Canada's defense spending is contentious because it falls below NATO's minimum contribution of 2% of GDP, currently at less than 1.4%. U.S. House Majority Leader Mike Johnson criticized Canada's lack of commitment as 'shameful,' accusing it of riding on America's coattails for security.
Prime Minister Justin Trudeau dismisses the 2% GDP target as a 'nominal' goal, emphasizing that Canada's defense spending is driven by strategic needs rather than arbitrary benchmarks. He announced a commitment to reach the 2% target by 2032, eight years from now, but provided no detailed plan.
The Canadian Armed Forces routinely return hundreds of millions of dollars annually because they cannot spend it. Recruitment bottlenecks, particularly security clearances handled by CSIS, and complex procurement procedures hinder their ability to execute spending programs effectively.
Major General Scott Clancy argues that defense spending announcements are often political gestures rather than actionable plans. Governments have a vested interest in not fully enabling the Department of National Defense to spend allocated funds, as reallocating these resources to other programs garners more votes.
Canada ranks in the top five NATO countries in terms of absolute increases in defense spending since 2015, with an additional $175 billion allocated. However, as a percentage of GDP, Canada spends less than 1.4%, well below the NATO minimum of 2%.
An original from Story Studio Network. Well, here we go. Look at that. It is the 11th day of July. Welcome in. It's now and next, the flagship podcast for Story Studio Network. I'm Dave Trafford. Hope you're enjoying your summer. Yeah, it's been a nice start to it, although we were building the ark, I think, here a couple of days ago in Toronto. Forecast was full of rain, of course. Barrel, the
Hurricane roaring up the East Coast and dropping remnants in this part of the world. We were told that we were getting like a month or more worth of rain in 24 hours. A little crazy. Anyway, things are drying up here. Nice and cool. Started the morning at about 20 degrees. I'm back out on the road and I'm running. I have one bad knee and I mean a bad knee. No ACL on my left knee.
And, uh, but that, that was, you know, happened in high school, never had it fixed. And in that time still playing hockey, I've run marathons, done triathlon, all that stuff. Good fun. Recently, it just seemed to be acting up to the point where I was a little concerned about doing my running. So I begged off, but you know what? I miss it. Yeah. So I decided to get back out on the road and I'll tell you, one of the things that inspired me was Aaron.
Erin's taken up running again and she's quite enjoying it. So I thought, oh, I miss that. I want to do that too. So the weather was good today and I'm glad to see it wasn't raining. It was about, I don't know, 19 degrees, a bit of a breeze in a seven o'clock a hour and went to the local high school and ran on the track. Wasn't breaking any speed records, but I'm, I was doing it. So it was good. So yeah,
That's my good news for the week. I hope you're having a good one and we're heading for, boy, we're already in the middle of July. So enjoy this while you can because it's a rare thing in this part of the world. We don't get this kind of weather and, you know, for the most part of the year, lovely to be able to enjoy it. Okay, so here's what we want to do.
I'm recording this in the 3 p.m. hour Eastern. And normally I would have done this recording yesterday or earlier in the week. And just because, you know, I can do an interview and get it all organized and away we go. But I wanted to wait to see what came out of the NATO summit. All right. And mostly because it was announced that the prime minister, Justin Trudeau,
was going to be making an announcement about Canada's defense spending. And that has been an issue, right? So NATO wrapped up today, and there's still some things going on in the last few hours. And beside the drama that is that political tornado shitshow swirling around U.S. President Joe Biden...
And whether he should be the Democratic candidate to face Trump in November, I mean, that's taken up a whole lot of oxygen there because it's being hosted in Washington and so on. But Canada's defense spending? More than a touchy subject. You know, it was just last month.
A couple of dozen U.S. legislators wrote to the Prime Minister, wrote to Justin Trudeau, insisting that Canada pony up its fair share in defense spending as a member in good standing of the NATO alliance. Now, the minimum contribution is 2% of GDP. Right now, we're spending less than 1.4%. But, you know, if you hear from Defense Minister Bill Blair,
He insists it's not about the quantity, but the quality of the spend. Not just a matter of how much you spend, but it's a matter of spending it well. Uh-huh. Well, okay. So, well, let's take that at face value. But he flags it and he kind of opens the door.
for the prime minister who took to the podium on the closing day of the summit and he's there to settle the argument once and for all before our government took office canada was spending less than one percent of our gdp on defense we vowed to rapidly change that and we followed through on our word canada is now in the top five nato allies when it comes to absolute spending on defense increased
since 2015. In 2017, we released a $49 billion plan to ensure long-term predictable funding with, for example, investments in new warships, aircraft and armoured vehicles. In 2022, we went even further by announcing an investment of $38 billion in Canada's NORAD modernization plan. And we just recently released Our North Strong and Free,
A defense policy update which invests 73 billion dollars in defense over the next two decades.
All that means that in Canada, since 2015, we've added $175 billion in defense spending. $175 billion in defense spending since 2015. 2015, we've spent that much more additional money, $175 billion. That's a big number. Except that just to hit the 2%, if you're going to do that today...
It would mean adding another $60 billion just this year alone. And that would be an annual expense that would continue. Now, the PM, though, did step up to the podium and says Canada is going to meet the 2% of GDP commitment in 2032. Eight years from now! How can...
How can Canadians be sure that you're serious about defense? Your government's been in power for nearly nine years. Russia invaded Ukraine two years ago. We are neighbors with Russia in the Arctic. Your own defense minister wants a credible, verifiable plan. And yet this week, as of yesterday, your government was still discussing how to reach that goal. And today you come out
with a timeline with no details of how to get there. So why should we believe you are serious and this is a priority for your government? Canada is in the top five countries of NATO in terms of absolute increases in spending of NATO on military expenditures over the past eight years. We have stepped up massively
We've stepped up massively. We continually step up and punch above our weight. We punch above our weight. Well, maybe. But that massive message isn't carrying a whole lot of weight.
with NATO allies. I mean, particularly when you hear from U.S. House Majority Leader Mike Johnson. He wasn't holding back, man. He just scoffed at the Canadian contribution. Shamefully, Canada announced in the last few days or the last couple of days that they won't be ponying up. They're not going to do their 2%. Why? Well,
Talk about riding on America's coattails. They have the safety and security of being on our border and not having to worry about that. I think that's shameful. I think if you're going to be a member nation and participant, you need to do your part. So how does Trudeau respond? Our approach on defense is a profoundly serious one that looks at what capabilities we need, what is needed and what is good for Canadians, where we can best contribute to the world,
and how to get there in a responsible way as a government. That has guided us. Not some nominal targets that make for easy headlines and accounting practices, but don't actually make us automatically safer. Canada's defense spending is not driven by, you heard him, some nominal targets that make for easy headlines? I mean, in one fell swoop here,
Justin Trudeau, standing in front of the NATO podium and the logo, proclaims that the 2% minimum contribution to NATO is irrelevant. The PM and Minister Blair are just focused on the absolute dollars. That's what they've promised to spend, and they'll continue doing that. And that's why they made such a big deal, saw all kinds of noise about the increased commitment to NATO.
And support for Ukraine as it defends itself against Russia. Nobody's arguing with that. That's a good idea. And why they took the opportunity to announce plans to buy new submarines. And they did all of that in the last 24 hours. It adds billions, and I love the way the Prime Minister, he emphasized that, billions to the spending commitment. But still, it doesn't come close to the 2%.
I heard one analyst today suggesting that the submarine and Ukraine announcements merely cauterized the issue. What an image, eh? Doesn't heal the rift with NATO, just leaves a scar. So where does that put us with Canadian defense spending? I want you to listen closely.
To part of a conversation I had recently with an RCAF veteran, he's retired Major General Scott Clancy, and he served as the Director of Operations for NORAD, so he knows a thing or two about a thing or two when it comes to defense and defense spending. He's going to tell you, government after government in this country make their defense spending announcements. The armed forces never spend it.
In fact, the Canadian Armed Forces routinely turns back hundreds of millions of dollars every year because they can't spend it. So I ask him, you know, is this just a political or a policy blind spot or is it something more serious? You could make the case that there's a blind spot here.
I'm sorry, I've dealt with Canadian politics and the people that support Canadian politics on the defense side and through Treasury Board up to the highest levels of the Canadian government. And I've seen the American side as well. You don't do anything in these areas that's not deliberate. It's done for a specific purpose. We'll start with, you know, and I ask my son who's involved in politics about this all the time, put these in the correct order.
Do the right thing. Get elected.
So is it you do the right thing so you can get elected or you get elected so you can do the right thing? 100% your politicians behind closed doors will always tell you, you have to get elected, be able to do the right thing. There is no Canadian government, conservative or liberal that has a real vested interest in taking away the transfer payments to the provinces, which is where they're going to have to go to get the more capital that they need to be able to, which means they're pulling out of
housing, healthcare, childcare, Aboriginal, like they're going to pull away from all of those programs to give to defense. This is billions of dollars, another, you know, 16, $17 billion that would have to be spent in this fiscal year. There's no way that they could do like the numbers in terms of billions of dollars is just beyond the appetite because they have to be taking it away from those issues. They're going to ensure that they're going to get elected.
and continue to be elected in the future. So there's no way. It's not a blind spot. And my theory goes even deeper than this. You know, if we transition this, not just from a point of view of money, to spend the money that you want to give to the Department of National Defense, you have to have the people in the Canadian Armed Forces to be able to spend that money. Now, it's not just them going out and exercising, although that is true.
It's also the people that are supporting all of those acquisition programs, which means those acquisition programs, they all slow down, which is fine for industry because they're still going to get paid. Just some of that payment gets deferred because it gets deferred. Then the government gets to claw back those monies in those fiscal, those fiscal years and allocate them to other things that garner them votes, medical care, more transfer payments to the, you know, Aboriginal, whatever it is, it's going to garner them more votes.
So they have a vested interest in keeping the Department of National Defense down. So, for example, from a recruiting point of view, the longest pole in the tent in your recruiting is security clearances. Okay, then let's streamline this. Let's get landed immigrants to be able to get their security clearances done.
Can't forces doesn't do security clearances. CSIS does. And the government of Canada has never manned CSIS or mandated them to clear the backlog of the can't forces, you know, recruiting problems. Therefore they get to say, oh, we give them money, but they never can spend it. Therefore, and the can't forces turns back routinely half a billion dollars in just it's out, not even it's new money. It's allocated monies. Because it can't spend it in the time it's got.
Because of the limitations, one, through Treasury Board. When they announced, when the Liberal Party announced strong, secure, and engaged its defense policy, and they've just recently updated it with a defense policy update. But when they announced it, there was more programming, more actual financial things that they had to get through Treasury Board that would occupy 100% of Treasury Board's time during the allocated years. And you're going, well, hold on. That means nobody else is getting any programs through Treasury Board, just defense? Correct.
Of course, it doesn't make any sense. So they've set themselves up and they know the counter forces can fail and they have a vested interest in not doing so because then they get to take those announcements that they make, even if they don't hit 2% and they allocate them elsewhere. The blind spot is they want to play both sides of the coin here.
They want the international prestige of being a NATO member and high functioning. And they still spend in the top six or seven of all the 32 NATO countries in terms of actual dollar value. It's the percentage of GDP because we're a rich nation that they spend less on. This becomes, you know, and they'd love to sit in that zone because they can just say, oh yeah, no, we're moving to, they don't have to show a plan to move towards 2%. And even if they did,
Most defense experts will say they can't because they will not enable government and the care enforcers, the Department of National Defense to be able to get there. They have a vested interest in not doing those things. So it's a classic example of taking advantage of government getting in its own way. Absolutely. Okay. To recap, spending announcements are just that, announcements. According to Major General Clancy-
Armed Forces don't have enough people to execute the spending programs. So recruitment is the issue. And security clearances are the major bottleneck for recruitment. But the Armed Forces doesn't do security clearances. That's a job for CSIS. Okay, we'll solve that, right? No. The government has never made that a priority for CSIS. And after all that...
The mechanism of government administration and the arcane nature of procurement procedures makes it virtually impossible for the armed forces to spend all the money they have in their annual budget. Okay, yahoo, here's to 2% in 2032.
All right, that'll do it for us. That'll wrap things up for this week on Now and Next. Just a reminder, next week we're back to our comms panel, our group of reliable sources. Yes, Lindsay Broadhead, Emery Akins, Bob Reed, and Brad Ross joining the show. And just as a note, for those of you who listen to it, you listen to it a lot.
It's probably one of the most engaging bits of podcasting we do when that crowd joins the roundtable here on Now and Next. If you haven't experienced it yet, dip back in.
Want to hear what you have to say about it. And, you know, there's lots to talk about generally. And so we will always be drawing on their communications expertise and particularly around, you know, government and the work that they have done in public service, all those sorts of things. So they can flip the coin on us and have a good listen to their take, their hot takes, as Brad Ross likes to say. That's a sub stack if you want to check it out.
on the issues of the day. That's on the way. And just a reminder, tomorrow, Friday, means On the Ledge is back in business. John Wright, Keith Leslie, and I will be here and we'll be in your feed presenting the latest episode of your Ontario Politics Podcast. And, oh, I don't know, a few things might come up, including what's going on or not going on at the Science Centre. Okay, until then.
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