Canadian Defense Spending is a Joke. Heres How to Fix It.

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Video originally published on April 20, 2024.

This analysis examines Canadian Defense Spending is a Joke. Heres How to Fix It. in historical and strategic context. It traces how the core developments unfolded, which institutions and actors shaped outcomes, and what those decisions changed on the ground. Rather than repeating headline-level claims, it focuses on concrete mechanisms, constraints, and tradeoffs that explain the trajectory of events. The discussion moves from Key Developments through Strategic Implications to Risk and Uncertainty, then evaluates wider consequences. The goal is to clarify not only what happened, but why these developments still matter for current planning, risk assessment, and policy decisions.

Key Takeaways

Hence why successive governments have spent so little on defense over the last quarter century.
(TITLE): Unprepared As damning reports go, they don't come much more damning than the recent two diving into Canada's Department of National Defense (or DND).
A psychology that can likely be explained by Canada's geography.
Not just because spending levels are low now, but because they've been low for decades.
The article is grounded strictly in the source video script and listed references.

Key Developments

Hence why successive governments have spent so little on defense over the last quarter century. When you have few vulnerabilities, putting only 1.22 percent of GDP into your military isn't such a problem. Or is it? In recent months, insiders have started to raise the alarm over Canada's defense spending. Painting a picture not of a nation that's comfortably secure, but one that's teetering on the edge of a self-inflicted crisis. A crisis in which plummeting military recruitment, aging hardware, and budget cuts are leaving Ottawa incapable not only of supporting its allies… but perhaps also of even defending itself. (TITLE): Unprepared As damning reports go, they don't come much more damning than the recent two diving into Canada's Department of National Defense (or DND). The first - published in November of 2023 - was an annual look inside the department's finances. The second, written in December, was an internal document that broadcaster CBC later revealed to the public. But while one was intended for public consumption, and one only for insiders, the two still pretty much said the same thing. To put it colloquially, Canada's military is screwed. Here's how Politico summed up the November fiscal report: “Canada's military can't deploy multiple operations concurrently to the extent that it is supposed to be able to, amid a recruitment crisis, aging fleets and infrastructure, and planned spending cuts.” The internal report was even more-brutal. In an overview of its findings, CBC wrote that (quote): “Only 58 per cent of the Canadian Armed Forces (CAF) would be able to respond if called upon in a crisis by NATO allies right now — and almost half of the military's equipment is considered "unavailable and unserviceable".” It's likely that former navy commander Mark Norman spoke for many when he gave his reaction to the report on CBC. Quote: “This is borderline atrocious.” The trouble wasn't so much the effects of low spending - although that has definitely played a part. A limited military budget has been part of the Canadian model for over a quarter of a century now. Nor was it a lack of skill or passion in the military. In multiple areas, Canada still shines brighter than its peers, including in its world-beating Special Forces. No, the problem seems to lie deeper, almost on a psychological level. A psychology that can likely be explained by Canada's geography. While the last two years of Russian aggression have been an urgent and bitter wakeup call for NATO's European members - with even previous laggards like Germany at last reaching the two percent spending target this year - Ottawa seems content to keep on slumbering. After all, Europe is far away, as are Taiwan and China. And with the military superpower that is the United States on its doorstep, Canada knows it has a close ally that will always defend it from attacks.

Strategic Implications

(TITLE): Unprepared As damning reports go, they don't come much more damning than the recent two diving into Canada's Department of National Defense (or DND). The first - published in November of 2023 - was an annual look inside the department's finances. The second, written in December, was an internal document that broadcaster CBC later revealed to the public. But while one was intended for public consumption, and one only for insiders, the two still pretty much said the same thing. To put it colloquially, Canada's military is screwed. Here's how Politico summed up the November fiscal report: “Canada's military can't deploy multiple operations concurrently to the extent that it is supposed to be able to, amid a recruitment crisis, aging fleets and infrastructure, and planned spending cuts.” The internal report was even more-brutal. Speaking to the Financial Times, Indo-Pacific expert Jonathan Berkshire Miller summed up Ottawa's thinking this way: “Successive governments have tended to treat foreign policy as a “luxury item” and have left it to the Americans to “step up to the plate”, or the Japanese and Australians in the Indo-Pacific.” To be clear, this isn't some new phase that can be pinned solely on the current government. Although Stephen Harper talked a good game on defense, spending fell to an all-time low of one percent of GDP on his watch. Not that he should be singled out for blame, either. For decades now, wars for Canada have been far away things that are engaged in out of a sense of duty and allyship. Despite the rock-solid commitment and performance of Canadian troops in Afghanistan, it's doubtful that many saw the occupation as an existential issue. Certainly not in the same way that, say, Poland views growing Russian aggression. With the rise of a multipolar world, though, there are signs that this mind set is at last changing. Foreign minister Mélanie Joly recently said in a speech that: “Our location on the globe — surrounded by three oceans — can no longer be relied upon to protect us.” At the same time, recent polling by the Angus Reid Institute has shown that over half of Canadians now say the government should increase its defense spending; a number that rises to nearly two thirds if a potential second Trump presidency is factored in. In its actions, too, Ottawa is starting to show it grasps the need pull its weight. The Canadian deployment in Latvia on NATO's eastern flank is set to grow to brigade-strength by 2026. In the Taiwan Strait, Canadian naval ships have begun joining US vessels in “freedom of navigation” operations. At home, the government has pledged to invest forty billion Canadian dollars in air defense system NORAD over the coming two decades. Yet for all things are starting to move in the right direction, there are concerns that it's not enough.

Risk and Uncertainty

In an overview of its findings, CBC wrote that (quote): “Only 58 per cent of the Canadian Armed Forces (CAF) would be able to respond if called upon in a crisis by NATO allies right now — and almost half of the military's equipment is considered "unavailable and unserviceable".” It's likely that former navy commander Mark Norman spoke for many when he gave his reaction to the report on CBC. Quote: “This is borderline atrocious.” The trouble wasn't so much the effects of low spending - although that has definitely played a part. A limited military budget has been part of the Canadian model for over a quarter of a century now. Nor was it a lack of skill or passion in the military. In multiple areas, Canada still shines brighter than its peers, including in its world-beating Special Forces. No, the problem seems to lie deeper, almost on a psychological level. That, for all the government may boast about stuff like buying 88 F-35 fighter jets, the Canadian armed forces remain woefully unprepared for a new era of military confrontations. Especially when you realize that - even now - the government is not only failing to raise military spending, but actually cutting it. (TITLE): Financial Problems When Ottawa's critics point out that it spends well below the NATO two percent threshold, defenders of the current policy like to reply that the figure is misleading. After all, Canada is the world's tenth largest economy. While it might only spend 1.22 percent of GDP on defense, that's still a heck of a lot of money. In raw dollar terms, that puts it in NATO's top seven spenders - way ahead of smaller economies, like Estonia, that spend over three percent. The trouble with this way of looking at things is that NATO spending isn't static. And many members are rushing to splash more cash. Poland, for example, is hiking defense spending to over 3.5 percent. Turkey is increasing its spending to an eye-watering four percent. That means this whole “seventh place in raw dollars” thing won't hold even if Canadian defense spending remains stable over the coming years. But staying stable is not on the cards. Even as most of the rest of NATO are increasing their military budgets, Ottawa is heading in the opposite direction. For anyone who's listened to Canadian ministers on the news talking about how they're investing in the armed forces, this might seem counterintuitive. After all, the Liberal Party government has made a big deal of the additional 8 billion Canadian dollars it pumped into defense following Russia's invasion of Ukraine. But the coming cuts are visible in the government's own spending projections. Estimates tabled in the House of Commons back in February show the planned defense budget dropping from C$26.49 billion in 2023-2024, to C$25.33 billion in 2025-2026.

Outlook

A psychology that can likely be explained by Canada's geography. While the last two years of Russian aggression have been an urgent and bitter wakeup call for NATO's European members - with even previous laggards like Germany at last reaching the two percent spending target this year - Ottawa seems content to keep on slumbering. After all, Europe is far away, as are Taiwan and China. And with the military superpower that is the United States on its doorstep, Canada knows it has a close ally that will always defend it from attacks. Speaking to the Financial Times, Indo-Pacific expert Jonathan Berkshire Miller summed up Ottawa's thinking this way: “Successive governments have tended to treat foreign policy as a “luxury item” and have left it to the Americans to “step up to the plate”, or the Japanese and Australians in the Indo-Pacific.” To be clear, this isn't some new phase that can be pinned solely on the current government. Although Stephen Harper talked a good game on defense, spending fell to an all-time low of one percent of GDP on his watch. That's a reduction of over 900 million Canadian dollars. And bear in mind that it'll affect the 2024-2025 budget as well. Overall, Defense News estimates the cuts will total 1.7 billion Canadian dollars by the end of 2026. The cuts are not across the board. Important investments - like upgrading NORAD - will not be affected, and key capabilities should be shielded. Instead, the government hopes to make the cuts by slashing travel budgets, the use of private sector contractors, and spending on infrastructure. Still, it's a sign that Ottawa has differing priorities to most of NATO. According to projections, over 19 of the alliance's 32 members should hit their two percent commitments in 2024. Canada, meanwhile, would have to spend an estimated C$75.3bn to close the gap. Something the government simply isn't interested in doing. We know this thanks to leaked documents that appeared in the Washington Post in 2023. Among them were reports that Justin Trudeau had told NATO allies that Canada would “never” meet the two percent threshold. Now, we should be fair here and note that Ottawa is not alone in this. on a recent video on spending levels within the alliance, countries like Belgium and Spain likewise steadfastly refuse to hit their NATO commitments. But Belgium is a tiny country with a perpetually-divided government, and Spain has no pretentions about being a military power. Canada, by contrast, aims to be an active, mid-level power. The 2017 policy document “Strong, Secure, Engaged” remains the official guidepost for how Ottawa sees its global military role. One key section outlines how the armed forces should be able to manage (quote): “Two sustained deployments of 500-1,500 personnel in two different theaters of operation, including one as a lead nation.” The November 2023 DND report, however, makes it clear that this is not something they are currently capable of doing.

The Geography of Complacency

Not just because spending levels are low now, but because they've been low for decades. Global News reports that the military budget has now stayed below 1.4 percent for 26 years. Such persistent underfunding affects not just Canada, but also Ottawa's ability to help its friends. In a recent article, War on the Rocks noted how (quote): “Canada's national security apparatus remains weak for a country of its size, wealth, and geography. Currently, its deficiencies in military spending and capacity means that it is unable to contribute much beyond providing stern warnings to deter a possible Chinese military invasion of Taiwan.” As we're about to see, there's a good reason for this. With such low spending over so many decades, Canada's military hardware isn't exactly in great shape. (TITLE): Hardware Issues With any military, there's expected to be a gap between the equipment it has on paper, and what it can actually put into the field in an emergency. The reasons why are obvious: stuff in storage might need time to return to full working condition. Ships or aircraft might be undergoing repairs or upgrades. Some older items may simply be waiting for replacements that have yet to be delivered. So it's not all that unusual to read that Canada's military hardware wouldn't be 100 percent ready to deploy if war broke out tomorrow. What is unusual, though, is how glaringly large the gap is between Ottawa's on-paper strength, and the reality. According to the internal December report leaked to CBC, all branches of the Canadian armed forces are crippled by a lack of kit in fit state. 46 percent of all equipment in the army is considered “unserviceable”. For the navy, the fraction of “frigates, submarines, Arctic Offshore Patrol Ships and defense vessels” that cannot be deployed is over half. The air force is in even worse shape: the report says 55 percent of its hardware is “unserviceable”. These numbers are compounded by similar problems affecting military infrastructure, problems that were highlighted in the public November report. To quote: “(A) significant number of assets (...) are approaching or have surpassed their life expectancy and have deteriorated.” As Politico summed the grim news up: “Military fleets are hampered by a mix of badly needed repairs, obsolescence, personnel shortages and inadequate maintenance infrastructure.” We can get a flavor of just how bad this is by briefly zeroing in on one branch as an example: the navy. The Royal Canadian Navy is running on a fleet of ships that are aging and in danger of becoming outdated. The country's 12 frigates - the backbone of the navy - are over 25 years old.

A Legacy of Underinvestment

The Economist notes that the four submarines backing them up are even-older hand-me-downs from the British Royal Navy. Perhaps even worse is the lack of naval replenishment vessels. According to War on the Rocks: “Were these ships to be used in a military operation, they would be of limited use given that Canada's one dedicated naval replenishment ship lacks navy-grade radars or a self-defense system — which critics argue makes it unfit for a war zone.” This is just one branch of the military, but it's emblematic of wider problems. The air force, likewise, runs on outdated kit as it awaits the arrival of new F-35s in 2026 - mostly CF-18s from the 1980s, and used F-18s that once belonged to Australia. The problem here doesn't just stem from low overall defense spending, but also from how the government prioritizes what money is available. The National Post notes that a typical military will put aside 20 to 30 percent of its budget for replacing outdated kit and investing in new technologies. Ottawa, however, puts aside just ten to fifteen percent. As the Post writes: “This has forced the military to soldier on with obsolete and worn-out equipment while it waits for replacements.” The problem is compounded by something that bedevils other NATO allies - from Britain to Germany - a procurement system that prioritizes fiscal caution over speed and efficiency. Public Services and Procurement Canada is the body responsible for overseeing purchases for all federally funded programs, and its remit is to ensure money is spent in a low risk, fair way. While that's a laudable aim, it often clashes with the realities of military procurement, whereby kit often has a single potential supplier and may need to be approved relatively quickly. So you get stuff like the Remotely Piloted Air System program, which took 17 years to secure drones. According to the Post: “Most of Canada's allies took four years or less to undertake the same process.” We don't want to just stand here pointing fingers. Often these sorts of procurement processes become byzantine nightmares not because pen-pushing officials take delight in hobbling the military, but because successive governments have brought in more and more rules in an attempt to make the system more accountable to the taxpayer. As we said earlier, that's a laudable aim. The trouble is that it's also a mindset that's only possible in peacetime. With Russia gearing up for a confrontation with NATO, and the Chinese threat to Taiwan growing by the day, a system that prioritizes speed is becoming increasingly important. Although, even a drastic change to procurements might not be enough to turn the good ship Canada around.

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Jackson Reed

Jackson Reed creates and presents analysis focused on military doctrine, strategic competition, and conflict dynamics.

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