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Chapter 5:
Canada's Leadership in the World

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As a member of the G7, G20, the Commonwealth, and La Francophonie, an important contributor to NATO, and a global supporter of democracy, equality, and human rights, Canada is a steadfast defender of the rules-based international order in an increasingly dangerous and competitive world.

Russia's illegal and barbaric invasion of Ukraine is the most significant threat to the rules-based international order since its creation following the Second World War. Thousands of Ukrainians have been murdered, and many millions more have been displaced. The conflict has accelerated longstanding issues of poverty, income inequality, and food insecurity in the Global South.

In response, Canada has provided critical financial and military assistance to Ukraine, worked to implement unprecedented sanctions on Vladimir Putin, his henchmen, and the Russian economy, stepped up to support vulnerable people around the world who are feeling the effects of Putin's barbaric invasion, and welcomed tens of thousands of Ukrainians to Canada.

With democracy under threat from countries like China and Russia, with global progress towards the Sustainable Development Goals slowing, and with climate change contributing to instability around the world, Canada must continue to take action on pressing humanitarian, development, and security challenges—both here at home and around the world.

Over the past year this has meant responding to the hunger crisis in the Horn of Africa, providing critical humanitarian and disaster assistance in Pakistan, Türkiye, and Syria, supporting women in Iran fighting for political and human rights, and providing assistance to restore security for the Haitian people.

Budget 2023 reinforces the government's commitment to keeping Canadians safe, defending the rules-based international order and contributing to global security, supporting the world's poorest and most vulnerable, and standing up for Canadian values around the world.

Key Ongoing Actions

In the past year, the federal government has announced a series of investments that have enhanced Canada's security and our leadership around the world. These include:

5.1 Defending Canada

Whether defending Canada from global threats or working with our allies around the world, the Canadian Armed Forces play an essential role in keeping Canadians safe and supporting global security.

To ensure those who serve our country in uniform continue to have the resources they need, Budget 2022 took significant action to reinforce the Canadian Armed Forces. Budget 2023 lays out the next steps to invest in and strengthen the Canadian Armed Forces.

Budget 2023 also takes decisive action to defend Canada and our public institutions from foreign threats and interference.

Stable, Predictable, and Increasing Defence Spending

Canada's defence policy, Strong, Secure, Engaged, committed to ensuring the Department of National Defence (DND) has stable, predictable funding. The government has delivered on this commitment. As a result of Strong, Secure, Engaged and subsequent funding increases, including funding for NORAD modernization and continental defence announced in June 2022, DND's annual budget is expected to more than double over ten years, from $18.6 billion in 2016-17 to $39.7 billion in 2026-27 on a cash basis.

Defence Policy Update

In response to a changed global security environment following Russia's illegal invasion of Ukraine, the federal government committed in Budget 2022 to a Defence Policy Update that would update Canada's existing defence policy, Strong, Secure, Engaged.

This review, including public consultations, is ongoing, and is focused on the roles, responsibilities, and capabilities of the Canadian Armed Forces. The Department of National Defence will return with a Defence Policy Update that will ensure the Canadian Armed Forces remain strong at home, secure in North America, and engaged around the world.

With this review ongoing, the Canadian Armed Forces have continued to protect Canada's sovereignty in the Arctic, support our NATO allies in Eastern Europe, and contribute to operations in the Indo-Pacific.

In the past year, the government has made significant, foundational investments in Canada's national defence, which total more than $55 billion over 20 years. These include:

In addition, the government is providing $1.4 billion to upgrade the facilities of Joint Task Force 2, Canada's elite counterterrorism unit.

A New Generation of Canadian Fighter Aircraft

With the largest investment in the Royal Canadian Air Force in 30 years, the government is acquiring 88 F-35 fighter aircraft, at a cost of $19 billion. The first of these modern aircraft is scheduled for delivery by 2026.

Canada's new fleet of F-35s will play an essential role in defending Canada's sovereignty, protecting North America, and supporting our allies around the world.

The government will also invest $7.3 billion to modernize, replace, and build new infrastructure to support the arrival of the new F-35s. This is the first project approved under Canada's plan to modernize NORAD.

Establishing the NATO Climate Change and Security Centre of Excellence in Montreal

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Climate change has repercussions for people, economic security, public safety, and critical infrastructure around the world. It also poses a significant threat to global security, and in 2022, NATO's new Strategic Concept recognized climate change for the first time as a major security challenge for the Alliance.

At the 2022 NATO Summit in Madrid, Montreal was announced as the host city for NATO's new Climate Change and Security Centre of Excellence, which will bring together NATO allies to mitigate the impact of climate change on military activities and analyze new climate change-driven security challenges, such as the implications for Canada's Arctic.

Securing Our Economy

Depending on dictatorships for key goods and resources is a major strategic and economic vulnerability. The world has seen this over the past year with Russia's attempts to break European resolve by cutting off natural gas supplies. Our allies are moving quickly to protect themselves from economic extortion, which includes friendshoring their economies by building their critical supply chains through other democracies.

Canada is doing the same, and by working together with our allies and partners, we will ensure that our supply chains are not vulnerable to exploitation, and that hostile foreign powers cannot buy up Canadian industries and natural resources.

As this process continues across the world's democracies, it can make our economies more resilient, our supply chains true to our values, and it can protect our workers from unfair competition created by coercive states and race-to-the-bottom business practices.

Here in Canada, it can also create economic opportunities for Canadian workers and communities. Canada has the talented workforce and the resources needed to become a reliable supplier of the critical goods and resources that our allies need. Budget 2023 investments in building Canada's clean economy will also ensure Canadian workers benefit as we support our allies in friendshoring their economies.

Protecting Diaspora Communities and All Canadians From Foreign Interference, Threats, and Covert Activities

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As an advanced economy and a free and diverse democracy, Canada's strengths also make us a target for hostile states seeking to acquire information and technology, intelligence, and influence to advance their own interests.

This can include foreign actors working to steal information from Canadian companies to benefit their domestic industries, hostile proxies intimidating diaspora communities in Canada because of their beliefs and values, or intelligence officers seeking to infiltrate Canada's public and research institutions.

Authoritarian regimes, such as Russia, China, and Iran, believe they can act with impunity and meddle in the affairs of democracies—and democracies must act to defend ourselves. No one in Canada should ever be threatened by foreign actors, and Canadian businesses and Canada's public institutions must be free of foreign interference.

5.2 Supporting Ukraine

Since Russia's illegal full-scale invasion of Ukraine, Canada has supported the people of Ukraine as they fight for their sovereignty and democracy—and for democracy around the world. Canada will stand with them for as long as it takes.

With more than $5.4 billion in total aid, Canada has provided essential financial assistance to the government of Ukraine and delivered significant military support.

In helping to lead a global effort to inflict crushing economic sanctions on Russia, Canada has also played an important role in reducing Putin's war chest and holding his henchmen accountable.

Canada's financial assistance to Ukraine includes:

Canada's military contributions to support the Armed Forces of Ukraine include:

Other Canadian support for Ukraine has included:

Canada is also playing a leading role in efforts to cut Russia off from the global economy and hold Putin and his hangers-on accountable for their illegal war on Ukraine. Canada's sanctions efforts include:

Chart 5.1
Financial Support to Ukraine
(per capita, USD)
Chart 5.1: Financial Support to Ukraine

Notes: Includes commitments to Ukraine from January 24, 2022 to January 15, 2023, plus US$5.5 billion announced by Japan in February 2023, US$0.5 billion announced by the United Kingdom in March 2023, and $2.4 billion announced by Canada. Financial support for Germany, France, and Italy includes share of support from the European Union, which includes contributions by the European Commission and European Council.

Sources: Trebesch et al. (2023) "The Ukraine Support Tracker" Kiel WP; Department of Finance Canada calculations.

Text version
Financial Support
Japan 48.9
United Kingdom 54.9
Italy 67.2
United States 79.3
Germany 87.3
France 87.9
Canada 98.1

Financial Assistance to Ukraine in 2023

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Canada's financial support for Ukraine has helped its government continue to operate in the face of Russia's illegal invasion, including by paying pensions and delivering essential government services to Ukrainians, purchasing fuel to get through the winter, and restoring damaged energy infrastructure.

Bolstering the Defence of Ukraine

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Canada is steadfast in our commitment to help Ukraine defend its sovereignty, territorial integrity, and democracy, and Budget 2023 commits additional funds for military aid to Ukraine.

Humanitarian, Development, and Security and Stabilization Assistance for Ukraine

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As Ukraine bravely fights back against Putin's illegal invasion, Canada will continue to provide further assistance to the people of Ukraine.

To support Ukraine's ultimate recovery and reconstruction, Canada will also work to assist Ukraine in ensuring its ability to access private capital in the years to come.

A Safe Haven for Ukrainians

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Since January 2022, and particularly since the beginning of Russia's full-scale illegal invasion of Ukraine, Canada has become a safe haven for nearly 200,000 Ukrainian citizens and returning Canadian permanent residents of Ukrainian origin, including through the temporary Canada-Ukraine authorization for emergency travel.

On March 22, 2023, the federal government announced that it was extending this pathway by allowing Ukrainians to apply until July 15, 2023, and arrive in Canada until March 31, 2024.

To support this extension, the government has committed an additional $171.4 million over three years, starting in 2022-23.

Indefinite Withdrawal of Most-Favoured-Nation Status From Russia and Belarus

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On March 2, 2022, Canada became the first country to revoke Russian and Belarusian eligibility for Most-Favoured-Nation status, placing Russia and Belarus in the same category as North Korea. This applied the 35 per cent General Tariff to virtually all Russian and Belarusian imports. Similar measures were subsequently implemented by the United States, the United Kingdom, and other major trading partners.

5.3 Standing Up for Canadian Values

With human rights and the rule of law under threat from authoritarian regimes around the world, Canada has an important role to play in fighting for the values we cherish. Indeed, as a democracy, Canada has an obligation to take steps to protect the most vulnerable and help to build a safer and more prosperous world for people everywhere.

Canada is committed to improving the lives of women, girls, and vulnerable populations around the world, and to increasing international development assistance every year towards 2030. Through our Feminist International Assistance Policy, Canada has delivered high levels of international assistance.

Building on this progress, Budget 2023 continues to take action to stand up for Canadian values around the world.

Chart 5.2
Projected International Assistance Envelope Spending, 2023-24
(millions, cash basis)
Chart 5.2: Projected International Assistance Envelope Spending, 2023-24

Notes: Figures are forecasts and do not include expiring elements that have not yet been

Text version

The chart shows how Canada's International Assistance Envelope resources are projected to be allocated by pool in 2023-24.

Strategic Priorities Fund 200
Crisis Pool 200
International Financial Institutions 801
Peace & Security 448
International Humanitarian Assistance 609
Core Development 4,630

Supporting the Economic Growth of Developing Countries

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Since the 1970s, Canada has offered preferential tariff programs to developing countries, which support these countries in growing their economies through the export of goods to Canada.

This is estimated to reduce federal tariff revenues by $130 million over six years.

Eradicating Forced Labour from Canadian Supply Chains

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Canada is gravely concerned by the ongoing human rights violations against Uyghurs and Muslim minorities in China, as well as by the use of forced labour around the world. Given these concerns, it is important that importers address their supply chain vulnerabilities and ensure their production promotes our shared Canadian values around the world.

5.4 Combatting Financial Crime

Serious financial crimes, such as money laundering, terrorist financing, and the evasion of financial sanctions, threaten the safety of Canadians and the integrity of our financial system. Canada requires a comprehensive, responsive, and modern system to counter these sophisticated and rapidly evolving threats.

Canada must not be a financial haven for oligarchs or the kleptocratic apparatchiks of authoritarian, corrupt, or theocratic regimes—such as those of Russia, China, Iran, and Haiti. We will not allow our world-renowned financial system to be used to clandestinely and illegally move money to fund foreign interference inside Canada.

Since 2019, the federal government has modernized Canada's Anti-Money Laundering and Anti-Terrorist Financing (AML/ATF) Regime to address risks posed by new technologies and sectors, and made investments to strengthen Canada's financial intelligence, information sharing, and investigative capacity.

Canada's AML/ATF Regime must continue to be strengthened in order to combat the complex and evolving threats our democracy faces, and to ensure that Canada is never a haven for illicit financial flows or ill-gotten gains.

In Budget 2023, the government is proposing further important measures to deter, detect, and prosecute financial crimes, protect financial institutions from foreign interference, and protect Canadians from the emerging risks associated with crypto-assets.

Combatting Money Laundering and Terrorist Financing

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Money laundering and terrorist financing can threaten the integrity of the Canadian economy, and put Canadians at risk by supporting terrorist activity, drug and human trafficking, and other criminal activities. Taking stronger action to tackle these threats is essential to protecting Canada's economic security.

In June 2022, the Government of British Columbia released the final report of the Commission of Inquiry into Money Laundering in British Columbia, also known as the Cullen Commission. This report highlighted major gaps in the current AML/ATF Regime, as well as areas for deepened federal-provincial collaboration. Between measures previously introduced and those proposed in Budget 2023, as well as through consultations that the government has committed to launching, the federal government will have responded to all of the recommendations within its jurisdiction in the Cullen Commission report.

In Budget 2023, the federal government is taking action to address gaps in Canada's AML/ATF Regime, and strengthen cooperation between orders of government.

These legislative changes will:

Strengthening Efforts Against Money Laundering and Terrorist Financing

In keeping with the requirements of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA), the federal government will launch a parliamentary review of this act this year.

This review will include a public consultation that will examine ways to improve Canada's Anti-Money Laundering and Terrorist Financing (AML/ATF) Regime, as well as examine how different orders of government can collaborate more closely. This will include how governments can better use existing tools to seize the proceeds of crime, and the potential need for new measures, such as unexplained wealth orders. Other topics of consultation will include, but will not be limited to, measures to support investigations and prosecutions, enhance information sharing, close regulatory gaps, examine the role of the AML/ATF Regime in protecting national and economic security, as well as the remaining recommendations from the Cullen Commission.

Canada is also leading the global fight against illicit financial flows, having been chosen to serve for two years, effective July 2023, as Vice President of the Financial Action Task Force (from which Russia has been suspended indefinitely), as well as co-Chair of the Asia/Pacific Group on Money Laundering for two years, beginning in July 2022. 

Implementing a Publicly Accessible Federal Beneficial Ownership Registry

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The use of anonymous Canadian shell companies can conceal the true ownership of property, businesses, and other valuable assets. When authorities don't have the tools to determine their true ownership, these shell companies can become tools of those seeking to launder money, avoid taxes, evade sanctions, or interfere in our democracy.

To address this, the federal government committed in Budget 2022 to implementing a public, searchable beneficial ownership registry of federal corporations by the end of 2023.

This registry will cover corporations governed under the Canada Business Corporations Act, and will be scalable to allow access to the beneficial ownership data held by provinces and territories that agree to participate in a national registry.

While an initial round of amendments to the Canada Business Corporations Act received Royal Assent in June 2022, further amendments are needed to implement a beneficial ownership registry.

The government is introducing further amendments to the Canada Business Corporations Act and other laws, including the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and the Income Tax Act, to implement a publicly accessible beneficial ownership registry through Bill C-42. This represents a major blow to money laundering operations and will be a powerful tool to strengthen the security and integrity of Canada's economy.

The federal government will continue calling upon provincial and territorial governments to advance a national approach to beneficial ownership transparency to strengthen the fight against money laundering, tax evasion, and terrorist financing.

Modernizing Financial Sector Oversight to Address Emerging Risks

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Canadians must be confident that federally regulated financial institutions and their owners act with integrity, and that Canada's financial institutions are protected, including from foreign interference.

These legislative changes will:

The government will also review the mandate of FINTRAC to determine whether it should be expanded to counter sanctions evasion and will provide an update in the 2023 fall economic and fiscal update. In addition, the government will review whether FINTRAC's mandate should evolve to include the financing of threats to Canada's national and economic security as part of the parliamentary review.

These actions will continue the strong oversight of the financial sector that underpins a sound and stable Canadian economy.

Canada Financial Crimes Agency

To strengthen Canada's ability to respond to complex cases of financial crime, Budget 2022 announced the government's intent to establish a new Canada Financial Crimes Agency (CFCA), and provided $2 million to Public Safety Canada to undertake this work.

The CFCA will become Canada's lead enforcement agency against financial crime. It will bring together expertise necessary to increase money laundering charges, prosecutions and convictions, and asset forfeiture results in Canada. These actions will address the key operational challenges identified in both domestic and international reviews of Canada's AML/ATF Regime.

Public Safety Canada is developing options for the design of the CFCA, working in conjunction with federal, provincial and territorial partners and external experts, as well as engaging extensively with stakeholders. Further details on the structure and mandate of the CFCA will be provided by the 2023 fall economic and fiscal update.

Protecting Canadians from the Risks of Crypto-Assets

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Ongoing turbulence in crypto-asset markets, and the recent high-profile failures of crypto trading platform FTX, and of Signature Bank, have demonstrated that crypto-assets can threaten the financial well-being of people, national security, and the stability and integrity of the global financial system.

To protect Canadians from the risks that come with crypto-assets, there is a clear need for different orders of government to take an active role in addressing consumer protection gaps and risks to our financial system.

The federal government is working closely with regulators and provincial and territorial partners to protect Canadians' hard-earned savings and pensions, and Budget 2023 proposes new measures to protect Canadians.

Secure pension plans are the cornerstone of a dignified retirement. While pension plan administrators are required to prudently manage their investments, the unique nature and evolving risks of crypto-assets and related activities require continued monitoring.

The federal government launched targeted consultations on crypto-assets as part of the review on the digitalization of money announced in Budget 2022. Moving forward, the government will continue to work closely with partners to advance the review, will bring forward proposals to protect Canadians from the risks of crypto-asset markets, and will provide further details in the 2023 fall economic and fiscal update.

Chapter 5
Canada's Leadership in the World
millions of dollars
2026-2027  2027-2028  Total
5.1. Defending Canada 0 15 27 26 9 10 86
Increasing NATO's Common Budget 70 116 235 298 374 465 1,558
Less: Funds Previously Provisioned in the Fiscal Framework
-70 -116 -235 -298 -374 -465 -1,558
Acquiring New Critical Weapons Systems 0 112 127 101 101 101 542
Less: Funds Previously Provisioned in the Fiscal Framework
0 -112 -127 -101 -101 -101 -542
Replenishing the Canadian Armed Forces' Stocks 0 135 121 119 100 130 606
Less: Funds Previously Provisioned in the Fiscal Framework
0 -135 -121 -119 -100 -130 -606
Improving the Digital Systems of the Canadian Armed Forces 32 161 161 69 69 69 562
Less: Funds Previously Provisioned in the Fiscal Framework
-32 -161 -161 -69 -69 -69 -562
Further Support Initiatives to Increase the Capabilities of the Canadian Armed Forces 2 30 28 16 15 0 90
Less: Funds Previously Provisioned in the Fiscal Framework
-2 -30 -28 -16 -15 0 -90
Establishing a Regional Office for NATO's Defence Innovation Accelerator for the North Atlantic 0 4 6 10 10 10 41
Less: Funds Previously Provisioned in the Fiscal Framework
0 -4 -6 -10 -10 -10 -41
Establishing the NATO Climate Change and Security Centre of Excellence in Montreal 0 11 8 7 7 7 40
Less: Funds Sourced From Existing Departmental Resources
0 -3 -2 -2 -2 -2 -10
Protecting Diaspora Communities and All Canadians from Foreign Interference, Threats and Covert Activities 0 8 21 20 4 4 56
5.2. Supporting Ukraine 98 212 61 0 0 0 371
Bolstering the Defence of Ukraine 200 0 0 0 0 0 200
Humanitarian, Development and Security and Stabilization Assistance for Ukraine 0 85 0 0 0 0 85
Less: Funds Sourced From Existing Departmental Resources
0 -85 0 0 0 0 -85
A Safe Haven for Ukrainians1 0 212 61 0 0 0 273
Less: Funds Previously Provisioned in the Fiscal Framework
-102 0 0 0 0 0 -102
5.3. Standing Up for Canadian Values 0 0 10 40 40 40 130
Supporting the Economic Growth of Developing Countries 0 0 10 41 41 41 132
Less: Projected Revenues
0 0 0 -1 -1 -1 -2
Additional Investments – Canada's Leadership in the World 0 13 27 36 31 32 140
Establishing a Cyber Security Certification Program for Defence Procurement View the impact assessment 0 6 9 9 0 0 25
Less: Funds Sourced From Existing Departmental Resources
0 -3 -4 -4 0 0 -11
Funding proposed for PSPC, DND, and the SCC-CCN to establish a cyber security certification program to protect Canada's defence supply chain. Cost recovery options will be explored for the program's administration.
Canada's Extended Continental Shelf (UNCLOS) Program View the impact assessment 0 6 13 31 31 32 113
Funding proposed for NRCan to prepare a revised submission to secure Canada's rights over its extended continental shelf in the Arctic Ocean, and to protect Canadian sovereignty in this increasingly contested area.
Enabling Humanitarian Assistance View the impact assessment 0 5 11 0 0 0 16
Less: Funds Sourced From Existing Departmental Resources
0 -1 -2 0 0 0 -3
Funding proposed for PS, the RCMP, GAC, and CSE to support the delivery of a mechanism under proposed amendments to the Criminal Code, to permit humanitarian assistance and other activities (e.g., to support refugee resettlement), in areas controlled by terrorist entities.
Chapter 5 - Net Fiscal Impact 98 241 125 102 80 81 728

Note: Numbers may not add due to rounding. A glossary of abbreviations used in this table can be found at the end of Annex 1.

1Announced March 22, 2023.

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