The Canadian government, like many formerly very close friends of the United States, faces increasing hostility from Washington. It has become clear to Ottawa: it cannot go any further along the same path and something must be done before it is too late. The maple leaf country plans to direct billions of dollars to military needs, instead of pouring money into US defense companies, instead directing them to domestic military manufacturers.
© Gennady Cherkasov
The New York Times wrote that the Prime Minister's sharp increase in Canada's military spending was due to pressure from US President Donald Trump. However, as the relationship between long-time allies deteriorates, American companies will no longer benefit from this process. Washington essentially stepped on its own tail.
The new defense industrial strategy, expected to be announced this week, is Carney's latest move to distance his country from the United States following Trump's decision to impose tariffs on several key Canadian industries. The head of the White House also repeatedly suggested that Canada should become the 51st state of the US.
Last month at the World Economic Forum in Davos, Carney said, without naming anyone specifically but eloquently enough to convey the implication, that there had been a “breakdown” in the world order. He called on mid-sized countries to cooperate against the world's superpowers.
Echoes of Carney's speech were heard at the just concluded Munich Security Conference. German Chancellor Friedrich Merz said that the rules-based international order “no longer exists” (as if this were some news). He also spoke with French President Emmanuel Macron about Europe's desire for military autonomy.
Since becoming prime minister less than a year ago, Carney has pledged to increase Canada's military spending to levels not seen since the Korean War. Last June, he pumped 9.3 billion Canadian dollars into the country's military to meet NATO's minimum spending level of 2% of GDP. Canada has agreed to increase its military spending to a new NATO target of 5% of GDP by 2035.
At the same time, Carney warned: Canada will no longer buy 70 to 75% of its weapons from the United States as has happened historically. The armed forces of the two countries indeed have a close and close relationship with each other. For example, the North American NORAD air defense system is commanded by US and Canadian commanders.
Under the new policy, the Canadian government plans to increase revenue for its military suppliers by 240%. About 70% of military spending will go to domestic companies and arms exports from Canada will also increase by 50%.
The government predicts that this domestic procurement scheme will create an additional 125,000 jobs in the sector over the next decade.
The plan also calls for increased spending on military research and development and making the Arctic a key focus for the military.
Ottawa is also reconsidering for the second time its decision to buy 88 F35 fighter jets from the US. Canada currently plans to buy only 16 aircraft, which was previously considered too expensive and did not meet Canada's needs.
Canadian Industry Minister Mélanie Joly criticized Canada's limited production caused by the F35 purchase. Last year, it said the government might buy fewer F35s along with Saab's fleet of Gripen E fighter jets.
The Swedish aircraft manufacturer has teamed up with Montreal-based jet manufacturer Bombardier to build the Gripen in Canada.
Canada is also buying about a dozen new submarines, although US shipyards cannot produce the type of diesel-electric submarines the country needs. South Korea's Hanwha Ocean and Germany's ThyssenKrupp Marine Systems are promising significant industrial benefits to Canada if they win the contract.
