The 2021 German Federal Election and its Implications for Canada

Opinion by Robert Malloy.

The end of the Merkel era in Germany will be a monumental shift for Europe. In her absence, the Social Democratic Party of Germany has formed government for the first time since 2005, signalling potential social shifts in one of the EU’s most powerful nations. Despite the election called in their favour, the SPD at the time of writing is still in talks over who will assume the chancellorship and how to go about forming a coalition government. The likely successor to Merkel is Olaf Scholz of the SPD, who seeks to create a coalition with the German Green Party and the Free Democratic Party (FDP). One arena expected to see among the most significant impact will be NATO and international security, as the SPD and likely coalition parties have declared different objectives with regards to defense and desire a more pro-European position as opposed to Merkel’s Atlanticist position. Trade is another area that could be greatly affected by the advent of an SPD government, with the party having opposed trade agreements like CETA in the past but with other coalition parties perhaps having different views. Perhaps most importantly, environmental policy and tackling climate change will be fundamental to Canadian German relations over the SPD’s term in office. The proposed coalition seeks to bring the German Green Party into the fold, meaning environmentalists will have a strong voice in affairs related to Canada and our environmental conduct. These three arenas will become the focal points of German Canadian relations going forward.

Canada, Germany, and NATO

German defense policy as it relates to Canada is somewhat uncertain due to the nature of the parties within the coalition government. The defense policy portion of the SPD’s manifesto for the 2021 election called for a “Sovereign Europe within the world”, acknowledging that Europe needs to rise to the challenge of an increasingly multi-polar world [1]. In contrast, the German Greens, and the Free Democratic Party (FDP) stressed multilateralism and international cooperation in their manifestos [1]. Seeing as these parties are the most likely to form a coalition around the SPD, it will be interesting to see the foreign policy developments that emerge from a coalition with different goals.

One can reasonably expect, however, that after four tumultuous years in NATO under Trump and with the SPD holding the majority of seats, the coalition government will be hesitant to fully embrace transatlantic allies and will most likely advocate within NATO and the EU for a more Euro-Centric approach to security. This will have a noticeable impact on Canada with regard to our defense policy. If the SPD coalition succeeds in advocating for a united European front, Canada may be made to either rely more heavily on US support or may be forced to choose between US and EU allies. The outgoing Merkel government committed to spend €53 billion on the NATO alliance in 2021 and with US president Joe Biden hoping to revive the alliance, there is still hope yet [2].

The SPD, in forming a coalition government, will not be able to enact their desire for a more isolated Europe. The German Greens and FPD will both use their positions to advocate for Atlantic cooperation in defence, especially with an ascendant China and an ever-present Russia [3]. However, the uncertainty over the future of the NATO alliance that began under the Trump administration will continue. With other European nations equally skeptical of the alliance, especially France, the future of Atlantic collective defense remains uncertain at best. This will lead Canada to potentially engaging in a soul-searching endeavour in the coming years as we seek to find our place in a shifting, unfamiliar world order.

Canadian-German Trade

Germany and Canada have enjoyed a fruitful trade relationship for decades. Both Germany and Canada are members of elite trade organizations such as the G7 and Germany is Canada’s largest export market within the EU [4]. In 2016, under the previous Merkel government, the Comprehensive Economic and Trade Agreement (CETA) between Canada and the EU was signed. However, the SPD and German Greens have not been enthusiastic supporters of free trade. The parties militantly opposed CETA in the lead up to its passing, arguing it was detrimental to workers' rights and environmental policy [5]. This could be an indicator of potential cooperation or a foreshowing of sour relations between Canada and Germany.

Since elected to office in 2015, Trudeau has vowed to undertake measures to improve the lives of low-income workers and families. His 2021 election platform stated similar goals as well [6]. These policies align with the left-wing ideology of the SPD and Greens, which could bode well for relations between the two countries if shared left-wing values are demonstrated. However, if the SPD and its coalition allies choose to embrace opposition to free trade and protectionism in the name of defending German workers, trade between Canada and Germany could suffer a blow. Trade between the two countries will be dependent on economic trends in the aftermath of the pandemic as well as the willingness of the coalition government to maintain the principles of free trade.

The FDP, the third party within the coalition and the one with the fewest number of seats, has its party values based on liberalism and pro business economic policy. While the Greens and the SPD do value workers' rights and have protectionist tendencies, the coalition government will have within it voices advocating for trade, which will create favourable circumstances for the Canadian economy.

Environmental Policy

One aspect that will affect Canadian German relations will be the tackling of climate change and environmental policy. In this area, Canada and Germany will find a great deal of common ground and potential for cooperation. However, failure on the part of either country’s leadership to meet climate goals or participate in climate action could lead to colder relations. Given the coalition government includes left wing parties in the SPD and Greens, as well as a liberal party in the FDP intent on keeping pace with global trends in the FDP, climate policy will feature heavily.

Olaf Scholz, the likely successor to Merkel as chancellor, has vowed to bring about a swift transition within Germany toward renewable sources of energy such as solar and wind power to help in the fight against climate change [7]. This sentiment offers potential for economic and environmental collaboration between Germany and Canada. Canada is currently a world leader in renewable energy production, with Canada obtaining 18.9% of its power from renewables. Canada is also the second largest producer of hydroelectricity in the world [8]. Canada has an opportunity to share technical knowledge, expert analysis, and mutual investment in green technologies with the German government. This could have the effect of endearing Canada to the German government, opening up collaboration in other areas and gaining an ally on the international stage in Canada’s fight against climate change.

Environmental issues could also create tensions between the German government and Canada. The German Greens, the second largest party within the proposed coalition, is renown for an aggressive stance towards climate change. Their 2021 platform includes a commitment to cut Germany’s emissions 70% by 2030 [9]. Trudeau’s liberals, by contrast, have been less aggressive on climate change. Trudeau’s government previously committed to a reduction in emissions of 36% by 2030, raising that to 40-45% reduction in emissions in the leadup to the 2021 election [10]. This represents a considerably less aggressive push on climate change. With the German Greens controlling the third largest voting bloc in German parliament, a lackluster performance by Canada in the fight against climate change could negatively affect diplomatic relations.

The Next Four Years

The current German coalition government and Liberal minority government were elected within a month from each other and it is more than likely the two governments will represent their countries for the next four years. Given that both governments have at least a somewhat left-wing alignment, relations between Canada and Germany should prove warm in the coming few years. However, Canada will need to anticipate differing German attitudes towards international defence and climate change and respond dynamically in order to maintain warm relations. Management of the Canadian economy must also be prepared for an ideological shift in the German economy, which will affect Canada’s biggest export market in the EU. With a shifting world order and regionalism on the rise, the traditionally assured alliance and cooperation between Canada and Germany will see certain tests arise over the coming four years.

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Bibliography

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8. "About Renewable Energy." Natural Resources Canada. December 13, 2017. https://www.nrcan.gc.ca/our-natural-resources/energy-sources-distribution/renewable-energy/about-renewable-energy/7295.

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10. Taylor, Stephanie. "Trudeau Increases Canada's 2030 Emissions Target to 40-45% - National." Global News. April 22, 2021. https://globalnews.ca/news/7779596/climate-change-emissions-targets-canada-2030-trudeau/.