War-materiel-mongering becoming the western world's fastest growing industry

My brother works for a defence contractor/supplier. He has a wry sense of humour and when asked what he does for a living replies “warmonger” eliciting various responses from raised eyebrows to uncomfortable giggles.

That’s actually not quite right. He is peddling war equipment and technology but not war itself. After all, it’s called the defence industry not the offence industry.

Whatever you call it, selling goods and services to the military is becoming one of - if not - the fastest growing industries in Europe and North America (and some countries in Asia). The Canadian PM just committed to spending 2% of GDP by the end of this fiscal year. The Yanks, NATO, etc. are now talking about 3%, 4% or even 5% of GDP.

There was an article in the Economist this week talking about moribund small cities in Europe that have come alive as manufacturers of equipment are creating 800 or 1000 new high paying jobs in a single expansion.

It’s important to point out early on that 2% of GDP doesn’t mean 2% of GDP. We use GDP as the denominator to allow for comparison between countries but if Canada buys F38s from the US there is almost no GDP impact in Canada unless there are ITBs or some other reciprocal agreement. There would be GDP from the operations and maintenance but not the purchase.

But if Canada gets ‘its share’ of the global rise in defence spending it will mean new equipment manufacturing somewhere in the country and it also could mean more tech activity such as cybersecurity and other defence-related IT. It could also mean producing large modular components for investment in arctic bases and other physical infrastructure.

What’s in it for good ol’ New Brunswick? There are a few firms that produce parts and services in the defence supply chain but by my analysis NB has the smallest defence sector in the country relative to GDP - if you exclude government employees. Because of CFB Gagetown we have a larger share of defence employees than a number of other provinces.

If we got our ‘share’ of the $9B new spending by end of fiscal, that would equate to $200 million worth of new economic activity. If you start talking 3% that would add another $400 million, etc. In other words, a major new industry for New Brunswick.

Now, unfortunately, it is unlikely the defence spending will be divvied up per capita. But it still should force a conversation about the industry and its impact on the Canadian economy. If Europe is using defence spending to support ‘moribund’ smaller cities there could be a lesson in there for Canada.

I am hearing some interesting opportunities are being pursued which is good news. The problem with any kind of government procurement is that politics is always lingering in the shadows no matter how pure they say the process is.

I say let’s get in the peace-reinforcing mongering business.