Show Me the Money: National Security in the 2019 Federal Budget: Part 1

3 May 2019

By Stephanie Carvin

National security is seldom an issue that grabs the attention of the Canadian media – even less so on budget day (and even less so during a political scandal). A quick look on the website for the budget highlights spending on seniors, pharmacare, housing and policies to promote good jobs – not a spy to be found. Nevertheless, for Canadian national security watchers there were a number of items in the 2019 Federal Budget that give a pretty good indication of the Liberal government’s priorities as they head into an election in just a few short months.

I’ve broken this blog into two parts that provide a mostly descriptive view of the Budget. First, a post on cybersecurity, election security and economic national security. The second part will look at national security policing priorities, the border and anti-money laundering initatives


Like last year, cybersecurity is the major headline in terms of national security. In 2018, the Liberal government announced $507.7 million over five years, starting in 2018-2019, for this purpose, with $108.8 million per year ongoing to support the National Cyber Security Strategy and to establish the Canadian Centre for Cyber Security (which officially launched in October 2018).

Budget 2019 provides $144.9 million over five years, starting in 2019-20 to protect Canada’s critical cyber systems in the finance, telecommunications, energy and transportation sectors. (This includes $22.9 million from within existing CSE resources.)

Interestingly, the Budget then hints at legislation to come: To this end, the Government intends to propose new legislation and make necessary amendments to existing federal legislation in order to introduce a new critical cyber systems framework. And indeed, sources within Public Safety say that despite the short time left in the legislative calendar, the government will be introducing legislation on cybersecurity as relates to critical infrastructure sometime in May.

This funding will also support the Canadian Centre for Cyber Security “in providing advice and guidance to critical infrastructure owners and operators on how to better prevent and address cyber-attacks.” While the Budget document doesn’t say this directly, presumably the funding and new legislation are the result of new mandates under the CSE Act (if Bill C-59 ever passes).

Not another network!

Interestingly, the budget also includes $80 million for the establishment of three or more Canadian cyber security networks across Canada that are affiliated with post-secondary institutions. Apparently, these will be selected through a “competitive process” that will expand research, development and commercialization partnerships between academia and the private sector and expand the pipeline of cyber security talent in Canada.”

I have mixed thoughts on this. Collaboration is fine, but so-far the “big-issue network” approach taken by the Trudeau government has had limited results. In 2017 the Liberals’ Strong, Secure Engaged defence strategy announced that it would be setting up networks to study defence issues in Canada. Two years and one experimental network later, we still don’t know what DND’s intention in this space actually is. In the weeks before Christmas, the government announced a grant program (New Frontiers in Research Fund) that forced thousands of early career engineers and social scientists into a shot-gun marriage to spend their pre-tenure holidays coming up with a poorly-defined “high-risk” research project. Groups, such as Serene-RISC are already doing good work in this space. So, I am a bit skeptical over this idea – and forcing academics to burn their productive hours to play guessing games over what the government actually wants to see is, in my view, not the best way to go.

Election Security

Another clear priority that has emerged for the Trudeau government since 2017 has been election security. Under “protecting democracy” the Budget announces $30.2 million on safeguarding democratic institutions. This includes $4.2 million over three years, starting in 2019-20, to provide cyber security advance to Canadian political parties and election administrators. As Craig and I discussed on the podcast with the Chief Electoral Officer, political parties are likely to be targeted and ensuring they have robust security to protect their information, systems and the data they have on voters is key. (Although the government has still not mandated a strict policy in this regard.)

Canada has also been leading international efforts to promote collaboration to detect and potentially deter foreign interference in the election. In January 2019, the government announced the creation of a “Rapid Response Mechanism” that will “be tasked with sharing information and threat analysis — and identifying opportunities for coordinated responses when attacks occur.” The Budget provides the Mechanism with $2.1 million dollars over three years. (While the Mechanism deserves a post in its own right, it’s worth noting that it was announced during the June 2018 G7 Summit.)

Along these lines the government also announced $19.1 million for the Department of Canadian Heritage with $19.4 million over four years, starting in 2019–20, to launch a Digital Democracy Project. Heritage already has $7.5 million over two years for a “Digital Citizen Initiative” which is supposed to support digital, news and civic literacy programming and tools ahead of the 2019 General Election. Funding will support research and policy development on online disinformation in the Canadian context – but we have little to no idea how this will be done. If I was to wish/speculate, I would look at the late 2000s when the Harper government created the “Kanishka Project” to further research on terrorism in Canada. As an academic it would be interesting to see Heritage create a “Disinformation Kanishka Project” – that would fund research projects on this topic.

Economic National Security

Something that has been growing behind the scenes in recent years is the salience of “economic security”. This began in a significant way in the early 2010’s with concerns about the strategic impact of foreign investment, particularly by state owned enterprises. This has expanded in recent years to cover issues related to trade, intellectual property and technology deals with companies in potentially adversarial states.

Budget 2019 devotes $67.3 million over five years, starting in 2019-2020 and $13.8 million per year ongoing to “economic-based security threats” – something that seems to be entirely unique to this document. This money will go to Public Safety Canada; Innovation, Science and Economic Development Canada (ISED); Global Affairs Canada; and the Royal Canadian Mounted Police, among other federal agencies.

What is even more interesting is how the funds will be spent. According to the document, the government intends to: “enhance outreach and engagement with key stakeholders including Canadian businesses and academic institutions; raise awareness about risks; and enhance the suite of tools to appropriately address threats while continuing to encourage foreign investment, trade and economic growth.” Reading this line in conjunction with the December 2018 speech by CSIS Director David Vigneaut that identifies economic espionage as a priority threat to Canada, it suggests the government may be taking a far more muscular approach to warning Canadian industry and academics about the risks of working with companies like China. This would be something of a sea-change: Canada’s national security agencies have not typically engaged with the private sector in this way – and dealing with academic outfits is always sensitive. I am definitely interested in finding out more about this new strategy prior to the 2019 election.