Over $20 billion in new spending, but almost nothing new for our national defence.
There is no more important duty for the federal government than ensuring we have a strong national defence. Disagreements between our Citizens on tax rates, cultural issues, and social spending are meaningless if our country is undefended.
For decades, Canada has been falling short of the bare minimum NATO commitment of spending 2% of GDP on our military.
This was bad enough when the world seemed relatively peaceful, but it’s far worse and completely indefensible now that China and Russia are led by expansionist hyper-nationalists.
And now, with the United States and our European allies growing weary of our freeloading on defence, Canada must take our national defence seriously.
With this in mind, the fall economic update was a deeply disappointing document, and not just because of the political chaos that was unleashed today.
“The federal government broke its key fiscal guardrail and posted a deficit of $61.9 billion for the 2023-2024 fiscal year, according to the fall economic statement released on Monday, blowing past the $40.1 billion level at which it promised to keep the deficit.
The Liberal government is also projected to go beyond the $40.1-billion guardrail for the next two fiscal years, with a deficit projection of $48.3 billion in 2024-2025 and $42.2 billion in 2025-2026, higher than what was forecast in the budget last spring. The federal government is on track to stick to two of its three fiscal guardrails, with the debt-to-GDP ratio set to be 42.1 per cent for 2023-2024 and decline to 41.9 per cent the following year. Additionally, the deficit-to-GDP ratio is projected to fall to under one per cent in 2026-2027.”
From a national defence perspective, this is a significant missed opportunity. $21 billion in new spending would have gotten Canada close (though still a bit short) to the 2% NATO minimum.
According to the PBO, the country is currently at 1.35% of GDP on defence, one of the worst numbers among NATO nations.
How will our NATO partners react when they see our government spending so much more overall, but failing to invest in our military?
After all, as noted by Conservative MP Michelle Rempel Garner, people would have assumed that such a large increase in the deficit would have been related to keeping our defence commitments:
Canada is led by a deeply unserious Prime Minister, resulting in a deeply unserious government.
With even a small amount of fiscal discipline – restraining the growth of spending rather than overall cuts – the government could have kept the deficit stable while getting Canada close to the NATO target.
With a willingness to reduce non-defence spending, Canada could have exceeded the NATO target and slightly reduced the deficit.
And even in the absence of fiscal discipline, the government could have increased the deficit to hit the NATO target, which would have been fiscally irresponsible but at least defensible from the perspective of protecting the Canadian People and keeping our commitments to our allies. And before people say that’s impossible, it should be noted that while our deficit is high, it is smaller as a percentage of GDP than the deficits in many allied nations that spend far more on defence than we do.
Let’s be clear:
Canada is running out of time to take our national defence seriously.
China and Russia are getting more dangerous, even as Russia is ground-down in Ukraine. Russia has moved to a full war economy, and China is engaged in the largest military buildup since WW2. Russia is ramping up their investment in Arctic military infrastructure, while Canada’s Arctic is almost completely undefended. A large-scale war in Europe (which would inevitably draw in Canada and the US), is likely if weak Western leaders make the mistake of abandoning Ukraine.
The federal government can no longer pretend that the world is the same as it was in 2015.
That makes a large-scale military buildup our top national imperative. The fact that the current Liberal government fails to understand this, and fails to adequately invest in our national defence even as they spend like crazy elsewhere, is yet another reason this country desperately needs new leadership.