First published in the Globe and Mail August 12, 2025
In June, Prime Minister Mark Carney made an ambitious commitment: Canada would meet the NATO target to spend 2 per cent of its gross domestic product on defence this fiscal year, not in 2032.
Later that same month, Mr. Carney and the leaders of our 31 allies in the North Atlantic Treaty Organization went even further. At the insistence of U.S. President Donald Trump, the alliance agreed to raise the bar to 5 per cent of GDP by 2035.
The price tag is staggering. About $9-billion in additional defence spending this year. Tens of billions more in 2035 and every year thereafter.
That’s a lot of money – and for good reason. We’re in an increasingly dangerous world. We can no longer take our security for granted. As the Prime Minister said during his June announcement, “if middle powers aren’t at the table, they’ll be on the menu.”
But we’re also in an era in which capital is scarce.
Early in the COVID-19 pandemic, Canada put a lot of money on the government credit card to keep businesses afloat, health care systems functional and individuals safe. Our population is aging and has growing and expensive needs. And we’re in a trade war that demands government intervention to help people and businesses most affected, build economic resilience and pursue trade diversification.
We cannot afford to act haphazardly. This new money must be spent wisely.
Canada must focus on what produces the greatest return on investment for taxpayers while enabling the Canadian Armed Forces to do what they do best: protect Canadians.
This is where the concept of multipliers is instructive.
For economists, sound public spending has a fiscal multiplier that catalyzes new investment in the private sector to build the economy.
For defence experts, they are preoccupied with force multipliers: investments that make our military more capable, mobile and resilient.
For Canada, a country with a relatively small military and persistent underinvestment in industrial innovation, we need to direct defence dollars with both multipliers in mind.
We must also confront negative multipliers, and none are more prominent than climate change.
As NATO acknowledged in 2021, climate change acts as a “threat multiplier,” fuelling conflicts by exacerbating state fragility and causing mass population displacement; threatening security infrastructure such as bases, air stations and naval ports; and opening new arenas of geopolitical competition, especially in the Arctic.
Climate change is already putting a strain on the Armed Forces.
In 2023, during Canada’s worst wildfire season, more than 2,000 Armed Forces personnel were deployed for firefighting and evacuations – more than are currently stationed in Latvia as part of our largest overseas mission.
This has become the new normal. In a warming world, the Armed Forces are increasingly tasked with responding to fires, floods and storms. That has stark implications for the long-term operational readiness of our military.
So, what’s the solution? How can Canada grow its economy, build more capable Armed Forces and address the threat of climate change?
We back the builders of Canadian climate hard technology.
Climate hard tech is the real, tangible solutions – the steel, circuits and machines – we need to build a decarbonized economy and stave off the worst impacts of our rapidly changing climate.
But these technologies are about more than solving the trickiest problems in the climate space. Many of them are dual use; they have climate and defence applications.
Take drones. Heavy-lift drone swarm technology, such as those drones being advanced by B.C.-based FireSwarm Solutions Inc., can safely and effectively combat wildfires. Heavy-lift drones can also help carry out missions and transport materials without putting soldiers in harm’s way.
Satellite tech is also dual use. Kitchener, Ont.-based hum.ai (formerly Coastal Carbon) is combining satellite remote sensing with artificial intelligence to measure carbon sequestration potential along Canada’s coastline. This same technology can be used to monitor the Arctic frontier against threats from adversaries.
There are countless other climate tech solutions such as batteries, renewable-energy microgrids and modular building infrastructure that can drive down emissions and help the Armed Forces be more agile, efficient and capable.
Canadian companies such as FireSwarm, hum.ai and many others are building solutions that create the type of multipliers we want while counteracting the ones we don’t. And they’re doing it with the support of innovation catalysts such as NorthX Climate Tech.
Today, Canada consistently ranks second only to the United States on the Global Clean Tech 100 list. We have an abundance of critical minerals that are key inputs for many climate tech solutions. We have some of the best and brightest innovators in the world.
What those innovators lack is capital. With this once-in-a-generation investment in defence, we have the perfect opportunity to provide it to them.
Canada cannot afford to silo climate, economic resilience and national defence. In a world of converging risks, climate tech is defence tech. And for our sovereignty, economy and security, Canada must lead on both.
Let’s make sure our next wave of defence spending reflects that.
