Canada’s Military Policy:Time to Chart a New Course?           Nick Smith
An Era of Unprecedented Spending-Canada spent approximately $23 billion on its military in the 2010-2011 fiscal   year, hi...
-The Harper administration’s CanadaFirst Defense Strategy plans to increasethe baseline military budget (notincluding oper...
Source: “Canadian Military Spending 2010-11”
Should combating terrorism be a     Canadian Military priority?-Public opinion surveys indicate that most Canadians feel t...
Military Intervention vs Foreign Aid-A study by Jean-Paul Azam and Veronique Thelen (2010) found that Western    democraci...
The Economic Benefits of Lower          Military Spending-In the short term, military spending boosts aggregate demand and...
-higher taxes to finance military spending increases deadweight loss in    domestic production-borrowing from banks to fin...
-According to simulations performed   by Knight et al (1996), long term   economic benefits of military   spending decreas...
The Swiss Militia: A Viable Model            for Canada?-Switzerland’s armed forces consist of only 5% professional soldie...
Advantages of a Militia-much lower cost-to-personnel ratio-imposes natural limits on military spending and interventionism...
National Defense Game                             Canada                      Professional                                ...
Preliminary Recommendations-Being as fortunate as we are to live in such a safe and secure region of the   world, our mili...
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Canadian Military Policy

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Canadian Military Policy

  1. 1. Canada’s Military Policy:Time to Chart a New Course? Nick Smith
  2. 2. An Era of Unprecedented Spending-Canada spent approximately $23 billion on its military in the 2010-2011 fiscal year, higher than the budget has ever been since WWII-Spending is 18% above its peak during the Cold War (FY 1952-53) and 61% higher than its post Cold War low of (FY 1998-99)-Canada now has the 13th largest military budget in the world: of the 12 countries outspending us, 11 have considerably higher populations and 10 have considerably higher GDPs (exceptions are South Korea and Saudi Arabia)-Maintaining a military presence in Afghanistan until March 2014 will cost an additional $1.5-2 billion in the coming years, assuming no further extensions or unexpected costs
  3. 3. -The Harper administration’s CanadaFirst Defense Strategy plans to increasethe baseline military budget (notincluding operational costs such as theAfghanistan mission) to $31 billion by2027-The cost of the controversial F-35stealth fighter jet procurement isestimated to be between $14 – $29.5billion-Despite this massive spending, ourcontributions to UN peacekeepingmissions have dwindled from providing10% of all peacekeeping troops during Source: “Canadian Military Spending 2010-11”the Cold War to contributing only 0.07%of total troops (56 of 88,885)
  4. 4. Source: “Canadian Military Spending 2010-11”
  5. 5. Should combating terrorism be a Canadian Military priority?-Public opinion surveys indicate that most Canadians feel they are at a low risk of being the victim of a terrorist attack and do not often worry about terrorism in Canada (Lemyre et al, 2006)-Since the Air India bombing of 1985, there have been 3 terrorism fatalities in Canada.-In contrast, there have been 158 Canadian casualties in the Afghanistan War since 2002-Canada is considered one of the western countries at lowest risk for terrorist attacks
  6. 6. Military Intervention vs Foreign Aid-A study by Jean-Paul Azam and Veronique Thelen (2010) found that Western democracies may be able to more effectively combat terrorism by contributing higher levels of foreign aid than by using military intervention-Despite the fact that terrorists are predominantly from relatively educated and financially secure families, foreign aid (especially that earmarked for education) seems to be an effective way of encouraging the recipient governments to strengthen their own counterterrorism measures-Terrorism actually tends to increase when US military intervention takes place in close proximity to oil-exporting countries
  7. 7. The Economic Benefits of Lower Military Spending-In the short term, military spending boosts aggregate demand and increases capacity utilization (economic output as a % of output capacity)-However, long term increases in military spending have a negative effect on capacity output-Resources being used to fuel the war effort are drawn from tax dollars and tend to decrease both public and private investment in productive fixed capital
  8. 8. -higher taxes to finance military spending increases deadweight loss in domestic production-borrowing from banks to finance military spending can contribute to inflation-R&D becomes more concentrated on military innovations rather than technological advances in economically productive areas or technologies which improve the health and well-being of Canadians-policies built around supporting military innitiatives are generally detrimental to efficient resource allocation (trade restrictions, preferences for certain firms and industries, etc)-there is potential for rent-seeking activities to grow around the military industrial complex due to the often non-competitive allocation of resources
  9. 9. -According to simulations performed by Knight et al (1996), long term economic benefits of military spending decreases will be highly pronounced for countries which spend a large portion of their GDP on defense-In the middle east and eastern Europe, a drop in spending from Cold War levels (10 & 12% of GDP, respectively) to western levels of 2% will increase total productive capacity by over 30% over 50 years
  10. 10. The Swiss Militia: A Viable Model for Canada?-Switzerland’s armed forces consist of only 5% professional soldiers, with the rest being citizen conscripts-All 18 year old able-bodied Swiss men must either serve for one year in active military service (after which time they serve in a reserve capacity for 10 years), civilian service (social services such as reconstructing cultural sites, helping the elderly, development assistance abroad, etc), or pay an additional 3% income tax until age 30-Switzerland’s military budget is equivalent to $3.6 Billion, less than 1/6th of Canada’s-Despite this, Switzerland’s standing army is nearly double the size of Canada’s (212,000 vs 115,000)
  11. 11. Advantages of a Militia-much lower cost-to-personnel ratio-imposes natural limits on military spending and interventionism by future administrations-a smaller air force and fewer armored divisions would have minimal impact on peacekeeping operations-the US-Vietnamese and the Soviet-Afghan wars and new theory on deterrence strategy provide evidence that guerrilla warfare can often nullify the advantage of a numerically and technologically superior army
  12. 12. National Defense Game Canada Professional Militia Army Declares 0 0 WarHostile 12 8Power Maintains 10 12 Peace 10 10
  13. 13. Preliminary Recommendations-Being as fortunate as we are to live in such a safe and secure region of the world, our military spending is becoming excessive-Adopting a Militia style armed forces (or at least reducing our spending on offensive weaponry such as jet fighters, bombers, artillery and tanks) could save Canadian taxpayers between $5 billion and $20 billion per year excluding savings on Afghanistan and new equipment-Reorienting our priorities away from the war on terror and back towards peacekeeping will save Canadian lives and may even improve our international reputation-Militias are a powerful deterrent against military aggression, even when a conventional war could not be won
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