Commonwealth_ Canada‘s traditional pledge to spend 5% of its GDP on defence, an estimated $150 billion annually, has stirred domestic and international controversy. The commitment, made last month at the NATO summit in The Hague, is a historic milestone in Canadian defence policy. It is a bold expansion of defence spending but also a potential realignment of Canada’s economic and geopolitical priorities.
The reasoning behind the government’s decision would appear to be to rebuild the Canadian Armed Forces after years of underinvestment. From obsolete capacities through recruitment and retention, Canada’s military is generally thought to be overstretched and under-resourced. The $150 billion estimate is an effort to reverse that, plug manpower gaps, and improve capacities to combat emerging threats.
Aside from the military imperative, there is also a specific economic motive. Canada’s defence procurement has long been a vehicle for industrial growth, employment generation, and high-tech transfers. Given the evolving transnational security context, especially since Russia‘s invasion of Ukraine, this alignment between defence and economic interests is timely. The new Canadian security and defence industry partnership with the European Union looks to create ties between Canadian defence companies and Europe’s massive $1.25 trillion ReArm Europe program.
Although the alliance holds promise, it also faces numerous challenges. The Canadian government must balance its domestic needs and foreign obligations, ensuring its military is adequately armed and leveraging opportunities for economic growth. But rearmament potential is likewise destined to take some time before it comes to fruition, especially since European defence industries are recovering from years of underfunding and fragmentation.
Despite the promise of eventual cooperation, Canada’s military crisis is urgent. The majority of Canada’s equipment is outdated, and the need for operational capability is pressing. The government will have to develop ways to accelerate acquisition. There are several mechanisms that can accelerate acquisition processes, such as the National Security Exception (NSE), authorising derogation from some trade rules for responding to critical security needs; the Urgent Operational Requirement (UOR), employed for prompt acquisition purchases; and the Advance Contract Award Notice (ACAN), which accelerates the contract-making process by pre-identifying preferred providers in advance.
Speed will be required if Canada is to effectively re-equip within the aggressive timeline it has set. The episode recalls Poland‘s rapid defence transformations following the outbreak of war in Ukraine. Warsaw did not wait for EU frameworks to set; instead, it leapt at bilateral arrangements, particularly with America, to update its military and shield its borders rapidly. While Canada is no longer in the same geographical rush, the geopolitical imperatives are just as onerous.
Yet another stern challenge to Canada’s defence policy will come this summer in the shape of a report concerning the F-35 program. The government must decide whether to proceed with its complete order, reduce it, or consider other options with European partners. With increased costs, pilot shortages, and infrastructure shortfalls, the decision will have far-reaching effects on Canada’s defence strategy as well as political credibility.
Underpinning this transformation is the question of Canada’s international partnership. Although the government has expressed a desire to withdraw from excessive dependence on the United States and develop its relationships with Europe more profoundly, how much is feasible remains unclear. The U.S. remains Canada’s largest defence and economic partner, and Europe’s industrial preparedness remains underdeveloped.
The NATO summit underscored the need for cooperative and adaptable action to counter emerging threats. Canada’s new commitment is an indication of willingness to take the lead, but it will require not just dollars, but political will, strategic foresight, and logistical agility to deliver. Meanwhile, translating a massive budget commitment into tangible security dividends will be a challenge, especially while considering the larger economic and diplomatic environment that surrounds this commitment.
