Rearming the North:

Canada’s Defence Investment and the New Strategic Economy

  • The government of Canada is working to meet the standards set out by international partners within a rapidly evolving security landscape.
  •  Canada Strong: Budget 2025 promises to invest heavily in responding to threats to Canadian sovereignty and security. It earmarks $81.1 billion over five years for the CAF. CBSA, CISIS and RCMP meanwhile, are getting a total of $2 billion, a 15% increase over prior budgets. 
  • This massive investment has implications for Canadian security and foreign relations, as well as the economy.

At Home

Overall, Canada Strong: Budget 2025 signals that changes to the CAF and DND under this government will focus on the economics and efficiency of procurement, with a whole lot more money and resources to back this up. 

The  Buy Canada strategy, which stresses procurement of Canadian made equipment from domestic sources, lies at the heart of the  budget’s security and defence allocations, making it easier it easier to purchase equipment from Canadian manufacturers. Canada already has a reasonably robust security and defence manufacturing sector, due in part to an existing procurement system designed to favour Canadian business. 

But this budget promises to develop that defence industrial base further, improving the supply chain and processes for getting new and better equipment and materiel to the CAF. An estimated 81,200 direct and indirect jobs will allegedly be created by this investment. Development loans will also be made available through new and existing funds, with special attention being paid to small and medium sized business. The budget also promises to address longstanding inefficiencies and duplication in Canadian defence procurement with the creation of a new agency to promote engagement and cooperation between buyers and sellers. 

And (Not Too Far) Abroad

Budget 2025 also acknowledges that Canada has historically fallen short of its international defence spending commitments and responsibilities. US President Donald Trump has made it clear that Canada needs to pull its weight in NATO. At least some of this is performative, however, and intended as justification for threats and specific action against Canada. Nevertheless, the budget’s promises to step up defence spending could address both President Trump’s claims that Canada is a “freeloader” and ensure that Canada could withstand a potential kinetic threat to its sovereignty.  

The budget also references current NATO targets and commitments. The mission in Latvia, judging by funding allocations and official comments, will likely continue to be Canada’s primary focus in this regard, at least for the foreseeable future.

Not The Only Beneficiaries

The CAF and DND are not the only parts of Canada’s security apparatus that are getting more cash and a revamp. CBSA and the RCMP have also been allocated funding to hire 1,000 new officers each. The budget also provides funding for the RCMP to augment its national security and counterterrorism capabilities and for CBSA to upgrade border surveillance and screening systems. CSIS will get a 15% budget increase, and all three agencies are expected to strive for better information sharing and more effective joint operations.

The Fine Print

Questions remain, however. For example, despite infusions of cash for CSIS and the RCMP and the expectation that the two agencies (along with CBSA) will work together more efficiently, the budget doesn’t say much about how this should be accomplished. Meanwhile, budgetary fine print threatens to cut funding allocated to security and intelligence oversight bodies, particularly the National and Security Intelligence Committee of Parliamentarians (NSICOP) and the National Security and Intelligence Review Agency (NSIRA). The Canadian security environment is in tremendous flux and the RCMP, in particular, is struggling to define and manage its place in that environment. So, cutting funding to bodies that play a key role in helping the intelligence community navigate troubled times, most especially a fractured relationship with the United States, seems counterproductive.   

While “buying Canadian” as a procurement model makes economic sense, in the security and defence sector, it is not always realistic. Budget 2025 is not too clear on how this will be addressed, especially given current US posturing around Canada’s role (if any) in continental / hemispheric defence. Clearly, this country needs to wean itself from its dependence on the American “military industrial complex.” Current talks between Swedish aerospace manufacturer Saab AB, Bombardier, and the federal government, aimed at building Gripen fighter aircraft in Canada, could be a major step in the right direction.

Why This Is important

Historically, the United States has been Canada’s most reliable security and defence partner. But as discussed in previous CIBs, America is degrading its own intelligence and defence capabilities and freezing out Canada in the process. And America isn’t the only problem. Our allies in Europe are less than pleased with our defence and security capabilities. For years, NATO has been saying that Canada must do more. As an original signatory to the NATO Charter with a proud military and intelligence history, this seems like a reasonable ask. 

The security apparatus of Canada needs to stand and operate above current standards on its own. To do so, it must increase its capacity. Budget 2025 acknowledges this new reality and appears to be taking concrete steps to bridge the gap between current Canadian operational capacity and real-world realities. Whether it achieves what it promises remains to be seen, however.

This assessment is based on information available as of 1200 hours EST, 25/11/14.