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

[Czech_pivo]

This is a distinction without a difference as far as procurement is concerned. We have projects they aren't getting calls and emails answered from the US. Or issues slow walked. You may not see that with your retiree hat on. But there are issues when we're dealing with political appointees in the US. I assume the Europeans, Koreans and Japanese have the same problems.

Like I said, this trend is going to be very hard to reverse. And every leader who comes in is going to get briefed about all the challenges.

This issue will eventually become similar to the lack of CDN tourists in Vegas, California, Vermont, Florida and the shutting down of Kentucky Bourbon and Tennessee Whiskey - they'll be asking why aren't we spending our money in those states or on those products, having zero clue as to the reason why.

That's basically a path to weak productivity growth and stagnation - "creating jobs", especially "good-paying jobs". Eventually it takes everything we have and more (borrowing) just to stop slipping backward, and eventually the cost of borrowing drags us backward. We get a lift every decade or two from some kind of major innovation (eg. offshoring, dot.com, AI) which kicks productivity and postpones decline.

The main point of being against trade protectionism is that it makes things cost more. Fighting trade protectionism by being protectionist is just self-inflicted damage.

Tell that to Trump, he thinks that its the greatest thing since the ability to declare bankruptcy and walking away free and clear.

 

[Furniture]

That's basically a path to weak productivity growth and stagnation - "creating jobs", especially "good-paying jobs". Eventually it takes everything we have and more (borrowing) just to stop slipping backward, and eventually the cost of borrowing drags us backward. We get a lift every decade or two from some kind of major innovation (eg. offshoring, dot.com, AI) which kicks productivity and postpones decline.

The main point of being against trade protectionism is that it makes things cost more. Fighting trade protectionism by being protectionist is just self-inflicted damage.

Defense industries aren't Apple or General Mills, they are vital industries for the defense of the nation. If they require the government to pay a bit more to keep the industry alive, that's just part of the cost of being a sovereign nation.

We aren't talking about making all of our shoes, and toasters here, we are talking about making missiles, UAS, etc...

 

[ytz]

Defense industries aren't Apple or General Mills, they are vital industries for the defense of the nation. If they require the government to pay a bit more to keep the industry alive, that's just part of the cost of being a sovereign nation.

We aren't talking about making all of shoes, and toasters here, we are talking about making missiles, UAS, etc...

There's also no realistic pathway to sustain the type of spending that the government intends and this forum says they want, if the majority of it is not in country. Imagine telling an Ontario autoworker laid off because Trump wants all auto manfaucturing in the US that he's going to have to pay more in taxes so that we can do 5% on defence and that most of that will be spent in the US. The government is trying to map a pathway where increased defence spending sustains some jobs and industry. And that is a pathway to long term sustained spending.

 

[ytz]

The US is an ally - we share several defence arrangements. What I see is people mischaracterizing the situation. I don't care if it's supposed to be political manoeuvring or just emotional strain.

What I see is you mischaraterizing the situation out of ignorance.

Please actually read the document in question before making assumptions.

 

[Brad Sallows]

This issue will eventually become similar to the lack of CDN tourists in Vegas, California, Vermont, Florida and the shutting down of Kentucky Bourbon and Tennessee Whiskey - they'll be asking why aren't we spending our money in those states or on those products, having zero clue as to the reason why.

Tell that to Trump, he thinks that its the greatest thing since the ability to declare bankruptcy and walking away free and clear.

Trump's trade policies are foolish. I've been saying that since before he was in a position to give them effect. The same reasons for declaring Trump's policies foolish apply to anyone else's policies.

Given that the nightly news has been delivering stories about Americans lamenting the loss of Canadian liquor markets and tourists due to Trump's policies, it's obvious they know why. However, as wildly successful as Canadian boycotts have been at being noticed by the people most directly affected, the chief political purpose - to sway the administration and Congress - has not been met. Just a little bit more and they'll notice?

 

[Brad Sallows]

Defense industries aren't Apple or General Mills, they are vital industries for the defense of the nation. If they require the government to pay a bit more to keep the industry alive, that's just part of the cost of being a sovereign nation.

We aren't talking about making all of our shoes, and toasters here, we are talking about making missiles, UAS, etc...

Yes, we're talking. But after the dreams end and reality intrudes, all the fiscal capacity and more (borrowing amounts to pulling future revenues into the present) was already used up. I'm predicting that much of the happy-happy-joy-joy is going to go away. I predict that social spending over-commitments will put the defence spending spree to bed in a couple of years, and we'll be left with fragments of defence capabilities based on whatever was acquired in the initial rush.

Canada is not going to be able to size the requirements box and the resource box exactly where it wants - one of them will have to yield. If we hold the requirements relatively firm, we won't have the luxury of spending whatever is needed to hit over-ambitious domestic industry targets.

 

[Brad Sallows]

What I see is you mischaraterizing the situation out of ignorance.

Please actually read the document in question before making assumptions.

I was responding to another person's comment, not whatever is situated in your head.

Canada is still in a number of defence and non-defence arrangements with the US. The US is objectively a friend and ally irrespective of Trump's irrational trade policies, which are directed at almost everyone.

 

[Czech_pivo]

Trump's trade policies are foolish. I've been saying that since before he was in a position to give them effect. The same reasons for declaring Trump's policies foolish apply to anyone else's policies.

Given that the nightly news has been delivering stories about Americans lamenting the loss of Canadian liquor markets and tourists due to Trump's policies, it's obvious they know why. However, as wildly successful as Canadian boycotts have been at being noticed by the people most directly affected, the chief political purpose - to sway the administration and Congress - has not been met. Just a little bit more and they'll notice?

Congress is limp dick and Trump won't do crap until after CUSMA is either resigned, scrapped or something in between. Until then we should stay the course and not change a thing.

 

[ytz]

Congress is limp dick and Trump won't do crap until after CUSMA is either resigned, scrapped or something in between. Until then we should stay the course and not change a thing.

And this is why all of this will go beyond Trump. Every single ally has seen and now knows that nothing the Americans commit to is reliable. Nobody wants to plan economic and defence policy around a strategic surprise every 4 years.

Who knows what comes after Trump. And who knows what norms go out the window next. And given that defence equipment has an in-service life of decades, everything we buy from the US or any other supplier is a multi-year bet.

 

[Czech_pivo]

And this is why all of this will go beyond Trump. Every single ally has seen and now knows that nothing the Americans commit to is reliable. Nobody wants to plan economic and defence policy around a strategic surprise every 4 years.

Who knows what comes after Trump. And who knows what norms go out the window next. And given that defence equipment has an in-service life of decades, everything we buy from the US or any other supplier is a multi-year bet.

Exactly - best plan going forward, expect that the years from 2028-32 will be a repeat of today, if its not, great make hay while the sun shines for those 4yrs but be ready for 2032-36 to be another 2024-28. We should never expect (nor want) for things to go back to what it was before.

I see that our trade with the US ended at around 67% of our total. Great, by the end of this year knock it back another few % to say around 63% and keep chipping it downward until its under 50%.