Events

This session will examine the economic and policy implications of a historic increase in Canadian defence spending, as the government moves to meet the 2% of GDP benchmark and signals a longer-term path toward 3.5%. This shift represents a major structural change in fiscal policy with wide-ranging effects on growth, investment, and resource allocation. The discussion will focus on the trade-offs required to sustain this spending trajectory. These include pressures on public finances, the likelihood of tax adjustments, and the broader reallocation of government spending. Participants will gain insight into how this defence buildup could reshape the fiscal framework and alter the role of the federal government in the economy.

A key theme will be the policy design and execution risks associated with a defence agenda driven directly by the Prime Minister’s priorities. While this centralized approach may accelerate decision-making, limited alignment within the public service and military leadership raises important questions about implementation credibility, timing, and economic spillovers. The session will also analyze the proposed creation of the Defence Investment Agency (DIA) as a major institutional reform with implications for procurement efficiency, industrial policy, and private sector participation. The DIA represents both a potential catalyst for productivity gains in defence procurement and a source of execution risk that could affect investment outcomes.

The webinar will situate these developments within the context of shifting geopolitical conditions and the government’s trade and investment diversification strategy. The discussion will highlight the economic constraints and structural barriers facing this agenda, as well as the implications for capital flows, supply chains, and business strategy.

This session is part of TABE’s “Middle Power, Major Stakes: Canada in the Era of Geopolitics and Global Rivalry” series.

This session (and series) is being organized and moderated by Alex Ciappara, a TABE Board member.