Thank you for the typically excellent article, but I would question whether you address the headline notion of the government aspirations. Admittedly there can be a somewhat fluid definition of what exactly defines an aspiration in this context.
Beyond the strictly generic policy goals of “defending Canadian sovereignty”, “meeting international obligations”, etc., should we not look for specific targets in terms of capabilities, availabilities, domestic sourcing, maximum non-Canadian sourcing, domestic ability to supply/compete and so on.
Apologies if I’ve missed some of these in the announcement and maybe I’m too interested in the very nerdy number targets (planes, tanks, ships, etc.) but given the massive amount of money about to be spent, shouldn’t we have some hard targets?
We should look for specific platforms, systems, and capabilities, but not exactly from this type of announcement. Cabinet and the PM set the mission and the funding (this announcement) now the CAF and procurement/DND civil service go shopping.
Ideally, we don't want cabinet picking and chosing specific systems. They might broadly pick a capability (ie tanker aircraft) but it would be up to the CAF and PSPC to pick the system and quantity.
There are more than 50 capital acquisition projects for the CAF at various stages (some funded to actually buy equipment, but most funded just to do the administrative procurement work). PSPC and the CAF will go back to cabinet and say "with this addition funding, we'd like purchase x, y, and z funded". Then the specific requirements and quanties are announced for the defense industry to bid on.
Sorry if I was unclear. I did not expect an announcement including specific systems or platforms - as cool as that would be. I merely wanted to say that I did not think the announcement included (as the headline suggests) the new aspirations of the government, other than possibly meeting the spending target earlier.
I completely agree that the politicians should not be selecting systems, although the current debate over the F-35 is testing this, and possibly for good reason.
Not there yet. Expect a progressive elaboration - as details get worked out, problems getter better defined, and shared meaning is created amongst key stakeholders.
It was actually the ‘Greatest Generation and Baby Boomers’ who paid down the WW II debt and those two generations gained something from that debt - peace and a growing economy. Canada had no ‘Cold War’ debt as you call it. The debt during that period had nothing to do with the Cold War, rather it was Trudeau the elder who like his son had no concept of economics. We have little of anything of lasting relevance to show for most of that debt. It’s the same going forward, we have little of lasting relevance to show for JT’s debt other than maybe TMX.
Very informative and appreciated the links. If there is substance (follow through) to the P.M.'s announcement then that's great for our Armed Forces, us and our global stature . If there will be a need for more public servants in the DND, this could be an opportunity to reallocate public servants instead of reduction or increase to the public servants. I think moving Coast Guard to DND is positive and can improve Canadian costal defence strategy.
1) I see the plans for the $9B but beyond a few simple things like raises I don't understand how they can spend it by end of March 2026.
2) As mentioned, the $14B has no details to it except the reclassification of the Coast Guard as defence spending and there's talk of CSE. The Coast Guard budget comes in at $2.4B per year, but it is an unarmed, unionized agency tasked with maritime safety and not even law enforcement (e.g. search and rescue, navigation aids, etc.). CSE is a civilian cyber-security and SIGINT agency with an annual budget of $1B. So, combined, nowhere near $14B and neither seem to qualify under the NATO spending definition: "payments made by a national government (excluding regional, local and municipal authorities) specifically to meet the needs of its armed forces, those of Allies or of the Alliance". I would argue that for the Coast Guard to take a defence role (similar to the US?) it would need not only a complete redirection/retraining of its staff but an entirely new and expanded fleet, at which point why not just give it to the navy?
Ultimately, with the timelines, the reclassification of agencies that do not qualify as military spending, and $10.6B of existing spending that has not been identified, I question the whole idea that the 2% target has been met. I think PBO and NATO partners will weigh in sooner (I believe the last government tried to put non-military spending toward the 2% and were firmly rebuffed) but come March 2026 I would not be surprised if we come in at 1.5%.
A major flaw in defence revitalization is the belief that money solves the problem. The government can allocate all the money they want, but without people they are buying widgets that will be unused and thus not provide capability. Yes, funding can help entice some people in the door and maybe retain some for a few more years, but it won’t do enough to solve the problem.
Look at the CAF pilot retention of the 90s where money was the solution - a failure. Also the USAF tried paying pilots more (bonuses) and it had little positive effect. The USN at the same time opted for a leather flight jacket and their results were much better (culture and community). The point being that unless the culture and reputation of the CAF changes for the better the ‘cliff to climb’ will remain insurmountable.
The CAF has arrived at this place through a series of missteps starting arguably with Hellyer’s initiatives to make the armed forces just another department and then accelerated by ongoing governments funding and mission focus steps to vanilla the forces from a once proud culturally unique and proud warrior segment of society to what we see today - a choice that barely registers in society as a choice for our youth and is vilified (and readily accepted by recent CDS’) as a misogynistic, sexually predatory and discriminatory organization, which it is not. Even the few, high profile, supposed perpetrators who have been charged, have not been found guilty and been paid significant compensation as a result of the defamation.
Unless the culture and reputation can be changed for the CAF community - and effort invested in this - the cliff will be insurmountable and Canada will be trying to play catch up ala 1930s, but facing a much more inordinately difficult challenge.
There have been many serious political mistakes made that are undermining the CAF as a distinguished career option but one of the most serious blunders was to deliberately undermine the proud history of the regiments. The government fascination with DEI/equity and decolonization initiatives is counterproductive to a military culture that is heavily steeped in history. Flags, anthems, uniforms, dress codes etc are rallying points that forge a strong culture of teamwork, which is 180 degrees away from the individualism of DEI. A proud and successful military works around teamwork, not everyone for themselves.
Well said. DND will not, however, be absolved from the government-wide expenditure review that is underway, owing to its relative size among the departments. There will be some robbing from Peter to pay Paul, as there was last year. That expenditure review exercise just became more important with the announcement of the new defence funding if the government is to stick to its fiscal targets of a declining deficit to GDP ratio in a few years.
I was at the Carney speech at Munk. He also said that DND is to deliver a new defence policy "immediately". That will be a tall order, depending on one's definition of "immediately". Our North, Strong and Free is thus dead, and had the shortest life of any defence white paper since "Challenge and Commitment: A Defence Policy for Canada" (1987). It seems to me Carney wants a new defence policy that takes more account of the changed relationship with the US and that he wants ot to contain a clear and strong defence industrial policy for Canada. ONSAF and SSE have neither of those elements. The next weeks and months will be interesting to watch on the implementation side of the Carney speech
A very useful breakdown of where the money will go to get to 2%. God is in the details of scaling up but it is about time. You floated 60% for US defend purchases compared to 75%. I will be interested in a discussion of what the % is to maintain sovereignty. My gut wants to be go less but I am not sure what the sweet spot would be.
I don’t think a % of US vs non-US spending has anything to do with sovereignty. It’s really about Canada having the capability to a) defend itself and b) contribute to Canadian interests.
I agree the key question is the ability to defend ourselves and protect our interests is key. That gets into the 2% target, capacity transformation and the actual level of fund required to protect our sovereignty. I expect to be effective we are looking at much more as a percentage of GDP. Excessive dependency on one supplier for military goods creates vulnerabilities and leverage which can have an impact on sovereignty. The US treatment of the Ukrain is a glaring example.
Should have that before a buying spree takes place, but essentially a lot of work and time goes into White Papers and they all say essentially the same thing: defence of the homeland, NORAD, NATO, other commitments as they arise. I think we can finally drop the traditional UN nonsense.
I know I’m a bit late here, but I think someone needs to dig into the “75% of military spending goes to the US”. I can’t reconcile that amount.
Take a fictitious military project that has a life cycle cost of say $20B.
Maybe $3-5B goes to the initial acquisition of the equipment. Depending on the type of equipment, maybe $1B for infrastructure - that money is almost all spent in Canada, using Canadian architects, contractors and building materials. The remaining $14-16B goes towards in service support (ISS) over the next 20+ years. Some of that may be parts bought from the original equipment manufacturer (OEM) , but many of those parts can/could be built in Canada as part of Industrial Technical Benefits (ITBs). So parts from the US, maybe. Labour? Pretty much all done in Canada by Canadians, many of whom work for a Canadian company. They might work for a US company, depending on how you count for it (Bell helicopters in Mirabel QC is a good example of a Canadian company whose workers are primarily in Canada, but is owned by a US company).
So let’s see:
Initial acquisition : 15-25%
Infrastructure: 0-0.5% (assuming use Canadian building materials)
ISS: let’s say conservatively that 65% of this cost is labour, the remaining 35% is parts, and all parts only come from the US - usually not the case).
Therefore, 35% of $14-16B = $4.9 to $5.6B spent in the US.
So total US spending for our $20B project = $7.9 to $10.6B of a $20B project. 35-55% spent in the US.
Of course, I’m not a finance guru, and every piece of equipment will have different percentages, I haven’t accounted for foreign exchange factors between $CAD and USD, etc, etc.
But 75%??? Show me the math please.
Then have a look at what we’re actually buying.
-Fixed wing SAR planes - CC-295 Kingfisher: bought from Airbus in Spain, supported in Canada.
-Upgrading Cormorant SAR helicopters - bought from Eurocopter - Leonardo (ITA) and Augusta Westland (UK). The bulk of the work to be done by IMP aerospace in Canada.
-CC-330 Husky refuelling aircraft, converted Airbus A330-200 airliners.
-submarines? Will not bought from the US
-River class destroyers for the Navy - European design, modified and built in Canada, uses some US systems.
-Joint support ship? German design, modified and built in Canada.
-Light armoured vehicles - built in Canada.
-rifles - built by Colt Canada.
Even F-35 - ISS (where the bulk of the money will be spent) and infrastructure will almost all be done in Canada, by Canadians even if they work for a US-owned company like L3. ~$3M of parts on each aircraft (whether a Canadian F-35 or not) built in Canada.
Pretty basic, we need more people in uniform, fit and trained enough to be deployed and to effectively do the jobs which civil servants do, not more unionized civil servants.
Relying on US based suppliers, especially those subject to the Patriot Act would open some pretty serious holes in a sovereign defense establishment (specifically AWS). It would seem better to align with other allies and their capabilities than put another cent into the US or its suppliers. Sometimes an investment just needs to be written off and this seems to fit the bill at least on capital items. Great that capability is being rebuilt for personnel and maintenance.
The only people to gain anything of real value in these spasms of the endless arm's race have been the already rich and those that come up with the ideas for how we can destroy more people and things in higher volumes, with more efficiency.
Thank you for the typically excellent article, but I would question whether you address the headline notion of the government aspirations. Admittedly there can be a somewhat fluid definition of what exactly defines an aspiration in this context.
Beyond the strictly generic policy goals of “defending Canadian sovereignty”, “meeting international obligations”, etc., should we not look for specific targets in terms of capabilities, availabilities, domestic sourcing, maximum non-Canadian sourcing, domestic ability to supply/compete and so on.
Apologies if I’ve missed some of these in the announcement and maybe I’m too interested in the very nerdy number targets (planes, tanks, ships, etc.) but given the massive amount of money about to be spent, shouldn’t we have some hard targets?
We should look for specific platforms, systems, and capabilities, but not exactly from this type of announcement. Cabinet and the PM set the mission and the funding (this announcement) now the CAF and procurement/DND civil service go shopping.
Ideally, we don't want cabinet picking and chosing specific systems. They might broadly pick a capability (ie tanker aircraft) but it would be up to the CAF and PSPC to pick the system and quantity.
There are more than 50 capital acquisition projects for the CAF at various stages (some funded to actually buy equipment, but most funded just to do the administrative procurement work). PSPC and the CAF will go back to cabinet and say "with this addition funding, we'd like purchase x, y, and z funded". Then the specific requirements and quanties are announced for the defense industry to bid on.
Sorry if I was unclear. I did not expect an announcement including specific systems or platforms - as cool as that would be. I merely wanted to say that I did not think the announcement included (as the headline suggests) the new aspirations of the government, other than possibly meeting the spending target earlier.
I completely agree that the politicians should not be selecting systems, although the current debate over the F-35 is testing this, and possibly for good reason.
Not there yet. Expect a progressive elaboration - as details get worked out, problems getter better defined, and shared meaning is created amongst key stakeholders.
Where is all the money coming from?
Like everything else, from your great-grandsons’ and daughters’ wallets.
Just like baby boomers and Gen Xers paid/are paying for the massive debt incurred during WW2 and the Cold War. That’s just how debt works.
It was actually the ‘Greatest Generation and Baby Boomers’ who paid down the WW II debt and those two generations gained something from that debt - peace and a growing economy. Canada had no ‘Cold War’ debt as you call it. The debt during that period had nothing to do with the Cold War, rather it was Trudeau the elder who like his son had no concept of economics. We have little of anything of lasting relevance to show for most of that debt. It’s the same going forward, we have little of lasting relevance to show for JT’s debt other than maybe TMX.
Very informative and appreciated the links. If there is substance (follow through) to the P.M.'s announcement then that's great for our Armed Forces, us and our global stature . If there will be a need for more public servants in the DND, this could be an opportunity to reallocate public servants instead of reduction or increase to the public servants. I think moving Coast Guard to DND is positive and can improve Canadian costal defence strategy.
Thank you for this excellent article.
I'm struggling with two big things:
1) I see the plans for the $9B but beyond a few simple things like raises I don't understand how they can spend it by end of March 2026.
2) As mentioned, the $14B has no details to it except the reclassification of the Coast Guard as defence spending and there's talk of CSE. The Coast Guard budget comes in at $2.4B per year, but it is an unarmed, unionized agency tasked with maritime safety and not even law enforcement (e.g. search and rescue, navigation aids, etc.). CSE is a civilian cyber-security and SIGINT agency with an annual budget of $1B. So, combined, nowhere near $14B and neither seem to qualify under the NATO spending definition: "payments made by a national government (excluding regional, local and municipal authorities) specifically to meet the needs of its armed forces, those of Allies or of the Alliance". I would argue that for the Coast Guard to take a defence role (similar to the US?) it would need not only a complete redirection/retraining of its staff but an entirely new and expanded fleet, at which point why not just give it to the navy?
Ultimately, with the timelines, the reclassification of agencies that do not qualify as military spending, and $10.6B of existing spending that has not been identified, I question the whole idea that the 2% target has been met. I think PBO and NATO partners will weigh in sooner (I believe the last government tried to put non-military spending toward the 2% and were firmly rebuffed) but come March 2026 I would not be surprised if we come in at 1.5%.
A major flaw in defence revitalization is the belief that money solves the problem. The government can allocate all the money they want, but without people they are buying widgets that will be unused and thus not provide capability. Yes, funding can help entice some people in the door and maybe retain some for a few more years, but it won’t do enough to solve the problem.
Look at the CAF pilot retention of the 90s where money was the solution - a failure. Also the USAF tried paying pilots more (bonuses) and it had little positive effect. The USN at the same time opted for a leather flight jacket and their results were much better (culture and community). The point being that unless the culture and reputation of the CAF changes for the better the ‘cliff to climb’ will remain insurmountable.
The CAF has arrived at this place through a series of missteps starting arguably with Hellyer’s initiatives to make the armed forces just another department and then accelerated by ongoing governments funding and mission focus steps to vanilla the forces from a once proud culturally unique and proud warrior segment of society to what we see today - a choice that barely registers in society as a choice for our youth and is vilified (and readily accepted by recent CDS’) as a misogynistic, sexually predatory and discriminatory organization, which it is not. Even the few, high profile, supposed perpetrators who have been charged, have not been found guilty and been paid significant compensation as a result of the defamation.
Unless the culture and reputation can be changed for the CAF community - and effort invested in this - the cliff will be insurmountable and Canada will be trying to play catch up ala 1930s, but facing a much more inordinately difficult challenge.
Great comments.
There have been many serious political mistakes made that are undermining the CAF as a distinguished career option but one of the most serious blunders was to deliberately undermine the proud history of the regiments. The government fascination with DEI/equity and decolonization initiatives is counterproductive to a military culture that is heavily steeped in history. Flags, anthems, uniforms, dress codes etc are rallying points that forge a strong culture of teamwork, which is 180 degrees away from the individualism of DEI. A proud and successful military works around teamwork, not everyone for themselves.
Well said. DND will not, however, be absolved from the government-wide expenditure review that is underway, owing to its relative size among the departments. There will be some robbing from Peter to pay Paul, as there was last year. That expenditure review exercise just became more important with the announcement of the new defence funding if the government is to stick to its fiscal targets of a declining deficit to GDP ratio in a few years.
I was at the Carney speech at Munk. He also said that DND is to deliver a new defence policy "immediately". That will be a tall order, depending on one's definition of "immediately". Our North, Strong and Free is thus dead, and had the shortest life of any defence white paper since "Challenge and Commitment: A Defence Policy for Canada" (1987). It seems to me Carney wants a new defence policy that takes more account of the changed relationship with the US and that he wants ot to contain a clear and strong defence industrial policy for Canada. ONSAF and SSE have neither of those elements. The next weeks and months will be interesting to watch on the implementation side of the Carney speech
A very useful breakdown of where the money will go to get to 2%. God is in the details of scaling up but it is about time. You floated 60% for US defend purchases compared to 75%. I will be interested in a discussion of what the % is to maintain sovereignty. My gut wants to be go less but I am not sure what the sweet spot would be.
I don’t think a % of US vs non-US spending has anything to do with sovereignty. It’s really about Canada having the capability to a) defend itself and b) contribute to Canadian interests.
I agree the key question is the ability to defend ourselves and protect our interests is key. That gets into the 2% target, capacity transformation and the actual level of fund required to protect our sovereignty. I expect to be effective we are looking at much more as a percentage of GDP. Excessive dependency on one supplier for military goods creates vulnerabilities and leverage which can have an impact on sovereignty. The US treatment of the Ukrain is a glaring example.
Great article. I’m looking forward, however, to some sort of defence policy statement that puts more meat on the bones! Perhaps a new white paper??!!
Should have that before a buying spree takes place, but essentially a lot of work and time goes into White Papers and they all say essentially the same thing: defence of the homeland, NORAD, NATO, other commitments as they arise. I think we can finally drop the traditional UN nonsense.
I know I’m a bit late here, but I think someone needs to dig into the “75% of military spending goes to the US”. I can’t reconcile that amount.
Take a fictitious military project that has a life cycle cost of say $20B.
Maybe $3-5B goes to the initial acquisition of the equipment. Depending on the type of equipment, maybe $1B for infrastructure - that money is almost all spent in Canada, using Canadian architects, contractors and building materials. The remaining $14-16B goes towards in service support (ISS) over the next 20+ years. Some of that may be parts bought from the original equipment manufacturer (OEM) , but many of those parts can/could be built in Canada as part of Industrial Technical Benefits (ITBs). So parts from the US, maybe. Labour? Pretty much all done in Canada by Canadians, many of whom work for a Canadian company. They might work for a US company, depending on how you count for it (Bell helicopters in Mirabel QC is a good example of a Canadian company whose workers are primarily in Canada, but is owned by a US company).
So let’s see:
Initial acquisition : 15-25%
Infrastructure: 0-0.5% (assuming use Canadian building materials)
ISS: let’s say conservatively that 65% of this cost is labour, the remaining 35% is parts, and all parts only come from the US - usually not the case).
Therefore, 35% of $14-16B = $4.9 to $5.6B spent in the US.
So total US spending for our $20B project = $7.9 to $10.6B of a $20B project. 35-55% spent in the US.
Of course, I’m not a finance guru, and every piece of equipment will have different percentages, I haven’t accounted for foreign exchange factors between $CAD and USD, etc, etc.
But 75%??? Show me the math please.
Then have a look at what we’re actually buying.
-Fixed wing SAR planes - CC-295 Kingfisher: bought from Airbus in Spain, supported in Canada.
-Upgrading Cormorant SAR helicopters - bought from Eurocopter - Leonardo (ITA) and Augusta Westland (UK). The bulk of the work to be done by IMP aerospace in Canada.
-CC-330 Husky refuelling aircraft, converted Airbus A330-200 airliners.
-submarines? Will not bought from the US
-River class destroyers for the Navy - European design, modified and built in Canada, uses some US systems.
-Joint support ship? German design, modified and built in Canada.
-Light armoured vehicles - built in Canada.
-rifles - built by Colt Canada.
Even F-35 - ISS (where the bulk of the money will be spent) and infrastructure will almost all be done in Canada, by Canadians even if they work for a US-owned company like L3. ~$3M of parts on each aircraft (whether a Canadian F-35 or not) built in Canada.
The list goes on.
Someone please show me the 75% math???
Pretty basic, we need more people in uniform, fit and trained enough to be deployed and to effectively do the jobs which civil servants do, not more unionized civil servants.
Relying on US based suppliers, especially those subject to the Patriot Act would open some pretty serious holes in a sovereign defense establishment (specifically AWS). It would seem better to align with other allies and their capabilities than put another cent into the US or its suppliers. Sometimes an investment just needs to be written off and this seems to fit the bill at least on capital items. Great that capability is being rebuilt for personnel and maintenance.
The only people to gain anything of real value in these spasms of the endless arm's race have been the already rich and those that come up with the ideas for how we can destroy more people and things in higher volumes, with more efficiency.