Ottawa is trying to do the impossible — rein in spending while ramping up defence. Finance Minister François-Philippe Champagne’s recent letters to cabinet ministers asking for sweeping cuts — 7.5% in 2026, 10% in 2027, and a staggering 15% in 2028 — are setting the stage for what could become a painful contradiction, especially for the Department of National Defence (DND).
The Trudeau government — now under the economic stewardship of Mark Carney — is making a bold attempt to balance the federal budget’s operating side. On paper, that might sound responsible. But the reality on the ground, particularly in the defence sector, suggests otherwise.
Defence spending in Canada is set to rise significantly over the next few years to meet NATO’s 2% GDP commitment. That’s a major step forward, especially in the current global climate, where instability is growing and allies are pushing Canada to carry more of its own weight. But here’s the catch: the federal government wants to make those increases in capital spending while still cutting day-to-day operations.
This approach may look clever in a spreadsheet, but it’s shortsighted and potentially dangerous. Operational spending isn’t just “fat” that can be trimmed — it’s the fuel that keeps the machine running. It covers salaries, training, maintenance, logistics — the things that make a military functional rather than theoretical.
You can buy all the new fighter jets and warships you want, but if you don’t have the personnel to operate and maintain them, or the budget to train regularly, the investment is hollow.
And it’s not just defence that will feel the squeeze. The Public Service Alliance of Canada has already raised the alarm about job losses and reduced services. That matters. Cuts of this magnitude don’t just shave off inefficiencies — they hollow out departments, often hitting front-line workers first and hardest.
This is a classic example of policy dissonance: a government trying to walk both sides of the line — increasing its international credibility through defence commitments while trying to maintain a domestically palatable “fiscal responsibility” narrative. But at some point, the contradictions catch up. You can’t promise a more capable military and simultaneously ask it to run on less.
Yes, there are areas of bureaucracy in Ottawa that could be streamlined. But applying arbitrary, across-the-board cuts to all departments — including one as mission-critical as National Defence — is lazy budgeting. It avoids the hard work of strategic prioritization.
If the government truly wants to balance fiscal prudence with national security, it needs a smarter, more nuanced approach. That might mean protecting certain departments from cuts, or looking for long-term structural savings instead of short-term belt-tightening.
Canada is at a crossroads. We can’t afford to posture internationally while weakening ourselves from within. If the federal government keeps pushing defence to “do more with less,” we may end up doing less with more — and that’s a price we can’t afford to pay.
