Don’t miss the boat — Canada and AUKUS should be partners

Canada’s absence from the AUKUS trilateral security pact between fellow Five Eyes allies Australia, the United Kingdom and the United States has not gone unnoticed. But despite recent admonishments that Canada’s global security contributions are “shameful,” or claims that it has been “America’s least helpful ally,” little appears to be being done to bring Ottawa into the fold.

If Washington, London and Canberra are serious about ensuring Ottawa is a steadfast partner in competition with China, they should immediately invite their ally in the high north to a seat at the AUKUS Pillar II table, just as they formally did with Japan earlier this year. This would place the ball squarely in Prime Minister Justin Trudeau’s court to decide on his nation’s future role in supporting Indo-Pacific security.

Canada’s participation in AUKUS makes eminent sense as the partnership’s three incumbents rapidly transcend their initial focus on building a fleet of long-range nuclear-powered submarines for Canberra. AUKUS Pillar I, the centerpiece of the agreement equipping Australia with the highly sensitive technologies it needs to build these submarines, remains a pivotal long-term priority. But AUKUS Pillar II, focusing on an array of advanced capabilities, is quickly emerging as the Indo-Pacific alliance-of-choice for managing technology cooperation in the region and preventing Chinese overmatch in strategic areas such as AI, quantum, hypersonics, and critical minerals.

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At the State Department and the Pentagon, Pillar II increasingly resembles the crown jewel in a growing minilateral network intended to spur co-development, co-production, and co-sustainment in the United States’ priority theater. Last December’s landmark legislation from the US Congress, authorizing the State and Commerce Departments to develop new technology transfer rules to create a seamless Pillar II export control environment across the AUKUS nations, should have opened a political window for drawing Canada into the partnership. But it did not.

Washington’s excitement around AUKUS is evident, but Canada’s appetite for Pillar II cooperation is frequently overshadowed by its longstanding aversion to acquiring nuclear submarines and the reality of its atrophied defense industrial base. Ottawa’s lower readiness for Pillar I cooperation overlooks the fact that the partnership, with its shared cultural and historical roots and advanced industrial capacity, should provide low-hanging fruit for Canadian policy and business leaders starved of opportunities for high-technology cooperation elsewhere.

In the lead-up to the recent Washington NATO summit, the Trudeau government’s current commitment to raising defense expenditures to 1.76 percent of GDP by 2030 drew sharp criticism for falling well short of most fellow NATO members — and its alignment to the transatlantic alliance’s 20 percent spending requirement for future capabilities is even weaker. Ottawa is now facing international pressure to spend more, particularly over its shaky path to cross the NATO target of 2 percent GDP on defense spending — a number it exceeded through the early 1970s.

Participation in a mature technology alliance such as Pillar II could help quell anxiety about Canada’s future ability to meaningfully support its security partners. The vitality of the Canadian innovation ecosystem is already inextricably linked to the success of regional trade through the United States-Mexico-Canada Agreement (USMCA), which itself is increasingly tied to developments in the Indo-Pacific. This should make Canadian engagement in Indo-Pacific technology cooperation — and by admission AUKUS — not just an option, but a necessity.

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Admittedly, given Ottawa’s past reticence to being part of a “first division” of US-aligned military powers, the AUKUS security pact’s more open approach to competition with China, along with Australia’s prioritized focus on Pillar I submarine development, could temper the appetite in Canada for joining up. Unlike other multilateral efforts in the region, AUKUS doesn’t shy away from the possibility of military confrontation with China, particularly in the event of a Taiwan contingency.

But leaders from the AUKUS nations have been increasingly clear that the submarine program is closed to new members, and the only open door is around Pillar II technologies. In other words, while Australia and the United Kingdom slowly inch toward new submarines, AUKUS must necessarily focus on the full-spectrum integrated deterrence toolkit of economic and technology cooperation that is instantiated in Pillar II in order to be relevant. With careful scoping, this aspect to AUKUS strategic positioning could align with Canada’s own priorities.

Canberra and London should also consider the potential for Canada’s Pillar II candidacy to drive political momentum across the United States for meaningful technology transfers. A longstanding exemption for Canada from US International Traffic in Arms Regulations (ITAR), alongside USMCA provisions laying the groundwork for robust technology procurement across the two nations, would position Canada to engage in seamless co-development with the United States from day-one of its participation in Pillar II, instilling a hastened sense of urgency for lowering restrictions to technology sharing across the rest of the AUKUS innovation zone. Furthermore, Canada’s proactive efforts to build resilient critical minerals production, evident by recent amendments to its Investment Canada Act and 2022 Critical Minerals Strategy, align well with AUKUS objectives to secure these essential inputs for defense industrial production.

For Washington, Canadian participation in Pillar II offers a chance at forging a truly robust and active technology free-trade zone with its closest allies. Though Canada was a founding member of the US National Technology and Industrial Base (NTIB) established in 1997, US-Canadian advanced research and development (R&D) cooperation remains limited today — and actual NTIB industrial collaboration has been tepid even as the base has expanded to Australia, the United Kingdom, and New Zealand.

While Ottawa seeks long-range missiles and explores options for its aging submarine fleet, its R&D underutilization weakens Canada’s ability to support US systems and represents a current hindrance to long-term industrial collaboration. Washington and Ottawa’s most recent attempt at enhanced collaboration, a so-called ICE Pact with Finland to build an allied fleet of polar icebreakers rivaling that of Russia and China, underscores the untapped opportunity for comprehensive industrial engagement with Canada.

Other allies and partners across the Indo-Pacific are closely observing AUKUS for new opportunities to pursue co-innovation with the United States. This is why an advanced innovation power like Japan is already undergoing the non-trivial process of identifying potential collaborative projects under Pillar II.

Canada should be an obvious and easy choice for any potential expansion of AUKUS. Yet its omission thus far from these discussions presents real questions about both Ottawa’s seriousness and the pact’s ability to rapidly expand beyond its existing contingent.

Setting a short-term deadline for extending Pillar II participation to Canada would represent a significant accomplishment for AUKUS as it nears its third birthday.

Mohammed Soliman is the director of the Strategic Technologies and Cyber Security Program at the Middle East Institute, a member of McLarty Associates, and a visiting fellow at Third Way. On X: @ThisIsSoliman

Elliot Silverberg is a nonresident scholar with the Strategic Technologies and Cyber Security Program at the Middle East Institute. All views are his own and do not represent the positions of any organization or affiliation.