After years of taking flak for stingy defence spending, Ottawa is greenlighting what could be Canada’s biggest military investment since World War II.
What happened: Prime Minister Mark Carney announced that Canada will hit NATO’s 2% of GDP defence spending target by March of next year. The feds' core goal is to use $9 billion in extra defence funds to build more military equipment and infrastructure in Canada.
- Ottawa’s shopping list includes new aircraft, vehicles, drones, and cyber tools as well as higher pay for military service members.
- The government says its priority will be buying Canadian gear and using domestic materials wherever possible.
Why it matters: Canada has relied almost entirely on the American defence industry for decades, with three-quarters of the country’s defence spending currently flowing to the States. Now, the feds want to reduce that dependence on the increasingly unpredictable U.S., lean more on European allies, and build a real defence industry at home.
Big picture: The billions in extra defence spending will inevitably crowd out other budget priorities like housing and healthcare. That said, continuing to miss the NATO defence targets also risks hurting Canada’s standing with its allies and reducing Ottawa’s leverage in trade negotiations with the U.S.
What’s next: With NATO now contemplating bumping its defence spending target to 5% of GDP, Canada might not be getting too many pats on the back for finally hitting the 2% benchmark.—LA
