Canada moves to 2% GDP end of FY25/26 - PMMC

[DBNSG]

The big difference I see is that back in the 80’s when the Mulroney government put out the White Paper, there were huge “peace demonstrations” (funded by Moscow) in every major city and critical editorials in most major news outlets. Opposition to the whiff of increased defence spending was real, which is why much of that White Paper disappeared. Now, I am not seeing anywhere near that level of public opposition, save for the odd Tankie artsy prof at some backwater university. Most editorials I’ve seen the last few years (even before Trump 2.0) called for more defence spending.

I am definitely sensing a change.

I definitely agree. I golf with an old High School buddy and my brother quite often and lets just say they are good little Liberals.
Both now agree that Canada has let defence slide for too long and its time to get serious. Both of them asked me last Summer what the Americans would do if we just refused to up our spend , just keep mooching. I warned them that the Yanks were waking up and the peace dividend was coming to an end. They now get it but see our new commitment as a keep the Yanks at bay sort of effort.

 

[DBNSG]

Non-paywalled version of the article: https://archive.is/1WQBN

Makes sense to me. Get a budget out late in the calendar year, with time for departments and agencies to digest it before the start of the federal fiscal in April. The point about getting a budget out some months before construction season seems reasonable too.

If we’re to have a budget once a year, then publishing it when it makes more sense for planning purposes doesn’t seem to me to be a bad thing.

It might even kill March madness, ... Nah what was I thinking.

 

[Kirkhill]

I was referring to the selection process and lowering the testing standards to allow a noncompliant bid to win, just like the LSVW and CF-5.

Obviously the standards were set too high. You expected too much. You need to be more realistic to encourage more competition.

Or so goes the argument.

On the other hand, many times the 80% solution will get the job done.

 

[ytz]

I warned them that the Yanks were waking up and the peace dividend was coming to an end. They now get it but see our new commitment as a keep the Yanks at bay sort of effort.

I question this narrative. If Trump is going to do something, he'll do it anyway. And I fear that making it so conditional on American approval will see public support tank when Trump (inevitably) refuses to acknowledge our increased spending.

Here's a simple question. Has Trump actually gone easy with trade on any ally that has increased spending? Has he shown renewed commitment to defend allies who spend more?

 

[ytz]

It might even kill March madness, ... Nah what was I thinking.

Read the article. The budget presentation and cycle is changing. Not the fiscal year. This will probably change business planning cycles. But not March madness.

 

[Kirkhill]

Yeah. But what happens when the budgets come out and we have $50b deficits? Balanced budgets, more social spending, more defence spending. Pick two. The next government will have the same choices too.

This is why I think 2% is possible. More is a bridge too far. Up to 2%, there's ways to spend a lot of that in Canada. The more we spend that leaves the country, the harder it is to support.

Thus Roshel Dodges and GM LUVs rather than Leos and CV90s.

I wonder what Carney would have to promise Sweden to get a licence to build 1000 Bandvagns in Canada... and get the spare parts rights.

 

[Maxman1]

Yes, but I would not blame the current government for that one.

Again, not the current government, a Liberal government yes, but not the same government.

The current government is really a continuation of the Trudeau government.

 

[Kirkhill]

The current government is really a continuation of the Trudeau government.

The Establishment is a continuation of The Establishment.

Colours and banners, names and faces are not the issue.

 

[ytz]

I wonder what Carney would have to promise Sweden to get a licence to build 1000 Bandvagns in Canada... and get the spare parts rights.

Nothing? They just have to build in Canada using Canadian steel.

 

[Kirkhill]

Nothing? They just have to build in Canada using Canadian steel.

Maybe. But Sweden has an export driven economy. It keeps its people employed through exports.

I kind of think there would be some kind of quid pro quo.

 

[ytz]

Maybe. But Sweden has an export driven economy. It keeps its people employed through exports.

I kind of think there would be some kind of quid pro quo.

Their prize would be the profits and fees for IP. And if that's not enough, we'll get somebody else to build in Canada.

Why do you think the Koreans and Germans are suddenly promising all kind of work share in Canada for the submarine contract? They are starting to get that specs or price alone won't win.

 

[Jarnhamar]

Because if the requirement is strictly defence of Canada, that can be done for less than 2% and an even smaller full time army.

You figure Canada could defend itself against an invasion with an even smaller full time army than we have now?

 

[ytz]

You figure Canada could defend itself against an invasion with an even smaller full time army than we have now?

Who is invading us?

 

[QV]

Who is invading us?

The Americans if you ask certain people.... kidding! Sheeeesh...

A country ought be able to adequately defend it's self even if you think, right this moment, the risk seems very low.

 

[Jarnhamar]

Who is invading us?

I don't know. You said we can defend Canada with a smaller regular army than we have now.

 

[FJAG]

I'll also go back to what I said earlier. What's the actual need? Because if the requirement is strictly defence of Canada, that can be done for less than 2% and an even smaller full time army. Anything above and beyond derives from the obligations we understand and perceive for our participation on the world stage. And to the average voter, that is quite subjective.

I'll truck out the old canard that the defence of Canada starts at the Fulda Gap (now the Latvian border). I had a Russian diplomat tell me that if the Baltic states join NATO, the tanks will roll. They didn't but I don't doubt they will if the Russians see or make an opportunity for that.

Deterrence matters. The first line of deterrence for us is now the Baltics. The golden rule of deterrence is that the opponent must see that his aggression will fail. To convince the Russians of that they must see credible forces opposing them. I don't quite think we're that credible yet because we have too little behind what we've put in the shop window.

The second aspect of having forces in Europe is getting brownie points for being there and having a pin on the map with a little Canadian flag big enough for others to see. It gives you a voice at the table and a hand up on some hard power. Currently we have been so far behind that our soft power is pretty much nonexistent.

Some here want divisions in Europe. Once you take the cost of recruiting, equipping, training and sustaining that force, we're talking north of $10B per year (going by a rough wag from this US CBO doc says various brigades cost and looking at conversion and inflation). If we want balanced budgets at the same time, how are we going to convince voters that this is more important than say universal dental care or say reducing the lowest income tax bracket by 1-2%?

I'm one of those who thinks we would do better having a division in Europe. By that I do not mean 15,000 Canadians and 300 of our tanks.

For starters you can make a fairly decent modern armoured division with around 10,000 folks in two manoeuvre, one fires and one sustainment brigades. And they don't all need to be Canadians. We could furnish a div HQ a manoeuvre brigade and elements of the fires and sustainment brigade while other, smaller European countries provided the rest. Denmark, right now is furnishing a skeleton multinational div in Latvia. IMHO we could and should take that over but we're already being challenged by the MN brigade we are leading.

Further, of the troops we provide, they don't all have to be posted or rotated to Europe - prepositioned equipment and flyover troops are adequate. They don't even all need to be full-timers. The ratio of everything would need to be confirmed as would the base required at home to sustain it during combat.

Having a credible force in Europe, backed up by a credible force at home, is a price we pay for belonging to the club and getting the recognition for being a valued member of the club. It's like an insurance policy. The premiums are just a drain on your resources until your house catches fire. Until then everything is an intangible that maybe someday even gets you a seat on the Security Council.

I'm a cynic at heart and right now my biggest complaint about the army is that it doesn't deliver the defence outputs that it should for the money being spent on its annual salaries. There's little sense in having 25,000 full-time and 18,000 part-time soldiers if all that we can realistically put into the field and sustained is 2,500 of them. We were barely able to do that for Afghanistan.

I'm not happy with what I'm seeing as the next stage in army modernization as it doesn't improve the outputs unless and until a fairly serious materiel package allows the force to expand. I tend to believe that a peacetime army can and should have much of its force in fully equipped reserve formations and thus greatly reduce its annual running costs. Those same CBO tables show you how much. Canada doesn't want to do that.

 

[ytz]

A country ought be able to adequately defend it's self even if you think, right this moment, the risk seems very low.

I don't know. You said we can defend Canada with a smaller regular army than we have now.

The primary military threats to Canada are air, missile and naval. That's clearly defined in our defence policies. There's no defined land threat to defend against. And nor one on the horizon. For those primary threats, the government is basically committing to spend several hundred billion in equipment purchases over the next 20 years between fighters, satellites, ships, subs, radars and whatever happens with Golden Dome.

When there's a case for what exactly (not some vague amorphous idea) the army should be designed to defend against, they'll get a lot more. Otherwise, expect to be treated like the optional force it is. Some years will be good (like right now). And when it is time to cut, expect to be first on the chopping block.

 

[ytz]

I'll truck out the old canard that the defence of Canada starts at the Fulda Gap (now the Latvian border). I had a Russian diplomat tell me that if the Baltic states join NATO, the tanks will roll. They didn't but I don't doubt they will if the Russians see or make an opportunity for that.

Deterrence matters. The first line of deterrence for us is now the Baltics. The golden rule of deterrence is that the opponent must see that his aggression will fail. To convince the Russians of that they must see credible forces opposing them. I don't quite think we're that credible yet because we have too little behind what we've put in the shop window.

The second aspect of having forces in Europe is getting brownie points for being there and having a pin on the map with a little Canadian flag big enough for others to see. It gives you a voice at the table and a hand up on some hard power. Currently we have been so far behind that our soft power is pretty much nonexistent.

I'm one of those who thinks we would do better having a division in Europe. By that I do not mean 15,000 Canadians and 300 of our tanks.

For starters you can make a fairly decent modern armoured division with around 10,000 folks in two manoeuvre, one fires and one sustainment brigades. And they don't all need to be Canadians. We could furnish a div HQ a manoeuvre brigade and elements of the fires and sustainment brigade while other, smaller European countries provided the rest. Denmark, right now is furnishing a skeleton multinational div in Latvia. IMHO we could and should take that over but we're already being challenged by the MN brigade we are leading.

Further, of the troops we provide, they don't all have to be posted or rotated to Europe - prepositioned equipment and flyover troops are adequate. They don't even all need to be full-timers. The ratio of everything would need to be confirmed as would the base required at home to sustain it during combat.

Having a credible force in Europe, backed up by a credible force at home, is a price we pay for belonging to the club and getting the recognition for being a valued member of the club. It's like an insurance policy. The premiums are just a drain on your resources until your house catches fire. Until then everything is an intangible that maybe someday even gets you a seat on the Security Council.

I'm a cynic at heart and right now my biggest complaint about the army is that it doesn't deliver the defence outputs that it should for the money being spent on its annual salaries. There's little sense in having 25,000 full-time and 18,000 part-time soldiers if all that we can realistically put into the field and sustained is 2,500 of them. We were barely able to do that for Afghanistan.

I'm not happy with what I'm seeing as the next stage in army modernization as it doesn't improve the outputs unless and until a fairly serious materiel package allows the force to expand. I tend to believe that a peacetime army can and should have much of its force in fully equipped reserve formations and thus greatly reduce its annual running costs. Those same CBO tables show you how much. Canada doesn't want to do that.

I actually don't disagree with you that our security is tied to what happens in Europe. There's two issues here though.

1) How do you make this easily comprehensible and concrete to a voter who is being asked to pay for it? The 2% of GDP idea is at least somewhat comprehensible as the price to join the club of other peers. That starts getting higher as I fear the backlash.

2) How best can we help? Cause while folks like yourself might dream of divisions, there's the question we of what the Europeans want as help and what we can best provide in a mutually beneficial way or leveraging our strengths. For example, we build an alternative to Starshield that the rest of NATO can use? That removes leverage the US and Musk have. Or.. divisions are hard to move. Ships and airplanes? Not so much.

There's classified NATO tables on required capabilities for each country. But those are obviously minimums.

 

[Jarnhamar]

The primary military threats to Canada are air, missile and naval. That's clearly defined in our defence policies. There's no defined land threat to defend against. And nor one on the horizon.

Good post, thanks for writing that out.

As far as the no land threat. Yes, but Trumps annexation talk sure scared the shit out of a lot of people.

It was a key feature during our last election and the LPC certainly wasn't quoting our defence policy about no land threats. In fact it seemed to have spurred a lot of patriotism and talk about sorting out our defence. If we're acknowledging the US as a boogeyman and using "who is in the best choice to stand up to them" in election platforms maybe we should also add land threat to the defence policy.

 

[ytz]

Good post, thanks for writing that out.

As far as the no land threat. Yes, but Trumps annexation talk sure scared the shit out of a lot of people.

It was a key feature during our last election and the LPC certainly wasn't quoting our defence policy about no land threats. In fact it seemed to have spurred a lot of patriotism and talk about sorting out our defence. If we're acknowledging the US as a boogeyman and using "who is in the best choice to stand up to them" in election platforms maybe we should also add land threat to the defence policy.

If we go down that road, then we shouldn't be buying any weapons from them and creating or perpetuating all kinds of other dependencies on them either.

You can't on one hand say the US is such a massive threat that we need a large land force to defend from them. And on the other hand, buy fighters, armoured vehicles, ordinance, etc that are extremely dependent on an American supply chain. Not to mention sharing a binational defence command and binational comms networks.

Personally, I don't buy that the US is a military threat. I do buy that they are increasingly an economic threat. The solution for that isn't military though (beyond Buy Canadian policies).