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Canadian military spending:
How does the current level compare
to historical levels? … to allied
spending? … to potential threats?
By Bill Robinson and Peter Ibbott
03-1
About this Paper
This report compares the current level of Canadian military spending to historical levels; to allied
and in particular US spending; and to potential threats to Canadian, allied, and global security.
Its purpose is to place Canada’s current level of military spending in accurate context.
About the Authors
Bill Robinson has been writing about defence and security policy issues since 1982. From 1986
to 2001 he was a member of the staff of Project Ploughshares. Dr. Peter Ibbott is an Assistant
Professor of Economics and a member of the Connections Project at King’s College in
London, Ontario.
Project Ploughshares Working Papers are published to contribute to public discussion and debate
of peace and security issues. Opinions expressed in these papers are those of the authors, and do
not necessarily reflect the policy of Project Ploughshares.
First printed March 2003
ISSN 1188-6811
ISBN 1-895722-37-3
Canadian military spending:
How does the current level compare to historical levels?
… to allied spending? … to potential threats?
By Bill Robinson and Peter Ibbott
Canadian military spending:
How does the current level compare to historical levels?
… to allied spending? … to potential threats?
By Bill Robinson and Peter Ibbott
How much money should Canada spend on its
military? The answer to that question may seem
straightforward: Canada should spend whatever
amount of money is required to properly fund
the military capabilities deemed necessary or
desirable for Canada by the Canadian
government and the Canadian people. No more
and no less.
But what military capabilities are necessary or
desirable? The occasional issuance of defence
white papers notwithstanding, it is extremely
difficult, perhaps impossible, to forge a lasting
consensus on this question. In practice, the size
of the military budget has more often determined
defence policy than been determined by it.
The real determinants of military spending are
such factors as historical levels of military
spending; the spending level of allies (and the
degree of pressure they apply on Canada with
respect to Canada’s military spending);
institutional (departmental and military industry)
pressures; regional economic policy and
industrial policy considerations; competition with
funding priorities in other policy areas; and
changes in the level of perceived military threat
to Canada, its allies, and the global community.
It is commonly believed that the current level of
Canadian military spending is much lower than it
has been in the past, that Canada has fallen
behind its allies in providing funding for its
military, and that the Canadian military no longer
has the funds to respond adequately to the
threats facing Canadian security.
This report compares the current level of
Canadian military spending to historical levels; to
allied and in particular US spending; and to
potential threats to Canadian, allied, and global
security. It does not seek to answer the question
of what the appropriate level of funding of the
Canadian military ought to be. Its purpose, rather,
is to place Canada’s current level of military
spending in accurate context.
CONTENTS
Chart I: Canadian military spending, 1946-2001
Chart II: US & Canadian military spending, 1946-2001
Chart III: US & Canadian military spending, 1946-2001 (Vietnam War expenditures excluded)
Chart IV: Canadian military spending (% GDP), 1946-2001
Chart V: US & Canadian military spending (% GDP), 1946-2001
Chart VI: US & Canadian military spending/GDP gap, 1946-2001
Chart VII: NATO military spending 2001
Chart VIII: NATO military spending 2001 (US excluded)
Chart IX: NATO vs non-NATO countries (military spending 1999)
Chart X: Canadian arms customers vs non-customers (military spending 1999)
Chart XI: Canadian agencies with counter-terror role (total agency budgets 2002)
Endnotes
Chart I
This chart shows the level of Canadian military spending during the post-Second World War period (all figures
converted to 2002 dollars). The current level of Canadian military spending is lower than the levels it reached
during the Korean War-era and Reagan-era buildups. But it remains higher than Canada’s average level of
military spending during the post-war period ($10.2 billion in 2002 dollars).
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Chart II
This chart compares the relative changes in US and Canadian military spending during the post-World War II
period. With the exception of the Vietnam War era, percentage increases (and decreases) in Canadian spending
have tracked US changes very closely throughout the post-war period. (Note that Canadian and US spending
are plotted on different scales; the chart compares the relative evolution, not the absolute levels, of Canadian
and US spending.) The post-2001 military buildup by the United States is likely to move the US spending line back
above the Canadian line, although probably not as significantly as during the Vietnam War.
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Chart III
US & Canadian military spending
(Vietnam War expenditures excluded)
1946 - 2001
Like Chart II, this chart compares US and Canadian military spending during the post-World War II period, but
with estimated Vietnam War-related expenditures excluded. The current level of Canadian military spending
relative to US spending may be inadequate, as many people have argued. But Charts II and III demonstrate that
an extraordinarily consistent level of relative spending (inadequate or not) has been maintained throughout the
post-war period.
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Chart IV
Measurements of military spending as a percentage of Gross Domestic Product (GDP) can be highly misleading,
suggesting, for example, that Turkey spends more than the United States (see Chart VII for the actual levels of
spending). Nonetheless, GDP comparisons can be useful for examining the relative economic burden of military
spending. In Canada’s case, military spending has declined as a percentage of GDP since 1952. As Chart I
demonstrates, however, the primary explanation for this pattern is not a decline in military spending; rather, it is
the result of growth in GDP over this period.
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Chart V
This chart compares Canadian and US military spending as a percentage of GDP during the post-World War II
period. While the United States has devoted a larger share of its GDP to military spending during almost all
of this period, that share also has been in decline since the early 1950s, again primarily as a result of growth
in GDP.
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Chart VI
US & Canadian military spending/GDP gap
1946 - 2001
\
This chart shows the gap between the percentage of GDP spent on the military by the United States and the
percentage of GDP spent on the military by Canada. Not surprisingly, given the pattern recorded in Chart V, this
gap also has been in decline since the late 1960s. It now stands below 2 percentage points, its lowest level
since 1951, down significantly from the average post-World War II level of 3.7 points. The post-2001 military
buildup by the United States may have the effect of reversing this trend, at least temporarily.
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Chart VII
This chart shows the military budgets (actual number of dollars spent) of NATO member states. It shows that
Canada is the sixth largest spender among the 19 members of NATO. Turkey, which spends the largest
percentage of GDP of the NATO members, is ninth on the list. No NATO member comes close to matching the US
level of military spending, which alone accounts for roughly 40 percent of the world’s total military spending.
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Chart VIII
This chart compares the military spending of NATO members excluding the United States. Canadian military
spending is well below that of the second-tier NATO spenders (all of which have much larger populations and
economies, and two of which are Permanent Members of the Security Council). But it remains in the position it
has held throughout most of the post-World War II period: at or near the top of the third tier of military spenders.
Canadian spending would have to double for Canada to join the ranks of the second-tier spenders.
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Chart IX
In 1999, NATO Secretary General George Robertson said, “if NATO is to do its job … we can no longer expect to
have security on the cheap.” As this chart demonstrates, the NATO states accounted for more than 60 percent
of global military spending in that year – more than 1.5 times the rest of the world’s spending combined. (Note
that this statistic should not be misread to suggest that the non-NATO world is or is likely someday to become
united in hostility to NATO. In fact, the vast majority of other states have good relations, and in some cases
formal alliances, with NATO states.)
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Chart X
Canadian arms customers vs non-customers
Military spending 1999
The list of states to which Canada sells military goods may provide a better guide to the perceived potential for
hostilities. This chart compares the combined 1999 military budgets of the states that have been Canadian arms
customers during the past ten years to those of non-customers. Presumably, most if not all of the countries that
Canada helps arm are not considered to be hostile or likely to become hostile to Canada. These states account
for 96 percent of global military spending. The average military budget of the approximately 100 non-customer
states (with most of which Canada also has good relations) is about $250 million. Most of these states have little
or no capability to conduct military operations beyond their borders, with the possible exception of terrorist-like
activities.
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Chart XI
Canadian agencies with counter-terror role
Total agency budgets 2002
Shown in black: Department of National Defence (DND) intelligence organizations (INT), Office of Critical Infrastructure and
Emergency Preparedness (OCIPEP), Joint Task Force Two (JTF2), and remainder of the DND budget (Other). Shown in grey: Canadian
Security Intelligence Service (CSIS), Canadian Coast Guard, Canada Customs, and Royal Canadian Mounted Police (RCMP). Shown in
white: estimated budget of all non-federal (i.e., provincial and municipal) police forces in Canada.
Canada faces no conventional military threat to its own territory and is part of the largest and most powerful
alliance system in the world. This does not guarantee, however, that Canada is able to respond adequately to
the possibility of terrorist attack. This chart shows the current budgets of a number of agencies and
organizations that play a role in the prevention of or response to terror attack, among other responsibilities.
Broader (and longer-term) efforts to address the roots of terrorism are not listed. Any or all of the above might
be considered appropriate candidates for additional counter-terror-related funding if it is available.
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Chart IV: Military spending figures as in Chart I.
GDP figures 1961-2001: Statistics Canada CANSIM
II Table 380-0017, “Gross Domestic Product
(GDP) at market prices” column; pre-1961:
Statistics Canada CANSIM I Series Label Number
D11000.
Endnotes
Years recorded on charts represent the first part
of the fiscal year (i.e., 1946 = fiscal year 1946-1947).
Chart I: Military spending 1961-2001: Statistics
Canada CANSIM II Table 380-0034, “defence”
column, quarterly data converted to fiscal year
totals. Military spending pre-1961: Statistics
Canada Historical Data Series H19-34, “defence”
column. Spending figures converted to 2002
dollars using Gross Domestic Product implicit
price index (IPI). GDP IPI 1961-2001: Statistics
Canada CANSIM II Table 380-0003, “Gross
Domestic Product (GDP) at market prices” column
(final 2002 inflation is authors’ estimate); pre-1961
IPI calculated from Statistics Canada CANSIM I
Series Label Number D14442 and D11000,
recalibrated to the value of the 1961 GDP IPI.
Chart V: Military spending figures as in Charts I
and II. Canadian GDP figures as in Chart IV. US
GDP figures: FY 2003 Budget, Historical Table 10-1,
“GDP (in billions of dollars)” column.
Chart VI: Figures derived from Chart V.
Chart VII: Budget, “NATO Defence Expenditures
(2001)” table, Department of National Defence
(available on-line at http://www.forces.gc.ca/site/
about/budget_e.asp [downloaded 4 January 2003]).
Chart VIII: Figures as in Chart VII. US spending
excluded.
Chart II: Canadian statistics as in Chart I.
US military spending 1946-2001: National
Defense Budget Estimates for FY 2002, Table 6-11,
“Department of Defense Outlays by Title.” US
figures converted to 2002 dollars using Composite
Outlay Deflator: FY 2003 Budget, Historical Table
10-1, “Total Defense” column. US and Canadian
spending are plotted on separate scales, calibrated
so that the same line represents both the average
level of Canadian spending ($10.2 billion) and the
average level of US spending (US$296 billion).
Chart IX: NATO and world spending totals:
Conversion Survey 2001, “Military expenditures,
1989-1999” table, Bonn International Center for
Conversion (available on-line at http://www.bicc.
de/budget/data/milex_survey2001.html).
Spending figures for Czech Republic, Hungary,
and Poland added to NATO total. Non-NATO
spending derived by subtracting NATO total from
world total. Robertson quotation: “NATO Secretary
General calls for increased defense spending,”
Defense Systems Daily, 3 December 1999.
Chart III: US and Canadian statistics as in Charts
I and II. US spending excluding Vietnam Warrelated expenditures estimated from “Comparison
of US Defense Outlays with Estimated Dollar Cost
of Soviet Defense Activities,” US Department of
Defense, January 1982 (available on-line at
http://www.d-n-i.net/charts_data/reagan_
weinberger_ussr_comp_1981.htm [downloaded 3
January 2003]).
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Chart X: Recipients of Canadian military exports
1992-2001: Export of Military Goods from Canada,
Department of Foreign Affairs and International
Trade (DFAIT), annual report, 1993 to 2002
editions. Among other provisions, Canadian
military export guidelines call for the “close
control” of military exports to countries that
“pose a threat to Canada and its allies.” DFAIT
statistics do not include countries whose military
forces have received Canadian goods classified as
“civilian,” such as transport helicopters. Military
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spending totals calculated from Conversion Survey
2001, “Military expenditures, 1989-1999” table,
Bonn International Center for Conversion.
Chart XI: Budget figures from separate 20022003 Estimates, Part III: Report on Plans and
Priorities for Canada Customs and Revenue
Agency, Fisheries and Oceans, National Defence,
Royal Canadian Mounted Police, and Solicitor
General Canada. Budgets of non-federal police
forces, Joint Task Force Two, and DND intelligence
organizations (Communications Security
Establishment, the Canadian Forces Information
Operations Group, and other DND intelligence
organizations) are authors’ estimates. Other
agencies and organizations also play roles in the
prevention of or response to terrorist attack.
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working paper
Project Ploughshares is an ecumenical agency of the Canadian
Council of Churches with a mandate to carry out research, analysis,
dialogue, and public education on peace and security issues in
Canada and the world. It is affiliated with the Institute of Peace
and Conflict Studies at Conrad Grebel University College,
University of Waterloo.
… and they shall beat their swords into ploughshares and spears
into pruning hooks; natiion shall not lift up sword against nation;
neither shall they learn war any more. (Isaiah 2:4)
Project Ploughshares
57 Erb Street West
Waterloo, Ontario N2L 6C2 Canada
519-888-6541
Fax: 519-888-0018
[email protected]
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