Canada doesn’t need a defence industry

Public Works Minister Rona Ambrose speaks at the recent CANSEC military trade show in Ottawa.

Rideau Institute president Steven Staples outlines five reasons why Canada doesn’t need a defence industry (Embassy, 30 May 2012):

[T]he defence industry doesn’t just want to sell rifles and airport scanners to the government, it wants to sell the idea that Canada’s security depends on the very financial success of the companies. And they want the Harper government to recognize their importance in a new defence industrial policy for Canada.

“Canada’s own success in defending its sovereign, economic and national security interests depends largely on how two important stakeholders—Canada’s military, and its defence and security industries—operate independently and together,” declares boldly one of the defence industry’s recent reports to the government, lobbying for more support.

The government should “align defence procurement strategies and processes to support the [defence industrial] policy,” it added.

But is that true? There are at least five good reasons why Canada doesn’t need a defence industry.

[1] The only customers for military goods and services are governments, and so companies heavily invested in military production are dependent upon government spending to ensure their profitability.

The defence industry is deaf to the other priorities of taxpayers, and insists that its slice of the budget pie remains as large as it always has been, even if everyone else has to do with less. …

[2] Once the company fulfils its military contract with the government, its only options are to close the production line or find other buyers on the international market.

The Canadian government is responsible for controlling exports through permits, but often turns a blind eye to arms sales from Canada in order to help the companies sell to the United States and elsewhere. …

[3] Certainly defence spending will create some jobs, just like other forms of government spending. But it is not clear whether defence spending is the best way to create jobs, nor if all those jobs be in Canada, as the defence industry often asserts.

According to researchers at the University of Massachusetts, US government spending on education creates twice as many high-paying jobs as defence spending. Government spending in other areas, such as health care, mass transit and infrastructure creates even more jobs (but at slightly lower levels of pay, according to the 2007 study). …

[4] Too great a concentration on defence production can actually leave our economy more vulnerable and less able to adapt to international economic shifts.

When the Soviet Union collapsed and global defence budgets declined accordingly, Industry Canada noted that Canada’s largely commercially-focused aerospace industry lost far fewer jobs than those countries more invested in military aviation production. …

[5] With the polarized political environment in Ottawa today, the defence industry has aligned itself closely with the Conservative government, and in an unusual development, has taken to join in the political fray by chastising the government’s opponents on defence issues.

“We want all parties to support the government’s decision because it is in the best interest of all Canadians,” said Gregory Yeldon, president of Esterline CMC Electronics, at a 2010 Ottawa press conference intended to support the government’s controversial F-35 stealth fighter program.

The economic and political influence wielded by the defence industry can be overwhelming, and may distort defence policies toward the companies’ interests, instead of meeting the needs of the Canadian Forces.

Tags: Canada's Defence Industry, Canadian military spending, F-35, Steven Staples