Canada’s top business lobby, the Business Council of Canada (BCC), is pushing for sharp government spending cuts to fund a dramatic hike in military spending. Their recent report, Security & Prosperity: The Economic Case for a Defence Industrial Base Strategy, urges the federal government to develop a robust defence industrial base and increase defence spending to 3% of GDP by 2034/2035—well above NATO’s 2% benchmark.
Canada’s Current Defence Spending
Canada is one of eight NATO countries falling short of the 2% target set in 2006. Its defence spending is $26.90 billion as of 2022, representing 1.24% of its GDP, marking a 6.05% increase from the previous year’s spending of $25.36 billion.
The government has announced plans to increase defence spending in the coming years with a new overall investment of $8.1 billion over five years and $73 billion over 20 years. This increase should raise Canada’s defence-spending-to-GDP ratio to 1.76% by 2029-30.
Prime Minister Trudeau has emphasized that Canada is on a “clear path” to reach the 2% target by 2032, citing the changing global security situation as a driving factor.
Shifting Targets: The Push to 3% GDP Spending
The push for raising defence spending to 3% of GDP stems from several factors related to emerging global threats and changing geopolitical dynamics:
- Escalating global tensions: With 56 identified worldwide conflicts, nations must modernize their military capabilities.
- Arctic security concerns: Climate change is making the Arctic more accessible, increasing interest from countries like China and Russia.
- Shifting security landscape: Recent events, such as Russia’s invasion of Ukraine, have disrupted international cooperation frameworks, particularly in the Arctic region.
- Evolving threat perceptions: There’s a growing focus on “great power” competition, especially with China, rather than just the war on terror.
- Technological advancements: New defence priorities include space, uncrewed aerial vehicles, AI, and missile defence.
- NATO commitments: Canada has pledged to meet NATO’s 2% of GDP defence spending target by 2032, which would require nearly doubling its current spending.
- U.S. President Trump’s influence: The incoming president’s position on maintaining strength through defence contributions from NATO members could influence Canada to increase defence spending.
Ben Machine’s Role in Supporting Growth in Defence Spending
Ben Machine is fully prepared to support Canada’s increasing defence spending with our expertise in precision manufacturing and advanced CNC machining. As the Canadian government boosts its military budget to address emerging global security challenges, we stand ready to scale our operations and meet the growing demand for high-quality defence components. From aerospace to unmanned vehicles, we have the capability to deliver the precision and efficiency needed for the next generation of defence technologies.
We have a proven track record of rapidly expanding production capacity and integrating the latest technology to meet client demands. Our ability to scale operations while maintaining the highest standards of quality makes us a reliable partner for the Canadian government. We are committed to helping strengthen Canada’s military readiness and ensure that we meet the evolving needs of the defence sector as the country works toward its defence spending goals.
