Carney, 2%, And The Death Of Cautious Canada

On The Defence Announcement

There’s a lot of reason to have questions about Mark Carney’s defence spending announcement today, that we will in fact hit 2% in fiscal 2025-26, and I’m going to be recording a Scrimshaw Show later today with friend of the site (and, more notably for this, former soldier) Nathaniel Arfin on the actual defence implications of this announcement. But I’m extremely happy about this announcement, not because of what it is but what it represents.

One of the problems since Chretien has been a lack of ambition in this country. Trudeau was a departure from that in a couple of ways - the childcare, Pharmacare, and dental care proposals did represent ambition, undeniably - but we came out of the 20th Century with a massive budget surplus and we’ve mostly spent that room on tax cuts. No nation building infrastructure, no real broad economic diversification, no competition agenda, just a few good means-tested programs and broad incrementalism. In the pandemic we threw caution to the wind, but for all the talk in 2020 about how COVID would be a paradigm shift, it was far more of an aberration than anything else.

We are an eminently cautious country, the kind of place that looks for ways to get to no. We saw in the pandemic that when there is a will to achieve something we do it. Suddenly the barriers to progress go away the second there’s some pressure. When we want to get things done, we can do it, but we too often focus on the reasons not to - the shareholders and interest groups that don’t want change always matter more. God forbid we change zoning laws, lest we offend the existing residents. God forbid we even have a conversation about wholesale tax reform in this country again, even though we absolutely could use a holistic look at whether there’s more efficient ways to raise the revenues we need.

We see it in our corporate culture, our bureaucracy, and hell even our sports teams. The decision to keep the Leafs together wasn’t motivated by logic, but by fear - fear that Shanahan wouldn’t be able to explain to his bosses if Marner went on to win a Cup in his new city. As a country we play not to lose, instead of playing to win. We are the prevent defence of countries, parking the bus to avoid screwing up too much. In benign times, it can work. But we have found rocky waters, and caution isn’t enough.

We need to be bold and ambitious on both domestic policy and international affairs. We need boosted defence capacity that renders us less reliant on the Americans, so that it gives us more leverage when negotiating the economic partnership. If we have to rely on them entirely for defence, then they have us over a barrel on the renegotiation of the trade deal. This is an important step to strengthening our leverage in those talks, while also making the Americans happy that one of their longstanding irritants is now gone.

This has the capacity to be transformational in a lot of ways for Canadians, and this could be a day that we look back on as a turning point not merely for this government but for this country. I hope it is. But I hope the spirit of this announcement and this initiative infects the whole of government, because holy fuck we need it.

One of the arguments that opponents of private, employer based health care and supporters of Medicare For All in America make is that breaking the employer link to your health care will foster better economic outcomes. The argument is that people will be more willing to create businesses, take risks, and generally be ambitious if they don’t need the health insurance they get from their 9-5. It’s a logical argument, and I suspect in the US you’d see it born out. But in Canada, there’s no such creativity.

Maybe it’s a cultural thing - we don’t tell ourselves stories about our revolution, we don’t make bootstraps myths part of our national story, and we certainly don’t pretend that everyone is a generation away from fabulous riches even though it’s false. But it shouldn’t have to be. A more measured sense of country and a more attuned to reality country is not actually definitionally a guarantee that things must be this small-c conservative. We need to foster big thinking and risk taking.

Whether it’s some form of tax code rewrite to cushion the blow of losses, furthering various write offs and allowances to incentivize responsible risk taking, or merely blowing up entrenched monopolies and essentially cartels, we need the boldness that has taken our defence policy by storm to become our country’s calling card. We need to view this for what it is, an opportunity to stop the poison that infects this country.

I’m not claiming to be above that poison - I’ve definitely embraced it, infected by it at too young of an age through a combination of too much exposure to the GFC and the nihilism of both American and Canadian politics in the early 2010s. But I can recognize it for what it is, with the benefit of hindsight. It is a self-fulfilling prophecy that ends in us being relegated to a bit player on the global stage, a middle power that punches far below our weight instead of a middle power that punches above. It’s a race to the bottom, a slow puncture on the road to salvation. We must break it.

Mark Carney laid out a path to not just making Canada safer, but freeing us from our national malaise. He is killing Canada’s crisis of chronic caution, and in doing so, he is setting this country up to finally be the best version of itself, at a time when we’ve never needed this more.

(As we ramp up coverage of the Carney era, national unity threats in Alberta and Quebec, and attempt to use whatever influence I have to influence this new government, consider a paid subscription. All work will remain free but a paid subscription is a way to support my work and enable me to continue to do what I love.)