Developing a Complex

By Peter Langille | 1988-04-01 12:00:00

A military-industrial complex is relatively new phenomenon for Canada, but business, government, and military leaders are determined to pursue their interests within a coalition that is not only aligned to, but directly integrated with the larger American military -industrial complex.

The Pentagon, along with the Canadian government and the Department of National Defence, have powerful allies in their efforts to develop a North American defence industrial base. Organizations such as the Business Council on National Issues (BCNI), the Association for American Defence Preparedness -- Canadian Chapter (AADP), the Conference of Defence Associations (CDA) and the Aerospace Industries Association of Canada (AIAC) are amongst the leading proponents of economic and military integration.

It should not come as a surprise. The Reagan administration's arms buildup generated a surge of demand for Canadian military products. Within a short period, the production and export of armaments became the second leading growth sector of the economy. In 1974, Canada exported $280.4 million worth of military products, but by 1985 these exports increased to $1,902.7 million. As a 1983 report on the armaments industry prepared by the Legislative Research Services acknowledged, "Although Canadian arms merchants -- a term that includes both government and industry -- have established a firm place for themselves among global arms dealers, efforts to encourage the further development of this profitable venture are setting the pace for the industrial and technological goals of the eighties and beyond."

This begins to explain why a number of Canadian businesses and military-industrial associations have come to play a prominent role in promoting a larger defence budget, an exaggerated Soviet threat, and a Reaganesque "security" policy. According to officials in the Defence Programs Bureau of the Department of External Affairs, there are expectations to export over $2.5 billion in defence products in 1988.

A clear reflection of those interests which propel the arms race was seen at the recent Financial Post/Air Canada conference, "The Defence Industry: Building Canadian Capability."

Approximately 500 delegates packed the Westin Hotel conference centre to hear of the economic and military opportunities offered by the new White Paper on Defence and the promise of closer military and industrial relations with the United States. The most alluring prospect, and one that organizations such as the BCNI, the ADPA (Canadian Chapter) and the CDA had lobbied hard to get, was the prospect of further integration into a North American defence industrial base. For a $500.00 registration fee, one expects a lot in return. In this case, billions were

Canada's Minister of National Defence, Perrin Beatty, set the agenda by parroting President Reagan's argument that "a protracted non-nuclear conflict would be possible without an escalation to a nuclear exchange." On this basis, Beatty stated that a major industrial effort would be required to develop a defence industrial base capable of sustaining protracted conventional war-fighting. He recommended that Canada participate in a wider North American Defence Industrial Base Organization (NADIBO).

The Defence Minster predicted that Canadian industry would derive great benefits from building nuclear submarines and other such programs. Accordingly he stresses that the government will "be counting on the support of industry to help implement this policy and ensure its success." In order to strengthen the ties between government and industry, the Minister also launched a new Defence Industrial Preparedness Advisory Committee (DIPAC) to be co-chaired by Peter Cameron of the Business Council on National Issues (BCNI).

The BCNI is a powerful organization. It has become the senior voice of business in Canada since it was founded in 1976. Composed of the chief executive officers of 150 major companies operating in Canada -- most of which are multinational corporations -- they represent assets of 700 billion dollars and employ over one and a half million Canadians. This has enabled them to exert an enormous influence over government policy in the last several years. For example, the Business Council has been the chief architect and the major proponent of the Canada-U.S. trade agreement.

The BCNI's association with defence affairs coincided with recognition of the financial opportunities arising from heightened Cold War tensions and the American arms buildup. In 1981, they launched their own Task Force on Foreign Policy and Defence. Through their extensive contacts within government and with several Ministers of Defence they received high-level briefings at NATO and NORAD headquarters. Since the inception of the task force, they have been active with publications and presentations that emphasize the Soviet threat and the need for a Canadian military buildup.

The current head of the task force is Thomas Savage, who is also the head of ITT Canada Limited. ITT is a major defence contractor in the U.S. Their chief advisor is Brigadier General George Bell (ret.) who now serves as President of the Canadian Institute for Strategic Studies. Thomas d'Aquino, president and chief executive officer of th BCNI, has been proud to note that Supreme Allied Commander, U.S. General Bernard Rogers, praised the BCNI's defence initiative as a model for the involvement of non-military organizations in NATO countries. Perrin Beatty is providing more than praise for the BCNI's assistance. As a reward, his new DIPAC initiative provides the BCNI with a unique opportunity to coordinate their efforts with the Department of National Defence. Although those involved try to discourage the use of the term, the military-industrial complex has emerged as a serious force on the Canadian political scene. It now encompasses a wide coalition of interests -- a network of interlocking scientific, business, bureaucratic, and military institutions that are reliant upon large government arms expenditures to fund the research, design, development, testing, and eventual deployment of new weapon systems such as cruise missiles, nuclear submarines and strategic defences.

The origins of Canada's new military-industrial complex were in one of the first Canada-U.S. free trade arrangements --the Defence Production Sharing Agreement (DPSA). This arrangement provided defence corporations based in Canada with access to the American market, and the opportunity to bid on Pentagon contacts. A later amendment to the arrangement stipulated that a reciprocal balance of trade in defence products be maintained. Canadians would be forced to purchase the equivalent in dollar value of what Canadian based "defence"

corporations could export. It was understandable that the U.S. government and American defence contractors would want similar access to the Canadian market. Nevertheless, by 1986-87, of the 25 major Canadian defence producers, 18 were branch plants of foreign owned multinational corporations.

It is no coincidence that the BCNI is assisting in the coordination of the free trade initiative and the development of a North American defence industrial base. They represent the most powerful multinational corporations in Canada. The combination of the DPSA and the recent DIPAC and NADIBO arrangements serves to strengthen the military-industrial complex and provide greater profits and influence to those who share similar interests.

Perrin Beatty has not tried to cover up the new alliance or the agenda. As he recently stated, "We will conclude a free trade deal with the United States and we will develop a North American defence industrial base for one good reason -- it is good for Canada."

"Those who oppose such trends," were described by the Minister as "today's Luddites."