The "Nation-Building" Claim Behind Carney's Military Spending
The Carney government's
Defence Industrial Strategy comes with the grandiose claim, not
to equip Canada to defend itself from foreign aggression, but to
actually drive economic development and innovation and
"diversify" from U.S. dependency. Although government
communications do not use the term, commentators have equated it
with "military Keynesianism," an "economic renaissance" and a
"revolutionary concept." In other words, the Carney
"renaissance" is based on stimulating economic development not
by meeting the growing needs of the Canadian people and their
economy but with wars and encouragement to war, where it becomes
in Canada's interest to make sure that wars keep going as often
and as long as possible. It also hides the fact that war
production greatly harms the economy, by removing huge funds
from the economy for weapons and armaments that are destroyed
and put nothing back into the economy. War production tied to
the U.S. war machine also undermines fraternal relations with
the world's peoples, especially with the peoples bearing the
brunt of these wars.
The increased emphasis on military spending necessarily leads to further impoverishment of the workers throughout the economy. Spending on war production represents an increase in the total value of goods produced that are consumed for wasteful purposes and are of no value in meeting the needs of working people. Yet every public dollar that is spent on war production forms part of the total amount of currency in circulation that is available for people to use for the purchase of goods that satisfy their needs. The same amount of money in circulation is chasing fewer useful goods. Whether or not they are employed in the defence industry, workers are then paid their employment income with these inflated dollars.
Here are selected quotes from government officials making the claim that war production will drive economic development and innovation, and diversify markets for Canadian goods.
"The transformation of our military capabilities can help transform our economy. Right now, National Defence already accounts for over 275,000 direct and indirect jobs... Our renewed commitment to defence will create tens of thousands more... and drive innovation in sectors like artificial intelligence, quantum, and cyber." – Prime Minister Carney announces the government's plan to rebuild, rearm, and reinvest in the Canadian Armed Forces, June 9, 2025.
"The world is increasingly dangerous and divided. Canada must strengthen our defence to better protect our sovereignty, our interests, and our Allies. These investments won't just build our military capacity -- they will build our industries and create good, high-paying jobs at home. If we want a more secure world, we need a stronger Canada." – PMO press release on NATO pledge, June 25, 2025.
"We are equipping our Armed Forces with the capabilities and support they need to protect Canadians and uphold our commitments around the world. This historic investment will strengthen our sovereignty and invest in the Canadian economy – growing a world-class defence industry that fuels innovation and job creation." – Defence Minister David McGuinty, "Canada's New Government Is Rebuilding, Rearming and Reinvesting in the Canadian Armed Forces," news release, June 9, 2025.
"As we strengthen the Canadian Armed Forces, we will also build up Canadian industry, driving innovation and creating good careers for Canadian workers and new opportunities for Canadian businesses." – PMO, press release, August 8, 2025. Also notes dual-use infrastructure like ports, airports, telecom.
"Canada commits 3.5 per cent of GDP to core military capabilities and an additional 1.5 per cent to dual-use security infrastructure (airports, ports, telecom, emergency systems) -- i.e., spending that directly overlaps with civilian economic capacity." – Canada Joins New NATO Defence Investment Pledge, June 25, 2025.
Who Pockets Canada's Defence Spending
Besides the claim of driving
economic development, the Carney government says one of its aims
with defence spending and with trade is to "diversify away from
U.S. dependency." The Canadian military industry is so heavily
integrated into the U.S. war economy that it is hard to
determine where ownership starts and stops. Not to speak of the
fact that militarily speaking, Canada's military is under U.S.
command for all practical purposes.
Nevertheless, there is a claim that with the Industrial and Technological Benefits Policy (ITB), Canadian military procurements "contribute to jobs, innovation and economic growth" across Canada because the ITB "contractually requires companies awarded defence procurement contracts to undertake business activity in Canada equal to the value of contracts they have won."
The following is a list of companies that stand to benefit or that already benefit from Canada's military spending. The mention of Canadian-owned or foreign-owned is nominal, as officially entered in procurement listings, even though the "Canadian-owned" do not belong to the people of Canada. But even with this definition the bulk of the military spending of the government of Canada ends up with entities under foreign ownership and control.
Key Recipients of Canada's Military Spending
- River-class destroyer (CSC) batch-1 implementation at Irving (Canadian-owned): CA$8.0 billion for ships 1-3 (including taxes), award March 3.
- P-8A Poseidon patrol aircraft: U.S. Navy contract U.S.$3.4 billion to Boeing (U.S.-owned) to build 14 P-8As for Canada (announced February 29, 2024).
- F-35 purchased from Lockheed Martin (U.S.-owned): CA$19 billion (January 2023), Auditor General update CA$27.7-33.2 billion (June 10).
- A330 MRTT (Strategic Tanker Transport Capability): CA$3.6 billion awarded to Airbus Defence and Space (July 25, 2023). Airbus is co-owned by the German-French-Spanish European Aeronautic Defence and Space Company with Britain's BAE with 20 per cent interest.
- SkyAlyne FAcT (Canadian-owned): CA$11.2 billion for 25-year contract for comprehensive aircrew training (May 28, 2024).
- LVM (Army logistics vehicles), GDLS-Canada + Marshall: CA$1.5 billion acquisition plus up to CA$1.08 billion in-service support (May/June 2024) to Power Team, a consortium led by General Dynamics Land Systems-Canada (GDLS-Canada) and Marshall Canada. One is a subsidiary of U.S-owned General Dynamics and the other is a subsidiary of UK-owned Marshall Group.
- Davie polar icebreaker: CA$3.25 billion (March 8) to Seaspan's Vancouver Shipyards and Chantier Davie Canada. Seaspan Shipping is U.S.-owned while Davie's ownership structure is "complex."
- MDA: CA$60 million (River-class destroyers, June 24) plus CA$39 million acquisition plus CA$27 million in-service support for Halifax-class unmanned aircraft systems (August 5). MDA Space is listed as Canadian-owned.
- The construction of two joint support ships: CA$2.4 billion 2020 build contract (later adjustments reported in 2024) awarded to Seaspan's Vancouver Shipyards. Seaspan is U.S.-owned.
- Ammunition production and stockpile plan: CA$9.5 billion over 20 years framework, to General Dynamics (U.S.), Colt Canada (based in Prague), ITM Defence (backed by UK private equity), Magellan Aerospace (Canadian-owned), HFI Pyrotechnics Inc. (Canadian-owned).
- Over-the-Horizon Radar technology contracted to Australian subsidiary of British defence firm BAE Systems, at a cost of $6 billion, as part of Canada's commitment to spend $38 billion to modernize NORAD. Announced on March 18.
(Sources: Government of Canada, Wikipedia, Marshall Group, AP News and other agencies)
This article was published in
Volume 55
Number 10 - October 2025
Article Link:
https://cpcml.ca/Tmlm2025/Articles/M550103.HTM
Website: www.cpcml.ca Email: editor@cpcml.ca