Canada's Projected Defense Spending
Canadian Shield Institute Chief Economist Kaylie Tiessen recently did some pretty simple math:
- Start with Canada’s current level of defence spending, which just recently passed 2 per cent of GDP.
- Take the government’s own forecast for future years, from the 2025 federal budget.
- Assume that Prime Minister Mark Carney is serious about Canada’s goal of hitting a defence spending target of 5 per cent of GDP by 2035.
If we actually do it, Canada will be spending a staggering $230 billion annually on defence spending, up from around $80 billion today.
Simply pouring a huge amount of money into defence procurement will not in itself drive the economy, if we don’t fix three essential deficits:
First, there’s Canada’s manufacturing capacity.
Second, there’s Canada’s retention and strategic use of intangible assets produced through defence R&D.
And finally, there’s the governance of emerging dual-use technologies.
Given the amount of taxpayer money involved, and what it means for Canada’s geopolitical stance in the wider world, we really need to get the policy right.
Read more about how Canada can get this right in an article cowritten by Shield’s Matthew da Mota here.
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