Six and half decades ago, as he left office, U.S. president Dwight Eisenhower warned against the “unwarranted influence” of the “military-industrial complex.”
Eisenhower did not mince words.
The former general, who had commanded World War II Allied Forces in Europe, called the complex’s “misplaced” power “disastrous.”
When we read Canadian prime minister Mark Carney’s first budget we can see how the dangerous power and influence of which Eisenhower warned has now gone global.
There are lots of losers in Canada’s November 4 budget, but one big winner: the military and its allied industries.
While Budget 2025 cuts almost all the rest of government program spending – including Veterans’ Affairs, Crown-Indigenous Relations, and International Development Assistance – it increases military spending by over $16 billion per year for five years.
Carney and his finance minister, François-Philippe Champagne, call it a “generational investment” in the weapons and apparatus of war.
Earlier this year, the Canadian government promised fellow NATO members it would fast-track the process of boosting our defence budget to two per cent of gross domestic product (GDP) and it was true to its word.
But that is not the end of it.
At last June’s NATO summit Donald Trump ordered the assembled alliance leaders to jump and they all answered in unison: “How high?”
Trump, capriciously, and based on no facts or evidence, decided all NATO members must now spend five per cent of everything their economies produce on guns, bombs, tanks, missiles, drones, and soldiers.
Such a massive arms buildup will exceed Dwight Eisenhower’s worst fears.
It will amount to a lot more than what the onetime general called “unwarranted influence”.
It will create garrison-states, armed to the teeth, around the world.
Bad economic news; government as catalyst
The 2025 budget is ostensibly aimed at making the Canadian economy more resilient in the face of Trump’s economic war.
The budget document sets the stage by painting a dire economic picture for Canada:
“Tariffs and supply chain disruptions are expected to be a drag on business investment and productivity. Combined with slower population growth, the level of real GDP is projected to be 1.8 per cent below what was anticipated in 2024 before the trade conflict.”
Chief among the negative items budget 2025 cites are a decline in Canadian exports to all countries of seven per cent and a drop in exports to the U.S. of ten per cent.
Steel and aluminum exports are down much more, by about a third.
For the government, this “economic shock” means less tax revenue. The result, says the budget, is a “deterioration of the federal budgetary balance by $7 billion per year.”
To mitigate this Trump-induced pain, the budget proposes a “new industrial strategy”.
This multi-pronged approach would have the federal government act, largely, as a catalyst for private sector investment.
And so, Budget 2025 states that the federal government will spend big on infrastructure, more modestly on support for research and skills development, and, for the first time in decades, invest in housing.
At the same time the government will offer a suite of generous tax incentives to private sector businesses worth, potentially, multiple billions.
One of those tax measures is what the budget calls a Productivity Super-Deduction.
That measure will allow businesses to write off a larger share of the cost of their investments in machinery, equipment and technology on an accelerated basis.
Companies will be able to get the tax break before they’ve spent what they plan to on new “productivity-enhancing assets.”
The budget makes an ambitious claim for these industrial strategy measures.
The Carney government says they will, somehow, result in over a trillion dollars in total investment over five years. Budget 2025 does not, however, say how this will happen. On this, as on many other matters, the budget lacks detail.
But even in the industrial strategy chapter, the military has pride of place.
Indeed, the budget’s forecast of new defence spending exceeding $16 billion per year might be a low estimate.
Stand-alone military investment entities
Among the pillars of the industrial strategy are a new Major Projects Office and an equally new Build Canada Homes agency.
But the government will also create a new Defence Investment Agency as part of what it calls its Defence Industrial Strategy.
Part of the purpose of these stand-alone defence initiatives is to shift Canadian defence purchases away from the now-unreliable U.S. toward Canada and non-U.S. allies, especially in Europe.
That will seem like a good idea to anyone who has not been sleeping since Trump took power this past January.
But a good part of the motive for the specifically defence-focused industrial strategy is less benign. Its purpose is to weave military activity more tightly into the non-military fabric of the economy.
The budget document makes this clear. It touts the benefits to the entire economy of military procurement:
“Business opportunities will be across the supply chain: from the production of raw materials, including steel and aluminum, to the truckers and rail workers who ensure their transit, to those who transform these materials into equipment, weapons, ammunition, and vehicles.”
For good measure, Budget 2025 promises that massive military investments will “also drive innovation in technology sectors, including artificial intelligence, quantum, and cyber.”
Some might imagine that massively increasing military spending could help this country resist the aggressive and hostile intentions of Donald Trump’s U.S.
That is hardly the case.
Consider that a good piece of the new military spending will go to areas where we Canadians are tightly integrated with the Americans. Chief among those is the North American Aerospace Defence Command (NORAD).
In any case, the Carney government seems to be ambivalent in its evaluation of the threat from Trump’s U.S., despite all of its Elbows Up talk.
A case in point: A while ago Trump mused about using U.S. government resources to buy a big chunk of Canada’s rare-earth-minerals industry.
When asked about Trump’s ambitions, and about the hazards of a foreign power owning such a strategic asset as rare earth minerals, Carney’s Natural Resources Minister, Tim Hodgson, responded: “The U.S is an ally.”
Yes, the U.S. is still a (sort-of) ally. But its current president has been unabashed about his desire to get his hands on our water and other resources – if not the whole country.
Major cuts in non-military spending
There is a cost to force-feeding the military-industrial complex with such a rich diet. That cost will be paid by much of the rest of government activity.
An appendix to the budget document indicates, for almost all government departments, how they should reduce their spending by 15 per cent.
The Fisheries and Oceans folks are instructed to “wind down” research and monitoring activities for which (non-specified) “alternate data sources” are available.
For Environment and Climate Change, the mot d’ordre is to “reduce or wind down activities that are not core to the Department’s mandate” – assuming such activities exist. The federal Environment Commissioner has often reported that the environment ministry is failing to fulfil many activities that are entirely within its mandate.
Natural Resources Canada will also cut environmental programs, notably the Green Homes Program and the previous government’s program to plant two billion carbon-absorbing trees.
In addition to a whole series of vaguely-defined efficiency measures, Budget 2025 enjoins Employment and Workforce Development to “increase its use of artificial intelligence (AI) to streamline and automate internal processes.”
AI is quickly getting its day in the sun for the Carney government.
But is it possible Budget 2025 is putting the cart before the horse when it comes to AI?
Earlier this year readers will remember that the PM created a whole new ministry of artificial intelligence (AI), headed by former broadcaster Evan Solomon. In a recent interview Solomon promised new legislation to deal with the potential dangers and harms of AI.
But the government is not waiting for Solomon’s new rules and regulations before diving headlong into the AI pool – and, as Shakespeare would have put it, the devil take the hindmost.
Some cultural institutions are getting modest funding increases.
Budget 2025 adds $150 million to CBC/Radio-Canada’s funding for this year, and promises a long-awaited mandate review for the public broadcaster.
This is a far cry from what former Canadian Heritage Minister Pascale St.-Onge recommended last February.
St.-Onge proposed Canada invest the average amount G-7 countries spend on public broadcasting, $62.50 per person, and make that a guaranteed amount. Currently Canada spends about $37.50 per person on the public broadcaster.
Despite the new money for CBC/Radio-Canada (and other organizations such as Telefilm Canada and the National Film Board), the ministry responsible for those bodies, and much else connected to Canadian identity, must cut 15 per cent of its operating costs.
The same is true for the Canada Revenue Agency (CRA), notwithstanding the scandalous lack of service that organization has been providing at its current level of funding.
International development assistance is often viewed as the soft power counterpart of military spending.
To achieve a safer and more secure world, the theory goes, the richer nations must help alleviate poverty, poor health, inadequate housing, environmental degradation, and unemployment in poorer nations.
That’s why, years ago, the world at large adopted the Millennial Development Goals, which encouraged the wealthy countries to devote 0.7 per cent of their GDPs to development assistance. (Canada has never reached that goal, although some, such as the U.K., have.)
Mark Carney obviously does not subscribe to that theory.
His 2025 budget reduces Canada’s already low level of assistance to less developed countries.
Among the victims are global health programming and international financial institutions.
And so it goes. The budget document outlines many more similar cuts.
The prime minister made a point of saying his government is not reducing transfers to the provinces for health and social services, nor cutting its own programs, such as that for dental care, a result of the previous government’s deal with the New Democrats.
Pharmacare will be a victim of this budget, however.
To date, only British Columbia, Prince Edward Island, Manitoba, and the Yukon have signed pharmacare agreements with the federal government, putting the program into action.
The plan had been to negotiate similar agreements with the other provinces and territories. But that will not happen now. The pharmacare initiative will be frozen in place.
There are some hopeful and bright spots in the budget – and some other scary stuff. For this space on rabble, that will have to await another day.
The Budget 2025 debate is now on in the House, but the House will rise next week, and then reconvene the following week.
That is when we can expect a vote on the budget.
Carney’s team has secured the support of one Conservative floor crosser, Chris d’Entremont, the sole Conservative elected in Nova Scotia in last spring’s vote.
That means they are now two votes (or abstentions) away from getting Budget 2025 through Parliament. If they fail, there will be an election.
But failure does not now seem likely.
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