Letters March 15, 2022

Investing in national defence and security

Goldy Hyder – President and Chief Executive Officer, Business Council of Canada

Canada’s Place in the World Economic Strategy Global Affairs International Trade

Letter to The Honourable Chrystia Freeland, P.C., M.P., Deputy Prime Minister and Minister of Finance

Dear Minister Freeland,

In the weeks since the Business Council of Canada provided its recommendations for Budget 2022, there has been a seismic shift in geopolitical forces across Europe and around the world. Russia’s unprovoked and unacceptable invasion of Ukraine has shattered the post-Cold War international order and forced governments to shift their focus from domestic priorities to defence and security.

In light of these historic developments, we feel compelled to supplement our pre-budget submission to address the renewed debate over Canada’s defence spending. Since the early 1980s, the Business Council of Canada has consistently supported necessary investments in our national defence and security to protect Canada’s sovereignty and honour the country’s commitments to its NATO and NORAD partners.

In 2006 and again in 2014 – following Russia’s illegal annexation of Crimea – NATO leaders agreed to commit a minimum of two per cent of their Gross Domestic Product to defence spending to ensure the Alliance’s continued military readiness. Russia’s invasion of Ukraine has underscored the need for a stronger deterrence and defence posture, prompting countries such as Germany and Denmark to announce robust increases in military spending. We believe Canada must demonstrate equal resolve.

We take this position recognizing that the federal government faces serious fiscal pressures. In our February 25 submission, we urged you and your Cabinet colleagues to undertake a broad-based, rolling review aimed at saving one to two per cent of program spending on a yearly basis over the current mandate.

Canada has always been a staunch and steadfast ally to peaceful democratic nations. By investing more in our defence capabilities, our country can continue to play a constructive role internationally amid renewed threats to our collective security.

Yours very truly,