FIRST READING: The military's all-out push to spend as much money as humanly possible

First Reading is a Canadian politics newsletter curated by the National Post’s own Tristin Hopper. To get an early version sent directly to your inbox, sign up here.

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With the end of the fiscal year only three months away, the Liberal government is facing the unusual problem of potentially failing to spend money fast enough.

Specifically, its Department of Defence is now in the closing weeks of an all-out drive to spend $9 billion as quickly as possible in order to satisfy a Carney government pledge to finally meet Canada’s NATO spending targets.

Ever since 2014, NATO has maintained a guideline requiring its member states to spend at least two per cent of their GDP on defence.

Canada has not once hit the threshold since it was set, despite repeated pledges by the government of then prime minister Justin Trudeau to do so.

Instead, Canada has consistently ranked as one the alliance’s worst freeloaders. According to NATO’s own accounting, Canada hasn’t even been able to maintain defence spending at anything higher than 1.5 per cent of GDP.

In June, one of the first major policy announcements of the newly elected Carney government was to boost defence spending just enough to hit the two per cent target by year’s end.

“Canada will achieve NATO’s 2% target this year – half a decade ahead of schedule – and further accelerate our investments in years to follow,” wrote the Prime Minister’s Office in a statement.

With the military budget already pegged at $53 billion at the time, it would take another $9 billion to hit the target.

Military hardware is extremely expensive, which typically means that buying $9 billion of it isn’t all that hard.

But the limitation for Canada was time.

Carney first made his spending pledge on June 9, and the fiscal year ends on March 31. This gave the Department of Defence just 10 months to spend $9 billion. Or, the equivalent of about $30 million per day.

The timeline is too short for Canada to simply stock up on big-ticket items like fighter jets or warships, as the military remains constrained by a procurement system that is notoriously bureaucratic and inefficient.

It took nearly 20 years for Canada to replace its stock of famously unreliable Second World War-era sidearms. Although all the military really needed to do was submit an order for new guns, the process was held up by years of tests, approvals and “buy Canadian” protocols.

The drive to replace Canada’s fleet of severely outdated CF-18s has been similarly plagued by an odyssey of false starts and political interventions. Despite a Canadian commitment to replace the fleet with F-35s as early as 2010, the deal is still in limbo, most recently over cabinet-level complaints that not enough of the plane is manufactured in Canada.

Given all the usual procurement speed bumps, the Department of Defence has needed to hit the $9 billion threshold by instead pouring money into avenues unconstrained by thickets of red tape.

One of the easiest was effectively a large-scale accounting trick. In September, the federal government announced that the Canadian Coast Guard was now a branch of the military. Previously, it had operated under the purview of the Department of Fisheries and Oceans.

Although the switch was explained as a way to “enhance coordination across government,” it also ensured that the agency’s $2.392 billion budget would henceforth be classified as defence spending.

The Department of Defence racked up another $2 billion by simply spending more on payroll. This year saw a 20 per cent increase to starting pay, meaning that new army recruits, for instance, instantly went from earning $43,368 per year to earning $52,044.

Raises, bonuses and allowances were similarly distributed throughout the ranks, with one example being a new $10,000 bonus paid to anyone completing basic training.

Military aid to Ukraine is insulated from the usual procedures of Canadian procurement; all Canada has to do is buy whatever the Ukrainians ask for.

As such, Ukraine aid provided another means to boost the bill for 2025.

At the G7 summit in August, Prime Minister Mark Carney announced $2 billion in new military aid to Ukraine, including $680 million for a “NATO Prioritised Ukraine Requirements List.”

This is essentially a kind of wedding registry for the Ukraine war; NATO puts together packages of U.S.-made arms for Ukrainian use, and NATO members then volunteer to buy one.

As the year-end deadline ticks closer, the military seems to be stocking up on all number of routine purchases — even if those purchases contradict Carney government promises to avoid buying U.S. equipment.

Last month, the U.S. State Department announced it had approved a US$2.68 billion ($3.7 billion) sale of bombs and other ammunition to Canada. The purchase order was for several warehouses of air-carried munitions that Canada will eventually use, regardless of whatever fighter it ends up buying.

This included 750 GBU-39 practice bombs, 220 “general purpose” bombs and 146 I-2000 penetrator warheads — often called “bunker busters.”

Around the same time, the U.S. Department of Defense similarly announced that it was approving a large sale of missiles, torpedos and electronic warfare equipment to the Royal Canadian Navy.

An “Arms Sale Notification” provided to the U.S. Congress listed US$1.7 billion ($2.4 billion) in naval equipment ordered by the Canadians.

All of this is probably why Defence Minister David McGuinty is proving to be uniquely confident that, this time around, Canada can actually hit its NATO target.

In a House of Commons committee just before the start of the winter recess, McGuinty seemed to welcome a charge from Conservative defence critic James Bezan that the Liberals would once again “fall behind the eight ball” on defence spending.

“We’re on this and watching it like a hawk, and you’re right to raise it,” he replied. “And we’re making sure we’re going to be delivering on time, by March 31.”

IN OTHER NEWS

Of the two Conservatives who crossed the floor to the Liberals in late 2025, the case of Michael Ma was the most baffling. He was the GTA MP who attended the Conservative Christmas party only hours before his defection, and later explained the dissonance of this decision by stating that he was “truly a Conservative” while at the gathering.

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Unlike with fellow floor-crosser Chris d’Entremont, there was a whole foreign interference angle to Ma’s defection. Chinese-Canadian demonstrators in Ma’s riding have accused him of being a “puppet” of Beijing, and the Hong Kong-born Ma has attended events alongside Beijing-aligned groups.
Anyway, one of Ma’s first actions in his new role as a Liberal will be to accompany Prime Minister Mark Carney on a goodwill visit to the People’s Republic of China next week.

Speaking of the China visit, it will be the first by a Canadian leader since Canada officially accused the Beijing government of using concentration camps to carry out a genocide in its northwest – a charge that Ottawa has never withdrawn. Also on Thursday, the Prime Minister’s Office noted that on the way home Carney would be making a stopover in Qatar. That would be the Middle Eastern autocracy whose government shelters the leadership of Hamas.

First Reading is a Canadian politics newsletter curated by the National Post’s own Tristin Hopper. To get an early version sent directly to your inbox, sign up here.