As pressure mounts for Canada to reach NATO’s military spending target, the Business Council of Canada (BCC)—representing Canada’s 170 largest monopolies—is pushing the federal government to exceed it.
According to the council, Canada needs to spend tens of billions of dollars more on its military might, hitting not the two per cent accepted target, but three per cent of GDP to defend its members’ “interests” at home and abroad. And they want the Canadian government to implement a deep austerity program to pay for it.
Canada’s ‘defence-industrial base’
As part of NATO’s imperialist war drive, the Trudeau government has doubled Canada’s military spending from $17.7 billion in 2015 to $33.8 billion over the past ten years, procuring new submarines, warships and fighter-jets.
However, this is still short of NATO’s target, which demands that its members spend two per cent of their GDP on their military—which would cost roughly $80 billion annually.
The incoming Trump administration has taken a sharp tone with NATO laggards like Canada, threatening them with “economic penalties” if they continue to fall short.
The Business Council of Canada has joined the chorus.
In its report, titled Security And Prosperity: The Economic Case for a Defence Industrial Base Strategy, Canada’s largest business lobby demanded that Canada hike military spending to three per cent of GDP by 2035.
Concretely, that means spending more on new military equipment, subsidizing military-related research and development, and building up military infrastructure (especially airfields and “aids to navigation”) supposedly to “safeguard Canadians” and ensure “prosperity”.
Guns instead of butter
According to Parliamentary Budget Office projections, hitting NATO’s target by 2032 would likely mean spending $82 billion per year. Basic arithmetic suggests that hitting the Council’s three per cent target would require spending nearly $120 billion per year—and more going forward.
With Canada’s economy submerging, where is this money going to come from?
The Council suggests that bankrolling “the lion’s share” of this military spending will require a deep austerity program. It favourably cites the Chrétien government’s cuts in the 1990s as an example to follow.
That was the deepest austerity in Canadian history. It consisted in massive cuts to unemployment support, education and hospital funding—cuts which have never been reversed.
The BCC’s proposals would thus mean more poverty, crumbling infrastructure and attacks on the working class.
Why they want more military power
The ruling class’ demand for more military spending is about more than remaining on friendly terms with the United States.
America, as the world’s main capitalist power, is also the world’s main exploiter. Naturally, Canada’s capitalists are eager to get in on the spoils. And, they will fight to remain on good terms with any U.S. administration.
But the council’s member companies—representing Canada’s 170 largest corporations—also have their own imperialist “interests” internationally.
The Council’s own board includes representatives from CIBC, National Bank, Brookfield, BlackRock, Dupont and George Weston Ltd. These monopolies make a killing off of, among other things, Middle Eastern oil, Asian sweatshop labour, land grabs in South America, and gambling on Third World debt.
The Canadian state is their state and its military is their military. When these parasites call for more military spending, they do so to extend their own influence, as part of the Western imperialist order.
We saw this in 2003, when the council was one of Canada’s main champions of the U.S.-led invasion of Iraq. When Canada opted for a supportive role instead, the Council flew 100 CEOs to Washington in the hopes that they could profit off of Iraq’s oil, transportation lines and basic infrastructure.
Today, U.S. imperialism is entering into a relative decline and facing off against rising powers like Russia, China and their regional allies. Canada’s imperialist ruling class is worried their interests may be challenged, in the Council’s words, by this “new, more tumultuous geopolitical reality.”
Accordingly, corporate Canada—represented by the Council—is desperate to do whatever it takes to salvage NATO and the Western imperialist order to defend and extend their “prosperity.”
The prosperity mirage
There is another aspect to this push for increased military spending. As the report states, “many of Canada’s closest allies have developed integrated approaches to economic and national security… Canada has not.” In other words, since other countries are spending massively on their defense industries, Canadian defense companies risk being left in the dust.
Therefore, the lobby asks that the government of Canada “invest more in Canada” and “boost the overall competitiveness of Canada’s defence industrial base”.
More concretely, they ask that Canada not only increase defense spending to three per cent of GDP, but that “35 per cent of that total [be] dedicated to the purchase of new major equipment and related R&D.” The report notes that Canadian military investments in research and development and major equipment are well below those of their allies.
This is in a context where, over the past decade, every western imperialist country, from the Eurozone to the United States, has begun to retreat from the “free market” rhetoric of the past. They’ve implemented a combination of protectionism and lavish subsidies for their home industries, as was the case with the U.S. Inflation Reduction Act.
So naturally, the business council wants to join in. Noting that defence contracting is generally exempt from Free Trade Agreement penalties, it insists Canadian industry needs a “high risk, high-reward” subsidy program, modelled on the U.S. government’s Defense Advanced Research Projects Agency (DARPA) and its “Defence Production Act.”
So not only is the BCC asking the government of Canada to cut social programs in order to boost defense spending, they ask that they use that opportunity to give them corporate welfare while they’re at it.
As said, the report argues that this is necessary to boost the “competitiveness” of Canadian industry on the world market. It also suggests that military subsidies and contracts could also help Canada’s ailing manufacturing sector to raise their productivity: “The Government of Canada can drive increased economic prosperity and security by enhancing productivity and technological innovation in advanced and high-value dual-use sectors.”
This is another case of the Canadian crisis of productivity. As we’ve explained before, the Canadian economy is in decline because capitalists are refusing to invest in production. Instead, they are asking that the state do it in their place. Canada’s manufacturing sector already receives annual subsidies from the federal government and Canada’s largest provinces totalling roughly $30 billion per year.
But the idea that military spending can “increase economic prosperity” is a mirage. Generally, military expenditure is unproductive. At best, military spending will simply move existing value around—from workers and the poor to Canada’s arms-dealers and their profiteer friends. But once the weapons are supplied, they themselves generate no value of their own. Ultimately, they’re a drain on society.
In the end, what this amounts to is a group of scandalously rich parasites asking the state to buy useless toys of war in the hope of artificially maintaining alive their failed economic system. It is truly a damning indictment of the bankruptcy of the capitalist ruling class.
Imperialism abroad breeds reaction at home
Workers have no interest in defending our own exploiters’ “prosperity” abroad any more than we do at home. Our enemy is our own ruling class—led by groups like the Business Council—and we must prepare to sweep them away.
Should the government—be it Conservative or Liberal—try to impose the cuts necessary to build up Canada’s war chest, it could very well lead to a social explosion. The labour movement must prepare for a fight. And we must prepare to sweep away our imperialist ruling class, once and for all—starting with the Council’s membership.
