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Why the Government of Canada Must Fast Track Defence Spending
by Kristen Duever
by Kristen Duever
The prorogation of the federal government couldn’t have come at a worse time. As we enter this uncertain geopolitical landscape, this message is directed not only to the next Prime Minister but to their successors as well: Canada must urgently prioritize and accelerate its defence spending.
On January 20, President Trump will be inaugurated. While some of his rhetoric—including threats of 25% across-the-board tariffs on Canada—may seem implausible, his administration’s potential for disruptive trade policies cannot be dismissed. Trump has consistently urged Canada to fulfill its NATO commitments and strengthen border security, and in these areas, his demands are not without merit. Failing to address these concerns could leave us vulnerable to both economic and security risks.
The Stakes for London and Canada
Closer to home, the urgency to act is underscored by the challenges facing General Dynamics Land Systems-Canada (GDLS-Canada), a cornerstone of London’s economy and a significant player in the nation’s defence industry. The company contributes sizably to Canada’s $14.3 billion defence sector, which employs 82,000 people and adds $9.5 billion to Canada’s GDP. For London alone, GDLS sustains over 1,800 jobs at its London facility.
However, the ripple effects of GDLS’s success extend far beyond its own operations. Many businesses in London’s broader community—from suppliers and contractors to service providers— over 200 local businesses rely heavily on GDLS’s stability and continued operations. A slowdown or downturn in GDLS’s activities would reverberate through the city’s business ecosystem, amplifying the economic impact and threatening the livelihoods of countless additional workers.
The industry’s stability is precarious. With about 85% of its revenue tied to exports and 15% of GDLS’s contracts sourced from the Canadian government, the uncertainty of competitive international defence contracts, especially in an industry where competitors bring their whole of government to the competition, proves a steep challenge for defence exports from Canada.
The Canadian Army is a Light Armoured Vehicle-based army. It is in Canada’s national strategic interest to ensure the production skills and supply chain are supported and sustained. By advancing its defence spending timeline, the Canadian government can demonstrate a serious response to ensuring a North American focus on national security, help safeguard jobs, preserve the sovereign manufacturing capabilities of our defence sector, and buffer against potential tariffs from the United States.
Meeting Commitments and Building Resilience
Canada’s NATO contributions are another pressing issue. We continue to be singled out for failing NATO’s recommended defence spending targets, and the only G7 country in NATO not spending 20% or more of defence budget on equipment -- a shortfall that undermines our alliances and international credibility. Addressing this gap is not only a matter of fulfilling our commitments but also a strategic imperative to bolster our international credibility in trade and security negotiations.
Furthermore, although a brief nod to it in Minister Bill Blair’s defence policy document, True North Strong and Free, Canada lacks a cohesive National Defence Industrial Policy. Let’s not kid ourselves – it’s pretty clear that relying on platitudes and notions of a bygone era will not set us up for security and success in this current international security environment. Identifying and focusing defence procurement policies to ensure sustainable industry is a key imperative and could streamline procurement, cut costs, secure jobs, support domestic innovation, and align investments with broader economic goals. Establishing and executing this framework must become a national priority.
A Call to Action
Our defence industry is at a crossroads, and its trajectory will have lasting implications for Canada’s economic and national security. By urgently accelerating defence spending, the federal government can stabilize key industries, protect thousands of jobs, reinforce our commitments to NATO, all while equipping Canada’s Armed Forces with needed kit. These investments would not only support GDLS-Canada and its vital contributions to London’s economy but also strengthen our standing on the global stage.
The clock is ticking. Canada’s leaders must act decisively to secure the country’s future. Waiting until 2026 is not an option—the time to invest is now.
