The recent push to increase Canada’s military spending has sparked intense debate on Parliament Hill, raising questions about more than just national security. While defence officials emphasize readiness concerns, economists and regional leaders are increasingly focused on the potential economic windfall these investments could bring to Canadian communities.
“Military spending is fundamentally about security, but we can’t ignore the significant economic benefits that follow,” explained Dr. Ellen Thompson, economics professor at Carleton University, during a recent panel discussion I attended in Ottawa. “Every dollar invested in defence can generate up to $1.80 in economic activity when you factor in supply chains and innovation spillovers.”
The federal government’s commitment to increase military spending toward the NATO target of 2% of GDP represents billions in new investment, with Defence Minister Bill Blair confirming last week that the upcoming budget will include a “significant down payment” on this commitment.
For communities like Cold Lake, Alberta, and Halifax, Nova Scotia, where military bases serve as economic anchors, the spending boost could mean thousands of new jobs. During my visit to CFB Halifax last month, local business owners described the multiplier effect of defence spending on everything from housing to retail.
“When the base expands, the whole city feels it,” said Marion Desjardins, who owns a café near the naval facility. “It’s not just the personnel – it’s the contractors, the suppliers, all the supporting businesses that benefit.”
The economic impact extends beyond base communities. The Canadian Association of Defence and Security Industries estimates that defence procurement supports over 60,000 jobs across the country, with particular concentration in Ontario and Quebec’s aerospace and manufacturing sectors.
Prime Minister Trudeau addressed this dimension directly during Question Period yesterday: “Our investments in national defence are investments in Canadian innovation, in good middle-class jobs, and in economic growth from coast to coast to coast.”
This perspective has begun to shift the political calculus around military spending. Provincial premiers, including Doug Ford and François Legault, have become unexpected advocates for increased defence budgets, with both leaders lobbying Ottawa to direct procurement contracts to their manufacturing bases.
But critics warn against viewing military spending primarily as an economic stimulus. “There’s always opportunity cost,” cautioned NDP defence critic Christine Moore in our conversation after committee hearings last Tuesday. “Every dollar spent on weapons systems is a dollar not spent on healthcare, housing, or clean energy – all of which create jobs too.”
The parliamentary budget office raised similar concerns in its analysis released earlier this month, noting that while military spending does create jobs, it typically generates fewer jobs per dollar than investments in education or infrastructure.
The reality is more nuanced than either side suggests. Defence investments offer unique advantages beyond direct job creation, including technological innovation that frequently spills into civilian sectors. The GPS technology in your smartphone, for instance, began as a military navigation system.
“Canada has fallen behind in defence R&D,” said Lieutenant-General (Ret.) Michael Day during a press conference at the Canadian Global Affairs Institute. “Increasing our investments doesn’t just strengthen our military – it catalyzes innovation in areas like artificial intelligence, advanced materials, and cybersecurity.”
The regional impact varies significantly. A new analysis from Statistics Canada shows that provinces with established defence manufacturing capacity – particularly Ontario, Quebec, and Nova Scotia – stand to gain the most from increased military procurement.
For communities like Bagotville, Quebec, where the CF-18 fighter base is a major employer, the economic stakes are high. Mayor Josée Néron told me during a community forum that the multiplier effect of military investment ripples through the entire Saguenay region. “Each military family supports our schools, shops in our stores, and becomes part of our community fabric.”
The proposed acquisition of new fighter jets alone – estimated at over $19 billion – represents one of the largest procurement projects in Canadian history. Whichever manufacturer wins the contract will be required to invest equivalent value back into Canadian industry through offset agreements.
Economist Jim Stanford from the Centre for Future Work offers a more tempered assessment: “Military spending can certainly stimulate economic activity, but we shouldn’t pretend it’s free. The question isn’t whether it creates jobs – it’s whether those jobs are the best use of public resources.”
The debate continues as Parliament prepares for the upcoming budget. What’s clear is that Canada’s military spending decisions will have impacts far beyond national defence, shaping regional economies and innovation landscapes for decades to come.
For ordinary Canadians watching this debate unfold, the intersection of security needs and economic benefits offers a rare opportunity for cross-partisan agreement – even if the path forward remains contested.
