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Canadians could face tax hikes as Ottawa scrambles to fund defence target: report
The think tank says Canada will need tax and spending changes to cover defence plans that could reach $150 billion a year by 2034-35.
- A new report from Howe suggests Canada must radically transform how it allocates federal funds to meet NATO and defence spending commitments.
- High debt levels, weak productivity, and slow economic growth mean Canada cannot accommodate defence spending increases promised by Prime Minister Mark Carney without "broader fiscal changes," according to the report.
- Colin Busby, the director of policy engagement at the institute, proposed a "mixed financing approach" including a GST increase, provincial transfer adjustments, and non-defence spending restraint, which the report said would "create fewer distortions and be less harmful to economic growth."
- Focusing solely on debt financing is "inappropriate and undesirable," Busby said, because it puts the burden of improving defence spending today on future generations of Canadians.
- Future fiscal strategies should include a slower rate of growth in federal transfers to provinces, Busby added, allowing them to cover a larger share of social program costs.
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Canadians could face tax hikes as Ottawa scrambles to fund defence target: report
The federal government should consider a one-to-two-point increase in the GST and slower growth in federal transfer payments to the provinces to finance a massive jump in military spending, according to a new report from the C.D. Howe Institute.
·Canada
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Canada's 5% defence dilemma: Show us the money trail, says think
After hitting NATO's two per cent GDP spending target in March 2026, Canada now faces a daunting climb to five per cent by 2035, according to the CD Howe Institute, one of the country’s leading economic think-tanks.
·Canada
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Total News Sources3
Leaning Left1Leaning Right1Center1Last UpdatedBias Distribution34% Left, 33% Center, 33% Right
Bias Distribution
- 34% of the sources lean Left, 33% of the sources are Center, 33% of the sources lean Right
34% Left
L 34%
C 33%
R 33%
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