National Interest

by Andrew Latham

    Despite recent increases in military spending, Canada’s guiding strategy is still based on dependence on US might.

    Canada is about to spend more on defense than it has since the end of the Cold War. Washington has noticed and Washington is pleased. Prime Minister Mark Carney’s government’s drive toward its NATO-mandated 2 percent of GDP, pushed along by years of American pressure, has bought Ottawa a reservoir of goodwill in the Pentagon and on Capitol Hill that it has not enjoyed in a long time.

    The goodwill is premature. Someone in Washington should sit down with Ottawa’s new “Defence Industrial Strategy” (DIS) and actually read it, because the document is far less concerned with what the Canadian Armed Forces need, or how fast they can get it, than with where the money ends up: Canadian firms, Canadian intellectual property and Canadian supply chains. What the DIS really amounts to is an industrial policy that has been handed a military budget, which is a very different animal from a rearmament plan.

    The instinct did not appear overnight. It has deep roots and the roots are worth understanding before anyone concludes that this is simply a matter of bad drafting.

    Geography did most of the work. For 80 years, Canada has lived next to the most powerful military on earth, under an umbrella it never had to pay full price for and a country in that position learns to treat defense as discretionary. The Americans would always absorb the threats that mattered.

    So the defense budget became available for other things—keeping the shipyards in Halifax and Quebec busy, throwing work to the aerospace sector, demonstrating to this region or that one that Ottawa had not forgotten it. When the inevitable capability gaps emerged, they did so quietly and American planning filled them in before anyone in Canada had to answer for the consequences.

    Out of all this grew a way of thinking about security that had very little to do with the actual application of force. Canadian governments of every political stripe came to believe that the country’s standing in the world rested on its diplomacy, its institutions, its reputation as a good international citizen—the whole apparatus of middle-power internationalism. Hard power was someone else’s department. The DIS is the latest expression of that worldview and once you strip away the language of sovereignty and prosperity, what is left is a very old reflex about what defense spending is really for.

    Every major Canadian procurement now has to do two jobs at once. It has to deliver military capability and an industrial outcome. When those two requirements pull in the same direction, all is well. When they pull against each other, the industrial side tends to win and the historical record on this is not subtle.

    Consider the long agony of replacing the CF-18 jet fighter. The program dragged on for the better part of two decades and the delay had almost nothing to do with any genuine uncertainty about which fighter the air force should fly. It had to do with what the contract would mean for Canadian aerospace, for jobs, for the firms that wanted a piece of it. The aircraft question and the industrial question were never separated. The air force waited and waited, with a capability gap that lasted far longer than any serious assessment of the threat would have allowed.

    The pattern is everywhere once you start looking: the surface combatant program, fixed-wing search and rescue, Arctic offshore patrol ships. In each case, the schedule stretched, the requirements bent and the uniformed services swallowed the cost while the industrial benefits were carefully parcelled out across the right constituencies. What the DIS does with this history is not break the habit but enshrine it.

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    Here is the part that should worry American planners. A larger defense budget run through this kind of machinery does not reliably produce a larger or more capable military. It produces more spending. Those are not the same thing and the difference is exactly what a Pentagon planner needs to understand when he sits down to work out what Canada can actually bring to a NORAD contingency or a NATO deployment, as opposed to what Ottawa has announced.

    Other allies looked at the world after February 2022 and drew the obvious lesson. The United Kingdom and Australia moved, with varying success, to create procurement channels where urgent military requirements could be processed without waiting on the industrial-policy machinery—keeping the two tracks at least structurally separate. Canada studied the same war, absorbed the same lessons and went the other way, lacing its operational and industrial objectives together more tightly than before.

    There is an old realist truth lurking underneath all of this. A state that mistakes its domestic political needs for a strategy will pay for the error, usually at the worst possible moment. The DIS is, in large measure, a creature of domestic politics. The budget has to keep the aerospace lobby, the shipbuilders, the regions and the sovereigntists happy at a moment when Canadian nerves about the United States are especially raw. Managing all of that is a considerable feat of political engineering, which is not the same as figuring out what the armed forces require and getting it to them in time.

    None of which means Canada should not build things at home. A domestic defense industrial base is a perfectly sensible thing to want. The trouble lies in the chosen instrument. Industrial development can be pursued through capital programs, research incentives and export support—tools designed for the purpose—none of which require bolting compliance conditions onto procurements that are racing against the clock. Reaching instead for the one mechanism guaranteed to slow the military down and then dressing the result up as strategic sophistication, is how you end up with a budget that grows while the force that budget is meant to rebuild stands still.

    For now, the arrangement holds. Washington wanted bigger numbers and Ottawa has delivered them; the burden-sharing quarrel has gone quiet and there is goodwill to spare. But alliances are not finally held together by goodwill. They are held together by the blunt question of who can do what when the shooting starts. Canada and the United States share a continent, a command and a long list of obligations that all assume Canadian forces will turn up ready to fight beside American ones. On the day that assumption fails, the gap will not close on its own. American assets will cover it and American planners will quietly file Canada under “unreliable” and plan around it.

    So the cheques will be large, the announcements impressive and the underlying problem untouched. The question worth asking is not whether Canada can afford to spend this money. It is whether the people spending it are trying to build a military or an industry and have convinced themselves that the answer is the same.