence. The Treaty was finalized in 2017 and, as of October 2019, 79 countries have signed and 33 have ratified. Fifty ratifications are required for the TPNW’s entry into force. Canada has not supported the TPNW, a position that is consistent with that of its NATO Allies and of other nuclear umbrella states. While Canada has acknowledged that the TPNW reflects a legitimate desire to accelerate disarmament, the Treaty is inconsistent with NATO obligations, does not contain credible monitoring and verification provisions, and divides the international community.

Canadian Priorities/Actions

Canadian and international peace and security is best secured through robust international non-proliferation, arms control, and disarmament policies, as part of a broader rules-based international system. As such, since the NPT came into force in 1970, Canada has been committed to upholding the NPT as the key global instrument to promote nuclear disarmament, non-proliferation and peaceful uses of nuclear energy. Canada works with partners to strengthen the NPT across all three of its pillars.

Nuclear Disarmament:

Canada and its NATO Allies support a pragmatic step-by-step approach towards nuclear disarmament, i.e. incremental progress to disarmament through initiatives that unite both nuclear weapon possessor states and non-nuclear weapon states. For example, Canada has been working for over 20 years to advance a Fissile Material Cut-off Treaty, building on Canada’s long-standing and internationally recognized leadership on this initiative. Canada also currently champions and supports several actions in the implementation plan of the UN Secretary General’s Agenda for Disarmament, including the promotion of the full and equal participation of women in all levels of disarmament decision-making. Canada’s work in the area of gender and disarmament has included vocal and active leadership in ensuring that gender considerations are taken into account in all resolutions of the UN General Assembly’s Committee on Disarmament and International Security. Canada is a strong supporter of nuclear disarmament verification and is one of only two countries that has provided both financial support and technical expertise for the International Partnership for Nuclear Disarmament Verification (IPNDV). Furthermore, Canada engages in public advocacy in support of the entry into force of the Comprehensive Nuclear Test Ban Treaty.

Canada is also participating in numerous international diplomatic efforts to advance nuclear disarmament and the NPT process. For example, in June 2019, Canada participated in the Swedish Ministerial Meeting on Nuclear Disarmament and the NPT. This diverse group of non-nuclear weapons states reaffirmed the importance of the NPT as the cornerstone of the global disarmament and non-proliferation regime and called for progress on disarmament. Canada is expected to participate in a follow-up meeting to be hosted by Germany on 25 February 2020 in Berlin.

Non-Proliferation and Peaceful Uses of Nuclear Technology:

As a state party to the NPT, Canada is bound by the principle that all NPT state parties have an inalienable right to access nuclear technology for peaceful uses in compliance with International Atomic Energy Agency (IAEA) safeguards. As a de facto permanent member of the IAEA’s decision-making body, the Board of Governors, Canada promotes nuclear safety and security in support of peaceful uses. Canada also actively supports nuclear cooperation through legally binding bilateral agreements with partner countries. In addition to the IAEA’s role on safeguards and verification, Canada has supported the IAEA’s capacity-building role, notably through the Technical Cooperation Programme, and supports IAEA efforts to enhance the security of nuclear and radioactive materials world-wide to reduce the threat of nuclear terrorism.

Easing International Tensions:

Canada currently supports a diplomatic solution in which North Korea completely, verifiably and irreversibly dismantles its weapons of mass destruction and ballistic missile programs. In the context of rising U.S.-Iran tensions, Canada has urged all states to reduce tensions and refrain from actions that could undermine the JCPOA, a key diplomatic achievement of the non-proliferation architecture. Within NATO, Canada is working with Allies to achieve non-proliferation, arms control and disarmament objectives. Canada is also encouraging dialogue between the United States and Russia on the extension of the New START Treaty.

Kingdom of Saudi Arabia

Issue

The core dilemma of Canada’s relationship with Saudi Arabia is how to address concurrently the range of Canada’s priorities: human rights, prosperity and regional security.

Context

While a challenging international actor, Saudi Arabia is remains a regional and global influencer. As the world’s largest oil exporter (with approximately three quarters going to Asia), Saudi Arabia plays a pivotal role in maintaining international energy security. The G20’s only member from the Arab world, Saudi Arabia will host the G20 in 2020 with a number of ministerial-level meetings and concluding in a Leaders’ Summit in November 2020.

In 2018, Saudi Arabia was Canada’s 17th largest trading partner with $5. 6 billion in bilateral merchandise trade (0.5 percent of Canada’s total global trade). Canadian companies such as Bombardier and SNC Lavalin have won major infrastructure contracts in Saudi Arabia.

[REDACTED]

Domestic situation

[REDACTED] While Saudi Arabia is the religious home of the world’s 1.6 billion Muslims, including one million Canadians, the Shi’a minority in Saudi Arabia is viewed with suspicion and at times suffers persecution. Saudi Arabia has failed to sign foundational UN human rights conventions, considering them a contravention of Shari’a law and remains at the bottom of most human rights indices.

The October 2018 murder of Saudi Arabian journalist Jamal Khashoggi shone an international spotlight on Saudi Arabia’s persecution of its opponents, with a report by a UN Special Rapporteur concluding that Saudi Arabia was responsible for the premeditated extrajudicial killing. Canada supported the report and, under the Magnitsky Act, imposed sanctions on some of those believed to be responsible. Canadian media have provided significant coverage to the case of Raif Badawi, a human rights activist imprisoned in Saudi Arabia whose family is now in Canada.

[REDACTED]. As part of the country Vision 2030 to diversify the economy, the current Saudi Arabian leadership has made some improvements for women, including granting them the right to drive and removing the need for a guardian’s consent for adult women to obtain a passport and/or travel. Recently, foreign women were exempted from the requirement to wear the abaya. Despite these improvements, women’s rights activists have been detained.

On March 7, Canada joined 35 countries in issuing a statement at the UN Human Rights Council calling for the release of the activists. The ongoing trial and detention of women rights activists has made clear that the regime may institute some reforms [REDACTED].

International Actions

Saudi Arabia provides unique access to critical regional intelligence and geopolitical position. Our key allies, the United States and the United Kingdom, work closely with Saudi Arabia in areas of regional security and counter-terrorism. Saudi Arabia is a member of the Global Coalition to Counter Daesh, a key actor in efforts to resolve the Syrian crisis. Particularly since the 2003 Iraq war, Saudi Arabia has been the main bulwark to Iranian adventurism in the region, with its efforts sometimes aligning with Israel’s security interests. However, the political ambitions of Saudi Arabia and Iran, sponsors of various regional Sunni and Shi’a communities respectively, has produced friction across the region, from the 1975-1990 Lebanese civil war to today’s conflicts in Yemen and Syria, resulting in refugee flows and demands for humanitarian assistance. [REDACTED] Saudi Arabia is directly involved with the Yemeni civil war, on opposite sides from the Iran-backed Houthis, which has led to attacks on Saudi territory. Saudi Arabia’s motivations for peace in Yemen have increased, following the September 14 attacks against the Saudi Aramco oil facilities, [REDACTED]. This was exemplified when Saudi Arabia brokered a power-sharing agreement between the Yemeni government and the southern separatist faction, which was signed on November 5.

Canada’s Current Engagement

In response to social media messages in August 2018 by Canada’s embassy in Riyadh underlining its concern over the arrest and imprisonment of Saudi Arabian human rights defenders, Saudi Arabia announced that it would expel Canada’s ambassador, suspend new trade and investment ties, and ban Saudi Arabian scholarship recipients from attending Canadian universities. Canada did not apologize for its actions, nor did it impose reciprocal measures. Canadian companies have had contracts with government entities suspended and have been unable to bid on new contracts; however, private Saudi Arabian companies have continued to work with Canadian companies. Ministerial-level discussions over the last year have not been able to resolve the current impasse.

In 2014, General Dynamics Land Systems Canada secured a US$13.4 billion contract – the highest-value contract ever by a Canadian company with any country – to supply 928 Light Armoured Vehicles and associated equipment, training and support services [REDACTED] In 2015, Saudi Arabia exercised an option to reduce the number of vehicles on order to 777, reducing the contract value to US$10.7 billion. [REDACTED]

This contract has come under significant public criticism because of Saudi Arabia’s human rights record and its actions in Yemen. [REDACTED]

[REDACTED]

Middle East Peace Process

Issue

• The Israeli-Palestinian conflict is at an impasse. Observers remain skeptical that progress can be made [REDACTED]
• The Trump administration has been developing a peace plan, but the hardening of Israeli and Palestinian positions cast doubt on its prospects for success.

Context

The Israeli-Palestinian conflict is at an impasse. It predates the creation of the State of Israel in 1948 but has worsened since the 1967 war launched by neighbouring Arab states and where Israel subsequently occupied East Jerusalem, the West Bank, Gaza and the Golan Heights. Advances made during the Oslo peace processes of the 1990s and creation of the Palestinian Authority did briefly generate positive momentum.

The key final status issues in the conflict – the fate of Palestinian refugees, the future border between Israel and a Palestinian state, the status of Jerusalem and its religious sites, and security for both Israelis and Palestinians, remain unresolved and little if any progress has been made in years. Other issues, including Israeli settlements in the West Bank and East Jerusalem, the refusal of some regional states to recognize Israel, and water access add complexity to an already intractable conflict.

Observers remain skeptical that progress can be made [REDACTED] Against this backdrop, the Trump administration has been developing a peace plan for Israelis and Palestinians and engaged regional states in an attempt to build support for a resolution of the conflict. These efforts notwithstanding, Israeli and Palestinian positions have hardened in recent years, [REDACTED]

Canada and the conflict

Canada has been, and continues to be, an active player in Middle East dynamics, including on Israeli-Palestinian issues. Canada maintains positive ties to both Israelis and Palestinians, has long supported peace efforts between the two sides, and in the past played a leading role as chair of the Refugee Working Group in the 1990s/2000s. More recently, Canada’s annual humanitarian and development programming in the West Bank and Gaza, and our contribution to Palestinian security sector development have underscored our desire to see a constructive resolution to the situation. Canada continues to support a two-state solution as the only viable option to achieving lasting peace. [REDACTED]

In addition, [REDACTED] resolutions related to the Israeli-Palestinian conflict are actioned at the UN General Assembly every year. Canada supports Israel at the UN and rejects the number of resolutions singling out Israel.

U.S. Peace Plan

A campaign promise from 2016, President Trump and his team have been working to develop a Middle East peace plan since taking office. The effort has been led by President Trump’s son-in-law Jared Kushner.

[REDACTED] the plan – referred to as the “deal of the century” - is said to be complete.

The White House now seeks an opportune moment to release it in full, so as to maximize its chance of success. Washington has opted to reveal the plan in two parts. The economic component – which proposed $50 billion in investments into the West Bank, Gaza and surrounding states over 10 years – was presented at a workshop in Bahrain in June 2019 (Canadian officials participated).

The United States has indicated that the political component of the plan may be released in 2019, though the ongoing process of forming a governing coalition in Israel following the September elections may alter this timing. [REDACTED] Countries like Canada can expect to be called upon to support specific elements (like border security or refugees), [REDACTED]

As the plan was being developed, the Trump administration undertook a series of foreign policy actions [REDACTED] These include: the recognition of Jerusalem as Israel’s capital and attendant embassy move; closing the Palestinian office in Washington; and cutting off financial support to the Palestinians, including U.S. contributions to the UN Relief Works Agency for Palestine Refugees in the Near East (UNRWA), among other actions.

[REDACTED] However, Palestinians have refused to engage with President Trump’s team, preferring instead to wait out the current administration while trying not to yield ground on any key final status issues. [REDACTED]

Palestinian Dynamics

The Palestinians have historically relied on Arab states’ moral, political and economic support to underpin Palestinian national aspirations; [REDACTED]

The Palestinian position has also been weakened by territorial and political schisms between the Fatah-led Palestinian Authority in the West Bank and the Hamas-controlled Gaza Strip. [REDACTED]

Israeli Dynamics

[REDACTED] Since 2017, the Israeli side has benefitted from a staunch ally in President Trump and continued bipartisan U.S. support for Israel’s defence. Among other positions, U.S. recognition of Jerusalem and support for Israel’s annexation of the Golan Heights [REDACTED]

Gaza

In Gaza, the territory is densely populated and strained for resources. The dire humanitarian situation reflects a complex cocktail of poor governance (by Hamas, a listed terrorist group in Canada), the constant risk of conflict escalation, displacement as a result of hostilities, unemployment rates that are among the highest in the world, high levels of food insecurity and limited access to essential services. As much as 97 percent of the groundwater is considered unfit for human consumption. Against this backdrop, weekly protests have taken place since spring 2018, with varying levels of intensity and violence, including rocket and mortar fire into Israel. Negotiations led by the UN and Egypt have led to an uneasy truce between Israel and Hamas that has been broken several times, and it remains to be seen whether these mediation efforts can produce a lasting agreement that can deliver economic relief for Gaza and enhanced security for Israel.

Support to UN Relief and Works Agency

Since 2016, Canada’s support to the UN Relief and Works Agency (UNRWA) – which provides assistance and protection to Palestinian refugees in Jordan, Lebanon, Syria, the West Bank and Gaza – has totaled $110M. Canada committed $20 million per year (2016 through 2019) to UNRWA’s Programme Budget to support basic education, health and social services to Palestinian refugees, and in 2018, provided $10M to the West Bank/Gaza Emergency Appeal as an exceptional, one-time response to the Agency’s unprecedented funding crisis. [REDACTED], Israeli political representatives continue to call for an end to UNRWA.

They have asserted that alternatives to UNRWA should be pursued, and that the definition of a Palestinian refugee should be reconsidered. [REDACTED] In November 2019, UNRWA’s Commissioner General resigned, and an investigation into his management misconduct is ongoing.

Russia-Ukraine

Issue

While Russia faces domestic challenges, [REDACTED] counter the United States (U.S.) and maintain control over its perceived sphere of influence.

The election of President Zelenskyy represents a political shift in Ukraine [REDACTED]

Context

Russia is an unavoidable international actor, oftentimes a disruptor, with a nearly one-million member army, a vast nuclear arsenal and world-class diplomatic service. As a permanent member of the UNSC and a member of the G20 and Arctic Council, Russia wields influence [REDACTED] and is a player on most international security issues, from Iran, Syria and Afghanistan, to North Korea and Venezuela. Ukraine figures prominently in Russia’s regional power projection, [REDACTED] Russian influence is growing in the Middle East, African and much of the Global South.

Domestically, [REDACTED] the country faces a stagnating economy, demographic decline, growing dissatisfaction and protests increasing in regularity across the country. Twenty years on, President Putin’s regime is not immune to these pressures, particularly given its prioritization of domestic survival and [REDACTED]. While President Putin may have benefited from the “Crimea is ours” sentiment that created a rally-around the leader effect in 2014, today, [REDACTED]

Russians appear to be more preoccupied with the socio-economic conditions of he country, manifested in local issues, from environmental degradation to the rising pension age. Despite palpable discontent among Russians, particularly a younger generation seeking to build an alternative future, [REDACTED]

Internationally, Russia seeks to maintain [REDACTED] and indispensable player in resolving conflicts, whose influence cannot be ignored by the West. Russia’s foreign policy seeks strategic leverage to counter U.S. and Western interests, as well as to maintain control in its sphere of influence. Five years after its illegal annexation of Crimea, Russia continues to consolidate its control over the Ukrainian territory. In the eastern Donbas region of Ukraine, Russia operates through proxies, from private military companies to well-financed, trained and armed militants. [REDACTED] Following more than 13,000 deaths and a de-facto separation of the non-government controlled areas from Kyiv, Russia still denies its military involvement. In contrast to Crimea, where Russia has made significant investments in infrastructure and tourism, Russia is not significantly investing in eastern Donbas nor integrating it into its own territory, but seeks for Ukraine to grant it a “special status”, ostensibly in order to protect the Russian-speaking minority.

In Ukraine, Russia’s influence over the country’s public has fallen, particularly among the politically-savvy younger generation. [REDACTED] Russia’s offer of Russian passports to Ukrainian citizens in the region, aimed at devaluing Ukrainian citizenship in the so-called “DNR” and “LNR”, suggest that the Kremlin [REDACTED] Russia’s costly presence in the impoverished and destroyed Donbas raises questions about Russia’s longer-term exit strategy.

In the Minsk and Normandy diplomatic formats for resolving the conflict, Russia and representatives of the so-called “DNR” and “LNR” have demonstrated the greatest intransigence. The illegitimate authorities demand direct dialogue with the Ukrainians, who do not recognize them as legitimate interlocutors. While negotiations have not yet yielded a breakthrough, the election of President Zelenskyy, who has positioned himself as the first truly “post-Soviet” leader of Ukraine, presents a window of opportunity.

Political Shift in Ukraine: the Zelenskyy Era

President Zelenskyy has ushered in generational change in Kyiv with the youngest, most gender-balanced and most reform-oriented cabinet in Ukraine’s history. Since his inauguration, [REDACTED] Trilateral Contact Group (TCG) negotiations with Russia and the DNR/LNR in Minsk and to the Normandy format (Ukraine, Russia, France and Germany). Zelenskyy has prioritized winning the hearts and minds of Ukrainians in Donbas – [REDACTED] This reflects the strength of Zelenskyy’s electoral majority, with about two-thirds of the population considering peace in the Donbas a top policy priority (alongside national unity and anti-corruption efforts). In promising to reboot the existing diplomatic negotiation formats, Zelenskyy has engaged in direct dialogue with Putin. He has also signaled a desire to expand the Normandy format to include the United States and the United Kingdom [REDACTED]

Recent developments in diplomatic efforts could provide the impetus for further de-escalation of tensions. Following a prisoner exchange between Russia and Ukraine in September, Ukraine, Russia, and the separatists signed onto the Steinmeier formula during a Trilateral Contact Group (TCG) meeting on October 1. The formula calls for special status for separatist-held Luhansk and Donetsk to take effect on the day of local elections held in these territories under Ukrainian legislation and OSCE monitoring. If the OSCE deems the vote to have been free and fair, then special status for these territories would take effect on a permanent basis. With the agreement signed, the last TCG-related obstacle to holding a Normandy Summit has been removed. Some disengagement of forces and weapons at the front line in eastern Ukraine has also recently taken place. A Normandy Four Summit could possibly take place in November.

Agreeing to the Steinmeier formula has been a Russian precondition for the Summit to take place, and is thus viewed as a major concession. In the days following the October 1 announcement, several medium-scale protests took place in Kyiv and elsewhere in the country decrying Ukraine’s “capitulation” and political comprises with Russia.

Canada's Current Engagement

Despite modest [REDACTED] diplomatic engagement with Russia since 2016, Canada-Russia bilateral relations remain difficult. Canada views many Russian actions as part of a pattern of unacceptable behaviour, including the nerve agent attack in the United Kingdom in March 2018, support of the Assad regime in Syria, support for civil strife in neighbouring countries, interference in elections, and disinformation campaigns. Few meaningful channels of dialogue exist, and cooperation even in the Arctic – where we share the greatest convergence of interests – remains extremely modest [REDACTED]

Canada has been a leading provider of humanitarian, development and military assistance to Ukraine following Russia’s illegal annexation of Crimea in 2014. Since January 2014, Canada has committed over $785 million in multifaceted assistance to Ukraine, imposed sanctions against more than 460 Russian and Ukrainian entities and individuals, and launched Operation UNIFIER (the Canadian Armed Forces military training mission to Ukraine). Canada also aims to increase prosperity through free trade with Ukraine via the Canada-Ukraine Free Trade Agreement (CUFTA) and development programming that focuses on economic growth. Canada hosted the Ukraine Reform Conference in 2019.

Canada’s message that Ukraine’s continued progress on reforms and prosperity offers the best avenue to resolving the conflict in eastern Ukraine resonates with Ukraine and the transatlantic community. Canada supports ongoing diplomatic efforts, including the ‘Normandy Four’ and TCG formats, to find a peaceful solution to the conflict. Without a formal role in these formats however, Canada is limited to raising our positions in multilateral forums of which Russia is a member (i.e. OSCE) or where Russia is discussed (i.e. G7, NATO).

Brexit

Issue

• The United Kingdom decision to depart the EU has not proceeded smoothly and continues to cause deadlock in British politics. Brexit has caused significant political and economic disruption for the United Kingdom and EU partners, which will persist for the foreseeable future. Canada has put in place policy and legal provisions to manage the transition. Should theUnited Kingdom leave the EU without a deal at the end of January 2020, bilateral trade would revert to a pre-CETA basis.
• In such a scenario, nearly all current Canadian goods exports would be duty-free. Notwithstanding the impact of Brexit on the United Kingdom, it will remain an influential player/partner as a permanent member of the UNSC in NATO, the G7, G20, and the Commonwealth.

Context

In the more than 1200 days since the June 2016 referendum on whether to leave the EU, the issue of how to achieve Brexit has paralyzed political life in the United Kingdom. New political identities have been formed around the Leave/Remain axis, with potentially generational consequences. While former Prime Minister Theresa May negotiated a Withdrawal Agreement with the EU, it was defeated in the U.K. House of Commons three times. The deadlock in Parliament on the best approach on Brexit ultimately led to May’s resignation, and the subsequent rise to power of Prime Minister Boris Johnson in July 2019.

The referendum result and subsequent uncertainty have dampened economic growth, discouraged investment and damaged the UK’s reputation, including as a haven for commerce. A recent report from the UK Institute for Fiscal Studies estimates that current U.K. GDP is likely 2. 5 percent smaller now than it would have been had the remain side won the 2016 referendum. There is significant uncertainty regarding potential future impacts on the U.K. Treasury and investment climate. A number of companies have announced or actioned plans to move operations out of the country or to delay/cancel new investments.

In an effort to ensure predictability, the United Kingdom has signed continuity or partial continuity agreements (based on existing EU trade agreements) with some current free trade agreement partners (such as South Korea, Switzerland, Norway, and Chile), accounting for less than 9 percent of U.K. global trade. Parallel FTAs with other partners, including Canada and Japan, remain incomplete. Finally, there is also concern among U.K. citizens living on the continent and EU citizens living in the United Kingdom about their status and future prospects.

The eventual impacts of Brexit will depend on the shape of any final arrangement between the United Kingdom and the EU. Brexit supporters have argued that ending British contributions to the EU would allow for increased financial flexibility, as well as control over immigration, labour markets and regulation. Economists have warned that being in the EU has a strong positive effect on trade, and that leaving the EU will negatively affect the economy in the medium and long term. Since the Brexit vote, the unemployment rate has continued to drop and is now the lowest it has been since the mid-1970s. However, average inflation-adjusted earnings have levelled off, and Britons today are earning less after inflation than they did before the 2008 financial crisis.

Status of EU-U.K. Negotiations

EU and United Kingdom negotiators reached a new Withdrawal Agreement on the morning of October 17, 2019, just 14 days before the scheduled October 31 United Kingdom departure. The European Council approved it the same day.

As Prime Minister Johnson’s attempt to obtain parliamentary approval by October 19 was unsuccessful, he was required to seek an extension to the Article 50 period until January 31, 2020, as a result of legislation previously passed by Parliament. The Withdrawal Agreement implementation bill was introduced to the House of Commons and has passed second reading, though a proposed timetable of 48 hours to consider and vote on the bill was rejected by the House, leaving the bill in limbo. The EU agreed to a January 31, 2020, extension but has made clear that no further changes to the Withdrawal Agreement will be entertained. Whether the Agreement will pass the U.K. Parliament is still an open question and the December 12 general election will have a major impact on the Agreement’s future.

If and when the United Kingdom leaves the EU with a Withdrawal Agreement, the next phase of Brexit will begin – he negotiation of the future relationship with the EU. With competing visions over trade and customs, as well as coordination on workers’ rights and the environment, this phase is expected to be as, if not more, difficult than the negotiations over the United Kingdom’s exit.

Withdrawal Roadblock

The primary issue preventing a path forward on Brexit was the conflict between avoiding border checks between Northern Ireland and the Republic of Ireland while the United Kingdom seeks to leave the EU Single Market and the Customs Union, and to negotiate its own free trade agreements. Border checks would be inconsistent with the aims of the Good Friday Agreement which laid the foundation to end sectarian violence between Catholics and Protestants in Northern Ireland. [REDACTED]

The new Withdrawal Agreement contains an updated Northern Ireland protocol which attempts to address these issues. Under the new plan, Northern Ireland will stay within the EU regulatory space for agri-food and manufactured goods. As well, Northern Ireland will officially remain within the U.K. customs area but, in practice, shipments of goods arriving in Northern Ireland from the rest of the United Kingdom will need to include a declaration whether they will stay in Northern Ireland, or will be forwarded onto the Republic of Ireland.

If the goods stay in Northern Ireland, the goods will enter without customs duties. If the goods continue onto the Republic of Ireland, they will be subject to EU tariffs. These checks will be undertaken at Northern Irish seaports and airports to avoid checks on the land border between Northern Ireland and the Republic of Ireland, thus ensuring the continuation of the all-Ireland economy stipulated in the Good Friday Agreement. The Democratic Unionist Party, which represents the Northern Irish Protestant community in the U.K. House of Commons, opposes the new agreement because of the increased alignment of Northern Ireland with the EU and because Northern Ireland will be subject to a different set of rules than the rest of the United Kingdom.

Implications for Canada

In the event that the Withdrawal Agreement is ratified and enters into force, Canada’s agreements and arrangements with the EU would continue to apply to the United Kingdom during a transition period that would last from the date of Brexit until December 31, 2020 (with the possibility of extension for another one or two years). This approach was approved by the Minister of Foreign Affairs in December 2018. [REDACTED]

Alternatively, in the event that the United Kingdom leaves the EU without an agreement and an accompanying transition period, it would cease to be party to the EU’s international agreements and would be treated as a third country. This no-deal scenario would require new Canada-U.K. instruments to be ready to come into force immediately. Individual departments have been working with their UK counterparts to develop such instruments in time for a potential no-deal Brexit. Specific agreements identified for transition include those related to Air Transport, Nuclear Cooperation, Customs Cooperation, Organic Equivalency, Civil Aviation Safety, and trade. Of the instruments identified for transition, replacement instruments have been prepared and are ready to enter into force on January 31, 2020, with the exception of the trade agreement (see below). Other aspects of a no-deal transition are not expected to be broadly problematic for Canada and Canadians, but a certain degree of disruption would be inevitable due to the inherent unpredictability of a no-deal Brexit and contingency planning continues. FAQs and other supports are being put in place to advise Canadian business and investors.

Status of the Canada-U.K. Trade Dialogue

Canada-UK merchandise trade amounted to $16. 3 billion in 2018, or 21.7 percent of our trade with the EU. Whatever the outcome of Brexit, the United Kingdom will remain a significant market for Canadian natural resources and companies. The United Kingdom is also an important source of foreign investment ($50 billion in Foreign Direct Investment stock) and destination for Canadian investment abroad ($109 billion in Canadian Direct Investment Abroad stock).

[REDACTED] On October 8, 2019, the United Kingdom published a slightly modified version of the MFN applied tariff schedule and restated its overriding policy objective, which is to protect British consumers and supply chains from price shocks. In the event of a no-deal Brexit, so as to ensure the flow of imported goods on which U.K. consumers and manufacturers depend, the United Kingdom would provide MFN duty-free market access to all WTO members on nearly 95 percent of applied tariff lines, [REDACTED]

[REDACTED]

Global Affairs Canada has put in place an interdepartmental Brexit preparedness network to support Canadian business interests in the case of a no-deal Brexit. Our Trade section at the Canadian High Commission in London has been liaising with its clients throughout the Brexit discussions as well as prepared a Brexit page on the Government of Canada website. A communications plan has also been developed for the various scenarios.

Syria

Issue

• The conflict in Syria has now lasted eight years. Its scope and scale have been socio-economically devastating in terms of lives and livelihoods lost and disrupted. International law has been undermined, including through the use of chemical weapons.
• With no political resolution on the horizon, the conflict is complicated by multiple proxy battles among regional and global actors, which have contributed to the prolongation and escalation of the conflict. Syria’s civil war feeds regional instability and has negative spillover effects globally which impact Canadian interests indirectly and directly (e.g. terrorist attacks, use of Canadian resources to address crises).

Context

The Syrian conflict began in 2011 when peaceful protests in southern cities, on issues such as unemployment, corruption and lack of political freedoms, resulted in a violent crackdown by the Assad regime. Opposition supporters eventually took up arms. The conflict took on regional and global dimensions with numerous state and non-state actors, including Daesh, getting involved, creating a complicated web of interests and objectives playing out at the expense of the Syrian people. Beyond complicating the original civil war, this proxy engagement threatens unintended escalations.

The regime has regularly shown contempt for international humanitarian law. Civilian populations have been severely impacted, often exacerbated by challenges to humanitarian access and medical workers and facilities targeted during hostilities.

Six million Syrian refugees have fled to neighboring countries, with Turkey (3.6M), Lebanon (1M), and Jordan (0.7M) and bearing the brunt, along with Germany (0. 6M) and Sweden (0.1M). There are more than 6.2 million internally displaced Syrians.

Despite Daesh having lost its territorial control, it remains a threat and conditions are still fertile for radicalization. This is a significant concern in displacement camps where family members of Daesh fighters are numerous, but also amongst disenfranchised Sunni communities within Syria and the region, and in refugee camps and communities outside. Turkey’s mid-October incursion into northeastern Syria risks sparking the resurgence of Daesh activity.

Among Syrians, there are deep divides along political, sectarian, ethnic and religious lines on how to move forward, including on how a future Syria should look and function. Opinions differ on whether the opposition should keep fighting, or whether peace is better even if at the expense of justice or accountability. Isolation and alienation of Sunnis (the majority population) will further the threat of radicalization, as will social conditions such as extreme poverty, lack of educational opportunities and reprisals.

Conflict dynamics and prospects

The survival of Syrian President Bashar al-Assad has hinged on Russia’s military and political intervention. Prior to this, the Syrian army was unable to defeat Daesh and other armed opposition groups. Today, the regime controls a significant portion of populous Syrian areas, including most of its land borders with Israel and Jordan. There is less incentive for political compromise.

The regime aims to take back the strategic and symbolic region of Idlib in northwest Syria which shelters 3. 5 million civilians, more than half of whom were displaced from other parts of Syria. With the highest concentration of anti-regime combatants in the country, this region is unlikely to fall easily. A Russian-backed regime operation in Idlib began in April and slowed following a summer ceasefire, but Assa still wishes to regain control in this region. Over 1000 civilians have been killed in Idlib and nearly 500,000 displaced so far.

[REDACTED] These forces are viewed by Turkey as terrorists but have been instrumental in the campaign against Daesh. The incursion has benefited Russia, Turkey, and the Syrian regime. Russia and Turkey have agreed that Turkey will maintain control for the time being of border areas taken during its operation, while Assad’s forces will control other border areas, with Kurdish-led forces withdrawing.

The regime has not engaged seriously in the widely supported UN-led Geneva process which aims to negotiate a political settlement. The Astana process, led by Russia, Iran and Turkey, is intended to negotiate military elements of the conflict (such as ceasefires) but has excluded key groups (e.g., Kurds, to which Turkey objects for domestic political reasons). Recent progress on establishing a UN-facilitated 150-member constitutional committee (composed of an even mix of regime loyalists, opposition and “independent” representatives) was put into question by Turkey’s recent invasion, though the UN and Russia remain supportive of the committee.

Regional and global implications

The Syrian conflict has resulted in a complex web of regional flashpoints related to Iran-US and Iran-Israel tensions; Qatar vs. Turkey-Saudi Arabia; Shia-Sunni and Arab-Kurdish conflict; Sunni extremism and ungoverned spaces; impoverished refugees with no safe way home; and Russia challenging NATO interests. The potential for further violent conflict in the region could have a larger global impact (e.g. energy prices, returning foreign terrorist fighters, homegrown terrorism), which would affect Canadian interests. [REDACTED]

Canadian priorities and engagement

Canada closed its embassy in Damascus and expelled Syrian diplomats from Canada in 2012. In response to the Syrian crisis, Canada has welcomed over 64,000 Syrian refugees and committed up to $3. 5 billion over five years (2016-2021) in military, security, stabilization, humanitarian and development assistance to the region. Canada is active in the U.S.-led Global Coalition against Daesh and contributes to all its military and civilian lines of effort.

Canada is also supporting the White Helmets (labelled a terrorist organization by Syria and Russia), who are first responders operating in opposition-held areas.

In July 2018, Canada led a high-profile international effort to evacuate particularly vulnerable White Helmets members from southern Syria. Work to resettle the 422 White Helmets and their families is ongoing.

Political Negotiations:

Canada views finding a political solution to the Syrian conflict as paramount to improving security and stability in Syria and the region, and improving humanitarian conditions. To support the political negotiations, Canada engages with political and civilian opposition groups, civil society, and formal and informal mediation processes. Canada has been a consistent advocate of the UN political process, and helped ensure constructive engagement of the opposition. This includes efforts to ensure representation of women in negotiations as well as on local and provincial councils.

Accountability for Syrian War Crimes:

Canada and many other international partners have condemned the Syrian regime’s disregard for international humanitarian and human rights law, and repeated use of chemical weapons. Canada supports the International, Independent and Impartial Mechanism ($2.9M) to investigate war crimes and crimes against humanity, the Commission for Justice and Accountability ($3.9M), and through the Organization for the Prohibition of Chemical Weapons ($27M).

Humanitarian Needs and Access:

Canada remains one of the top, single-country humanitarian donors, having allocated $450M since 2016 to UN partners, the ICRC, and NGOs working in Syria. Canada calls for the provision of full, safe and unhindered humanitarian access, which continues to be a challenge for partners throughout Syria.

India

Issue

• India is a growing power with increasing regional and global influence. It is also the world’s sixth largest economy and represents a market of significant opportunity for Canada.
• Beyond trade, India is a key partner to furthering many of our foreign policy objectives, particularly in Asia.
• There are opportunities to deepen the bilateral relationship across trade, investment, security issues and the environment.
• India faces serious domestic challenges, notably poverty, gender inequality and [REDACTED], and tense relations with China and, especially, Pakistan.

Context

With GDP growth at over seven percent, and an economy expected to become the world’s third largest by 2025, India is a global economic force. The country’s political influence at the international level is growing commensurately. It is a prominent member of the G20 and increasing trade, development, and political cooperation with Asian, Middle Eastern and African states.

India is also asserting itself as a regional military power and strategic counter-weight to China, competing for control over the Indian Ocean. It has done so in part by promoting a “free, open and inclusive” Indo-Pacific strategy.

More broadly, as the world’s largest democracy, India is positioning itself as a strategic partner to Canada, and like-minded in the promotion of a rules-based system. At the same time, India continues to maintain close ties with both Russia and Iran.

In 2010, India moved from being a major aid recipient to an international donor, providing hundreds of millions of dollars in assistance primarily to neighbouring South Asian states.

By the same token, India seeks to act as a representative of developing country interests within international organizations and multilateral negotiations.

Domestic and Regional Dynamics

Domestically, India has seen major political shifts of late. After years of rule by the centrist Congress Party, Prime Minister Narendra Modi and his conservative, Hindu-nationalist Bharatiya Janata Party (BJP) were elected for a first term in 2014. Modi’s BJP-led government was re-elected in May 2019 with a historic majority mandate and now controls both Houses of Parliament. The BJP also holds the balance of power in 13 of 30 state Legislative Assemblies.

Since re-election, the Modi government has [REDACTED] by revoking the special constitutional status of Jammu and Kashmir (J&K), and by supporting the implementation of a controversial national citizens’ registry in the state of Assam (bordering China).

The government’s actions in J&K, in particular, have led to tensions with rivals Pakistan and increasingly China, prompting fears of escalated conflict and increased military activity in the region.

Decades-long tensions, punctuated by three wars with nuclear-armed Pakistan, remain central to India’s strategic outlook. Skirmishes occur regularly along the disputed border, most recently in February 2019 when Indian jets entered Pakistan for the first time in decades in response to a suicide bombing that killed dozens of Indian paramilitary police in J&K. Meanwhile, India’s political and economic aspirations continue to be held back by human development challenges. Despite its rapid economic growth and pursuit of development innovations, poverty, infrastructure gaps, high youth unemployment, weak social services, gender inequality [REDACTED] persist. Policy responses are made difficult by the scale of the challenges and the [REDACTED]

Bilateral Relations

India is Canada’s 9th largest trading partner with two-way trade growing by 11 percent in 2018 alone. Prime Minister Trudeau’s 2018 official visit to India, controversies notwithstanding, resulted in a broad range of commercial and bilateral commitments. To date, the trade relationship has largely been driven by business-to-business relations. More than 1000 Canadian companies do business in India and Canadian portfolio investment is now estimated to be worth over $30 billion. While there is enormous opportunity to expand Canadian exports and investment in India, inefficiencies in the Indian economy, including complex regulations, judicial delays and [REDACTED] continue to present an obstacle to Canadian businesses.

Cooperation in areas beyond commerce, including security, defense and global issues, remains modest. Ministerial dialogues on foreign policy, trade and investment, finance, as well as energy, have been intermittent.

Strong people-to-people connections continue to shape relations in fundamental ways. Canada’s large Indian diaspora of over 1.4 million anchors growth in trade, tourism, education and cultural ties. And while Canada’s bilateral aid to India ceased in 2006 following a change in Indian government policy, we continue to provide assistance through multilateral organizations ($12. 7 million in 2017-18, focused in the health sector), and to fund partnerships between Canadian and Indian NGOs ($880,000 in 2017-18).

Key Considerations

India is keen on bolstering relations with Canada and there is scope to do so. Moving forward, however, Canada will need to carefully manage its growing ties with India [REDACTED].

While India represents a market of significant opportunity for Canada, international competition for access to the Indian market is fierce - especially from the United States, the EU, Japan and Australia. India is also less reliant on trade than other Canadian partners in the region, and domestic concerns can lead to high levels of protectionism restricting market access for Canadian companies or products (i.e. pulses).

It also bears noting that Canada’s allies are openly courting India on trade and political fronts. The United States, Japan, France and Australia have all developed complementary Indo-Pacific strategies.

Outlook

[REDACTED] and will continue to raise this issue, which can be managed through ongoing dialogue at all levels. Still, there remain clear opportunities to deepen the relationship across trade and investment, security, energy, and the environment. In the short term, high-level engagement could start with reinvigorating ministerial dialogues (e.g. on foreign affairs or trade and investment) in the coming months. Tensions over Jammu and Kashmir, including concerns over human rights, [REDACTED]

India is expected to continue its gradual ascent as an economic power and regional leader, and will press for international recognition of its aspiring great power status. The political dominance of Prime Minister Modi’s Bharatiya Janata Party also signals a shift away from Indias more [REDACTED]. Despite moves towards economic liberalization, India is expected to remain reflexively protectionist.

Tensions in Jammu and Kashmir

Issue

• Tensions in Jammu and Kashmir (J&K) – a region disputed by India and Pakistan since their creation in 1947– have escalated following the Indian government’s revocation of the state’s special status in August 2019.
• India views these changes as an internal, sovereign matter, while Pakistan asserts that India’s move is illegal under international law.
• India’s decision has been followed by increased security, mass arrests and a clampdown on communications and security. The move exacerbates already tense India-Pakistan relations, and could provoke renewed violence in the region.

Context

On August 5, 2019, the Government of India abrogated Article 370 of the Indian Constitution, which accorded special semi-autonomous status to the State of J&K. Corresponding legislation reorganizing the state and neighbouring region of Ladakh into two new Union Territories (UTs) directly administered by Delhi took effect on October 31, 2019. Although J&K will retain a local Legislative Assembly, its lawmaking authority will be limited compared to other states.

The abrogation of Article 370 also revoked special rights and privileges previously accorded to J&K, including restrictions on land and property ownership.

Opposing country positions

India insists the constitutional changes are an internal matter. Revoking the special status of J&K is a longstanding policy ambition of the governing Hindu nationalist Bharatiya Janata Party (BJP) headed by Prime Minister Narendra Modi.

The government asserts that the move will lead to improved social justice and economic development in the region, and help to promote national unity. The decision has proved popular amongst Indians outside of J&K.

Pakistan frames Kashmir as an existential issue and presents itself as the champion of J&K’s Muslim-majority population.

On August 7, 2019, Pakistan downgraded its relations with India, expelling India’s top diplomat and suspending bilateral trade. In tandem, Islamabad has embarked on a public relations and diplomatic campaign to elevate and internationalize the removal of Article 370 as “illegal” and in contravention of several UNSC resolutions.

Security Situation

New Delhi has deployed an estimated 50,000 paramilitary troops to the region since August. While authorities have claimed that the number of those detained through house arrest and preventive detentions are in the low thousands, credible estimates point to [REDACTED], including parliamentarians. There have been allegations of abuse by security forces.

India’s actions may [REDACTED] in J&K and further terrorist attacks against India. Previous attacks have been linked to Pakistan.

The situation could also adversely affect the conflict in Afghanistan, where Pakistan competes for influence with India. Pakistan has already sought to [REDACTED] to persuade Washington to intervene in its favour on the Kashmir issue. Thus far, the White House has called for “peace and stability” along the Line of Control separating India and Pakistan. The United States has also stressed the need for dialogue, expressed concern for the human rights situation in the region, and called out Pakistan for its continued support of extremist groups that engage in cross-border terrorism. While President Trump once offered to mediate the Kashmir dispute, he has since made comments signaling that he considers J&K a matter for India and Pakistan to resolve bilaterally.

China, Pakistan’s strategic ally in the region, had characterized India’s decision on J&K as “not acceptable” and not legally binding, and in early-October, called on India and Pakistan to resolve the issue bilaterally. [REDACTED]. Beijing strongly criticized the Indian government’s creation of two Union Territories, which encompasses territory claimed by China in the disputed region of Aksai Chin.

Other International Reactions

Many of Canada’s like-minded partners have raised concerns [REDACTED] publically via statements regarding potential human rights violations arising from recent measures, and the risk of escalation.

A number of these statements and [REDACTED]

With a few exceptions (i.e. Turkey, Malaysia), most regional neighbours in Asia and the Middle East have framed J&K as internal matter for India to decide. The Gulf countries have been [REDACTED] to India’s actions despite strong cultural ties to Pakistan. To many observers, the muted global response to Pakistan’s diplomatic push reflects India’s growing political and economic influence, and fear of reprisal for any explicit criticism of New Delhi on J&K issues.

[REDACTED] to date, [REDACTED] our longstanding ties with India as a democracy, major trading partner and important strategic actor in the region.

At the same time, concern exists that India’s response has led to restrictions on freedoms (i. e. communications blackout, arbitrary detentions), and, as such, that New Delhi should be encouraged to respect civil rights and ensure an inclusive process toward transition in J&K.

In line with likeminded, Foreign Minister Freeland issued a statement on August 13, 2019, expressing concern for escalation and infringement on civil rights. Minister Freeland also spoke with Indian Foreign Minister Jaishankar on August 14, 2019 and Pakistani Foreign Minister Qureshi on August 16, 2019, on this issue.

Outlook

Pakistan [REDACTED]

For Canada, well-informed and pragmatic engagement in South Asia will be critical amidst changing political and security dynamics in J&K and the wider region. In the aftermath of the J&K decision in particular, balancing economic, human rights and foreign policy priorities will be an ongoing challenge. However, Canada [REDACTED] by encouraging a transition in J&K that is peaceful, respectful of civil rights, and inclusive, and stressing the importance of meaningful discussions and consultations with affected communities.

Consular Cases

Issue

Global Affairs Canada manages a range of complex and sometimes high-profile consular cases that can be challenging to resolve and require a range of interventions, up to and including engagement by the Minister of Foreign Affairs, and exceptionally by the Prime Minister.

Context

Most of the approximately 210,000 cases opened by Global Affairs Canada consular officials in 2018 were routine. They related primarily to the loss or theft of documents, passport services, or citizenship applications and inquiries.

About 3 percent of these cases were more complex in nature, opened to help Canadians deal with a difficult event or situation abroad: deaths (1,440), arrest/detention (1,151) medical assistance (961), child/family-related (657), wellbeing/whereabouts (613), other (524), and assaults (280). These cases can take considerable time to resolve, and those affected are often under significant stress. The United States, Mexico and China were the top three locations for such cases.

A handful of these become very complex cases. One or more of the following factors can contribute to a case becoming complex:

Limited Consular Access:

Where consular officials have limited or no access to a Canadian detained abroad. This can occur if the case is related to the national security of the host country, if the country does not recognize dual citizenship, or if the security situation in a country limits travel by consular officials. (e.g. , [REDACTED])

Conditions of detention:

Prison conditions vary greatly throughout the world. Canadians can be subject to overcrowding, inadequate diet, lack of access to medical care and sanitation issues, triggering an additional level of service.

Individual vulnerability:

These cases will typically involve children and the elderly, those with mental or physical health issues, or individuals at risk owing to their religion or sexual orientation.

Local conditions/circumstances:

Cases impacted by country-specific issues, such as adversarial or incompetent local governments and other authorities, corruption, and linguistic, cultural, and religious differences. In cases involving legal matters, subjects often face fundamentally different legal systems and procedural challenges.

Children’s Issues:

Children’s issues often relate to child welfare, forced marriage, international adoption and surrogacy cases. International parental child abductions are unique concern, particularly in countries that have not ratified the Hague Convention on Child Abduction. (e.g. [REDACTED])

Mistreatment/Torture:

When a Canadian citizen alleges, or a consular official suspects, that the citizen was tortured or mistreated by local officials while detained in a foreign country. (e.g. [REDACTED])

Death Penalty:

The risk of being sentenced to death. The Government of Canada systematically seeks clemency in all cases of Canadians facing the death penalty abroad. (e.g. [REDACTED])

National Security Issues:

Cases involving allegations of suspicion of terrorism or espionage present risks of due process violations, mistreatment, and barriers to consular access and access to legal counsel. Host governments are often reluctant to cooperate with Canadian authorities. (e.g. [REDACTED])

Public information/opinion:

Expectations of Canadians sometimes are incongruent with the consular services that can be provided. Media coverage of cases, social media networking and engagement by non-governmental organizations can contribute to these expectations.

Role of the Minister

The Minister of Foreign Affairs is frequently contacted by clients, their families, or advocates (including Members of Parliament) regarding consular cases. The Minister directly engages in cases by:

• Engaging with clients and their family members;
• Raising cases with international counterparts;
• Commenting publicly, including issuing Ministerial statements, responding to media queries, and addressing the House of Commons;
• Engaging other Canadian ministers; and
• Mobilizing the office of the Parliamentary Secretary (Consular Affairs).

High-Profile Consular Cases

While complex cases can occur anywhere in the world, Canada is currently managing [REDACTED] high-profile cases in China [REDACTED].

China:

Canada has a number of ongoing complex cases in China, [REDACTED] the arbitrary arrest of Michael Kovrig and Michael Spavor and the arbitrary application of the death penalty against Robert Schellenberg. Since December 2018, Canada has engaged behind-the-scenes through more than 1,000 diplomatic engagements (including official meetings, and calls/interactions [REDACTED]

Syria:

Global Affairs Canada is currently aware of [REDACTED] Canadian Extremist Travellers and their family members in Syria; [REDACTED] Global Affairs Canada has received requests to assist the detainees in Kurdish custody, some of whom are parents with children. The Government of Canada closed its embassy in Damascus in 2012, and Canadian officials do not travel to north-eastern Syria due to the security situation. Therefore, Canada’s ability to provide consular assistance is extremely limited.

[REDACTED]

Death Penalty:

There are currently [REDACTED] Canadians sentenced to death abroad [REDACTED] Current policy is to seek clemency in all cases of Canadians facing the death penalty abroad. All of these cases have been raised, either specifically or generally, at the highest levels.

Political Unrest in Hong Kong

Issue

• In June 2019, large-scale protests erupted in response to changes proposed by Hong Kong authorities to local extradition laws that would have allowed extradition to all jurisdictions, including China.
• Despite the announcement that the extradition bill has been withdrawn, protests have continued with increasingly violent clashes between a minority of protesters and security forces.
• Anxiety over the loss of Hong Kong’s autonomy and its basic freedoms and lack of trust in Beijing has sustained the movement.

Context

Political Unrest

Hong Kong is experiencing the largest-scale protests in its history in response to changes to the Special Administrative Region (SAR)’s extradition laws introduced in April 2019. If passed, the legislation would have allowed case-by-case extradition to all jurisdictions, including to mainland China. Despite the announcement by Hong Kong authorities that the extradition bill was suspended on June 15, protests have continued with increasingly violent clashes between a minority of protesters and security forces. The situation deteriorated steadily over the summer, with weekly clashes and a significant number of protesters arrested.

Hong Kong’s Chief Executive Carrie Lam announced the full withdrawal of the bill on September 4. However, protesters remain unsatisfied and mistrustful, holding the line on their remaining four demands:

Lam’s resignation; an inquiry into police use of excessive force; cessation of the use of the term “rioters” to describe protesters; and a re-opening of dialogue on the introduction of universal suffrage. Thus far, authorities in Hong Kong and Beijing have not conceded to any of these demands, instead issuing messages of condemnation, including references to protests as “terrorism.”

In reaction to violent clashes during China’s national day celebrations on October 1, the Hong Kong authorities have invoked special powers under the Emergency Regulations Ordinance to ban face masks during protests. The move comes amid rising tension between police and protesters after an officer shot an 18 year old student during a clash. Subsequent escalation of tensions has seen an increased number of attacks targeting individuals, mainly key protester figures but also pro-Beijing activists have been noted in the last few weeks.

International Reactions

[REDACTED] So far, Beijing has been hesitant to intervene directly as this would generate a larger backlash in Hong Kong and among the international community, but also compromise Hong Kong’s reputation as a stable international business hub. Hong Kong is also an indispensable investment channel for China, providing 65 percent of FDI flow. Alongside other economic factors, the crisis has weakened Hong Kong’s economy: the SAR’s GDP growth forecast (for 2019) recently dropped to 0-1 percent, down from previous estimate of 2-3 percent. Hong Kong’s credit rating has also been downgraded by major credit agencies, citing factors including the risk of Hong Kong’s absorption into China’s legal system.

Many like-minded partners have raised their concerns with authorities in Hong Kong and Beijing and through public statements, urging dialogue and preservation of the SAR’s high degree of autonomy and basic freedoms. For their part, Hong Kong and Beijing have condemned the protests and framed the unrest as a security question connected to economic issues rather than a political issue, as indicated in Carrie Lam’s policy address of October 16. Hong Kong authorities have, however, launched a Dialogue process which, if deemed credible by protest leaders, may provide a path towards peaceful resolution. Regardless of steps taken in the short term, anxiety over the erosion of Hong Kong’s autonomy and Beijing’s increasing restrictions on civil liberties is likely to continue, as will local concerns about economic insecurity and loss of Cantonese language and culture.

Erosion of ‘One Country, Two Systems’

Enshrined in the Joint Declaration governing the United Kingdom’s handover of Hong Kong to the People’s republic of China, the ‘One Country, Two Systems’ framework guarantees Hong Kong its own political and legal systems, economic autonomy, and respect for its citizens’ human rights for 50 years after its return to China in 1997. Under the declaration, China’s Central Government maintains responsibility for foreign relations and national defence. To date, the arrangement has operated relatively well in preserving Hong Kong’s institutions. However, an erosion of the policy has been observed since 1997, as Beijing’s interventions in local affairs (particularly politics and freedom of expression) have become increasingly bold.

Concerns about human rights have also grown since the August 2017 sentencing of three young activists on charges related to the 2014 pro-democracy demonstrations, and banning of politicians who challenge Beijing’s views from running in local elections. In response, the international community including Canada publically expressed concern that these moves were meant to dissuade legitimate political movements.

Canada’s Reactions

The unrest in Hong Kong is being monitored very closely by the international community, including Canada. With 300,000 Canadians living in Hong Kong, Canada has a vested interest in Hong Kong’s stability and prosperity – the foundation of which is its relative autonomy and basic freedoms.

In a joint demarche with the United States on May 29, Canadian officials in Hong Kong raised serious questions with Chief Executive Carrie Lam regarding the proposed amendments to extradition laws. Canada also expressed its concerns in a joint statement with the United Kingdom on May 30, and a separate national statement on June 12. On August 17, Canada issued a joint statement with the EU, calling on all parties to reject violence and take urgent steps to de-escalate the situation.

On August 8, Global Affairs Canada updated its advice for Canadians travelling to Hong Kong. The update recommends that Canadians exercise a high degree of caution, due to ongoing large-scale demonstrations and potential violence. Canada has also established an Interdepartmental Task Force (chaired by Global Affairs Canada) to support the Consulate General’s management of this crisis, while developing contingency plans for potential further developments.

On October 29, in response to the decision by the Hong Kong authorities to ban Joshua Wong, one of the protesters’ leader, to run in the November 24 District Council election, Global Affairs Canda demarched the Chinese Embassy to reiterate Canada’s recommendation in the Human Rights Council’s 2018 Universal Periodic Review of China: “Ensure the right of Hong Kong people to take part in government, without distinction of any kind”. Canada noted that limiting eligibility to run in elections is counter to the 2018 UPR recommendation, which was accepted by China. The banning of this candidate and the death of a student protester, likely fleeing tear gas, are likely to aggravate tensions around these district elections.

Japan-South Korea: Tensions

Issue

• Historically tense relations between Japan and South Korea have deteriorated since mid-2019 over the issue of forced labour during the Japanese colonial period.
• [REDACTED]

Context

Since the 1990s, lawsuits have been filed in both South Korea and Japan by Korean nationals seeking damages for forced labour that took place during Japan’s colonial occupation of the Korean Peninsula (1910-45). In October 2018, South Korea’s Supreme Court upheld a lower court decision ordering a Japanese company (Nippon Steel & Sumimoto Metal Corp.) to pay compensation to four forced labourers. The court issued a similar ruling in November 2018 involving a third company (Mitsubishi).

These Japanese companies have refused to pay or otherwise comply with the South Korean rulings, in keeping with Japan’s official position that compensation for individuals was covered by a 1965 treaty that normalized bilateral relations. Similar suits are pending against 70 other Japanese firms, with estimates that 250 others could be implicated in future rulings.

Japan has requested arbitration under the 1965 treaty. South Korea has refused, on the one hand claiming that the administration cannot interfere in a judicial process, but also maintaining that bilateral consultations (provided for under the 1965 Treaty) have not been exhausted.

The 2018 court rulings are the latest in series of historical and territorial disputes arising from Japan’s 1910-45 occupation of the Korean Peninsula, including Japan’s practice of forcing Korean women into sexual slavery (as “comfort women”). [REDACTED]

Use of Trade Measures

In July 2019, Japan announced it would tighten export control measures on three specialized chemicals used in the production of semiconductors, smartphone displays, and television screens. Japan dominates global production of these chemicals, and several large companies in South Korea rely heavily on Japanese supply. Japan also removed South Korea from a “white list” of countries eligible for streamlined export licenses, effective August 28, 2019.

Japan insists that these trade restrictions are unrelated to strained bilateral relations. Instead, Tokyo has cited concerns with South Korea’s export control system, in particular the regulation of (onward) trade in goods or technology that could be used for military purposes. For its part, Seoul has argued that Japan’s trade restrictions are in direct retaliation for the 2018 Supreme Court decisions, and intended to undercut Korean economic development.

In response to Japan’s trade actions, Korea has removed Japan from its list of preferred export destinations; declared that South Korea would undertake more frequent radiation checks on certain food products and waste from Japan; and halted consultations to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), an initiative seen as Japan-led following the withdrawal of the United States in January 2017.

On September 11, Korea formally requested consultations with Japan as the first step in dispute settlement at the World Trade Organization. (Complicating matters, on September 10 the WTO’s appellate body upheld a ruling against South Korean anti-dumping duties, based on a complaint initiated by Japan in 2015.) Beyond the official response, some South Korean consumers have boycotted Japanese products and tourism.

Geopolitical Spillover

The dispute has become highly politicized in both countries. [REDACTED]

On August 11, South Korea announced its withdrawal from a military intelligence-sharing agreement (“GSOMIA”) with Japan, just ahead of the agreement’s deadline for renewal (on August 24). The agreement came into effect in November 2016, following years of negotiations [REDACTED]

[REDACTED]

On November 4, Prime Minister Abe and President Moon held their first formal bilateral meeting in 13 months. During the 11-minute meeting, on the margins of the ASEAN +3 Summit in Bangkok, both leaders reaffirmed that their bilateral issues should be resolved through dialogue.

Canada's Role

So far, no direct costs to Canadian commercial interests in either country have been identified. [REDACTED]

[REDACTED]

[REDACTED] Subsequently, Prime Minister Trudeau met with Prime Minister Abe on the margins of the G7, and discussed the ongoing tensions. [REDACTED]

Representatives of both governments have also met with officials in Ottawa to convey and seek support for country positions. [REDACTED]

Going forward, Canada has an interest in maintaining strong relations with Japan and the South Korea, whose cooperation is critical to maintaining a stable, secure North Asia. Relations between Japan and South Korea have suffered several difficult periods since the Japanese colonial period (as recently as 2017, Japan withdrew its Ambassador to South Korea for several months over the installation of a "comfort women" statue in Seoul). [REDACTED]

Afghanistan

Issue

• Violence and political instability in Afghanistan are expected to continue if not worsen following the September 2019 breakdown in U.S.-Taliban peace talks.
• [REDACTED], building on extensive contributions to date - including robust participation by our armed forces in the 2001-14 combat mission in Afghanistan.

Context

From 2001 to 2018, the Government of Canada has played an active role in Afghanistan, providing $3.3 billion in international assistance and contributing a total of 40,000 soldiers to the NATO International Security Assistance Force (ISAF), which concluded its combat mission in 2014. Canada has committed $195 million to support the Afghan National Defence and Security Forces through to 2020-21.

Uneven yet tangible progress has been made in Afghanistan. Education enrolment rates for girls are at an all-time high; there is increased life expectancy; an open media has developed; and there exists a functioning government with some democratic features that has the confidence of important parts of the country and people. It is qualitatively better than 20 years ago. However, despite gains, as would be expected in such a fragile context, challenges persist; social issues such as pervasive violence and discrimination against women and minorities are compounded by weak governance, robust insurgency and competing foreign interests.

The overall security situation in Afghanistan remains precarious and unpredictable, including for Canadian officials, and especially in rural areas. Among other variables, stability in Afghanistan is a function of meaningful regional cooperation, connectivity with donors and among competing local interests, and vigilance against terrorism. When these elements are compromised, political solutions suffer.

Peace Talks

In September 2019, a U.S. -Taliban peace agreement was reached “in principle” after more than a year of negotiations (in Doha, Qatar). However, on September 7 President Trump called off the talks citing a lack of commitment by the Taliban, further to an attack in Kabul which killed a U.S. soldier among 12 others.

Prior to the U.S. announcement, the talks had made progress on four central items: agreement by the Taliban to disavow links with transnational terrorist groups; terms of a drawdown of U.S. forces; agreement by the Taliban to enter into talks with the Afghan government; and a commitment to reduce violence (writ large).

By contrast, the cessation of peace talks is likely to bring an escalation in violence and conflict with no clear path for resolution. The breakdown has lowered expectations about the possibility of an accord in the short term, and created uncertainty around all component parts, but especially prospects for intra-Afghan talks and a gradual U.S. drawdown.

However distant a scenario, a key U.S. objective for resumed talks would be to see intra-Afghan negotiations lead to a political settlement between the Government of Afghanistan and the Taliban.

[REDACTED]

Great power dynamics in Afghanistan further complicate [REDACTED] efforts to reach a solution with the Taliban that implicates the national government. [REDACTED]

Canada’s Role

Since 2001, Canada has played a significant role in international efforts to stabilize Afghanistan. 159 Canadian armed forces members lost their lives in service during the NATO combat mission, and in 2006, Canadian diplomat Glyn Berry was killed in a terrorist attack while serving in Kandahar. These sacrifices have been accompanied by significant investments in security, development and humanitarian initiatives, many of which continue to the present.

Canada is currently ranked eigth among donors (2017) for bilateral aid to Afghanistan, with a 3-year $465 million commitment for security ($195 million) and development ($270 million) assistance, based on a women and girls-centered approach, with a leading role on education and health.

Canada has led efforts to promote the participation of women in the Afghanistan peace process, and supported the strengthening of Afghan national capacity to deliver basic services, particularly to women and girls. Over 8.9 million children (of whom 3.4 million are girls) now have access to basic education, compared to 2001 when fewer than one million children, mostly boys, were enrolled in school. Life expectancy in Afghanistan has increased by 17 years since 1990, and the under-five mortality rate has decreased significantly. Canada has also supported the increased recruitment of women in Afghan security forces, and the resettlement of 8,459 Afghan refugees between 2011 and 2017.

Bilateral development assistance levels [REDACTED] are funded with internal Global Affairs Canada resources, complemented by multilateral and partnership initiatives. Since 2014 Canada has also provided over $83 million in humanitarian assistance funding, of which $9. 7 million was allocated in 2019. Global Affairs Canada is determining Canada’s response to 2020 humanitarian appeals. Canada currently provides financial support to the Afghan defence and security forces which helps to counter the insurgency and protect rights of civilians. NATO Allies and Partners have committed troops and financial sustainment of the Afghan forces to 2024. Funding for Canadian security support to the Afghan military and police expires in 2020-21. [REDACTED]

Key Considerations

U.S./NATO policy on Afghanistan is a main driver of the security situation and peace prospects. Status quo or a worsening of violence is a likely near-term scenario.

Canada is not providing military/uniformed support to the 39-country NATO Resolute Support mission; however we do second a civilian policy officer to the NATO Office of the Senior Civilian in Afghanistan.

[REDACTED]

Rohingya Crisis

Issue

Repatriation of over 740,000 Rohingya refugees who fled violence in Myanmar to Bangladesh is unlikely in the short to medium term as the humanitarian crisis persists; meanwhile, the Government of Bangladesh is losing patience. [REDACTED]

Context

Myanmar

Atrocities committed by Myanmar’s security forces in August 2017 against the Rohingya caused over 740,000 Rohingya to flee Myanmar’s Rakhine State to Cox’s Bazar, Bangladesh. An August 2018 report by the UN Fact Finding Mission (FFM) on Myanmar determined that actions of Myanmar’s security forces constituted gross human rights violations and abuses, and had reasonable grounds to conclude a strong inference of genocidal intent on the part of Myanmar.

Repatriation is unlikely in the near term as Rohingya continue to face violence and persecution in Myanmar, and the Government of Myanmar has failed to address institutionalized persecution as it pertains to Rohingya demands for return including freedom of movement, equal access to social services, education and livelihood opportunities, security guarantees, and citizenship. The Rohingya are the largest stateless population in the world.

In addition, Rohingya are not returning to Myanmar due to ongoing impunity for perpetrators, escalating conflict in Rakhine State between Myanmar’s armed forces and a primarily Buddhist ethnic Rakhine armed organization (Arakan Army), restrictions on humanitarian access and telecommunications, and widespread anti-Muslim and anti-Rohingya sentiment.

Bangladesh

[REDACTED] the humanitarian crisis in Cox’s Bazar, now the largest refugee camp in the world. Dhaka is calling for expedited repatriation of Rohingya refugees to Myanmar, [REDACTED] and greater international burden-sharing. [REDACTED] increased restrictions on NGO activities [REDACTED] and imposed restrictions on internet and telecommunications.

Dhaka also intends to proceed with a controversial plan to relocate 100,000 refugees from the camps in Cox’s Bazar to a flood and cyclone prone island in the Bay of Bengal called Bhasan Char.

The international community has significant concerns regarding protection needs and the economic viability of this island, which would duplicate humanitarian response costs.

Canada’s Role

The onset of the crisis in 2017 led Canada to appoint the Honourable Bob Rae as the Prime Minister’s Special Envoy to Myanmar, whose report and recommendations shaped Canada’s Strategy to Respond to the Rohingya Crisis in Myanmar and Bangladesh.

The Strategy commits $300 million over three years (2018-21) towards alleviating the humanitarian crisis, encouraging positive political developments in Myanmar, ensuring accountability, and enhancing international cooperation.

Since the beginning of 2017, Canada has allocated more than $109 million for the provision of life-saving gender-responsive humanitarian assistance in Myanmar and Bangladesh. Canada is the fourth largest single country donor to the humanitarian Joint Response Plan in Bangladesh.

Canada continues to advocate for effective and timely access to Rakhine for NGOs and for the voluntary, dignified, safe, and sustainable return of refugees. Canada’s gender-responsive development initiatives in Rakhine promote social cohesion, reconciliation, and inclusive governance. In Cox’s Bazar, Canada is providing development assistance to host communities, while advocating for education and self-reliance opportunities for refugees, rights which are currently denied by the Government of Bangladesh.

In September 2018, Canada’s House of Commons recognized the crimes committed against the Rohingya as genocide. Canada continues to call for a Security Council referral of the situation in Myanmar to the International Criminal Court (ICC), and supports the UN’s establishment of an Independent Investigative Mechanism for Myanmar with a mandate to collect evidence and prepare case files for future criminal proceedings.

While Canada has had in place extensive sanctions, including an arms embargo, asset freeze, and dealings prohibition since 2007, Canada has also worked closely with the EU and the United States to coordinate the imposition of additional targeted sanctions in 2018 against various individuals involved in military operations in Rakhine State.

Key Considerations

Tensions are increasing in Cox’s Bazar between host communities and [REDACTED]

On further international accountability efforts, Gambia on behalf of the Organization for Islamic Cooperation (OIC) is expected to file, on November 11, a case against Myanmar at the International Court of Justice (ICJ) to determine whether it has violated the Genocide Convention. Several Canadian parliamentarians, civil society organizations, and municipal councils have advocated for Canada to take this approach. [REDACTED]

International Trade and Investment Profile

Canadian Trade and Investment Trends

Canadian Trade and Investment

Asia

Issue

• This complex region is experiencing changes in economic and power relations that are upending contemporary global and regional security dynamics.
• Weak or absent regional cooperation mechanisms, fraught histories, and increased militarization of the region increase the prospects for confrontation, conflict and economic destabilization.
• As the significance of the region grows, Canada’s approach must account for ongoing shifts in the strategic, political and economic landscape.

Context

Canada has traditionally regarded the Asia-Pacific region from a China-centric perspective; however, important changes in economic and power relations are forcing both Asian and Western countries to redefine the region. More common today is an acceptance of the term Indo-Pacific which, while still being defined, generally includes countries from the eastern Indian to the Pacific Oceans connected by Southeast Asia and including North Asia.

The “Indo-Pacific:”A region of change and tension

The Indo-Pacific is increasingly economically integrated, but faces a complex web of interrelated security challenges. It is home to 60 percent of the world’s population and represents 43 percent of the global economy. It includes three of the world’s six largest national economies (China, Japan and India), and the ten countries of the Association of Southeast Asian Nations^{Footnote 3} (ASEAN).

The Indo-Pacific region is the fastest growing economic region in the world, with projected GDP growth of 5.1 percent in 2019 (IMF). Over the past twenty years, the region has seen persistent and robust growth, driven in particular by strong economic performance in emerging markets (China, ASEAN and India), a growing middle class, and deepening linkages with global value chains.

These successes, however, mask the hard reality that the region includes three of the 10 countries with the most extreme poor in the world (India, Bangladesh and Indonesia) and remains home to 1.1 billion poor, including 264 million living in extreme poverty. Gender equality in the region is uneven, with important progress in advancing laws and policies, but a significant percentage of women experiencing intimate partner violence, and child marriage and teenage pregnancy still prevalent in some countries.

These unprecedented regional changes in economic and power relations are creating inevitable strains and tensions among countries that already have complex, and often fraught historical relations. A return of “great power politics” in the region is prevalent, alongside a fluctuating global commitment to a rules-based order, wherein states are acting in their perceived national interest unconstrained by multilateral norms and institutions—with concomitant risks of destabilization and conflict. The United States’ strategic primacy in East Asia and the Western Pacific is being challenged by China’s rise and increasingly assertive strategic posture. Bilateral U.S.-China tensions are playing out against a backdrop of competing strategic visions for the region.

Key players

China has experienced astonishing economic growth, becoming the world’s second largest economy and achieving a dramatic reduction in poverty. It is pouring resources into its military, giving it growing influence and the ability to challenge traditional power relations in the region.

An [REDACTED] one-party state, the Communist Party of China [REDACTED] depends on ensuring high levels of economic growth, and increasingly, national prestige. Tolerance of political dissent and freedom of expression has noticeably diminished since Xi Jinping became president in 2013, and a crackdown on human rights continues.

China’s Belt and Road Initiative is a centrepiece of China’s strategic repositioning, which prescribes [REDACTED] massive infrastructure investments that respond to genuine needs in many instances, but that could, over the medium term, serve to advance Chinese economic and military influence across the Indo-Pacific and beyond.

Negotiations in the ASEAN +6 format^{Footnote 4} towards a “Regional Comprehensive Economic Partnership” (RCEP) are a further vehicle for Chinese influence in the region.

Japan and Korea have both been dependent on the U.S. for their security, but have now also become highly dependent on their economic relationships with China. Both are acutely aware of their vulnerability to volatility in the relationship between the world’s two greatest powers (and with North Korea), [REDACTED]

[REDACTED], Japan is championing a vision of a “Free and Open Indo-Pacific” (FOIP) (extending to the east coast of Africa and west coast of the Americas), founded on the rule of law, freedom of navigation, economic prosperity and peace and stability as an international public good. Japan’s FOIP strategy is complemented by similar approaches adopted by Australia, the United States and India (referred to as the “Quad”) as well as South Korea and ASEAN.

India has also demonstrated significant economic growth and advances against poverty, though in a less dramatic fashion than China.

Regionally, India has had a difficult relationship with China, and traditionally had strong relations with Russia (which has ceded much influence in the region). As a growing regional power, it too is [REDACTED] reordering of regional power relations, while also being burdened [REDACTED] challenges stemming from the unending conflict in Afghanistan.

In the context of these dislocations, uncertainty, and rising tensions, all the major powers are courting [REDACTED] cooperation with the smaller ASEAN countries, which must thus struggle to navigate between the competing interests of the regional heavyweights.

The threat of protectionism and decoupling of the Chinese and American economies has prompted a renewed push for intra-ASEAN, regional and trans-regional economic integration. Similarly, ASEAN members are at the centre of the region’s preeminent political and security dialogues in the East Asia Summit and Defence Ministers’ Meeting-Plus, which includes major regional powers like China, the United States, Japan and Australia.

All this takes place in a region with a complex history and “long memories”. Territorial disputes and various other historical grievances are rife: to name but two, the two Koreas remain technically at war, and China vehemently asserts its claim over Taiwan.

Canada in the Indo-Pacific

Canada has a number of strategic interests in the region, including: i) advancing free and open market access for Canadian goods, services and investment to the region—in mature economies like India, Japan, South Korea and Australia as well as emerging markets like Indonesia, Philippines and Vietnam; ii) promoting democratic values, governance, and human rights along with like-minded partners; iii) contending with and adapting to the rise of China and India; and iv) preserving and strengthening regional security and stability, including by working with, and supporting, regional allies.

Current Engagement and Challenges:

[REDACTED]

The United States, Japan, EU, Australia, China, India and Russia, have been [REDACTED] increasing their engagement, and their influence in the region’s corridors of power. By contrast, Canada’s approach to the region has been inconsistent, with significant ebbs and flows, and has yet to fully leverage our significant people-to-people ties, commercial linkages and positive global reputation.

Political/Security:

Canada has been active in advancing priority interests and universal values in the region. [REDACTED], Canada has sought to engage regional mechanisms and forums, such as APEC, ASEAN, and the East Asia Summit, demonstrating staying power on issues that will guide both regional and Canadian interests including on climate change, cyber security, global health, the Arctic and global governance. Positive historical perceptions of Canada throughout much of the region, particularly set against U.S. -China tensions, may create additional space for enhanced Canadian diplomatic engagement.

The region faces many challenges that could lead to conflict, or otherwise threaten Canada’s interests. These include several longstanding territorial disputes (e.g. Korean Peninsula, Taiwan Strait, India/Pakistan, Japan/China) and a number of emerging security threats (e.g. South China Sea and terrorism threats throughout the region).

Canada’s people-to-people ties in the Indo-Pacific are wide and deep—including the tens of thousands of Canadians that live, work and travel to Asia every year and, reciprocally, the Asian diaspora who now live, study or work in Canada. 44 percent of Canada’s foreign-born population are from the region, with this proportion expected to increase steadily over the next decade. 16 percent of the overall Canadian population identify their ethnicity as being from the region.

By the same token, the perceived strength and influence of Asian diaspora communities in Canada may lead to charges of bias, which can debilitate bilateral relations and cooperation.

As with every Western country, a challenge is to advance Canada’s interests in supporting universal values (democracy, the rule of law and respect for human rights) and protect undeniable economic interests in China and other countries that do not share or adhere to these values.

Trade:

Many economies in the region are exhibiting strong growth, projected at around 5 percent per year on average. Even as it slows down, China’s economy is expected to continue to grow more than 6 percent annually for the foreseeable future. The region is projected to hold 65 percent of the global middle class, and to account for 50 percent of global GDP, by 2030.

Canada’s strengths in industries like minerals, energy, financial services, infrastructure, environmental technologies and services, and agri-food are closely aligned with the needs of the region, offering important avenues for export diversification. In recent decades, many Indo-Pacific countries have capitalized on globalization and regional integration to accelerate economic development, attract foreign investment, and create the world’s largest middle class.

The region’s demand for energy resources will continue to grow, and to significantly outweigh regional supply.

While Canadian trade and investment with the region is expanding, there remains significant unrealized potential for Canada to capitalize on the region’s strong growth, which will be crucial to Canada’s economic prosperity in the years to come.

For example, the region accounted for 14 percent of Canada’s overall export growth during the past decade, but Canada’s share of the region’s trade remained flat at 2.5 percent. FDI from the region accounted for 10 percent of Canada’s total inward FDI, but remains the region’s 13th largest FDI destination and only 1 percent of Asia’s outward FDI stock.

These opportunities notwithstanding, governance issues and, increasingly, the use of arbitrary trade measures will continue to constrain commercial engagement prospects. Canada’s economic interests are at risk due to rising economic nationalism and increased scepticism about the value of open, market-based trade relationships, and the rules-based international order that enables and sustains such exchanges. Despite rising trade flows between Canada and China, China’s willingness to link political and economic issues adds uncertainty to the trade relationship and increases the costs and uncertainty of doing business.

To date, Canada has two FTAs in force with Indo-Pacific partners – the Canada-Korea Free Trade Agreement (CKFTA, 2015) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP, 2018). Canada has also recently concluded FTA exploratory discussions with ASEAN, conducted exploratory discussions with China, and have ongoing (but stalled) FTA negotiations with India.

Development:

Canada’s development assistance in the region remains an important component of our engagement with Indo-Pacific countries, many of which are home to the world’s poorest people. In 2017-18 Canada’s assistance to the region totalled $1,316 million, inclusive of Central Asia. Of this total, $451 million was administered via multilateral channels such as the Asian Development Bank (where Canada is one of the largest donors) and the Asian Infrastructure Investment Bank.

Despite impressive growth in many countries of Asia and the Pacific, women continue to struggle to participate equally in the benefits of development. Canada has made support to gender equality and the empowerment of women and girls in Asia and the Pacific a fundamental aspect of its programming. Among other examples, Canada supports girls’ education in Afghanistan, sexual and reproductive health and rights in Bangladesh, women’s economic empowerment in Pakistan, the Philippines, Indonesia, Mongolia, Myanmar, and the Pacific islands, and women’s political rights in the countries of ASEAN.

From Canada’s early support to help Indo-Pacific countries meet basic human needs, Canadian assistance in the region has evolved to provide targeted technical assistance to support institutional reforms necessary for sustainable poverty reduction. Efforts to improve governance at the national and sub-national level, fostering appreciation for the rule of law, democracy, and respect for human rights, also helps to increase understanding of the benefits of, and thus support for, the rules-based international order.

Regional Drivers to Monitor’

In the face of increasing Chinese influence [REDACTED], Asian countries are jockeying to at least maintain – if not improve – their own economic and political standing within the region. This is leading to rising tensions within and between countries, [REDACTED]

Evolving socio-economic demographics will also be a regional driver to monitor.

For example, China, with its aging demographic and strengthened economy, is increasingly outsourcing manufacturing jobs to lower wage countries in the region. Further tensions may develop as regional neighbours compete to attract Chinese investment, [REDACTED]

From the perspective of Canada, despite being on the other side of the world, we cannot expect to be isolated from the effects of these changes. With the region soon to house two thirds of the middle class, we can expect their cultural, societal and financial influence to be felt globally.

To ensure Canadian values are effectively promoted and defended, Canada will require unambiguous and coherent messaging delivered as a whole-of-government platform. Fora such as APEC, the ASEAN Regional Summit and the G20 are important vectors in this regard, as are free trade agreements. Finally, to help Canada’s messages better resonate across the region, partnerships with like-minded countries in the region, such as Australia and New Zealand, will continue to be important to Canada.

Europe and Eurasia

Issue

Europe is increasingly unpredictable and divided in its approach to shared challenges. It is nevertheless essential to the promotion of core Canadian interests such as a rules-based international system, open and inclusive trade, security and prosperity.

Context

In a challenging global context, a strong and democratic Europe matters. A well-managed Canada-Europe relationship can be a source of prosperity and stability.

A sophisticated and diverse region of 515 million people, the EU is Canada's second largest market. Six of its member states are among the top 15 Canadian trade partners, and four are among Canada’s top ten sources of foreign direct investment (FDI). Between 2008 and 2018, the European share of FDI in Canada rose from 34 percent to 38 percent (to more than $300 billion) while the United States share dropped from 53 percent to 46 percent (representing just over $400 billion).

The Traditional Partners:

Canada has important opportunities to pursue vital interests in the familiar and historically like-minded parts of Europe, including the largely overlapping group of EU member states and allies in the North Atlantic Treaty Organization (NATO). The states of the EU have faced complex challenges in recent years, including uneven economic performance, irregular migration from Africa and the Middle East, increased anti-democratic populist movements, renewed far-right extremism in some places, malign influence from external actors and Brexit. On the whole, however, European states remain partners of choice for Canada for their generally close alignment on core interests, and their collective and individual weight in the global system, especially the United Kingdom, France and Germany.

NATO remains the central pillar of Euro-Atlantic security and has contributed to an unprecedented period of regional peace and prosperity throughout its 70-year history. The Alliance nonetheless faces challenges maintaining transatlantic unity, given U.S.-Europe policy divisions and U.S. pressure on Allies to increase their defence spending. Of several major Canadian contributions to NATO operations, leadership of the Enhanced Forward Presence battlegroup in Latvia has been particularly well-recieved by Allies on NATO’s eastern flank, wary of Russian aggression. Beyond NATO, Canada makes expert contributions to EU election and police observation missions.

The Strategic Partnership Agreement (SPA) with the EU helps guide Canada-EU cooperation on issues such as effective multilateralism, rule of law, human rights, a well-functioning international economic order, global security, climate and the Arctic. Canada is not always top of mind for the EU and its member states, but they recognize the practical importance of Canada's global engagement in broadening their own partnership options and appreciate our shared values. Regular and intensive interactions between Canadian ministers and senior officials and European counterparts reinforce this relationship.

The Comprehensive Economic and Trade Agreement (CETA) has been provisionally applied since September 2017. Some provisions with respect to investment, including the investment dispute resolution mechanism between investors and states (ISDS) and some provisions in the Financial Services Chapter will only apply once all Member States have ratified CETA. Bilateral trade rose 7.4 percent in 2018, totaling $156 billion. Canada is pursuing ratification by all Member States, with 13 completed to date and 15 remaining. The Brexit drama in the United Kingdom has generated much uncertainty, including for Canadian businesses. The United Kingdom is Canada’s largest EU market (22 percent of EU merchandise trade in 2018). Canada will pursue its own commercial interests with the United Kingdom as the Brexit process unfolds, including by implementing bilateral agreements in key fields such as nuclear energy and civil aviation.

Wider Europe:

Looking beyond familiar partners, Canada is increasingly affected by developments in a wider Europe that stretches east and south to include Russia, the Western Balkans, Turkey, Central Asia and the Caucasus. This region is home to some of the prominent fault lines emerging in the current rules-based international order. While trade with eastern Europe/Eurasia (including Turkey) totaled just $12 billion in 2018, there is considerable potential for growth in commercial relationships in the region.

Russia continues to take aggressive and illegal steps to assert its geopolitical ambitions and protect its national interests, particularly in the former Soviet republics and in the Western Balkans. These include violations of its neighbours’ sovereignty (Ukraine and Georgia), efforts at interference and destabilization (Montenegro, Moldova, North Macedonia, in dialogue between Serbia and Kosovo), and further signals that it would potentially intervene to protect Russian-speaking minorities in neighbouring states. Russia has also targeted NATO, the United States, Germany, France, Ukraine and others with disinformation and cyber campaigns, including interference in electoral processes. Canada’s relations with Russia remain difficult, and sanctions against Russia for its actions in Ukraine are in place. However, engagement continues on issues of common interest such as the Arctic, space cooperation and women’s empowerment.

Meanwhile, post-Soviet states in the Caucasus and Central Asia are struggling to de-link from Russia’s sphere of influence - either to choose a Euro-Atlantic orientation, or to establish a balance between Russia and the West (or, in some cases, with China). Some face threats to their territorial integrity, and are teetering between competing political, economic and generational spaces. Despite the fact that stability in this region implicates global and Canadian security, political and economic objectives, Canada’s diplomatic presence is relatively weak.

Ukraine, an especially important arena in the struggle against aggression and rising authoritarianism, is an exception. Since Russia illegally annexed Crimea and started backing militants in eastern Ukraine in 2014, Canada has committed over $785 million in multifaceted assistance to Ukraine. The 2019 Ukraine Reform Conference hosted by Canada is a good example of significant ongoing engagement. The Canada-Ukraine Free Trade Agreement (CUFTA) has been in force since August 2017. Canada’s political, trade, development, and security support are highly appreciated by Ukrainian leaders, [REDACTED]

A different test comes from Turkey – a NATO ally, G20 partner, and EU aspirant. [REDACTED] Canada is concerned about Turkey’s [REDACTED] its recent military operation in Syria. [REDACTED] Commercially, Turkey is an emerging G20 market with bilateral trade growing 20-25 percent annually, reaching just under $4 billion in 2018.

Outlook:

If in the past Canada’s interaction with European states was seen as mature and reasonably predictable, the current challenging environment of threats to security and prosperity creates further incentive for Canada to invest in relationships with Europe. [REDACTED] Canada and Europe can work together to help tilt the balance in states that are struggling towards democracy and open economies, and to enable their success.

Latin America and the Caribbean

Issue

• Latin America and the Caribbean (LAC) is an emerging region in Canada’s near abroad and thus uniquely important to our security and economic interests.
• Efforts to defend democracy and promote human rights in LAC have new urgency amidst acute governance challenges and ongoing social and economic inequalities, as seen in recent unrest across the region.

Context

Strong economic growth in Latin America and the Caribbean (LAC) in the early 2000s contributed to 72 million people being lifted out of poverty and 94 million joining the middle class.

Nonetheless, recent unrest across the region has demonstrated the lack of inclusivity of this growth, and underlying governance challenges.

Despite significant improvements in income distribution were made in the early 2000s, progress has declined since 2010. Social and economic inequalities often coincide with other forms of inequality, including gender, race and ethnicity.

Gender inequality and adolescent pregnancy rates are very high in LAC. Rates of femicide and sexual and gender-based violence are among the highest in the world.

Corruption is undermining progress.

In 2016-17, 20 percent of people in LAC reported paying a bribe for services such as education and health. Brazil-based Odebrecht (engineering/construction company) admitted to paying bribes in more than half of the countries in LAC.

The effects of climate change are impacting growth and stability across LAC.

The Caribbean is particularly affected, with many highly indebted small island states absorbing significant reconstruction costs. Recently, the Amazon region has seen a higher than average number of forest fires. While Brazil has been hardest hit, the fires are also considered the most significant environmental challenge faced by Bolivia in the past decade.

Irregular migration is at an all-time high due to the situations in Venezuela and Central America (Nicaragua, El Salvador, Guatemala, and Honduras). Migrants are overwhelming public services in Colombia, Peru, Ecuador, Costa Rica and Mexico. Approximately one quarter of LAC’s total population (154 million people) is between the ages of 15 and 29. Primary school completion rates are high (93 percent), yet youth represent more than 40 percent of unemployed (a driver of irregular migration).

Although LAC represents only nine percent of the world’s population, it accounts for nearly 40 percent of homicides. Criminal gangs and networks, responsible for one-third of the violence in the region, are particularly prominent in Mexico and Central America - fueling a surge of irregular migration north.

Although the region has now embraced democracy, there is some backsliding. Political dynamics in some places are volatile and polarized, resulting in a rise in populism. In Venezuela and Nicaragua, leaders have taken steps to undermine democratic institutions and rule of law. The Venezuela crisis is a threat to regional peace and security, and is challenging implementation of the Colombia Peace Accords. The crisis has led to the out-migration of over four million people, and is a major geo-political flash point.

Despite these challenges, the region has significant potential for further growth and democratic progress. Canada is well-placed to help mitigate governance issues, and benefit from growing trade and investment, and institutional and people-to-people links.

Canada’s two-way services trade with LAC totalled $21 billion in 2017 - an increase of 26 percent since 2013 - with $8.1 billion in services exports to LAC, and $12.9 billion in services imports. Canadian Foreign Investment in LAC amounted to $147 billion in 2018.

Total value of Canadian international assistance in LAC was $708 million in 2017-18 (12 percent of our total international assistance), and has evolved to reflect the region’s sophisticated and changing needs.

Challenges to sustained progress include low growth rates of the largest economies. In July 2019, the IMF cut growth estimates for Brazil and Mexico (the two largest economies in LAC) to 0.8 percent and 0.9 percent respectively.

Canada and LAC

In an effort to ensure shared prosperity and security, Canada is embracing opportunities and supporting efforts to tackle the challenges facing LAC:

Promoting trade and investment

In addition to two-way services trade and Canadian Foreign Investment noted above, eight of Canada’s fourteen free trade agreements (FTAs) involve countries in the region. These FTAs provide important opportunities for Canadian businesses. Ongoing negotiations with the Pacific Alliance and Mercosur trading blocs are expected to result in further opportunities.

Advancing democracy and human rights

Canada has historically championed the defence of democracy and promotion of human rights in LAC, including through extensive diplomatic, stabilization and development support for the Colombian peace process; supporting multilateral anti-corruption efforts in Guatemala and Honduras; issuing sanctions targeting officials in Venezuela and Nicaragua; and working within the Organization of American States (OAS) where, for example, it has played a leadership role vis-à-vis the Venezuela crisis.

Building climate resilience

Canada is strengthening climate resilience in the Caribbean, including through a $100 million five-year commitment to support post-hurricane reconstruction, and advocacy in multilateral institutions around access to financing. Such actions support a key regional priority and ensure safer travel for Canadians.

Opportunities for Enhanced Engagement

Capacity Building

• Many governments in LAC look to Canada for technical assistance. Mechanisms to deploy Canadian experts and provide training opportunities in Canada would enable timely support on key issues.

Innovative Technologies and Financing

• LAC offers a key market for Canadian products and services in growth areas such as green/renewable technologies, cultural industries, and public-private infrastructure partnerships.
• As the region shifts away from traditional forms of development assistance, Canada is well placed to support innovative financing initiatives.

Natural Resource Development

• Canada's strong presence in the natural resource sector could contribute to diversification into related sectors such as renewable energy, green mining, and electrification.

Democracy, Human Rights, Rule of Law

• Canada can continue to promote democratic principles and defend human rights, including by maintaining its leadership in pressuring for a peaceful democratic resolution in Venezuela.
• Canada can support and strengthen the efforts of institutions i.e. OAS and CARICOM.

Education

• Canada can strengthen its position as a destination of choice for students seeking tertiary education. Institutional partnerships, exchanges, scholarships and educational trade promotion activities can be enhanced.

Middle East and North Africa

Issue

The Middle East and North Africa (MENA) is important for the prosperity and security of Canada and its allies. Canada’s role must be carefully calibrate in response to conflict with wider international impact.

Context

Eight years after the Arab Spring, the Middle East and North Africa (MENA) region has seen increased geopolitical competition, changing relationships and the emergence of complex new conflicts. Geographically, MENA (generally the region from Morocco to Iran) is at the crossroads of Europe, Asia and Africa, situated at the origin of modern civilization. The region’s long history and diverse people place it on cultural and religious fault lines.

The region plays a pivotal role in the global economy. Five of the ten largest oil producers are in MENA, with the Gulf States home to one-third of global oil and gas reserves. Three of the world’s most vulnerable points for maritime transportation are located in the region, namely the Strait of Hormuz, Bab Al Mandeb and the Suez Canal. The region also offers commercial opportunities and sources of capital investment, in particular Israel and the Gulf. The regional GDP was US$3.6 trillion (approximately four percent of the world’s GDP). Reflective of its role as a guarantor of affordable oil for the global economy, Saudi Arabia is a member of the G20.

Income Inequality, which along with frictions on governance and human rights, has resulted in social and political unrest.

Within the region, Saudi Arabia and Iran compete for dominance through proxy groups, which exploit historic rivalries between Sunni and Shia respectively. Both countries have provided support to competing factions in Yemen (where Saudi Arabia and the United Arab Emirates support the Yemeni government against Houthi rebel forces backed by Iran) and in Libya, and retain ties to groups in Lebanon and Iraq [REDACTED]. More recently, under President Erdogan and in the face of Syria’s civil war, Turkey has sought to reassert its influence in the MENA region.

Because of the geostrategic importance and natural resource wealth of the region, global powers have in turn aligned themselves with regional players. The United States has strong commercial ties with Saudi Arabia as well as security cooperation to limit Iranian influence. For its part, Russia works closely with Iran, notably in Syria, motivated less by commercial factors (although such do exist) and more by strategic ones, significantly the basing of Russian military (including naval) forces in western Syria.

[REDACTED] The situation in the West Bank and Gaza is volatile and the risk of escalation remains omnipresent. The conflict persists as a source of contention throughout the region; only Egypt and Jordan have signed peace treaties with Israel. At the political level, regional support for the Palestinians [REDACTED] and, in the case of the Gulf States, financial assistance, but public opinion remains largely supportive of the Palestinians. Egypt, for instance, continues to maintain the blockade of the Gaza Strip jointly with Israel. Shared concerns about Iran have resulted in shifting dynamics as some Arab states engage more substantively with Israel. The latter’s enforcement of its redlines in Syria and confrontation with Hezbollah in Lebanon are designed to combat Iranian expansion and intentions; Israel continues to view Iran as its primary threat.

In response to profound inequality in their societies and resentment of Western colonial and post-colonial powers, an extremist and virulently anti-Western interpretation of Islam has developed, represented initially by Al Qaeda and later overtaken by Daesh (the Arabic acronym for Islamic State in the Levant).

The International Coalition against Daesh, of which Canada is a member, has been critical to the territorial defeat of this terrorist group. The long-term stabilization of Iraq requires the development of government institutions capable of rebuilding, providing services, and reducing sectarian tensions.

The hope of real democratic change in the region offered by the Arab Spring has waned as many countries continue to face weak governance and corruption, security threats, young and growing populations, high unemployment, and social unrest. This has led to waves of irregular migration toward Europe. More recently these conditions have provoked mass popular protest demonstrations in Lebanon and Iraq. [REDACTED] The region’s monarchies, in the Gulf and in Morocco, have remained stable but struggle to respond to their people’s demand for socio-economic and political change. Tunisia, a developing democracy, faces various socioeconomic challenges, including youth unemployment.

Canadian engagement

Working in collaboration with broader international efforts, Canada has continued to assert a leadership position where there are opportunities to do so, for example in promoting human rights, gender equality and universal freedoms; contributing to economic development; advancing stabilization and humanitarian efforts; supporting democracy; and working to counter terrorism and violent extremism. Canada has led on the annual Iran resolution at the UN General Assembly since 2003, and has been outspoken about arbitrary detentions in Saudi Arabia and the killing of journalist Jamal Khashoggi. Canada has, however, been criticized by some countries in the region for singling out the human rights records of specific countries and for its voting record at the UN on Israeli-Palestinian issues.

Canadian Armed Forces personnel are deployed in seven operations throughout MENA and were an active part of the alliance that defeated Daesh in Iraq. Canada’s military engagement under Operation Impact has been extended until March 2021. It consists of up to 850 Canadian Armed Forces deployed to Iraq, Kuwait, Qatar, Jordan and Lebanon to assist with training and advising Iraqi security forces and providing equipment, personnel and intelligence capabilities to the Global Coalition against Daesh. In addition, Canadian officers contribute to the UN Truce Supervision Organization (UNTSO) and support capacity building with the Palestinian Authority.

The presence of Canadian dual citizens, members of diaspora communities and large numbers of Canadian expatriates in the region contribute to the rich people-to-people ties between Canada and the MENA, but can represent an important consular obligation.

In 2018, Canada’s bilateral merchandise trade with MENA totaled $14.8 billion. Of that amount, $5.6 billion was with Saudi Arabia, our 17th largest trading partner. The region is regarded as an important potential source of foreign investment, especially given the size of the sovereign wealth funds held by the Gulf States (an estimated $2.5 trillion) as well as thousands of students. Free trade agreements exist both with Israel and Jordan.

In FY2017-18, total Canadian official development assistance to the region amounted to $634 million, or 11 percent of our global total. Programs focused on humanitarian relief, inclusive governance and economic growth, and women’s empowerment. Major MENA recipients in recent years include Iraq, Lebanon, Jordan, and the Palestinians. Canada is one of the top donors in providing humanitarian relief to the Yemeni and Syrian conflicts.

Canada is investing up to $3.5 billion over five years (2016-21) to respond to the crises in Syria and Iraq, and their impact on Jordan, Lebanon and the region.

This support helps set the conditions for security and stability; alleviate human suffering; enable civilian-led stabilization programs; and support governance and longer-term resilience.

Sub-Saharan Africa

Issue

Sub-Saharan Africa is a region with significant economic potential and growing geopolitical competition. For Canada, this presents opportunities for economic and political partnerships; it also represents a theater where global and regional players exert their influence. However, the region also faces persistent challenges such as poverty, weak governance, insecurity, and gender inequality.

Context

Sub-Saharan Africa (SSA) is a region of increasing economic and geopolitical importance. GDP growth is projected to reach 3.5 percent in 2019, but with growth rates of 5 percent or higher in almost half of SSA countries. Three of the top five fastest growing economies in the world are in SSA (i.e. Rwanda (8.6 percent), Ethiopia (7.7 percent) and Côte d’Ivoire (7.4 percent)). At the same time, the coming-into-force of the African Continental Free Trade Area (AfCFTA) agreement in July 2019, ratified by 27 African Union (AU) member states, aims to enhance regional economic integration and spur further growth.

Over the last decade, growth has created opportunities for Africans and international partners, many of which (e.g. United States, EU, China, India and Turkey) have reinforced commercial and political ties. Russia is the latest country to hold an African Summit [REDACTED] China’s political and economic footprint in Africa has expanded significantly, growing from $2.1 billion in investment in 2005 to $51.5 billion in 2017. This represents 2.2 percent of Chinese investment abroad in 2017. In comparison, Canada’s investment in SSA was $10.4 billion in 2017, representing 0.9 percent of its investment abroad. In terms of merchandise trade with SSA, China had $176 billion in 2017 and Canada had $5.64 billion

Through the AU, African countries are increasingly coordinated on global issues and exercising their influence within international institutions, including the UN (54 member states), La Francophonie (26), the WTO (39) and the Commonwealth (19). They have also assumed a greater role in addressing regional security challenges, including through significant contributions to UN and AU-led peacekeeping and conflict prevention and mediation efforts. Among SSA countries, South Africa and Ethiopia are strengthening their standing as regional and continental players, most recently with the Ethiopian Prime Minister playing a role in the negotiation of a transitional constitutional agreement in Sudan.

Despite these gains, SSA faces significant challenges. Some 41 percent of Sub-Saharan Africans still live in extreme poverty, with the reduction of poverty rates outpaced by population growth. These challenges are exacerbated by demographic pressures, with 60 percent of the population under the age of 25, and the growing impacts of climate change. According to Freedom House, as of 2019, only 16 out of 48 countries in SSA are electoral democracies. Despite advances in women’s political participation and girls’ enrollment in primary education, African women and girls continue to face discriminatory legal barriers, unequal access to resources, limitations on reproductive rights, and sexual and gender-based violence.

Fragility and Conflict in SSA

Armed conflict, political instability, terrorism and organized crime continue to affect parts of Africa, including in the Sahel and Lake Chad Basin area (Mali, Burkina Faso, Cameroon, Nigeria), in the Great Lakes and Central Africa (Central African Republic, Democratic Republic of Congo, Burundi), and in the Horn of Africa (Somalia, Sudan and South Sudan). Since 2012, Mali’s challenges are spreading to neighbouring countries and further regional destabilization could also take place beyond the Sahel. Piracy remains a challenge, in particular in the Gulf of Guinea region. The affiliation of some violent extremist groups with global terrorist networks is of concern, as is irregular migration of Africans to Europe – often involving dangerous crossings across the Mediterranean. According to the United Nations High Commissioner for Refugees, in 2018, an estimated 2,275 people died or went missing crossing the Mediterranean.

Canadian Engagement in SSA

Canada has cultivated relationships in Africa for more than five decades through our work with African countries and with regional and international bodies. Canada has a diplomatic presence in 19 countries and also engages with the AU on issues of regional and international importance. In 2018, Canada had $5.5 billion in two-way trade with SSA, and has eight Foreign Investment Promotion and Protection Agreements (FIPAs) in force with Benin, Burkina Faso, Cameroon, Côte d'Ivoire, Guinea, Tanzania, Mali, and Senegal.

In 2017, Canadian mining companies possessed over $26 billion in assets in SSA, and Canadian universities host over 33,500 African students. Canada maintains 15 bilateral development programs and a regional development program on the continent. In 2017-18, Canada provided over $2.32 billion in international assistance to the region, accounting for 38 percent of Canada’s total international assistance. In 2017, Canada’s Feminist International Assistance Poliy (FIAP) committed to increasing the share of bilateral international assistance provided to SSA to 50 percent by 2021-22.

Global Affairs Canada is pursuing a Feminist Foreign Policy advancing its overarching international objectives, including:

Promoting human rights and inclusive governance

Canada supports efforts to promote inclusive governance and respect for human rights in SSA, particularly for women, girls and other marginalized groups. As part of the Women’s Voice and Leadership program, Canada is supporting local women’s organizations in 16 SSA countries and at the regional level. Canada has worked closely with African partners to advance shared values, and has done so by co-sponsoring (with Zambia) a biennial resolution on ending child, early and forced marriage at the UN General Assembly since 2013. Canada also publicly advocates for democracy, as it has done through ministerial statements calling for a democratic resolution to the situation in Sudan.

Supporting poverty reduction efforts that reach the poorest and most vulnerable

Canada actively contributes through investments in education, health, and women’s economic empowerment. Canada is supporting sexual and reproductive health and rights, working with the nine West African countries of the Ouagadougou Partnership to increase access to family planning by 2.2 million users.

At the 2018 G7 Summit in Charlevoix, Canada announced a $400 million contribution for girls’ education in conflict and fragile states over three years – including a significant portion to SSA - as part of a $3.8 billion commitment by several G7 partners and the World Bank.

Investing in inclusive and green economic growth and diversifying trade

Canada is contributing $150 million to the objectives of the African Renewable Energy Initiative to increase access to renewable energy, and is collaborating with African partners on the development of the Blue Economy, co-hosting a high-level Sustainable Blue Economy Conference with Kenya in November 2018. Canada is also the sole donor to the African Trade Policy Centre which supported the development of the AfCFTA. In conjunction with these initiatives, and through the Trade Commissioner Service, Canada is helping Canadian companies access opportunities in a number of sectors including clean tech, climate-friendly agriculture, education, mining and information and communications technology (ICT).

Contributing to peace and stability

Canada contributes to regional peace and security through deployment of personnel to UN peacekeeping missions, investments in conflict prevention, peacebuilding and capacity building, and by championing the Women, Peace and Security (WPS) agenda. Canada is deploying up to 20 police officers to the UN Multidimensional Integrated Stabilization Mission in Mali (MINUSMA) and the EU Capacity Building Mission in Mali, as well as 10 military staff officers to MINUSMA, and is deploying a tactical airlift capability to the UN Regional Support Centre in Entebbe, Uganda. Canada is also partnering with Côte d’Ivoire as part of the G7 WPS Partnership initiative, and as part of the Elsie Initiative on Women in Peace Operations, Canada has established bilateral partnerships with the Armed Forces of Ghana and the Zambia Police Service, and is supporting the Senegal Armed Forces’ Gender Integration Strategy.

The United Nations

Issue

The United Nations System is a vital component of the global governance architecture and remains a central platform to advance Canada’s foreign relations. However, it is under increasing strain due to both evolving great power dynamics and organizational challenges.

Context

The UN is the only multilateral entity with universal membership, currently composed of 193 member states. The General Assembly and major UN Summits bring together world leaders to engage on pressing global issues and negotiate normative frameworks to address them. The Security Council remains the only world body with the authority to declare threats to international peace and security and deploy responses, including sanctions and military personnel. Peacekeeping missions (currently 14) seek to respond to multifaceted conflicts with mandates that encompass a wide variety of activities, including protecting civilians, monitoring human rights, supporting elections, facilitating humanitarian access and leading security sector reform efforts. The UN Development System provides critical support to countries around the world to assist the poorest and most vulnerable and implement the 2030 Agenda. UN entities such as the World Food Program and the UN High Commissioner for Refugees are front-line responders to humanitarian crises. The UN-brokered Paris Agreement guides global efforts to combat climate change. The UN advances human rights norms and contributes to the primacy of the rule of law by codifying and developing international law on a wide-variety of subjects.

Given its diverse mandate and central role in the global governance architecture, it is important that the UN functions efficiently and effectively. However, the UN currently faces a number of pressing challenges not least related to the resurgence of great power dynamics, and a difficult financial situation.

A return to great power competition and growing unilateralism among major powers is playing itself out in real time at the UN. This can undermine some of the principles and institutions that comprise the world body.

The current U.S. administration’s harder stance on a number of issues at the UN, including its decision to remove itself from the Human Rights Council, withdraw from UNESCO, and unilaterally limit its assessed contribution for peacekeeping (currently 28 percent) have [REDACTED] This is happening as China has taken an increasingly active and assertive posture at the UN, arguing convincingly that its economic and political heft should accord it greater influence. [REDACTED]

The UN Security Council is confronted with an increasing volume of complex crises but Geopolitical dynamics also affect the UNSC. Its reputation and effectiveness are frequently hampered by the degree to which its deliberations are driven by the national interests of the five permanent members (P5) and the use of (or threat to use) the veto by China and Russia, most starkly apparent in the case of Syria.

The UN currently faces a dire financial situation, with member states owing approximately US$5 billion in assessed contributions. The United States alone owes US$3.3 billion. Paying a share of the UN’s costs is a core obligation of membership. The Secretary-General has written to world leaders three times over the past year urging them to pay what they owe. Canada always pays its assessed contributions (US$76.2 million) to the UN system in full and on time. China also pays in full. Assessed contributions cover the UN regular budget (US$ 5.8 billion for the biennium 2018-2019), the peacekeeping budget (US$6.7 billion covering 13 of the 14 active peacekeeping missions) and International Criminal Tribunals (US$196 million for the biennium 2018-19).

While often a result of Member State decisions, the UN has long been criticized for having fragmented and duplicative structures, cumbersome and costly budgetary procedures, overly bureaucratic processes and organizational culture that can hinder effective implementation of programs in the field, and senior leadership of mixed quality. The UN has also had to grapple with some shortcomings in the management of some agencies and programs recently, with the heads of the UN Environment Programme and UNAIDS stepping down. In response, UN Secretary-General (UNSG) António Guterres has advanced an ambitious reform agenda that has upended decades-old structures in the areas of peace and security, sustainable development, and internal management in order to strengthen efficiency, transparency and accountability. Achieving gender parity in senior management and combatting sexual exploitation, abuse and harassment by United Nations personnel are also part of the reform agenda, and progress is being made.

Canada’s national interests are protected and advanced through a well-functioning UN. Our UN engagement provides a means of working with partners to advance international priorities and strengthen the institutions, treaties, arrangements and norms that are central to a rules-based international system. Canada is seeking election to the UN Security Council as a strong indication of our commitment to global burden sharing. Moreover, as one of the largest overall contributors to the UN, we can continue to lead by example by maintaining our strong support for the implementation of reform measures and by demonstrating constructive multilateral engagement.

UN Regular Budget: Top 10 Contributors

NATO

Issue

• The North Atlantic Treaty Organization (NATO) is the embodiment of the transatlantic bond and remains vital to the collective security of its members.
• Canada is an active member contributing substantially to the Alliance’s core tasks and missions. Canada faces criticism, primarily from the United States, for not increasing defence spending to 2 percent of GDP, the non-binding target level agreed by Allied leaders in 2016.

Context

NATO has been a stalwart in supporting and protecting the current rules-based international order which has evolved over the last seven decades. The principle of collective defence among NATO Allies, enshrined in Article 5 of the North Atlantic Treaty, ensures that Canadian sovereignty and security will be defended by Allies should Canada face a miltary threat. In turn Canada is commited to the defence of NATO Allies. The Alliance has been a cornerstone of Canada’s international security policy. As decision making is by consensus, membership gives Canada a voice and a veto on issues related to Euro-Atlantic security.

The Alliance currently has three main tasks: (1) collective defence among the 29 Allies (soon 30 with Macedonia) (2) crisis management within and beyond NATO’s borders (e.g. Afghanistan and Libya missions); and (3) cooperative security through partnerships (i.e. capacity building in Iraq, Jordan and Georgia).

Key challenges facing the Alliance include:

Russian aggression:

The NATO-Russia relationship, already strained by the 2008 hostilities in Georgia, has been severely affected following Russia’s illegal annexation of Crimea in 2014, ongoing interference in eastern Ukraine, and aggressive actions in the Kerch Strait in November 2018. In response to Russia’s provocative and destabilizing behaviour, NATO takes a dual-track approach of deterrence and high-level political dialogue. Notably, NATO has established an enhanced Forward Presence (eFP) through which it has deployed four multinational rotational battle groups, one each in Estonia, Latvia (which Canada leads), Lithuania and Poland.

Burden sharing:

Fair NATO burden sharing, and the progress of each Ally in reaching the guideline of spending two percent of GDP on defence, continues to be an issue of the highest importance for the United States and will be the most significant issue to manage at the December 2019 Leaders’ Meeting. Canada has not provided a plan to meet the 2 percent guideline by 2024, but continues to ensure that our significant contributions to the Alliance and defence spending increases are recognized. Canada is increasing its spending on defence by 70 percent from 2016-2017 to 2026-27, as part of its defence policy Strong, Secure, Engaged (SSE). Canada will reach an expected 1.48 percent of GDP in 2024-2025, (approximately CAD $31 billion). To reach two percent in 2024, based on current GDP forecasts, spending would need to be approximately $54.4 billion and there would be important operational constraints to address. Canada’s current level of defence spending is 1.27 percent of GDP for 2018-19, or approximately $28.8 billion.

Strain in transatlantic relations:

The relationship between the United States and the rest of NATO has become strained under the Trump administration. Contributing factors include U.S. President Trump’s threats to withdraw from the Alliance if Allies do not meet burden sharing expectations and a European push to bolster internal security and defence cooperation with a view to achieving European ‘strategic autonomy’. French President Macron’s call for a “European Army” raised worries about competition with NATO and duplication of effort.

The potential that non-EU Allies will be at a disadvantage or even barred from participating in joint European defence projects and procurement has also angered the United States. Despite these frictions, NATO-EU cooperation has increased in recent years and pursuing such cooperation remains necessary to maintain Alliance unity.

China:

At the behest of the United States, Allies have embarked on a comprehensive assessment of how China’s foreign, defence and security policies impact Alliance security. As Allies develop recommendations for NATO, [REDACTED]

Turkey-U.S. friction:

The deterioration of the Turkey-U.S. relationship is increasingly likely to have an impact on the Alliance. Both countries are at odds over multiple interconnected issues, including past U.S. support for the Syrian Democratic Forces, characterized by Ankara as terrorist entities, Turkey’s invasion of Syria’s north east and Turkey’s purchase of a Russian-made S-400 surface-to-air missile system. Turkey is an important member of the Alliance and possesses its second-largest army.

Afghanistan:

NATO remains engaged in Afghanistan chiefly through its Resolute Support Mission and the financial sustainment of the Afghan National Defence and Security Forces. Canada has not contributed military personnel to NATO’s current training mission in Afghanistan (France is the only other Ally with no troop contribution) but is providing $195M towards Afghan security sector support from 2018 to 2020, and $270M in development assistance from 2017 to 2020. U.S. and Afghan peace negotiations with the Taliban will impact NATO operations going forward.

Nuclear and Arms Control issues:

NATO continues to adapt its nuclear policy to evolving nuclear security challenges. Canada supports NATO’s ongoing efforts in this area and continues to promote Allies’ commitment to disarmament, arms control, and non-proliferation measures.

In response to Russia’s persistent violation of the Intermediate Range Nuclear Forces (INF) Treaty, the United States withdrew from the Treaty on August 2, 2019. NATO explicitly supported the U.S. withdrawal.

Canada and NATO

Canada was one of 12 founding members of NATO in 1949 and has contributed to every NATO military operation. Canada’s Joint Delegation to NATO is staffed by Global Affairs Canada and National Defence/Canadian Armed Forces. Canada’s current financial contributions to NATO total $165 million for 2018-19.

Canada currently holds a leadership role in three NATO operations:

• Canada is the framework nation for the enhanced Forward Presence multinational battle group in Latvia with up to 540 troops and is committed to continuing in this role through 2023.
• Canada has the command of the NATO Mission – Iraq, with up to 250 troops and will continue in this leadership role until the fall of 2020.
• In June 2019, Canada assumed command of the Standing NATO Maritime Group 2, operating in the Mediterranean and Black Seas, and is committed to continuing in this role until January 2020.

Canada is also a leader on the issue of women, peace and security (WPS) at NATO, and is the most important financial contributor to the NATO WPS Office headed by a Canadian, Clare Hutchison. Canadian female general officers currently occupy the post of Commandant of the NATO Defence College, are commanding the Standing NATO Maritime Group 2 and will lead the NATO Mission Iraq starting this autumn.

Emerging issues

NATO is currently working to address new and evolving challenges including cyber and hybrid threats, disruptive technologies, and the growing role of space.

Upcoming key NATO events in 2019

• Foreign ministerial, November 20, Brussels, Belgium.
• Leaders’ meeting, December 3-4, London, United Kingdom.

Canada and the G7

Issue

• An effective and well-functioning G7 remains in Canada’s direct interest.
• Despite tensions reflecting wider geo-political dynamics, the annual Leader’s Summit and Foreign Ministers meetings offer important venues for Canada to promote and coordinate pressing economic, trade, security and political issues among broadly like-minded countries.
• The United States is G7 President in 2020, culminating with a June 10-12 Summit.

Context

History and Key Issues

The Group of Seven (G7) was established in 1975 to increase international cooperation on pressing global economic and financial matters. The scope of the agenda has grown and members now address a range of matters, including security, development, environment, health, and gender equality, among other issues.

The G7 is comprised of Canada, France, Germany, Italy, Japan, the United Kingdom and the United States. Since 1977, the EU has also been invited to attend G7 meetings. In 1997 Russia joined, making the configuration a G8 until Russia’s expulsion in 2014, following its illegal annexation of Crimea.

Canada has hosted six G7 summits, most recently in 2018 in Charlevoix, Québec.

G7 and the International Context

G7 members have historically been bound together by respect for human rights, fundamental freedoms, democracy and the rule of law, and by a shared commitment to a rules-based international system. In the past, the G7 has bolstered international economic unity and proposed coordinated approaches to address pressing global peace, security and economic crises.

[REDACTED] Under the G8 format in particular there were several examples where Chairs’ Summaries were issued as opposed to negotiated consensus communiqués.

The real value of the G7 lies not just in the members’ ability to reach consensus on issues, but to have open and frank discussions on common challenges and points of division in order to bridge these gaps, and consequently influence global discussions and decision-making.

Canada and the G7

[REDACTED] A seat at the table offers Canada an opportunity to leverage the significant political and economic influence of the group to address global issues of priority concern to Canada. [REDACTED], the G7 currently remains unique in its reach. The G7 has been instrumental in orienting and stabilizing global financial markets, bringing much needed financing in support of global initiatives, and harnessing broader partnerships with non-G7 countries. The G7 also offers Canada (and the others) a privileged opportunity to engage and cooperate when confronting common geopolitical challenges.

France holds the 2019 presidency and Leaders met in Biarritz on August 24-26. The United States will assume the Presidency in 2020, and the Leaders’ summit will take place on June 10-12 (Location TBC). The agenda and themes will likely only be known in late 2019.

In addition to the summit itself, each Presidency chooses a series of ministerial meetings based on their G7 priorities, though Finance and Foreign Ministers meet every year.

[REDACTED]

However, the United States has expressed an interest in re-inviting Russia to the table [REDACTED]

G7 Foreign Ministers' Meetings

Participation in the G7 Foreign Ministers’ process (FMM) provides Canada with a unique vehicle to align positions with a small group of our closest partners on pressing international political and security challenges. The G7 FMM is usually held prior to the Leaders’ Summit, though dates for 2020 have yet to be announced. [REDACTED]

The United Kingdom will assume the G7 Presidency in 2021.

Canada and the G20

Issue

• Canada’s membership in the G20 – a group that represents 85 percent of global GDP - remains fundamental to address issues of economic growth and financial stability.
• The G20 Foreign Ministers’ meeting will take place from November 22-23 in Nagoya, Japan.
• Saudi Arabia will assume the Presidency of the G20 as of December 1, 2019.While their presidency is expected to be controversial, G20 partners have not yet expressed any hesitation about attending the Summit.

Context

History and Key Issues

The Group of 20 (G20)^{Footnote 5} was established in 1999 in large part as a result of efforts by Canada in response to the Asian Financial Crisis of the late 1990s. It met initially at the level of finance ministers and Central Bank Governors from advanced and emerging economies to discuss the stability of financial markets, and how to promote economic cooperation. Its diverse membership represents 85 percent of global GDP.

In response to the 2008 global financial crisis, the G20 was elevated to the level of leaders. At its core, G20 members are expected to promote economic stability and sustainable growth. Responsible and better coordinated monetary and fiscal policies are preconditions for such growth. The G20 continues to provide an important forum to discuss common approaches to global imbalances, capital market regulation, international trade and investment, and sustainable job creation in an increasingly digitalized world.

In recent years, the G20 has taken on an increasing number of subject areas, including health, environment/climate change, gender and women’s entrepreneurship, education and training, and migration/displacement.

Though cautious to ensure against mission creep, Canada has argued that such issues are appropriate for G20 consideration as there are significant economic implications associated with each of these issues if left unaddressed, and G20 action can offer an important demonstration effect.

In addition to an annual Leaders’ Summit, most recently in Osaka, Japan on June 28-29, 2019, the G20 Presidency traditionally hosts a range of annual ministerial meetings coinciding with the priorities of the presidency.

G20 Foreign Ministers Meeting

Japan’s G20 Presidency, which will wrap up with a meeting of G20 Foreign Ministers in November, 2019. This will be only the fourth time a G20 host has brought foreign ministers together as the G20 has not historically addressed peace and security issues. The meeting will provide a venue for a candid exchange of views on current issues related to the rules-based international order, counter-terrorism, anti-corruption and possibly geographic hot spots. In addition, this event offers an opportunity for key bilateral meetings.

Canada and the G20

For Canada, the G20 remains an important platform to influence global economic, financial, and trade policy issues notably given its make-up. The Group is most effective when focussed on matters affecting stability and growth, and international economic governance.

In this respect, the real value of the G20 continues to be the opportunity to build consensus among the major countries represented to pursue strong fundamentals crucial for economic stability and growth. This includes pursuing a collective international approach in support of the international financial architecture and open, rules-based trade and investment as a means of enhancing prospects for growth. However, consensus can be difficult to achieve with many diverse interests and perspectives at the table. [REDACTED]

In 2018 and 2019, all G20 members acknowledged that the rules-based trading system is a shared interest, though the current rules and institutions (namely the WTO) are falling short. The G20 called for reforms to make the multilateral system more responsive to the challenges of the 21st century. In 2019, Canada successfully launched a new initiative entitled the Private Sector Alliance for the Empowerment and Progression of Women’s Economic Representation (EMPOWER). A first meeting of EMPOWER can be expected to take place under Saudi Arabia’s presidency.

Turning to 2020, [REDACTED]

We can expect that the Saudis will seek to use the G20 to project a positive narrative of the nation as a strong economic influencer with a reformist approach consistent with their own domestic reform efforts.

Trade and the effective functioning of the institutions that underpin a rules-based trade order are expected to remain front and centre on the agenda.

Canada, through its own leadership efforts within the G20 and in other fora, can continue to bring a practical pro-trade voice to the table. Equally, there will be important opportunities to use the G20 platform to promote economic opportunity for all of our citizens, including ensuring that the Saudi presidency follows through on the G20 commitment to EMPOWER. [REDACTED]. Canada will have an important opportunity to encourage G20 members to remain focussed on the key issues that could impact upon global economic growth, while ensuring the annual Summit delivers concrete results.

Italy will assume the G20 Presidency in 2021.

World Trade Organization

Issue

Since its founding in 1995, the World Trade Organization (WTO) has helped create a comprehensive and common rulebook which underpins the majority of international trade. Through the WTO, member countries have lowered tariffs and established disciplines on other barriers to trade. The WTO, however, now faces serious challenges, including in concluding negotiations as well as a serious threat to its binding dispute settlement function.

Context

In an increasingly multipolar world where long-held expectations are being challenged, the WTO remains the pre-eminent international institution to uphold rules-based trade and is of strategic importance to Canada’s interests.

The WTO was established in 1995, replacing its predecessor, the General Agreement on Tariffs and Trade (GATT). Its 60+ agreements, binding on all 164 member states, are the largest trade agreements in the world, and effectively set the baseline rules for the multilateral trading system. The WTO’s dispute-settlement system is a key feature that is used by members to seek enforcement of the WTO’s rules.

Canada's Interests at the WTO

The WTO has been a cornerstone of Canadian trade policy. It provides a common set of rules, rights, and obligations for its 164 members and has been a forum for Canada to advance its trade interests on the broadest possible basis. It has also been a vehicle for Canada to build alliances, influence multilateral trade rules and secure concessions or results on issues where we would otherwise have little individual leverage as a medium-sized economy. In particular, binding WTO dispute settlement has facilitated the resolution of Canadian trade disputes (i.e. country of origin labelling for beef and pork, and softwood lumber), [REDACTED]

Status of WTO Negotiations

The most recent comprehensive round of WTO negotiations (Doha Development Agenda, or “DDA”) was launched in 2001, covering the core areas of agriculture, market access for non-agricultural goods and services, trade facilitation, development, intellectual property, trade remedies and subsidy disciplines, trade and environment, and dispute settlement.

The DDA has been stalled since 2008 and at the 10th WTO Ministerial Conference (MC) in 2015, members could not agree on the Doha-round status [REDACTED] Negotiations on core issues (i.e. agriculture domestic support, disciplining subsidies in fisheries) continue, albeit without much progress.

In December 2017, WTO members committed to conclude multilateral negotiations on fisheries subsidies by the end of 2019; [REDACTED] For example, in January 2019, 76 members (including Canada) announced their intention to launch plurilateral negotiations on e-commerce.

Other plurilateral initiatives underway include negotiations for domestic regulations on services, micro, small and medium sized enterprises and investment facilitation.

WTO Reform

The WTO faces many challenges: divergent positions among the membership on trade priorities; lack of consensus on how to reflect development considerations in trade policy, in particular the issue of differentiation for developing countries; an overloaded dispute settlement system; and a stalement over filling current and future Appellate Body vacancies. As a result, the system has come under severe stress, with some observers questioning its continued relevance. Nonetheless, WTO members agree that he organization performs a crucial role in facilitating global commerce. In this context and given the importance Canada attaches to the WTO, it has taken a leadership role to foster discussion among members on the need for WTO reform. In October 2018, Canada convened a diverse and representative group of WTO members^{Footnote 6} (the “Ottawa Group” or “OG”) committed to supporting and strengthening the multilateral trading system by working with other WTO members to complement and achieve coherence between modernization efforts undertaken by other WTO members, and to help identify ideas that appeal to the broader membership. Discussions have focused on three priority areas:

1. improving the efficiency and effectiveness of the WTO’s monitoring and transparency function;
2. safeguarding dispute settlement at the WTO and
3. updating the WTO rule book to reflect 21st century realities. OG Ministers have met three times to date: in October 2018, January 2019 and May 2019.

Impasse in Appellate Body Appointments

Over the past several U.S. administrations, the United States has had concerns on the operation of the dispute settlement system. More recently, the United Stateshas blocked new appointments of Appellate Body (AB) members. [REDACTED]

If the impasse in appointments is not resolved by December 10 (when the terms of two of the last three members ends), the AB will not be able to hear new appeals, because it will have fewer than the required three members to decide an appeal.

Given that a losing WTO member can appeal a panel decision to the AB, and that a WTO ruling is not effective until after the appellate process is over, a dispute could fall into the void if there is an appeal to a non-functioning AB. This would make the enforceability of WTO rules problematic and runs counter to the interests of many other WTO members (including Canada), and would be a serious blow to the credibility of the WTO. [REDACTED]

Canada continues to work with like-minded WTO members to find ways to address U.S. concerns. Canada and other Ottawa Group members have been supportive of the “Walker Process” under the WTO General Council led by New Zealand’s Ambassador to the WTO (David Walker). The process has provoked good discussion and identified areas of convergence in positions among WTO members, [REDACTED] Given the urgency of the situation, Canada and the EU have established a bilateral interim appeal arbitration arrangement which would operate within the framework of existing WTO rules and provide the option of resorting to binding arbitration as an alternative means to dispute settlement if the AB is unable to hear new appeals. Canada has been engaging other WTO members to gauge their interest in forming similar arrangements. [REDACTED]

Upcoming Events

WTO mini-ministerial meetings will be held on the margins of the World Economic Forum in Davos (January 2020), and the OECD Ministerial meetings in Paris (May 2020). These meetings represent opportunities to convene a ministerial meeting of the Ottawa Group. The 12th WTO Ministerial Conference (MC12) is set to take place in Nur-Sultan, Kazakhstan, in June 2020. [REDACTED]

International Financial Institutions

Issue

• International financial institutions (IFIs) play a critical role in enabling economic and social development and global economic stability through policy leadership, loans and grants to governments and investments in the private sector.
• Canada is a major shareholder in IFIs, given the fundamental role they play in the current rules based system and in supporting economic development in middle-income, poor, and fragile states.
• Canada also leverages its engagement with IFIs to advocate for and advance its sustainable development policy priorities with other countries. Given that the IFIs were established as non-political fora, it has been possible to make more progress on issues such as debt sustainability, including with China, than in other political fora such as the G20.

Context

IFIs are components of the international financial architecture established after WWII. Their mandate has evolved from rebuilding post-war Europe to providing necessary financial resources for programs in poor and middle-income countries, including fragile states. IFIs have comparative advantages in promoting sound economic management, infrastructure, and supporting the growth of the local private sector through innovative financing mechanisms.

IFIs include multilateral development banks (MDBs) and the International Monetary Fund (IMF). MDBs aim to reduce poverty; advance sustainable economic and social development; and promote regional cooperation and integration.

The MDBs typically provide non-concessional financial assistance to middle-income countries and some creditworthy low-income countries on market-based terms. They also provide concessional assistance, including grants and loans at below-market interest rates, to low-income countries.

Sharing the same objectives as the MDBs, the IMF fosters global monetary cooperation, secures financial stability, and facilitates international trade. The IMF conducts economic surveillance and provides policy advice, lending programs and technical assistance.

IFIs are making efforts to address concerns regarding the representativeness of their governance bodies, particularly reforming voting rights. Global powers including China, India, and Brazil are concerned with increasing their voice and voting power in these fora, along with developing countries.

BRICS countries (Brazil, Russia, India, China and South Africa) are also exploring alternative routes to play a larger role in global governance outside the traditional IFIs that Canada supports. BRICS established the New Development Bank in 2016 (formerly the BRICS Development Bank) to finance infrastructure. Traditional IFI shareholders remain concerned about the lack of solutions to address unsustainable borrowing by developing countries [REDACTED]

Canada and the IFIs

Canada is a significant shareholder in IFIs. IFIs are among Canada’s largest and most strategic partner institutions for supporting development interventions at scale given the size of their operations, track record, technical and financial expertise, convening role, and thought leadership. For example, with contributions from Canada and other donors, the World Bank’s International Development Association (IDA) provided $20 billion in grant and loan operations annually on average over the 2015-18 in order to support development results in infrastructure, social protection, and other sectors in the poorest countries. This included connecting 44 million people with new or improved electricity services over the same period.

Canada’s relationship with all the IFIs is co-managed by Global Affairs Canada and the Department of Finance. The Minister of Finance is Canada’s Governor to the Board of Governors of the World Bank, the International Monetary Fund, the European Bank for Reconstruction and Development, and the Asian Infrastructure Investment Bank. The Minister of International Development is Canada’s Governor to the African Development Bank, the Asian Development Bank, the Caribbean Development Bank, and the Inter-American Development Bank. As Governors, they are responsible for Canada’s oversight and overall governance of these institutions including their strategic policy direction, accountability, institutional effectiveness, financial and programming decisions. Most of these powers are generally delegated to Global Affairs Canada or Finance Canada’s senior management. Executive Directors represent Canada on the Boards of Directors of these institutions, which are responsible to oversee their general operations.

The Trade Commissioner Service maintains Offices of Liaison with International Financial Institutions (OLIFIs) in most IFI Headquarters cities to provide information, support and guidance to Canadian clients seeking procurement contracts and financing opportunities. The vast majority of Canadian contracts are for consulting services (versus goods or works), and are smaller contracts. However, Canadian companies are not as successfully engaged in implementing large IFI-funded climate-finance projects compared to firms from other major donors. To address this, the TCS invested in new resources for climate finance in 2017 and currently has regionally focused trade commissioners located within Canadian missions in Washington DC, London, Manila and Abidjan.

Current priority issues at IFIs

International Monetary Fund (IMF)

Kristalina Georgieva, former World Bank Chief Executive Officer, has succeeded Christine Lagarde as Managing Director of the IMF. We expect that under her leadership the IMF will continue to track the economic impact of gender inequality where it is critical to economic growth and public finances. Given that debt sustainability is an increasing concern, the IMF and the World Bank have developed a new approach to managing debt sustainability, which includes greater transparency.

World Bank Group

The World Bank is Canada’s largest development partner institution. It is a strategic partner of choice for supporting development interventions at scale given its global operations, track record, technical and financial expertise, convening role, and thought leadership. The World Bank has made serious commitments to eradicate extreme poverty by 2030 and to promote shared prosperity. In 2018, Canada, the United States, and other shareholders agreed to a $13 billion capital increase, which strengthened the World Bank Group’s financial stability and set robust targets on gender equality, climate change, and fragile and conflict-affected states. Climate finance has become an increasingly important part of its portfolio, representing almost a third of its financing as of 2019. Canada has played a key role within the organization in advancing gender equality and debt sustainability. Negotiations on the replenishment of the World Bank’s concessional window will conclude in December 2019.

African Development Bank (AfDB)

The AfDB is dedicated to poverty reduction, economic development and improving the lives of people on the continent. In 2019, Canada demonstrated its support by providing temporary callable capital to the AfDB to protect its AAA rating.

This allowed the Bank to keep its capacity to lend money to its regional members at a lower interest rate than the market. Negotiations are ongoing to replenish the African Development Fund, the concessional window of the Bank, which provided loans and grants to the poorest countries to improve their economic governance, build infrastructure and address sources of fragility and vulnerability.

Inter-American Development Bank (IDB)

The IDB is dedicated to reducing poverty and inequality, advancing infrastructure, and improving health and education in the Americas. The IDB will be a key partner to re-engage and help rebuild Venezuela once a transition takes place. The IDB has achieved important results in infrastructure. Between 2016 and 2018, it has helped built or upgrade more than 6,000 km of roads, provide access to new or improved sanitation to more than 968,000 households and make drinking water available to over 792,000 households.

Asian Development Bank (ADB)

The ADB focuses on poverty reduction and infrastructure development, in addition to being a leading contributor to the production and dissemination of knowledge in Asia.

In 2018, the ADB contributed to reducing close to 2.5 million tons of carbon dioxide equivalent per year reduced and trained 1,200,000 students on quality assurance systems. Negotiations of the replenishment of its concessional window, the Asian Development Fund, will take place in 2020.

Caribbean Development Bank (CDB)

The CDB supports inclusive and sustainable growth and development, promotes good governance and enhances the operations and effectiveness of local institutions. In 2018, the CDB helped 15,643 persons benefit from upgraded road infrastructure and 103 small and medium enterprises benefit from increased access to credit. Negotiations of the replenishment of its concessional window, the Special Development Fund, will take place in 2020.

Asian Infrastructure Investment Bank (AIIB)

Created in 2016 and based in Beijing, the AIIB is a new MDB focused on financing infrastructure projects. As of October 2019, the AIIB had 74 member countries, financed 50 projects with USD 9.6 billion, and has maintained a AAA rating. Since inception, the AIIB has implemented several policies, sector strategies and governance mechanisms to define how the AIIB operates and invests, in line with traditional MDBs. In 2020, we expect the AIIB to accelerate investments, continue to introduce some new strategies (e.g., Corporate Strategy, Water Strategy), while starting to review the effectiveness of existing policies (e.g., Environmental and Social Policy Review).

Organisation for Economic Co-operation and Development

Issue

• The OECD provides evidence-based and peer-reviewed policy analysis to advance economic and social issues in Canada and its 35 other member countries.
• Canada contributes actively to the work of the OECD, including on trade, AI, the future of work, taxation and the environment.
• A new Secretary General (SG) will be elected in 2021.

Context

Established in 1961, the OECD has 36 members representing approximately 62 percent of the world economy. Its mandate is to promote better policies for sustainable economic growth, employment, and a rising standard of living through open and stable markets and mutually supportive economic and social policies. Over 700 Canadian delegates from all levels of government and civil society participate in OECD committee work.

The OECD has over 250 committees, working groups and other bodies focusing on various OECD work areas (i.e. economics, trade, science, education). Four issues currently facing the world economy are particularly relevant in the context of the OECD: (1) the rising backlash against international trade and globalization; (2) the overall fragility of the world economy; (3) the interconnectedness of the global trading system; and (4) the digital transition. The OECD’s comparative strengths are its comprehensive and multi-disciplinary approach to data collection and comparative analysis, peer learning, evidence-based policy direction and guidelines, and policy coherence and impact measurement. The OECD’s work is supported by a Secretariat comprising 3500 staff from member countries. Angel Gurria, SG since 2006, will conclude his third term in 2021, [REDACTED]

The OECD budget is EUR 386 million (2019). Canada is the seventh largest contributor, paying 3.5 percent of the core budget ($18 million annually in assessed contributions).

Six countries applied for membership in 2017 (Argentina, Brazil, Bulgaria, Croatia, Peru and Romania), [REDACTED]

In 2019, the OECD focused on issues related to the digital transition for OECD economies. Highlights include hosting the Going Digital Summit (March 2019) and the Ministerial Council Meeting (May 2019), vice-chaired by Canada’s Minister of International Trade, which discussed how to harness the economic and social benefits of digitalization while mitigating potential risks.

Canada and the OECD

The OECD is an important multilateral platform for Canada, particularly in combatting anti-globalization sentiment and encouraging policies that promote inclusive societies. It offers a principled forum to share best practices, and gain insights from likeminded economies. Canada’s priorities for the OECD for 2019-20 are trade and investment; international taxation; supporting sustainable development; innovation and productivity and focusing on the digital economy.

Canada is working with other member countries to strengthen OECD governance, focused on member-driven priorities and budget discipline.

Asia-Pacific Economic Cooperation

Issue

• Canada is a founding member of the Asia-Pacific Economic Cooperation (APEC) forum, whose 21 members account for 60 percent of global GDP.
• Canada last hosted APEC in 1997.
• Our engagement has waned in recent years, and with it, Canada’s ability to set the agenda in this important regional plurilateral forum.

Context

Established in 1989, APEC remains Asia’s pre-eminent economic forum. Its mission – to promote sustainable growth and prosperity among its 21 member economies^{Footnote 7} —is advanced through a variety of forums, working groups and initiatives aimed at expanding free and open trade and investment, and cultivating favourable business environments throughout the region. It seeks in particular to enhance regional integration by removing barriers to trade and investment “at the border,” enhancing supply chain connectivity "across the border," and improving the regulatory environment "behind the border."

APEC also serves as a platform to share best practices on trade, economic integration and structural reform, and through technical cooperation targeting developing member economies.

APEC initiatives often complement work undertaken by other multilateral forums such as the G7, G20, Organization for Economic Cooperation and Development (OECD), and at the WTO in support of a rules-based trading system.

Hosting APEC is a significant commitment and rotated annually. In addition to the Annual Economic Leaders’ Meeting (or “Summit”), host countries will organize meetings of APEC ministers responsible for foreign affairs, trade and finance, “sectoral ministerials” in areas such as transportation, tourism, and SMEs, and a variety of technical and private-sector focused events. Chile was to host in 2019, but had to cancel due to civil unrest. Malaysia will host in 2020, New Zealand in 2021 and Thailand in 2022. Since APEC was founded in 1989, Canada has hosted only once, in 1997 (most economies with the capacity to host have done so twice).

Recent trade tensions between the United States and China have impacted APEC’s normally collaborative nature, and limited progress against some of its core objectives. Leaders did not reach consensus on a declaration at the 2018 summit in Papua New Guinea for the first time since 1993.

Private sector engagement is an important pillar of APEC's activities. The APEC Business Advisory Council (ABAC) represents the interests of the APEC business community. The annual APEC CEO Summit and regular APEC industry dialogues provide opportunities for business leaders to interact with APEC leaders. Each APEC Leader can appoint up to three ABAC members. Canada’s currently has two ABAC member, Ralph Lutes (VP Asia, Teck Resources) and Janet De Silva (CEO, Toronto Region Board of Trade).

APEC in the global economy

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Canada in APEC

APEC provides Canada the opportunity to further strengthen trade and economic ties with Asia-Pacific’s most dynamic economies. Four of Canada’s top five trading partners are APEC members: the United States, China, Mexico and Japan. In 2017, APEC accounted for more than 84 percent of Canada's total merchandise trade, alongside FDI in Canada valued at over $480 billion.

APEC is the only trans-Pacific regional organization—of which Canada is a member—that hosts an annual leaders-level meeting. It therefore serves as a critical platform to pursue our regional objectives, including trade liberalization and market reforms, as well as broader foreign policy goals, including membership bids for regional forums such as the leader-level East Asia Summit and ASEAN Defence Ministers Meeting – Plus (ADMM+).

Global Affairs Canada coordinates the activities of over a dozen partner departments involved in APEC’s broad agenda, ranging from customs procedures and regulatory reform, to women’s economic empowerment, mental health, and the digital economy.

In recent years, Canada has played an instrumental role in pressing for governance reforms, in particular the streamlining of APEC’s complex and expansive organizational structure, which now includes over 30 working groups. However, Canada has been less active in shaping the APEC agenda – a key measure of Canada’s commitment to the region among member economies.

Outlook

Chile was to host APEC Ministerial and Leaders’ Meetings November 13-17, 2019, to which foreign and trade ministers and Leaders from each economy were invited. On October 29, 2019, the Chilean President cancelled the meetings in order to focus his government’s attention on addressing domestic unrest.

Malaysia will host APEC 2020, with the first Senior Officials meeting scheduled for December 9-11, 2019. Leaders week scheduled for November 6-12, 2020.

Inter-American Multilateralism

Issue

The complex multilateral environment of the Americas requires Canada to engage strategically in those organizations that offer it the best opportunities to advance its foreign policy.

Context

Canada is a respected and influential multilateral player in the Americas, and uses its engagement in the region’s multilateral bodies to advance democracy, security and human rights (including gender equality and indigenous and minority rights), increase responsible trade and investment, and combat climate change.

The Americas have been prolific in generating multilateral organizations, often with overlapping goals, functions and activities. A recent survey carried out through the International Development Research Centre (IDRC) identified nearly 180 multilateral groupings in the Americas. There is scope for Canada to do more to strategically engage those institutions that best permit us to advance our core values and interests.

The Organization of American States and the Summit of the Americas

Organizations centered on the Organization of American States (OAS) and the Summit of the Americas process are considered to form the Inter-American system. The OAS has 34 active member states and its mandate consists of four pillars aligned with Canada’s long standing interests in the region: democracy, human rights, development and security.

The OAS is the primary forum for political engagement in the Americas.

Latin American and Caribbean nations place a high degree of importance on this insitution. Its meetings and yearly General Assemblies offer opportunities to deepen bilateral relations with key partners in the region. OAS instruments such as the Inter-American Democratic Charter, aimed at defending democracy when under threat, are among the most forward-looking of their kind, and OAS electoral observation missions are considered a model globally.

However, the OAS faces the limits and challenges inherent to many multilateral organizations. [REDACTED]

In addition, the OAS has been inclined to over-extend its mandate in spite of a modest budget (US$82.7 million in 2019) and limited insitutional capacity.

The Summit of the Americas process brings the highest level of political attention to hemispheric issues and is an opportunity for Leaders to meet, generally every three years, and provide guidance to the Inter-American system on pressing challenges. The most recent summit was held in Lima, Peru in 2018 and focused on “Democratic Governance against Corruption”.

Other Inter-American Organizations

Canada is also engaged with other Inter-American organizations, some of which have extra-regional ties, as well as sub-regional bodies, and informal groupings that complement formal efforts. Smaller sub-regional groupings organized along geographic or ideological lines are of increasing importance to Canada’s engagement in the hemisphere. The Caribbean Community (CARICOM) is the oldest of these and has been particularly adept at leveraging its voting bloc in larger organizations like the OAS and the UN. Canada is also a regional observer to the Central American Integration System (SICA), [REDACTED] is key to Central America’s economic development and integration.

In South America, the new Forum for the Progress and Development of South America (PROSUR) is being promoted by Colombia and Chile to replace the Union of South American Nations (UNASUR), an attempt to bring together South American Nations to explore political and economic cooperation. Canada is monitoring how it develops as it has the potential to become a significant player in the region.

Canada is currently negotiating a free trade agreement with the Southern Common Market (MERCOSUR) and a free trade agreement to become an associated state of the Pacific Alliance (PA). MERCOSUR and the PA are major trade blocs that are key to Canadian strategic trade and investment interests in the region.

Among Inter-American organizations with extra-regional ties, the Pan-American Health Organization (PAHO), the Economic Commission for Latin America and the Caribbean (ECLAC) and the Inter-American Development Bank (IDB) have been key policy and programming partners to Canada in the hemisphere. In addition to Canada’s cumulative subscription to the IDB of US$7 billion, its support to the IDB amounted to $18.3 million in core funding for 2018-19.

The emergence of informal groupings such as the Lima Group formed by some OAS Member States – including Canada – keen to address the democratic backsliding in Venezuela has had an impact on multilateral dynamics in the Americas. Such groupings can be useful to adopt temporary measures to complement the work of formal bodies when warranted.

Canada’s Inter-American focus to date

Canada has grown to be a respected and influential partner in the region, based on historic relations, mutual respect, its reputation of bringing a balanced voice to regional debates, and program investments.

The promotion and defence of democracy and human rights have been a hallmark of Canada’s multilateral involvement in the region. Canada made key contributions that led to the adoption of the Inter-American Democratic Charter in 2001, and, more recently, Canada’s leadership on Venezuela and Nicaragua has strengthened our voice and credentials.

Canada has been involved in multilateral initiatives and programs to fight corruption and advance hemispheric security, including through its Americas-focused Anti-Crime Capacity Building Program. [REDACTED] Canada has established good economic ties through trade agreements and development programming aimed at inclusive and clean growth.

Canadian Inter-American International Assistance focuses on governance, health, gender equality, inclusive growth and climate change, and strengthens the capacity of select regional institutions, such as the PAHO, the Inter-American Commission on Human Rights, the Justice Centre of the Americas and ParlAmericas. Canadian financial and institutional support has helped these organizations become evidence-based and results-oriented in implementing significant programming in the region.

La Francophonie

Issue

• As the multilateral organization that brings together the largest number of countries after the UN, with a focus on Africa and youth, La Francophonie is an important forum for advancing Canada’s foreign policy priorities.
• Canada is deeply engaged in maintaining and expanding its influence within La Francophonie, as well as increasing the organization’s efficiency and relevance.

Context

The International Organisation of La Francophonie (IOF), with its 88 member states, member governments and observers from across the globe (54 of which are full members), is the multilateral organization that brings together the largest number of countries after the UN. As more than half of its voting members are African countries, the organization is firmly focused on Africa. With an annual budget of approximately $100 million, its programming is primarily aimed at youth, reflecting the fact that 60 percent of the total population in the Francophone world is under the age of 35.

Canada is La Francophonie’s second largest donor after France, with annual contributions of approximately $40 million, including $24 million to the IOF. The remaining sum is divided among La Francophonie’s various institutions, including TV5MONDE, TV5 Québec-Canada, the International Association of Francophone Mayors, the Academic Agency of La Francophonie, the Senghor University of Alexandria, and the two ministerial conferences (for ministers of education—CONFEMEN—and for ministers of youth and sport—CONFEJES).

Federal-Provincial Dimension

For Canada, there is a key federal-provincial dimension to La Francophonie because Quebec and New Brunswick are also members, like Canada, while Ontario joined as an observer in 2016. It is the only international organization with this kind of provincial participation.

Constructive working relationships between the various levels of government in Canada have enabled Canada to maintain an enviable reputation within La Francophonie. The only fly in the ointment is the Government of New Brunswick’s recent reneging on its commitment to host the 2021 Francophonie Games.

Canada has held several high-level events for La Francophonie in this country, including three summits: in the city of Québec in 1987 and 2008, and in Moncton in 1999. This trend continues as Quebec is in the run to host the 2021 ministerial conference.

Full members of the Organisation internationale de la Francophonie (OIF)

Influence and leadership

Louise Mushikiwabo’s appointment as the head of the IOF in January 2019, succeeding Michaëlle Jean, did not lead to any loss of influence for Canada. The Secretary General selected Canadian Catherine Cano as the IOF’s Administrator, the number two position in the organization. They share similar views on the IOF’s broad direction. Among other things, they have set up a focus group on the organization’s direction and governance, and they have put a hold on new memberships so as not to interfere in discussions on IOF expansion.

The four major thrusts of the Secretary General’s roadmap (visibility of French, especially in the digital realm, youth, gender equality and political action) are in line with Canada’s list of long-standing priorities in La Francophonie. The Secretary General and the Administrator want the organization to put forth programming that is more focused and to place greater emphasis on initiatives that bring value added to communities.

IOF Expansion

For the past 20 years, encouraged by France, the IOF has seen its membership grow by more than 60 percent. [REDACTED]

50th Anniversary in 2020

The IOF will celebrate its 50th anniversary in 2020, and the Tunis Summit will be the high point of the celebrations. This summit, the first led by Louise Mushikiwabo and Catherine Cano, will be more than symbolic. The recommendations of various working groups and commissions that are studying key issues for the organization’s future (direction, governance, expansion, programming, budget, transparency, etc.) are slated to be presented to the heads of state and government for adoption and could redefine the organization.

Commonwealth

Issue

• As a founding member and a top donor, Canada has a keen interest in the future of the Commonwealth.
• Canada values the convening power of the Commonwealth. In the past, it has played an important role in promoting and upholding core democratic values, and in advocating for small and vulnerable states.
• [REDACTED]
• The 2020 Commonwealth Heads of Government Meeting (CHOGM) in Rwanda will be an opportunity for Canada to demonstrate leadership in the organization.

Context

The modern Commonwealth is a values-based association, which was founded in 1949. It has 53 member states, representing 2.4 billion people on five continents, most with historic links to the United Kingdom. The Commonwealth Secretariat’s 2019-20 budget is £44.1 million (approximately. $74.8 million).

The Commonwealth includes three intergovernmental organizations:

• The Commonwealth Secretariat (based in London);
• The Commonwealth Foundation (also based in London, whose role is to empower civil society); and
• The Commonwealth of Learning (hosted by Canada in Burnaby, B.C, whose remit is open distance education and learning in the Commonwealth, with a focus on girls).

[REDACTED] In recent years, Canada has consistently called for reforms to ensure that the Commonwealth is “fit for the 21st century” and has advocated for greater focus on its areas of value added, including:

• Being a forum for deliberation, problem solving, consensus decision making and collective action on common global challenges (such as climate change);
• Promoting and upholding good governance, democracy, human rights (including gender equality), and the rule of law – all core Commonwealth values enshrined in the Commonwealth Charter; and
• Advocating for, and supporting, small and vulnerable states (the majority of its membership), including to strengthen their resilience.

The Commonwealth has observed more than 140 elections in nearly 40 countries since 1980.

Commonwealth Governance

While Queen Elizabeth II is the overall Head of the Commonwealth, dual British-Dominican national Baroness Patricia Scotland is currently serving the last year of a four-year mandate as Secretary-General. Her term is due to end in April 2020 but will likely be extended by two months until the June 2020 CHOGM. She is also widely expected to seek a second, four-year term.

The High-Level Group (HLG) on Commonwealth Governance was mandated by Leaders at the 2015 CHOGM to provide independent recommendations on ways to improve Commonwealth governance Recommendations, which include introducing regular performance reviews for Secretaries-General, were adopted by Commonwealth Foreign Ministers at their September 2019 meeting, following three unsuccessful attempts, and will come into effect immediately after CHOGM 2020, subject to their endorsement by Heads.

Canada, a key player

A founding member, Canada is among the top three contributors with the United Kingdom and Australia. In 2018-19, Canada provided $10.5 million in core funding, including $7.9 million in assessed contributions to the Secretariat and Foundation, and $2.6 million in voluntary contributions to the Commonwealth of Learning.

The Commonwealth offers a forum and an audience to advance Canada’s priorities, including our UNSC campaign.

Canadian Arnold Smith served as the first Secretary-General (1965-75), and Canada has hosted CHOGM twice (1973 and 1987). In the mid-1980s, Canada played a leadership role within the Commonwealth to spearhead efforts to end apartheid in South Africa.

The 2020 CHOGM

The next CHOGM will take place on June 22-27, 2020 in Kigali, Rwanda (including a Foreign Affairs Ministers Meeting, and parallel Business, Youth, People and Women Fora). Over 8,000 participants are expected.

Host Rwanda has identified “Delivering a Common Future: Connecting, Innovating, Transforming” as its overall theme, as well as five key sub-themes for the CHOGM outcome document (Communiqué):

1. Governance and the Rule of Law;
2. Information and CommunicationTechnology (ICT) and Innovation;
3. Youth;
4. Environment; and
5. Trade.

In the coming months, consultations will continue on a High-Level Policy Paper circulated by Rwanda, which will form the basis of the Communiqué.

Among the other key issues expected to be discussed at CHOGM 2020 are:

1. Re-admission of the Maldives;
2. Endorsement by Leaders of the HLG recommendations; and
3. Ongoing implementation of the London 2018 CHOGM commitments, including the Commonwealth Blue Charter (Canada/the Department of Fisheries and Oceans is the Commonwealth Blue Charter Champion on Ocean Observations, through an Action Group).

CHOGM 2020 will provide Canada’s Prime Minister and Foreign Minister with opportunities for side-events, bilateral meetings and announceables, and also for a potential visit to other African countries in the margins. CHOGM 2020 will take place three weeks after the election for a non-permanent seat on the UNSC.

The World Economic Forum

Issue

The World Economic Forum is a pivotal platform for convening private- and public-sector leaders to tackle global issues and shape global, regional and industry agendas. Canada actively engages with the Forum through participation in Forum-related events and bodies, collaborating on key reports and issues and funding specific initiatives. The Forum’s Annual Meeting at Davos takes place each year in January, attended by a Canadian delegation selected by the Prime Minister.

Context

The World Economic Forum was established in 1971 as a not-for-profit foundation that identifies global issues and seeks solutions through private-public collaboration. Headquartered in Geneva, Switzerland, the organization engages with political, business, academic and civil society leaders to shape global, regional and industry agendas. In January 2016, the Forum was granted the status of an “International Organization”.

While often perceived as elitist, the Forum has succeeded in becoming a pivotal venue for fostering public-private partnerships and for focusing the attention of private sector leaders on the long term and the implementation of solutions to global issues like sustainability, technological disruption, environmental and social issues and governance. In particular, the Forum has established itself at the cutting edge of global discussions on “Globalization 4.0,” also known as the “Fourth Industrial Revolution” (4IR).

Forum Leadership

The Forum is chaired by its founder and executive chairman, Professor Klaus Schwab. The organization’s mission and values are guided by a Board of Trustees made up of leaders drawn from business, politics, academia and civil society. Canadians Mark Carney and Chrystia Freeland are currently members of the Board of Trustees in their personal capacities.

A Managing Board acts as the executive committee and ensures that activities fulfill the mission of the Forum. Børge Brende, former Norvegian Foreign Minister, is the President of the Managing Board and de facto number two in the organization.

Forum Meetings

The Forum’s flagship Annual Meeting at Davos takes place each year in January. It is attended by a Canadian ministerial delegation, sometimes led by the Prime Minister. Engagement at Davos provides an opportunity to attract investment, advance specific priority Canadian themes and build networks, helping shape discussions across sectors on global issues as well as the forward agenda of the Forum.

The Forum also holds a series of annual or biannual regional meetings in China, Africa, the Middle East, India, and Latin America. These are incomparable venues for understanding regional priorities and pursuing economic and political relationships. [REDACTED]

Forum Working Structure

The Forum has established a range of “System Initiatives”, led by Stewards— senior leaders from the public and private sectors, to serve as platforms to set agendas in particular issue areas and mobilize leadership, expertise, and resources from business, government, civil society, and international organizations. Many Canadian Ministers have in the past served as Stewards of Forum Systems Initiatives. The Minister of International Trade has served as a Steward for the System Initiative on Shaping the Future of International Trade and Investment, which aims to advance proposals for modernizing the international trade and investment system, including through improvements in trade facilitation, investment policy and global value chains.

The Forum’s Global Future Councils are responsible for carrying out the agendas set by the System Initiatives through leveraging talent and expertise across public and private knowledge networks, and by promoting innovation and cooperation on global issues. Canada is well-represented on the Global Future Councils at the senior official level from across government and by Canadian civil society and private sector leaders.

Forum Centres

The Forum recently opened two centres: the Centre for the Fourth Industrial Revolution (4IR) in San Francisco, and the Centre for Cybersecurity in Geneva. The Centre for the 4IR explores how science and technology policies can benefit society and how to counter the disruptive impacts of new technologies. The mandate of the Centre for Cybersecurity [REDACTED]

Canadian Engagement

The Forum provides a multi-layered platform to advance Canadian priorities and shape the Forum’s agenda in a unique ecosystem that brings together players from political, business, academic and civil society.

Canada’s engagement in the Forum ecosystem ranges from funding specific initiatives, such as the Global Alliance for Trade Facilitation, to participation in several Forum-related bodies and collaboration on key reports and initiatives. Canada also attends the Forum’s Annual meeting in Davos and regional meetings.

Global Affairs Canada’s recent involvement with the Forum has focused on initiatives related to trade and investment, development financing, food security, humanitarian assistance, resilience-building, and the Arctic. It was in collaboration with the Forum that Canada created “Convergence” in 2015 as a platform to accelerate blended finance deal-making in developing countries. Most recently, Canada has inspired the WEF to pilot country mapping exercises to attract private capital for SDG projects.

The Forum’s annual meeting in Davos and regional meetings offer opportunities to promote domestic intitiatives to an international audience through the participation in public sessions, and to connect with a wide range of actors through bilateral and pull-aside meetings.

The Forum’s work intersects with the work of other international organizations, such as the G7, the G20, APEC and the WTO.

Association of Southeast Asian Nations

Issue

• Canada derives a range of benefits from engagement with the Association of Southeast Asian Nations (ASEAN), including strengthened ties with individual members.
• There are nascent discussions underway for a Canada-ASEAN Free Trade Agreement (FTA), and Canada would like to upgrade its status to strategic partnership, and secure membership in the East Asia Summit.
• However, achieving institutional and trade objectives in the ASEAN context will require Canada’s consistent participation in related summitry, and meaningful support to thematic and programming mechanisms.

Context

Southeast Asia is a region of growing political and economic importance to Canada. The ASEAN is the region’s premier multilateral body. Its ten members represent nearly 637 million people with a combined GDP of US$ 3.1 trillion (2019). As a group, the countries of ASEAN represent the seventh largest economy in the world, and third largest population in Asia.

Initially established in 1967 to prevent conflict and the spread of communism in Southeast Asia, ASEAN’s work remains grounded in principles of non-interference, peaceful resolution of disputes, renunciation of the threat/use of force, and regional cooperation. An annually rotating member-state Chair sets ASEAN priorities each year and can make statements that represent ASEAN positions. Thailand is Chair in 2019, to be followed by Vietnam in 2020.

ASEAN Member States

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Since its formation, the Association’s significance has grown, in part through Dialogue Partnerships with global and regional powers including the United States, the European Union, China, and Japan. Dialogue Partners including Canada enjoy a special relationship with ASEAN and have access to dedicated ASEAN processes and meetings. This includes the annual ASEAN Post-Ministerial Conference (involving the foreign ministers of all Dialogue Partners), and annual ASEAN-Canada Economic consultations, co-chaired by Canada’s Minister of International Trade.

Meetings hosted by ASEAN cover a broad range of files – foreign policy, security, cultural and people-to-people ties, trade and economic issues – offering unique insights on the region and its place in the world. With Canada’s largest trading partners and several like-minded regional players participating in various ASEAN forums, these meetings also provide a venue to engage (bilaterally or otherwise) on Canadian priorities in Asia-Pacific.

Canada’s Engagement

Canada’s multilateral engagement with ASEAN is on the upswing. Recent policy advances include: the conclusion of exploratory discussions on a possible Canada-ASEAN Free Trade Agreement (FTA); the Joint Feasibility Study for an ASEAN-Canada FTA; the announcement of Canada’s scholarship program for ASEAN; and, the signing of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), whose members include four ASEAN member states.

Canada also supports ASEAN through international development and security programming. Since 2000, Canada has provided $2.7 billion in development assistance to ASEAN and its member states to help reduce poverty. This aid is delivered through various channels, including bilateral, regional, partnership, and multilateral programs, and the International Development Research Centre (IDRC). Canada also supports the region through a targeted ASEAN Regional Development Program with a field presence in Jakarta, which directly contributes to priorities set out in the Canada-ASEAN Dialogue Partnership.

International security programming assistance targeting ASEAN includes anti-crime and counter-terrorism capacity building, and extensive counter-proliferation support through the Weapons Threat Reduction Program (WTRP) – making Canada a privileged partner in this area. Since 2011, the WTRP has committed some $45 million to ASEAN and its member states, including $7.3 million announced in 2018 to support the mitigation of serious biological threats across the region.

Objectives in the ASEAN context

Canada is a founding member of the ASEAN Regional Forum (ARF), which is the primary Foreign Ministry-led security and defence forum in Asia-Pacific.

Beyond this role, Canada currently seeks to:

[REDACTED]

Strategic Partnership

[REDACTED]. A strategic partnership, while largely symbolic, would send a strong signal to ASEAN member states of Canada’s long-term commitment to the region and our desire to be a robust partner. [REDACTED]

Possible Canada-ASEAN FTA

Canada and ASEAN launched FTA exploratory discussions in September 2017. An initial set of exploratory discussions was held in July 2018, and subsequently in April 2019. ASEAN and Canadian officials presented a Joint Report on the outcomes to Economic Ministers at the ASEAN Economic Ministers (AEM)-Canada Consultations on September 10, 2019, effectively concluding Canada-ASEAN FTA exploratory discussions. Canada and ASEAN are now reflecting on next steps, [REDACTED]

East Asia Summit (EAS)

The EAS is recognized as the region’s premier leader-level comprehensive dialogue, involving Heads of State or Government from the ten ASEAN countries, the United States, China, Russia, Japan, India, Australia, New Zealand, and the Republic of Korea (i.e. all ASEAN dialogue partners, except for Canada and the European Union). The EAS deals with the full range of global issues, including regional stability and security, energy, environmental issues, and trade and economic matters. The EAS is where Leaders chart the future direction for cooperation in the region and participation gives countries a say in the region’s ongoing evolution.

Defence Ministers’ Meeting-Plus (ADMM+)

ADMM+ is a forum focusing on operational defence issues with a membership matching that of the EAS. Canada’s 2017 defence policy explicitly identified membership in ADMM+ as a policy objective in Asia-Pacific. Since then, National Defence has increased engagement with ASEAN members, including through an enhanced naval presence in the Asia-Pacific region, boosting participation in multinational exercises, increased high-level engagement, and focused efforts to strengthen key bilateral relationships. [REDACTED]

Canada and the African Union

Issue

• The African Union (AU) is the leading continental multilateral forum and principal interlocutor for Africa, including at the UN and other international forums.
• It is a key decision-making organization on peace and security, socio-economic development, governance, climate change, and continental integration.
• The AU is a conduit for strengthening engagement with African countries and helps advance Canada’s bilateral interests on the continent.

Context

The AU, led by its assembly composed of 55 African Heads of States and Government^{Footnote 8}, is a multilateral organization that promotes continental integration, security and sustainable development. It develops, negotiates and adopts common positions on key continental issues and priorities. The AU’s work is guided by Agenda 2063 − Africa’s blueprint for sustainable and inclusive development. Agenda 2063 sets out a vision for an integrated, prosperous and peaceful Africa.

Canada views the AU as a critical interlocutor to advance African peace and security, trade and development objectives. Canada supports the AU’s vision of finding African-led solutions to address developmental and political challenges.

The AU plays a growing role in peace and security on the continent through missions authorized or mandated by its Peace and Security Council, despite financial and capacity limitations. This includes maintaining peace operations in Somalia (AMISOM) and the hybrid UN-AU Mission in Darfur (UNAMID). The AU is also active in advancing the Women, Peace and Security (WPS) agenda^{Footnote 9}, and launched a series of activities aimed at establishing WPS networks and encouraging member states to adopt WPS National Action Plans. The AU promotes conflict prevention and resolution in several countries, most recently in Sudan. The development of these capacities is essential to protect Canadian political and economic interests, especially with the growing insecurity affecting the continent and beyond.

AU Summits

The AU Heads of State and Government meet annually at the AU Summit, one of the most important political events on the continent. High-level events taking place on the margins of the Summit are a key opportunity for AU members to engage with partners in in-depth discussions on shared priorities. The 2019 Chair of the AU Assembly is Egyptian President Abdel Fattah el-Sisi. South Africa was elected as the incoming chair and will take over in 2020.

AU Commission (AUC)

The AU Commission (AUC), based in Addis Ababa, Ethiopia, is the secretariat for the AU and is mandated to develop the policy frameworks, initiatives and instruments for the implementation of AU decisions. The Chairperson of the AUC is Moussa Faki Mahamat, an influential leader on the continent elected in 2017 for a four year mandate.

African Continental Free Trade Area

One of the most prominent flagship projects of the AU is the establishment of the African Continental Free Trade Area (AfCFTA), which Canada supported through its $13.2M (2016-21) contribution to the UN Economic Commission for Africa (UNECA). The AfCFTA agreement entered into force on May 30, 2019. As of November 2019, the agreement had been signed by 54 of the 55 AU member states (Eritrea has not signed), and ratified by 28 AU member states. The AfCFTA has the potential to drive growth and innovation in Africa, thus contributing to poverty reduction and achievement of the Sustainable Development Goals. Economic integration in Africa will contribute to deepening Canada-Africa trade and commercial ties and provide potential new opportunities for Canadian companies.

AU – UN Cooperation

Both the AU and the UN have made deepening their partnership a priority, signing a Joint UN-AU Framework for Enhanced Partnership in Peace and Security in April 2017. While cooperation has progressed, the question of providing predictable and sustained financing for Security Council-sanctioned AU-led peacekeeping missions through UN assessed contributions remains controversial. [REDACTED] Canada’s current approach focuses on encouraging efforts to find more predictable, flexible and sustainable financing mechanisms for African-led peace operations, while acknowledging that the UN is also facing a financial crisis.

AU Institutional Reforms

Since 2016, the AU has been undertaking a reform process to address a number of issues, including its financing, governance, structure, and coordination challenges with other African regional organizations. Canada closely follows the AU’s reform as the strengthening of the AU’s capacity would provide for a stronger strategic continental partner to advance peace and security, trade, economic growth and development.

Canada - AU Engagement:

Canada is represented at the AU by its Ambassador to Ethiopia who is cross-accredited. Canada is providing important financial support to the AU and partner organizations, including:

• $5M (2017-19) [REDACTED] to the AUC to build its capacity and support its efforts to increase gender equality and women’s empowerment in sectors such as peace and security, trade, economic development and regional integration.

AU related initiatives:

• $430,000 (2019) to the UN Development Program and the Cairo International Centre for Conflict Resolution, Peacekeeping, and Peacebuilding (CCCPA) in support of the Aswan Forum, the flagship initiative of Egypt as Chair of the AU for 2019.
• $13.2M (2016-21) to UNECA in support of the Action Plan for Boosting Intra-Africa Trade.
• $150M (2016-21) to the International Finance Corporation in support of the African Renewable Energy Initiative.
• $40M (2017-21) to the Africa Risk Capacity Initiative World Food Programme in support of the Strengthening Climate Resilience in Africa project.
• $1.25M (2017-20) in support of UNICEF and the Roméo Dallaire Child Soldiers Initiative.
• $1.4M (2018-19) in support of the International Crisis Group to strengthen UN-AU collaboration.
• $15.3M (2013-19) to UNECA for the implementation of the AU’s Africa