Canada must realize that a strong economy comes from a strong military

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Lawrence Herman is an international lawyer with Herman & Associates and senior fellow at the C.D. Howe Institute in Toronto.

Canada is a trading nation. Trade keeps the economy working, vital to the well-being of every Canadian. Securing and maintaining the country’s trade is thus one of the topmost responsibilities of the federal government, requiring skill, determination and a strategic focus on the national interest.

That means ensuring, among other things, that Canada’s weak performance in defence and security doesn’t spill over and harm the country’s key trading relationships, particularly when it comes to dealing with the United States, our biggest economic partner. The danger is that this spillover could well happen.

Former U.S. president Donald Trump caused a stir recently with his threat to NATO allies for not spending enough on defence. But he’s not wrong that we have been laggards.

For years, successive federal governments – Conservative and Liberal – have refused to put serious, sustained money into the defence portfolio. Canada has continually failed to meet NATO expenditure commitments and has fallen behind as a contributor to North American defence in NORAD. There’s a woeful history of defence procurement delays.

This decline in defence spending isn’t just a security problem. It’s an economic problem, too.

The risk is that being a laggard in military and defence expenditures weakens Canada’s standing in foreign capitals and reduces the country’s ability to resolve disagreements in trade and other critical areas. This is especially vis-à-vis the U.S., with whom goodwill and influence are essential – all the more important given that a review of the Canada-United States-Mexico Agreement, or CUSMA, will be starting late next year.

Public attitudes are at the source of Canada’s lacking defence spending. A recent Global News Ipsos poll showed that military matters are of concern of a mere 7 per cent of Canadians, while almost half say that the cost of groceries should be the top government priority, followed by inflation and interest rates (45 per cent), and access to affordable housing (39 per cent).

It’s very different in the U.S., where a 2023 PEW Research Center survey showed that 40 per cent of Americans put strengthening the military on top. This isn’t surprising. The U.S. is the world’s paramount superpower, and American public attitudes are shaped accordingly. As Canada’s position is of a much smaller dimension, there’s a lower-level concern over defence.

But Canadians should be concerned. For a nation that derives its prosperity from trade, the front-of-mind, bread-and-butter economic issues ultimately tie back to defence.

When the public does not have that recognition, the result is that the federal government pays little attention to defence spending, meaning Canada is continually criticized abroad as a laggard. The country’s reputation as a serious player in international affairs diminishes, and trade suffers as a result.

Last spring and summer, there was a flurry of international opprobrium over Canada’s poor performance, coming near the bottom of the list in meeting its NATO commitments to spend 2 per cent of GDP on defence. There was a hugely damaging report in The Washington Post in April that Prime Minister Justin Trudeau said Canada would never meet those targets.

Former U.S. ambassador to Canada, David Jacobson, said at the time that Mr. Trudeau’s comments risk making it harder for the two countries to resolve bilateral irritants: “It’s one of those things that causes governments to lose confidence,” Mr. Jacobson said. “It’s a perfect example of what not to do in order to help solve some of the bilateral issues in both directions.”

Canadian experts, including former senior officials, have spoken out about the dangers of the country’s poor defence performance weakening its international standing. As Mr. Jacobson indicated, it has effects on Canada’s weight in Washington, where influence is a critical commodity. Canada’s recent exclusion from U.S.-led trade and economic initiatives in the Asia-Pacific region is a reflection of how that commodity has been depreciated.

There is no easy solution. The problem is that for Canada to come close to meeting NATO commitments and boosting its much-reduced international reputation, it would require a major change in public expenditures. But that would put the Liberal government up against its supply-and-confidence deal with the NDP, a party loathe to do anything on defence matters. And then there’s the political reality reflected in polling about the absence of interest in defence matters among Canadians.

To change public attitudes, determined political leadership is necessary. For Canada to secure and enhance its trade and economic interests – and ultimately the standard of living of Canadians – respect and influence in foreign circles, especially in Washington, are required. That means a serious, increase in military spending to meet NATO and other commitments, embracing a long-term strategy combining defence, security and trade.

It comes down to political courage, something successive Canadian governments have failed to display. It’s time for that to change.