‘Canada First’ Military Spending a Surrender to Bad Policy

Published in the Globe and Mail, February 14, 2013

We have in this country a federal government that increasingly is engaged in trying to determine which business, which regions, which industries will succeed, and which will not, through a whole range of economic development, regional development corporate subsidization programs. I believe that in the next election we have got to propose a radical departure from this.

So spoke Stephen Harper in February, 2002. He has come a long way since.

The younger Mr. Harper repeatedly stressed the evils of government subsidies and attempts to pick winners and losers in the economy, while stating that the government should focus on creating the underlying conditions for growth through lower taxes and reduced regulation.

In power, however, the Prime Minister has demonstrated a curious mix of free-market preferences on the one hand and knee-jerk nationalist reactions to protect Canadian industries in politically sensitive sectors on the other. A report issued this Tuesday provides an opportunity to test which of these inclinations is the stronger.

The report was written by the special adviser to the Minister of Public Works and Government Services, Tom Jenkins, on ‘leveraging defence procurement through key industrial capabilities’. Mr Jenkins concludes that through targeting certain sectors, Canada can use the money it will be spending on defence over the coming years to boost economic growth. Underlying this view is a boldly asserted assumption that, ‘many aspects of defence production are particularly effective growth promoters’, especially as defence industries are ‘important sources of technological dynamism and innovation.’…

Read the rest of this article on the Globe and Mail website.

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