Mark Carney speaking to members of the Canadian Forces.
Mark Carney speaking to members of the Canadian Forces. Credit: Mark Carney / X Credit: Mark Carney / X

At the Canadian Aviation Electronics (CAE) plant in Montreal on February 17, Prime Minister Mark Carney announced the first Defence Industrial Strategy (DIS) as part of a massive remilitarization of Canada. 

The $6.6 billion strategy is a roadmap to reach the North Atlantic Treaty Organization’s (NATO) five per cent GDP target and rebuild, rearm and reinvest in the Canadian Armed Forces (CAF) over the next decade. 

Carney explained that the government would make “unprecedented investments in over-the-horizon radar, in submarines, in aircraft, and boots on the ground — boots on the ice.” 

The DIS was featured in the Liberal government’s budget, Canada Strong, that was passed in the House of Commons last November, but has not yet received Royal Assent. The DIS will be supported by the new Defence Investment Agency (DIA) to ramp up domestic weapons production and exports. Yet, this rapid rise in military expenditures and acquisitions risks corruption and puts Canada on a dangerous “wartime footing.”

Government refuses to disclose details of reaching NATO’s five per cent target

In his speech in Montreal, Carney explained, “we have committed to doubling our defence expenditures by the end of this decade. That amounts to an additional $80 billion over the next five years.” He added that Ottawa will spend an additional $45 billion per year for security and defence. In the next ten years, the federal government will invest $180 billion in defence procurement and $290 billion in defence and security-related infrastructure.

According to NATO’s latest Defence Expenditures report, Canada’s military spending was $44 billion in 2024 and will rise to $64 billion this year to hit the two per cent GDP target, which is five years faster than scheduled. The federal budget confirmed that Canada will reach NATO’s new Defence Investment Pledge of five per cent of GDP by 2035, which the allies agreed to at the summit in the Netherlands last June. The pledge comprises 3.5 per cent of GDP for core defence expenditures and 1.5 per cent of GDP for supplementary defence and security-related spending. 

Carney admitted that NATO’s Defence Investment Pledge will mean the federal government boosting military spending to over $150 billion per year within a decade.

Last July, the Parliamentary Budget Officer (PBO) asked the Department of National Defence (DND) to provide it with the projected spending profile to achieve the pledge by 2035, but DND refused. In its report published earlier this month,Fiscal Implications of Meeting NATO’s 5% Commitment, the PBO explained that the Carney government has not provided it with information about its plan to meet the pledge despite the PBO’s legal entitlement to those details.

Without DND’s information and transparency, the PBO estimated that the federal government would have to spend an additional $33 billion annually to meet the NATO five per cent commitment and this would lead to core defence spending of $159.1 billion in 2035. With more money going to the military, the PBO also warned that the government would face higher deficits and an increased debt-to-GDP ratio, weakening the government’s fiscal position. The other significant risks from rising military spending are corruption and global conflict.

Weapons manufacturers lobbied to put defence procurement on a “wartime footing”

The military brass, weapons manufacturers, and their funded think tanks in Ottawa have been lobbying for a DIS that puts Canada on a “wartime footing” for many years. In May 2022, Canada’s Chief of Defence Staff General Wayne Eyre said in a CBC interview: “Given the deteriorating world situation, we need the defence industry to go on to a wartime footing and increase their production lines to be able to support the requirements that are out there, whether it’s ammunition, artillery, rockets, you name it.”

Five months later, the Canadian Global Affairs Institute (CGAI) held a conference, “Putting Canadian Defence Procurement on a War Footing,” that brought together government, industry and military leaders in Ottawa. General Eyre gave the closing address and called for more defence spending and acquisition. 

The CGAI is funded by big weapons contractors including BAE Systems, Boeing, General Dynamics and Lockheed Martin. The following year, CGAI and the Canadian Association of Defence and Security Industries (CADSI) released a policy brief, “Getting Canada to a Wartime Footing,” which recommended a robust defence industrial base. CADSI is the national defence and security industry network of 900 companies that lobbies the federal government for more defence procurement and hosts the annual arms fair CANSEC.

In 2023, the Parliamentary Standing Committee on National Defence (NDDN) was tasked with studying procurement. Hearings were held that November with witnesses invited from CGAI, CADSI, and the Conference of Defence Association (CDA) Institute—all funded by weapons manufacturers. They dominated the hearings and pushed for more military spending and procurement. Seven months later, the NDDN released its report A Time for Change: Reforming Defence Procurement in Canada with many recommendations favourable to industry, including establishing a defence industrial strategy despite evidence of corruption in defence procurement.

The NDDN report revealed fraud, abuse and waste in Canada’s current system of defence procurement. The report identified the problems of secrecy, cost overruns, inadequate oversight, and a lack of accountability. One of the witnesses, the Union of National Defence Employees, admitted that there was “chronic understaffing, ethical concerns with the granting of contracts, the unchecked bloating of invoices and quality control issues” in military procurement. 

With the recent federal cuts and layoffs in Treasury Board and Public Services and Procurement Canada, there will be less interdepartmental capacity and oversight of DND’s procurement. Worse still, Carney has put his friend in charge of the new Defence Investment Agency (DIA), which is central to the DIS.

Political patronage: Carney appoints a donor to lead new Defence Investment Agency

The DIA is a special operating agency (SOA) within Public Services and Procurement Canada. Carney appointed Doug Guzman, his close friend and donor to his election campaign, as the Chief Executive Officer of the new agency. Guzman was previously a Managing Director at Goldman Sachs where Carney worked and then became Deputy Chair of the Royal Bank of Canada from which he has stepped down to head DIA. 

As revealed at the hearing of the Standing Committee on Government Operations and Estimates (OGGO) on November 6, 2025, Guzman has been appointed for a three-year term despite having no experience in government procurement, the military, or the defence sector. He will receive one of the highest salaries in the federal government over $670,000/year plus performance bonuses. Guzman’s salary is more than double the Chief of Defence Staff General Jennie Carignan who commands the military at $329,000 and more than the Minister of National Defence David McGuinty at $309,000.

According to a statement from the Prime Minister’s Office: “The Defence Investment Agency’s first phase of operations will focus on standing up the organisation, deploying integrated procurement teams, and advancing a first wave of high-priority defence procurements.” However, at the OGGO hearing, Conservative Member of Parliament Tamara Jansen expressed her concern with the patronage appointment of a private sector banker to the DIA. Jansen also worried that the “massive new spending envelope” will create a “market-driven military industrial complex” with little oversight that will move capital around, but not rebuild the CAF. With the new agency and defence industrial strategy, there is a real risk of profiteering by government insiders, contractors and investors.

DIA’s first contract, worth approximately $5 billion for military satellite technology in the Arctic, was awarded to Telesat, a company that is facing a lawsuit from its creditors for fraudulent asset transfers. The President and Chief Executive Officer of Telesat, Dan Goldberg, is another close associate of Prime Minister Carney. The DIA contract to Telesat should be seen as a government bailout with taxpayer money of a troubled company led by Carney’s friend.

At the OGGO hearing, many committee members expressed their concerns that there are inadequate mechanisms to monitor the DIA. Canada’s Secretary of State for Defence Procurement, Stephen Fuhr, a Liberal MP, is supposed to oversee the new agency. Yet, Fuhr has close connections to Canada’s military industrial complex. He served for 20 years in the Royal Canadian Air Force as a combat pilot and then was an executive of SkyTrac, an aerospace and satellite company. 

As a Liberal MP, Fuhr has been the Chair of the House of Commons Standing Committee on National Defence and a member of Canadian NATO Parliamentary Association where he has advocated for higher military spending and defence procurement. Fuhr cannot provide independent oversight of the new agency. With the DIA and the DIS, the federal government has created conditions for conflict of interest as well as insider trading and profiteering.

Increased military spending and defence procurement risks corruption

With inadequate public and parliamentary oversight of defence procurement, Carney’s plan to rebuild the Canadian military risks severe corruption as there is in the U.S. The U.S. Government Accountability Office has kept the Department of Defense (DOD, now Department of War) for three decades on its High-Risk List because of its persistent and pervasive problems of fraud, abuse and waste. Cases of bid-rigging and bribery are common in military procurement.

In 2024, RTX, formerly Raytheon, paid $950 million to settle a case brought by the Department of Justice that revealed the company’s involvement in conspiracy and pay-offs in contracts with the Pentagon and foreign military sales. Last year, the U.S. House of Representatives’ Subcommittee on Government Operations held a hearing on defence procurement and found that “the DOD has not been able to adequately manage fraud risks or account for how much money has been spent and where its assets are held, wasting billions in taxpayer dollars.” RTX and the other big American weapons manufacturers have subsidiaries in Canada and are the prime contractors to the CAF.

Worse still, NATO has been rocked by recent corruption scandals related to procurement in Europe, which have been ignored by Western media. Last May, the European Union Agency for Criminal Justice Cooperation along with Belgian authorities launched investigations into fraud and bribery related to NATO’s Support and Procurement Agency (NSPA). The NSPA is based in Luxembourg and is headed by Stacy Cummings, who was previously the U.S. Principal Deputy Assistant Secretary of Defense for Acquisition at the Pentagon.

The Luxembourg Times reported that NSPA’s Human Resources Director, Geneviève Machin, a Canadian, was the whistleblower who sent a letter last February to NATO’s Secretary General Mark Rutte about Cummings and the irregularities at the agency. The corruption probe involves defence contracts for ammunition and fuel with several allies: Belgium, Italy, Netherlands, Spain and the U.S. Some of these contracts involve NATO allies and the Israeli weapons manufacturer, Elbit Systems, as the Corruption Tracker, an organization that monitors corruption in the arms trade, reported. Though NATO headquarters confirmed the investigations, it did not provide any details about the individuals and corporations involved and has avoided further media about the scandals.

Transatlantic readiness for what? NATO and Canada are preparing for war

Despite these scandals, the Prime Minister has signed a bilateral agreement with the Europe Union (EU) for new “defence procurement arrangements”. Canada is participating in the “Security Action For Europe” (SAFE) program to facilitate common defence procurement and to allow Canadian companies access to the European aerospace and defence market. SAFE is a key pillar of the European Commission’s $1.3 trillion ReArm Europe Plan: Readiness 2030.

Why are Canada and Europe re-arming? What are they getting ready for? Last December in Berlin, NATO Secretary General Mark Rutte claimed: “We must be prepared for the scale of war our grandparents or great-grandparents endured.” He emphasized, “we need to spend this money to keep ourselves safe from the Russians.” That same month Canada signed the SAFE agreement with the EU.

The United Kingdom’s Chief of the Defence Staff Sir Richard Knighton also cautioned that the British people must be ready to “sacrifice” their children to defend against Russia. Similarly, the French Chief of the Defence Staff General Fabien Mandon contended that France must be ready to “lose its children” and prepare for a war with Russia in three or four years. Germany’s Defense Minister Boris Pistorius also argued that Europe must be prepared for war.

In January of this year, at the Society and Defence Annual National Conference in Sweden, NATO’s Supreme Allied Commander Europe, U.S. General Alexus Grynkewich, argued in Orwellian double-speak that the alliance must “urgently” prepare for the possibility that Russia, China, Iran and North Korea could launch wars in Europe and the Pacific simultaneously, with 2027 being a potential flashpoint year. Yet, the following month, it was the U.S. and Israel that illegally attacked Iran.

The Canadian government is accelerating the recruitment of more soldiers and reserves to “fight on new battlegrounds.” As the backgrounder of the defence investment plan states, the goal is to build the Canadian military into “a strong fighting force.” The budget, Canada Strong, affirms that new military capabilities are needed for “modern warfare.” In an interview with Sky News this month, General Carignan stated that DND is building a force of 300,000 personnel to prepare for “large-scale conventional warfare.”

Moreover, as detailed in the U.S. Department of War’s hawkish National Defense Strategy (NDS) released on January 26, the Trump administration wants more “burden-sharing” by the allies. As the NDS explained, the U.S. will focus on the Indo-Pacific region to confront China and expects its European and Canadian allies to “deter and respond effectively” to Russia. The Prime Minister affirmed in his Davos speech, “Our commitment to NATO’s Article 5 is unwavering, so we’re working with our NATO allies, including the Nordic-Baltic Eight, to further secure the alliance’s northern and western flanks” against Russia.

Worryingly, with billions of dollars going to re-armament and not diplomacy and peacebuilding, the evidence suggests that Canada and the transatlantic allies are on “wartime footing” against Russia, China, Iran and North Korea. The U.S. and its allies are preparing for a global war instead of investing in peace and averting global warming.

Where’s the peace? Carney’s militarism will fuel conflict and climate breakdown

In his announcement about the DIS and rebuilding the military in Montreal, the Prime Minister did not say the word “peacekeeping.” Peacekeeping is absent from the DIS and from the federal budget Canada Strong. The Canadian military is currently at its lowest level for peacekeeping with only 27 soldiers on United Nations’ peace support operations. By contrast, Canada has 3,000 soldiers leading the NATO multinational battle group in Latvia. Carney also overlooked “peace” and “climate change” in his speech, “Principles and Pragmatism: Canada’s Path” at the World Economic Forum in Davos.

Carney’s plan “to rebuild, rearm and reinvest” in the CAF puts Canada on a path to war and does not reflect the principles that he articulated before he ran for office. In his 2021 book, Value(s): Building a Better World for All, Carney asserted that governments, corporations and societies must work together to tackle the most significant crisis of the twenty-first century: catastrophic climate change. He wrote that “climate change is the tragedy of the horizon” and that the “window to act is finite and shrinking.” At that time, Carney also served as the UN Special Envoy on Climate Action and Finance and an advisor for the climate summit, COP26, in Glasgow.

In Value(s), Carney recommended that every financial decision take “climate change into account.” Yet, his government’s first DIS ignores the climate impacts of fossil fuel-powered military procurement that will exacerbate global warming. Fighter jets, warships, armoured vehicles and missile launchers consume vast amounts of refined petroleum. Carney is investing in the most carbon polluting department – the military – in the government and will profit from it.

As revealed in the Prime Minister’s 16-page filing to Canada’s Office of the Commissioner of Conflict of Interest and Ethics, the former central banker has substantial shares in British and American arms companies, including BAE Systems, Boeing, L3 Harris Technologies, Lockheed Martin, Palantir Technologies, Northrop Grumman, and RTX. Carney is also heavily invested in Chevron, ConocoPhillips, Exxon Mobil and Halliburton—companies that provide the fuel for the tactical vehicles the CAF plans to buy.

While Carney is rapidly raising the military budget and recruiting more soldiers, his government has cut funding to Environment and Climate Change Canada and eliminated many positions in the department. This February, the Canadian Climate Institute published a report that showed that “the country is not on track to meet any of its climate goals, including its 2035 target and net zero emissions by 2050.”

Last September, the UN Secretary General António Guterres released an important report entitled The Security We Need: Rebalancing Military Spending for a Sustainable and Peaceful Future. The report warned, “Military expenditure harms the planet because it is emissions-intensive. Each dollar allocated to the military generates more than twice the greenhouse gas emissions of a dollar spent elsewhere.” The Canadian government is diverting billion of tax dollars to re-armament instead of decarbonization and renewable energy.

Costly, carbon-intensive militarism through Canada’s new DIS and DIA will prevent the country from rapidly reducing emissions and achieving its target under the Paris Agreement. Carney’s remilitarization plan recklessly risks corruption and global conflict and will accelerate climate breakdown. The Canadian public and Parliament should oppose it.

Tamara Lorincz

Tamara Lorincz, PhD graduate, Balsillie School of International Affairs, Wilfrid Laurier University, and member of the Canadian Voice of Women for Peace and the Women’s International League for Peace...