We all hope such preparation will prove unnecessary, but hope is not a strategy.
I wish we lived in a time when tax cuts and balancing the budget could be the top priority of the federal government. That was the world of 2015, a time when the budget was balanced, the economy stable, and the ‘biggest’ issue was whether to legalize marijuana or not.
Now, we face the prospect of a global war. China continues its historic military buildup and is even now getting help from Russia in planning a potential invasion of Taiwan. In return, China has helped to keep Russia’s war economy going as Russia brutalizes Ukraine, while massive North Korean artillery shell production for Russia outpaces North American and European support for Ukraine, despite North Korea having a GDP smaller than that of Manitoba.
In this context, the upcoming Canadian budget takes on a new significance, and the government faces some difficult choices. While Canada’s economy returned to growth in July, per capita GDP is no higher today than it was in 2019. Six years of stagnation have led to Canada falling behind, and large government budget deficits have not translated into stimulative effects.
At the same time, Canada’s dangerously underfunded military is no longer just a vulnerability, but is an existential threat to Canada’s future, given the rapidly escalating military power of our potential adversaries. Further, the worsening of Canada-US relations leaves open the possibility that Canada will face incursions from Russia in the North without guaranteed U.S. assistance, and that we could find ourselves assisting our European allies without U.S. support.
We must therefore think of the unthinkable: Preparing for a massive global conflict.
In this dangerous environment, the next federal budget must be a rearmament budget. Now is not the time to try to balance the budget, nor is it a time to spend more on social programs. That doesn’t mean the deficit doesn’t matter, but it does mean that it would be irresponsible to prioritize deficit reduction over national defence.
Canada requires a significant shift in spending. Spending should be frozen or cut across the board this year, aside from the military. Overall restraint combined with rearmament should leave Canada with a large but not extreme budget deficit, and make our economy more efficient by reducing the inflationary aspects of excessive government spending, redirecting employment to the more efficient private sector, and directing investment towards the Canadian defence sector – often a key driver of innovation.
Such a shift in spending would be controversial. Many interest groups would be outraged, and there would be real impacts on many Canadians from reduced spending. But we are paying the price for years of irresponsibility. Canada ran massive deficits while our military withered away, meaning there is no easy way to rearm at the scale that is needed without a combination of large deficits and spending restraint.
But if we want to ensure Canada’s survival as an independent nation, we don’t have much of a choice. No country is magically guaranteed ongoing existence, and hostile nations like Russia will not be dissuaded by nice words or summits. Real military strength, the ability to train our citizens for war and build the weapons they need to fight that war is what will guarantee the continuation of the Canadian story. That’s why Canada’s upcoming federal budget must focus above all on preparing our nation for a global conflict, even as we all hope such a conflict will not occur.
Spencer Fernando
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