If Canadians want more security, they'll have to foot the bill

In this episode of The Big Story, host Karen Sciolan discusses Canada's recent achievement of meeting NATO's 2% defense spending benchmark, a milestone after years of lagging behind. However, the real challenge lies ahead: sustaining a shift to a 5% GDP defense target by 2035. Colin Busby, Director of Policy Engagement at the C.D. Howe Institute, explains the financial and political complexities of this transition, emphasizing that while short-term accounting differences allow some flexibility, long-term sustainability requires tough choices. He argues that increasing the GST is the most sensible revenue option due to its minimal behavioral impact and the existing GST credit that offsets regressivity. Alternatives—cutting transfers to provinces or burdening future generations with debt—are equally unpalatable. Busby stresses that defense is exclusively a federal responsibility, making fiscal discipline and transparency essential. He also highlights major hurdles in human resources, supply chain development, and domestic industrial capacity, warning that without a credible, multi-year financial plan, Canada risks failing to deliver on its security commitments.