150 Years of Canadian National Defence Spending

Canada’s federal government is going to deliver a new defence policy that is expected to guide Canada’s military for the next generation. While in the works for months, it comes in the wake of President Donald Trump’s recent exhortation at the NATO meetings that NATO members are not spending enough and Tuesday’s speech by Minister of Foreign Affairs Chrystia Freeland that Canada must rely more on itself for defence signaling that today’s defence policy release will involve a significant rebuild of Canada’s military. If that is the case, moving to a foreign policy where Canada will have both “good manners” and “strong muscles” will mark a significant shift in Canadian policy – if of course there is follow through. 

It is not outside the realm of possibility for Canada to have a large military – indeed we had quite a large one during the Second World War. For a nation of 11 million there was nearly one million men and women serving in the armed forces, 48 RCAF air squadrons and 471 fighting vessels of various types. Despite a massive demobilization, the military remained robust into the 1950s and until the late 1960s we even had an aircraft carrier. One way of capturing the ebb and flow of the Canadian military is via federal spending on national defence.   Well, what better way to set the stage and context for today’s unveiling of a new defence policy than a romp through Canada’s national defence spending over 150 years. The sources for this data are of course Statistics Canada, Historical Statistics of Canada and recent federal budgets and you can access the data here (See Appendix).

From one million dollars a year out of a 14 million dollar budget in 1867, Canada’s national defence spending was about 28.5 billion dollars in 2015-16 according to the Federal Fiscal Reference Tables. The federal budget numbers I worked with (in initially constructing this data series) placed it at about 22 billion dollars. As a share of federal government spending, it was 7.1 percent in 1867 and 6.7 percent by 2017. Figure 1 plots national defence spending as a share of total federal spending and shows that there are three distinct peaks – the First and Second World Wars and the Korean War/Cold War era. By the early 1970s, defence spending as a share of total federal spending was where it was prior to both world wars – under 10 percent.

Figure 2 presents real per capita national defence spending from 1870 to 2017 in inflation-adjusted dollars (GDP Deflator, 2014=100). From approximately 7 dollars per capita in 1870, spending is currently at about $585 per capita. While there are real per capita spending peaks associated with both world wars and the Korean War, peak per capita spending was in 1943 at approximately $5,600.

Finally, Figure 3 presents national defence spending as a share of Canadian GDP from 1870 to 2017. It was about one quarter of one percent in 1867 and currently stands at about 1 percent. It of course once again spikes during WW1, WW2 and the Korean War but the largest value is in 1943 at 37 percent of GDP.

For Canada to double its defence spending as a share of GDP – that is bring it to 2 percent - it would entail a spending boost of about 22 billion dollars in one year. Given the federal government is currently projecting a deficit of 28.5 billion dollars places the size of the required commitment in context. It should be an interesting day.

 

Update: The plan is out.  According to the Globe and Mail: "Canada’s new defence policy includes $62.3-billion in additional spending over the next 20 years, including a total of just $6.6-billion over the next five years.The plan would bring Canada’s defence budget to $32.7-billion a year in a decade, up from the current annual budget of $18.9-billion. This represents a boost in Canada’s annual military budget of more than 70 per cent by 2026-2027."  I guess there is some debate over what the size of the defence budget is given that I seem to have about three numbers now as to what current spending is. I used 22 billion in my calculations.

Comments

[Robots2005 AI2015]

In General, stopping WMDs means you should lower interest rates and vice-versa...you can macro who spends good and bad too. But it isn't efficient to worry about money over Q-of-Life as a trillion in stealth spending equals $100M for a diamond-copper anti-laser coating.
The worst part of the budget is the armed drones. If they don't use biometric (brainwave) C&C and optical (laser) QE-ed communication, they can all be hacked at once, globally. And AI doesn't need to attain self-improving to be the worst terrorist threat at least. Several expert systems and technologies can enable it to win. For example, maybe one million future robots that can tie at paintball, can win if we don't have rail-guns or EMP munitions. Combined with a personal stealth suit, maybe only 1000. Insect drones are scary to imagine unless we convert to resilient DC (wind) power and appliances. For this reason, non-proliferation of many technologies is key. A global sensor network will be everywhere. AI and robot projects can be side-channeled if there are superconducting acoustic and seismic sensors everywhere. Along with strike capabilities.
The flip-side is the rapid-response will require the 5-eyes to be in charge of new air capabilities. Things like EMAL jets that add a funnel shaped superconductor (30 meter surface length) can be positioned on the great lakes and near coastal universities, on container ships or destroyers. You wouldn't want 3D printers in Wpg or within 100km. Proppeler planes can spot unmanned cars but if more than 2.5% of vehicles are hacked they can disrupt logistics and help AI win. AI will learn hacking right away and only needs to have the ability to monitor its systems and understand we can cut its power before potentially being hostile. That is why ON's AI Budget is at least 10x hostile. Checks on power should include sanity brain scans and learning of utilitarian books brain scans. Recall of such (Scotch were UK's storm-troopers) measured by brain scans before making policy/emergency-decisions, probably will be the faculty that induces a utopia and makes Star Trek analogies meaningful. The USA is missing out on CNT batteries that will enable airforce laser power beaming. Aligned CNTs may enable the brain scan that measures recall of utilitarian thinking that forms a check on power better than what UK and Canada have, but you don't want robot and AI with CNTs (CNT/diamond macro useless); acoustic missiles might not track a CNT robot. An enlightenedly educated India would gain an Eye. The F-35 was nearly vertical takeoff if they would've junked the stealth for a less than a cm of copper and diamond. With hackable NASA you want lasers at atmosphere absorbing wavelengths in space to hit missiles, eventually safe Rare Earth mines, and much of the research re-directed to the airforces. Housing should be non-flammable as fire is guaranteed known by AI.

[Robots2005 AI2015]

...in economic terms, the existing key metrics stem from a general strategy of fighting tyranny since the UK got to IR 1st. They were never the be-all, but were a decent strategy at least given Victoria. Robots and AI can be used by tyrants and fighting terrorism is similar, but soon there will be competing metrics. Your GDP may grow 4% but the risk technology itself might wipe out half the C-of-C and geniuses with cellphones might be -5% if equated to GDP. And Wynne isn't alone in providing a dangerous Victorian-optimism foundation: the NRC just announced a robot lab in the worst location of the free world. It could be used to R+D good applications just like business should be about the social good. Edison's time was about creating jobs in a two Party system.
You could use robots to install ground sensors across Earth and then get rid of them. You could use drones to surveil using superconductor GPR. Better, CNT gliders and fossil fuel blimps to drag SC-receiver wires looking for robots digging a 3D printing lab. But you need to analyze the specifics first before using macro. 3 big metrics are optical computers, room temperature SCs, and superconductor MRI one year old infant skull stickers. Boston tests for mental illness, each dollar there is maybe 10x as it enables the rest of the consumer economy not to be wiped out.
The EPA, Mining Sectors, all will soon turn into the military in fighting bad robot underground labs. As well the Utilitarian APTN and the water pollution market-stimulating superconductor water-quality sensors of a few threads up.