The future role of government series

Consistently ranked among the world's best places to live, Canada has enjoyed the advantages of a democratic political system, a strong economy driven by international trade, a multicultural society enriched by immigration, and a good reputation for having forward-thinking and values-based foreign policy. These benefits are tied to global stability, a rules-based international order, and integration with the global economy.

But widespread volatility is threatening the very attributes of the international system that sustains Canada's economic, political, and cultural prosperity. The need to shore up international institutions is growing, but Canada is not ready to step up—its global influence has waned in recent years due to inconsistent, sporadically documented, and inadequately resourced policies in areas such as international relations, security, and defence.

What can be done to reverse this decline and improve Canada’s standing on the world stage?

Over the past few months, Deloitte leaders have come together to consider the evolving role of government and bring perspective to the state of this country’s international relations. Our collective aspiration for Canada is this: to centre foreign policy on the importance of global stability that is upheld by a rules-based international order and protected by a collective approach to security and defence. A trusted ally and partner, Canada would be welcomed in the various efforts of the United Nations, other intergovernmental bodies, and alliances, through which it could exert an influence consistent with its favourable standing in the international community.

This article is part of Deloitte’s future role of government series, which examines the trends that are provoking governments to act and seeks to provide Canadian governments with bold ideas to help them address the underlying issues. Underpinning our work is a recognition that the role of government is evolving. Read our introductory report, The future role of government: Society is evolving. So must the way it is governed, for more context.

Diplomatic, economic, and military stability worldwide has been strained over the past few years by numerous disruptive events. A global pandemic, an over-warming planet, the rise of extremist networks, an increase in cyberwarfare, and advances in weaponry threaten security, urging an international response. These and other factors are pushing Canada to rethink its approach to international relations and adopt more intentional, strategic foreign policy. This would include determining the leadership role it wants to take, the policy levers it needs, and the domestic and foreign partners with whom to collaborate to achieve its objectives.

The current state of international relations

Canada faces foreign policy challenges in four key areas, which weaken its global position: shifting values and declining strategic relationships; diminishing recognition of its diplomatic stature; decreasing relevance due to a lack of innovation and technological advancements; and low economic and democratic resilience.

Shifting values and deteriorating strategic relationships

Diminished diplomatic influence and the lack of a comprehensive foreign policy review³ have resulted in a muted expression of Canadian values and limited the impact of its strategic relationships at the international level.⁴ This has in turn affected Canada's ability to prioritize and meaningfully participate in organizations like the United Nations and the Organisation for Economic Cooperation and Development, shape Group of Seven (G7) discussions, and contribute to long-term humanitarian and capacity-building efforts.

Canada's position is further complicated by shifting allegiances and fraying alliances. The foreign policy of its closest ally, the United States, has fluctuated considerably in recent years, for example, challenging Canada’s ability to rely on the consistency of its counterparts and compelling the government to develop a distinctly Canadian strategic direction.

To preclude fair criticism and further reputational risk, Canada must also avoid being swayed by short-term domestic political cycles and ensure its value-based positions are backed by a consistent, multi-year investment in resources. It must course-correct to mitigate risks and ensure its foreign policy aligns with its values and long-term objectives.

Diminishing recognition and priority-setting capabilities

Canada’s diplomatic stature has diminished due to its recent approach to international relations and limited investment in leadership. Over the past 15 years, the high turnover of federal ministers—the average tenure has been less than 18 months—has created a lack of consistency that ultimately hampers the country’s ability to exert international influence and manage important federal institutions.

The lack of stability and resources impairs effective leadership and guidance, and the decreasing number and experience of foreign policy officers exacerbates the issue.

While the absence of an intentional foreign policy platform allows the government flexibility in managing day-to-day issues, it also impacts the ability of diplomatic missions to effectively engage their counterparts and manage their priorities. As most foreign policy issues are not “papered down,” missions routinely need to reach back to Global Affairs Canada for perspectives and priorities, which slows the response, centralizes thinking, and restricts innovative dialogue and diplomacy. Moreover, mission staff are often constrained by partisan agendas or norms at any given time, which impedes their autonomy and the exercise of their expertise.

In short, the lack of framing guidance hampers Canada’s ability to negotiate optimal agreements with other nations and international bodies.⁵

Decreasing relevance in tech innovation

Canada lacks a robust strategy for implementing technological advancements in national security, supply chain security, and defence organizations, and has faced criticism for its slow adoption of such technologies. It makes it more vulnerable to malicious actors, many of which operate outside Canadian borders, who seek to exploit security gaps, low cybersecurity awareness, and lagging technology to compromise the cyber systems of government as well as private organizations.

It also makes the country less attractive as a partner in key strategic defence forums such as the Australia, United Kingdom, United States Security Partnership (AUKUS) and the Secure and Competitive Resilience Initiative (SCRI), from which Canada is excluded.

The absence of a national focus on and investment in critical technology infrastructure and supporting policies also increases the risk of interoperability issues and hinders the secure sharing of sensitive information with key allies and partners. While the benefits of drones, augmented-human machines (e.g., robotic limbs), unmanned aerial vehicles, and situational awareness sensors are well-established, Canada has been slow to develop a protected classified cloud infrastructure and to use artificial intelligence (AI) for national security and military operations.

As information-sharing is vital for multi-domain operations among Five Eye (FVEYS) and North Atlantic Treaty Organization (NATO) countries, accelerating technological modernization is critical. Enhancing the security of Canada’s classified national security and defence cloud platforms and enabling the more efficient collection, transmission, and processing of large amounts of data, real-time analytics, and informed decision-making would help its partners as much as itself.

Low economic and democratic resilience

Canada's economic strength and commitment to democratic resilience are crucial to its global standing. The 1994 North American Free Trade Agreement (NAFTA) fuelled remarkable economic growth, placing Canada among the top G7 or G20 nations with an extensive network of free trade agreements. With trade links to 51 countries and 1.5 billion consumers, Canada’s economic prowess has been reinforced through its comprehensive trade network, fostering economic ties with democratic allies and diverse partners.

Beyond the economic gains, Canada uses its trade relationships to pursue broader priorities. For instance, the Canada-Chile Free Trade Agreement includes a pioneering chapter on trade and gender, highlighting an innovative approach to bilateral cooperation for enhancing opportunities for women.⁶  Seeking to replicate such successes, Canada aligns its trade efforts with its international agenda.

At the same time, countries must safeguard their domestic capabilities for security as well as economic reasons. Concerns raised by the 2012 acquisition of Nexen by a Chinese state-owned company, for example, underscore the need to protect strategic sectors for national security.⁷ In the future, emerging technologies such as AI, clean energy, and quantum computing will make access to specific technological capabilities and critical minerals essential for long-term economic resilience. Thus, Canada should look to leverage legislation such as the Canada Investment Act to protect its access to key resources and capabilities.

Addressing labour shortages is also important to Canada’s economic health. Initiatives like the provincial nominee programs, which provide a path to permanent residency for skilled workers, acknowledge this need; however, bureaucratic inefficiencies have hindered their effectiveness.⁸ To attract skilled immigrants to help fill talent gaps, immigration processes can be streamlined.

Understanding the links between economic health, security, and democratic resilience is paramount. Prioritizing economic sustainability and social security positions Canada to withstand crises and contribute to international stability, while harnessing its economic and democratic strengths enables it to emerge as a global leader dedicated to fostering a stable and resilient global community.

Recommendations

To help the federal government address these challenges and regain an international reputation as a respected leader, we’ve developed numerous targeted recommendations. They’re organized under four levers: people and leadership; policy and processes; technology; and collaboration.

People and leadership

What steps can leaders take to improve Canada’s reputation on the world stage?

Modernize professional training for diplomats that differentiates Canada as an international power

Addressing global challenges like climate change requires a diplomatic corps with drive, perseverance, and broad knowledge, who can balance regional, sectoral, and specific issues while strengthening Canadian national security and gathering intelligence. Consistent collaboration between Global Affairs Canada and departments like the Privy Council Office and Economic Development and Innovation agencies is key to forward-thinking, long-term foreign policy. 

Yet the loss of skilled, experienced diplomats to retirement and cost reductions has weakened Canada’s diplomatic capacity. To rejuvenate it, recruitment campaigns can aim to foster closer ties between foreign service and educational institutions.⁹ Modernizing professional development training with a focus on contemporary diplomatic skills and the use of science and technology would help nurture a stronger foreign affairs identity. This approach cultivates individuals to be well-informed about Canadian priorities, as well as the customs, traditions, history, and priorities of other states.¹⁰ 

Focus on leadership roles to support Canada’s public-facing foreign policy

Although it sits at various international trade tables, including the Arctic Council and NATO, Canada has had limited global influence. To re-energize its role, it can work to assume leadership or key supporting roles in international organizations that also benefit Canadians, such as sustainable development working groups that aim to improve living conditions in the Arctic.

Domestically, a whole-of-government approach to developing strong leaders who can balance understanding Canadians’ needs with openness to suggestions and constructive criticism would be a positive initiative. Effective leadership in a democracy prioritizes the welfare and aspirations of those being led.

Policy and processes

What values and investments can government pursue to elevate Canada’s stature on the international stage?

Review foreign policy and policymaking processes

Canada’s lack of clearly defined national interests results in a purely reactive foreign policy approach to geopolitical challenges. For example, its failure to pre-emptively develop a comprehensive NAFTA renegotiation strategy undermined its ability to advance national priorities when the Trump administration’s threats to leave the agreement forced renegotiations.

To avoid being at such a disadvantage in the future, Canada must embrace a proactive approach. This would start with a thorough review, involving subject-matter experts and relevant ministers, of interest- or values-based policies. The outcome of the review would guide the development of a set of policies that, along with plans and resources for implementation, would reflect Canada’s current world view. Thus aligned with contemporary values, interests, and emerging global trends—such as strategies for securing the Arctic against attack, peacekeeping in developing countries, aiding refugees, and promoting gender equality—this refreshed foreign policy would help to elevate Canada’s global voice and influence. It would also provide a forum for Canadian leaders across sectors to proactively identify and prepare to handle international dilemmas, rising pressures, and uncertainties.

Finally, to ensure that Canada’s national priorities maintain alignment with  evolving geopolitical trends, intelligence relationships with foreign powers need to be strengthened to share information, engage in strategic alliances, and make evidence-based policy decisions. 

Link contributions to national interests to increase soft power

A nation’s soft power can be maximized with like-minded nations when its foreign policy aligns with its domestic interests and values. Canada can do so by supporting aid programs in areas such as Indigenous sovereignty, gender equality, cultural diversity, inclusion, and the distribution of wealth from national resources such as fishing, energy, and minerals. This will enable Canada to have more consistent and coherent diplomatic messaging and influence. 

Determine how to increase the percentage of gross domestic product (GDP) committed to defence spending and international assistance

Canada’s budgeted defence spending in 2023 amounted to 1.29% of its GDP, falling short of its NATO commitments and raising concerns about its reliability as a defence partner. To address this, Canada can develop an investment plan that aims to meet or surpass NATO’s 2% target over the long term.¹¹ A possible model to follow is Denmark’s, which involves non-partisan defence agreements. These serve to codify government responsibilities for consistent armed forces resourcing beyond electoral cycles, thereby fostering confidence in its parliament. Taking a similar approach would position Canada as a responsible actor that invests proportionately in global security and aligns its principles across party lines.

Acknowledge the intersectionality of policy areas and encourage government to work horizontally 

There are benefits to identifying cross-policy challenges and opportunities that affect the international arena. It facilitates coordinated efforts and ensures proposed solutions consider the implications across various policy areas. For instance, changes in immigration targets impact both the economy and relations between countries. The Government of Canada can balance interests strategically by adopting an intersectional approach to foster collaboration between departments such as Immigration, Refugees and Citizenship Canada, and Global Affairs Canada.

An intersectional approach is also about considering cross-sectoral concerns. The Arctic is an example: the lack of a substantive military base¹² in the region threatens Canadian sovereignty and diminishes the country’s influence within the Arctic Council. By exploring innovative tools and processes from other government departments or sectors that could be applied to these issues, leaders could identify a better solution for safeguarding Canada’s security and sovereignty while actively considering environmental concerns in the Arctic than they might have by looking only at traditional options.

Technology 

What technologies can government implement to help it retain global relevancy in the minds of allied nations?

Capitalize on quantum computing and AI

Cybercriminals are exploiting security gaps, a lack of awareness, and emerging technologies to compromise the cyber systems of both public and private organizations. To address this risk, federal, provincial, and territorial governments can incentivize industry to invest in quantum computing and AI tools for probabilistic scenario-testing to identify the likelihood of data breaches and help develop effective response strategies.¹³ This would enhance security in line with global advancements in cybersecurity and improve national resilience to external threats.

Adopt emerging technologies and modernize procurement to implement them fast

Canada can explore deploying advanced digital technologies in a safe and effective manner to enhance its capabilities in key departments. It also needs to improve the agility and speed of its procurement processes so it can acquire the necessary digital equipment without delay, as the lack of AI usage in defence increases the vulnerability of Canadian Forces personnel and operations over time.

As conflicts increasingly involve cyber elements, Canada can also adopt a strategic, future-oriented approach to develop its technological capabilities and resilience to ensure national security. For example, Canada could enhance its military and national security capabilities by leveraging advanced AI and quantum technologies to optimize decision-making, resource allocation, and the overall efficiency of defence procurement processes.¹⁴

Implement a national security and defence cloud network

Multi-domain operations involving FVEYS, NATO countries, the intelligence community, and the Border 5 community rely on networked platforms to share information. Canada does not currently have a protected-B and classified sovereign cloud network, which not only hinders its ability to efficiently collect, transmit, and process large volumes of data for real-time analysis—which is crucial to national security and defence—but also jeopardizes its interoperability with its trusted allies, particularly the United States and North American Aerospace Defense Command (NORAD).

Canada therefore needs to develop a national security and defence cloud network. This would facilitate the secure exchange of data among allies, enable advanced analytics, and eliminate information silos as well as support cloud-based command and control (CBC2) operations.

Renew the focus on satellite communication

The security situation in Canada’s Arctic region is a growing concern due to the lack of substantial military bases and year-round capabilities to enforce sovereignty.¹⁵ Canada’s contributions to NORAD early in the Cold War is aged: outdated radar surveillance systems, basic forward air operating locations, partial interceptor response, RADARSAT Constellation Mission satellites for marine surveillance, and Maritime Monitoring and Messaging Micro-Satellite (M3Msat) for ship location and marine traffic management.¹⁶ These limited capabilities would fold under even moderate hostile action.

To address this challenge, Canada should commit to a defence policy update (DPU) to reassure both its own citizens and the United States of its commitment to continental defence. The update can outline plans and allocate resources for replacing the Distant Early Warning (DEW) Line system with advanced systems capable of detecting long-range and low observable threats. The DPU can also prioritize updated infrastructure to support F35 fighters, continuous Arctic communications through the Tactical Narrowband Satellite Communications–Geosynchronous (TNS-GEO) project and Enhanced Satellite Communication Project–Polar (ESCP-P), and the identification of strategic staging bases and operational support hubs to project Canada’s force in its sovereignty and national interests.¹⁷ 

In the long term, Canada’s investments in military, defence, and space infrastructure and technologies will demonstrate its ability to maintain strategic control over the Arctic region.

Collaboration 

In what ways can the Canadian government enhance collaboration and promote greater awareness between domestic groups and foreign governments?

Use space and cloud platform technologies for priority alliances

Canada can work to improve its national security capabilities by competently leveraging advanced technologies, particularly in cloud and space, to help allies as well as itself. For example, offering data from RADARSAT, ESCP-P, and space situational awareness network satellites would help strengthen relationships, especially with allies that lack their own space assets. Aggressively advancing cloud-based protected-B and sovereign classified networks development would enable Canada to maintain interoperability with key allies (as noted earlier) and support smaller ones with digital communication.

As Canada enhances its capabilities, it can serve as an example to other countries and share equipment with priority allies. This would help Canada to re-establish itself as a key member of the international intelligence community, one that can encourage greater data-sharing among allies and court interest from other partner countries, as well as enhance its position and influence in the global security landscape.

Take a coordinated approach to security literacy to increase resilience

The limited understanding of security literacy has led to a lack of government commitment to addressing security and cybersecurity risks. To change that, Global Affairs Canada, national security and defence agencies, provincial and territorial partners, and international partners can collaborate to foster a better understanding of the security risks in economic, social, environmental, and security sectors. Engagement in increasing security literacy in this way could lead to enhanced resiliency across critical infrastructure sectors and proactive security and cybersecurity risk mitigation.¹⁸ 

Collaborate to improve living conditions at home and abroad, attract immigrants, and encourage newcomers to remain 

Canada can take a comprehensive approach to align its humanitarian priorities with efforts to attract skilled labour from other countries—and keep them happy here. To accomplish this and raise its profile in the international community, the federal government needs work with non-governmental organizations (NGO), post-secondary institutions, and professional associations to:

1. Lead by example. Identify and address shortcomings in domestic programs to improve the support system for Canadians and demonstrate effective governance.
2. Support humanitarian efforts abroad. Invest in helping states to unlock capabilities and improve citizens' lives through effective social policies and governmental reform.
3. Incentivize migration of skilled workers to Canada by streamlining immigration processes.

Advance defence expertise at the provincial and territorial level

The federal government’s defence-related collaborations with the provinces and territories typically centre on economic outcomes, assigning defence contracts to encourage provincial investments in defence capabilities. For instance, the National Shipbuilding Strategy awards contracts based on the expected positive economic impact in the regions in which the work takes place. 

This strategy, however, does not prioritize initiatives that foster a defence ecosystem. Provinces and territories can step up by developing their own ecosystems and expertise by investing in research, development, education, and infrastructure through collaborative engagements with public and private and best-in-class organizations. Building in-house knowledge and capabilities would enable provinces to better capitalize on the opportunities from defence contracts, lead to a robust defence industrial base in Canada, and reduce reliance on external sources (foreign companies and countries) for defence capabilities.

Conclusion

Our aspiration is a Canada that efficiently uses its energy, food, and water resources and that optimizes its data and AI capabilities. It’s seen as a decisive business and defence partner, and is recognized for its skill in immigration, climate, and national security policies.

In our ideal of its future state, Canada will:

• Enjoy an effective and skilled diplomatic corps capable of restoring the nation’s brand and influence. A reset of diplomatic stature, recognition, and priorities will reinvigorate Canadian leadership with a focus on the Arctic and global peacekeeping.
• Maintain focused values and strategic investments that increase the nation’s domestic strength and contribute to its soft power, enabling it to have a positive impact on the world stage. Moreover, it will be able to meet its NATO commitment to 2% GDP spending on defence and establish itself as an equal player in the alliance.¹⁹
• Invest in alliances and resiliency for the Arctic through the newest technologies, including quantum computing and AI, as well as emerging technologies for observations, communication, and security to make Canada a reliable, well-informed, and risk-prepared nation that is ready to quickly address future threats to both its own sovereignty and that of its allies.

Endnotes

Thank you to our key contributors, Lucia Nalbandian and Justin Del Negro