While Australia and Canada are similar in many ways, their approaches to defence policy are quite different, not least when it comes to their defence budgets. While Australia’s GDP is about 18% smaller than that of Canada, it spends considerably more on defence—US$24.0 billion this year, compared with Canada’s US$14.0 billion.

The Royal Australian Navy (RAN) and the Royal Canadian Navy (RCN) are recapitalising major parts of their fleets at around the same time, with the RAN’s SEA 5000 program and the RCN’s Canadian Surface Combatant (CSC) inching closer to decisions. It’s interesting to see how the two countries approach what at first glance looks like a similar defence problem, so we produced an analysis for the CDA Institute in Ottawa, which has published our findings in full in the latest issue of their On Track magazine.

Both countries are allies of the United States, and both have long and sparsely occupied coastlines, and large areas of ocean to surveil and secure. Both are commodity exporters and rely heavily on foreign sales for their prosperity.

But Canada has several important advantages compared to Australia. Canada and the US have the largest bilateral trade relationship in the world, which means Canada is less dependent on seaborne trade than Australia. And Canada’s contiguity with the continental US insulates it from geopolitical shifts in other regions of the world, and grants it an implicit American security guarantee. While Canada and the US are bound to defend each other through their membership in NATO, their geographic proximity means that the US would have an inherent interest in preventing foreign interference in Canada even without formal treaty commitments. Washington expects Canada to do its part, but as the more capable partner, the US takes the lead in continental defence—and it can’t opt out even if it judges that Ottawa isn’t pulling its weight.

Those essential differences play out in the military force structures of the two nations. One thing that’s immediately apparent is that the RAN is much more ‘balanced’ than the RCN—essentially it can do a little bit of everything, rather than focusing on one or two operational priorities. The RAN has a solid amphibious capability by virtue of its two Canberra-class LHDs and HMAS Choules. It also has a robust submarine capability in the six Collins-class boats. The core of its surface fleet currently comprises eleven frigates (three Adelaide-class and eight ANZAC-class) and will grow to twelve in future (three Hobart class DDGs and nine Future Frigates).

The RAN’s force structure reflects the fact that Australia is far away from its ANZUS ally, and has de-facto responsibility for security in its near region (as was evidenced by the small role played by the US in the INTERFET operation in East Timor). Australia needs a reasonable level of self-sufficiency to carry out that role. Having a ‘balanced’ fleet allows the RAN to respond to a variety of threats, from high-end warfighting to humanitarian assistance/disaster relief in the South Pacific. Australia also needs to be able to pull its weight as a US ally, hence the acquisition of Aegis destroyers and the emphasis on using an American combat system and weapons for its submarines.

The RCN, on the other hand, is much more specialised. Due to its implicit security guarantee that comes with the land border with the US, Canada doesn’t have to worry much about defending North America’s maritime environs. So the RCN has traditionally focused its warfighting capabilities further afield, mainly in Europe. And as part of the broad NATO alliance, Canada can opt to provide a high level of capability in a relatively narrow spectrum of activities. During the Cold War the RCN was a prominent contributor to NATO’s anti-submarine warfare (ASW) operations and its current force structure reflects that heritage. It currently operates 12 Halifax-class frigates optimised for ASW, as well as four Victoria-class diesel electric submarines that, among other duties, help NATO navies hone their ASW skills.

Australia is embarking on an ambitious program to double the size of its submarine arm from six to twelve, thus matching the number of major surface combatants. But the RCN’s submarine fleet is small compared to its surface fleet and there seems to be little appetite for an expansion of the RCN’s underwater capability. The RCN doesn’t field much in the way of amphibious capability, and has no specialist air defence vessels—two areas in which Australia has made a substantial investment.

The specialisation that Canada has been able to pursue has resulted in a Navy that is focused but limited in the scope of activities it can undertake. But it’s also substantially less expensive than Australia’s ‘balanced force’, thus allowing Canada to do defence on the (relative) cheap. That all reflects the difference between an implicit but unshakeable security guarantee and one that is contingent on the US deciding that it needs to be engaged an ocean away from its own shores.

Sea State

A report released by the Center for Strategic and Budgetary Assessments has proposed basing a second US aircraft carrier in Japan. The report argues that a continuous presence of US naval assets will be harder to sustain if the number of vessels declines (which is likely) and that forward basing would make deployment much more efficient. An aircraft carrier based in Japan would be able to spend triple the amount of time in its area of operation compared to one based in the US. However, the US Navy reportedly has not yet discussed the possibility.

The UK has been forced to ask for help from France and Canada as they search for a Russian submarine. The submarine was reportedly spotted off the Scottish coast and the UK fears the boat could be trying to spy on a Trident nuclear deterrent sub. The UK retired their sub-hunting aircraft in 2011 during widespread military cuts and they are yet to be replaced. Russian submarines have been quite the nuisance this year, eluding the Swedish Navy in Stockholm and ‘aggressively operating’ near underwater communications cables.

The keel has been laid down on the third and final Hobart-class Air Warfare Destroyer, HMAS Sydney. HMAS Hobart was launched in May and is due to be delivered in mid-2017, with the Sydney due for delivery in the first half of 2020.

 

Flight Path

Uh-oh, it looks like the long-troubled F-35 Joint Strike Fighter program may about to take another hit—this time from the US. It seems that ballooning costs and low production rates of the fighter program are causing the US Air Force to consider buying additional F-15s or F-16s. Franz-Stefan Gady takes a look at the rumours on The Diplomat. But it’s not all bad news for the fighter program—the UK has ramped up its commitment to the program, with Prime Minister David Cameron announcing over the weekend the UK will buy 138 F-35s, with 24 in operation by 2023.

The Royal Australian Air Force and the Australian Antarctic Division have successfully completed their first joint mission delivering bulk cargo to Antarctica by air. A C-17A Globemaster, the largest aircraft to land at the Wilkins aerodrome in Antarctica, made the 3,500 km trip from Hobart. You can watch a short time-lapse of the C-17 being unloaded here.

The French aircraft carrier Charles de Gaulle has been deployed to the eastern Mediterranean to enable French jets to intensify air strikes on Daesh targets in Syria. Since the Paris attacks, French airstrikes have been targeting the Daesh stronghold of Raqqa in Syria. Britain is reportedly poised to join France and other countries in carrying out airstrikes against Daesh targets.

 

Rapid Fire

Although Canada may be drawing down its aerial presence in the war on Daesh, Prime Minister Justin Trudeau has announced an increased number of Canadian military advisers on the ground in Iraq. The number of additional troops to be deployed isn’t clear yet, but there are already roughly 600 Canadian Armed Forces personnel in Iraq, including 69 Special Forces trainers.

US Marine Corps infantry units are conducting tests alongside the affectionately-named ‘Spot the robotic dog.’ The prototype quadruped robot is being developed by google-owned company Boston Dynamics, and is being used to investigate the possible role of quadruped robots in combat zones. The training exercises tested Spot’s scouting abilities by sending the robot into buildings ahead of marines, but he could also be used for load carriage, search and rescue operations and charting enemy territory.

The number one problem with the US Army may be the number of non-deployable soldiers. Speaking at Fort Leavenworth last week, Daniel A. Dailey, Sergeant Major of the Army, stated that as many as 50,000 US soldiers were medically unfit for deployment. Daily said that this amounts to roughly three of the ten US Army divisions and represents a sizeable impact on force readiness.

Australia and Canada have similar defence problems. Both have a continental area to surveil and defend; and both front onto three oceans, while having to build their defence forces from the resources of relatively small populations. And both have made remarkably similar investment decisions in the past (see table).

Table 1: Australia and Canada comparators

	Australia	Canada
Population (2013)	23.1 million	35.2 million
Defence budget (billion $)	A$32.1/US$25.0	C$19/US$15.3
Defence budget (% GDP)	1.93	1.0
Army (full time)	28,600	25,000
Strike fighter aircraft	95	77
Maritime patrol aircraft	18	14
Surface combatants	11	13
Submarines	6	4

Sources: World Bank, budget papers, IISS Military Balance 2014 Strategic Outlook for Canada 2014/15.

The funding trajectories and health of the two militaries has also been similar over the past 25 years. The capability of the Australian Defence Force (ADF) ran down considerably in the 1990s as a consistently flat budget profile eroded buying power. Then, after just squeaking through the East Timor operation in late 1999, the government saw fit to deliver a substantial funding boost in the early 2000s.

Likewise, the Canadian Armed Forces (CAF) lacked funds to even sustain the force in being during 1995–2004, and significant force structure shortfalls appeared. A 2015 Parliamentary Budget Officer (PBO) report into defence funding (PDF) noted that the funding across that decade fell short by C$13.4 billion, resulting in the ‘hollowing out’ of the CAF, and a ‘shortage of trained personnel, loss of airlift and surveillance capability in the Air Force, loss of command, control and air defence platforms in the Navy and loss of direct and indirect fire capabilities and wheeled logistics vehicles in the Army’. In response—much like in Australia—defence funding was ramped up in 2005, with approximately C$20.9 billion beyond the ‘tread water’ level being provided, which allowed many of the force structure and readiness deficiencies to be addressed.

But while there’s been a close parallel between the two countries’ approach to defence in the past, the future looks different. Australia’s government has a policy of increasing defence spending to 2% of GDP by FY 2023–24. If that promise is kept, by Mark Thomson’s estimates (pp. 129-131) as much as an extra A$61 billion will be made available for capital investment over the next decade, even allowing for greater than inflation increases in personnel and operating costs.

In Canada, however, the situation looks much bleaker. In response to calls for greater spending, the Canadian government announced in its 2015 budget that it would increase the defence budget by 3% nominal each year, starting in 2017/18. Assuming that background inflation doesn’t rise over 3%, at least it’s a real increase, but it won’t be anywhere near enough. The PBO’s future projections suggest that there’ll be a shortfall of at least C$30 billion over the next decade.

That would be bad enough if Canada was able to soldier on with its existing materiel. But the CAF needs to recapitalise many of its frontline assets, including its ageing CF-18 Hornet strike fighters. (Australia is spending about A$20 billion to replace its Hornets.) Similarly, the Canadian Air Force would ideally like to replace its CP-140 Aurora maritime patrol aircraft. Australia has already signed deals to replace its similar AP-3C Orions with a mixture of P-8 Poseidon and MQ-4 triton aircraft, at a total approved cost of around A$7 billion. Bluntly put, Canada won’t be recapitalising its aircraft fleets with the sort of money likely to be available. And even upgrades to keep the current fleets flying would have to be marginal propositions. It’s the same story at sea—it’s hard to see Canada replacing its submarines, for example.

Given the remarkable similarities between the current and past trajectories of Australian and Canadian defence funding, it seems odd that they’re now diverging so markedly. Of course, plans are plans, not reality. Canada could change its mind as the realities of the current abstemious policy sink in and a future Australian government could decide it has better things to do with 2% of GDP.

The answer might lie in each country’s assessment of its security. One very substantial difference between Australia and Canada is geography. One has an alliance and a long land border with the United States, and the other only an alliance, being at the end of long lines of communication. All other things being equal, Australia has to work harder at alliance maintenance than Canada to be sure of its security guarantee. That probably explains the existing difference in government spending priority, shown by the commitment of just 1% of GDP on Canada’s defence but up to 2% for Australia.

There’s also the China factor. The security situation on the western side of the Pacific is less sanguine than to the east and Australia is more alarmed than Canada. If it’s serious about fixing the looming defence funding crisis, perhaps Canada needs to learn to worry a bit more.

This post is abridged from an article in the Summer 2015 edition of On Track (PDF), the journal of the Conference of Defence Associations Institute, Canada.

Tony Abbott’s early June visit to Ottawa, Washington, and New York and then to France for the 70th anniversary of the D-day landings, offers a platform for the Prime Minister to set directions in one essential relationship—the US—and two under-rated ones, France and Canada. Each leg of his visit deserves a blog post outlining the strategic opportunities and risks in those relationships. After the PM’s North Asia visit it’s clear the government wants to reshape Australia’s key international partnerships. In addition to the Free Trade Agreements, promoting closer strategic ties with Japan and more open investment relations with China shows the government aims for more than just continuity. In Canberra, where success in officialdom is measured more by delivering stability than change, that reshaping may come as a surprise.

Tony Abbott’s meeting with fellow conservative Canadian PM Stephen Harper will inevitably be overshadowed by his later meeting with President Obama, but we shouldn’t underestimate Abbott’s interest in the Canadian relationship. In February this year he told the Australia-Canada Economic Leadership Dialogue in Melbourne that ‘the relationship is strong but under-developed even though we are as like-minded as any two countries can be. So, I want to make more of this friendship: for our own good and for the good of the wider world’. As Abbott’s speech makes clear, he values the link for its historical foundations in military cooperation during WWI. The PM was too savvy to use the term ‘Anglosphere’, because that would have been reviled by the usual glassy-eyed suspects, but it’s clear the government sees the intelligence relationship between the five-eyes countries as bedrock national security. The question is: what more could or should be done in defence and security cooperation between Canberra and Ottawa? Read more