Canada Is Showering Arms Dealers With Money While One in Four Can’t Afford Groceries
Soaring food costs are making it impossible for almost a quarter of Canadians to access basic groceries. Instead of strengthening safety nets, the Canadian government is lining the pockets of defense contractors.
Canadian prime minister Justin Trudeau attends the NATO summit in Madrid, June 29, 2022. (Bernd von Jutrczenka / picture alliance via Getty Images)
As Canada’s federal government opens the tap for military spending, one in four Canadians are going hungry. Soaring living costs are making groceries unaffordable. With few signs that help is on the way, struggling Canadians are being asked to survive on meager government support, while war profiteers are set to get rich on the back of a military-spending boom.
In a recent interview, Jan Reynolds, a resident in Guelph, Ontario, who lives on federal Old Age Security (OAS) payments, explained to me that she currently has just $30 per week to spend on groceries. This means she cannot afford many basic items, such as bread and eggs.
“I get tired, because I know I’m not, at times, getting enough nutrients,” said Reynolds, who is currently eating just two meals per day amid soaring grocery prices and ever-rising housing costs. She is among the 23 percent of Canadians who say they aren’t eating properly because they don’t have enough money to buy food.
Amid worldwide inflationary trends, Canada’s latest consumer price index update showed costs for groceries were 9.7 percent higher in May 2022 than in May 2021. Prices for vegetables rose 10.3 percent and costs for meat increased by 9 percent year over year. The cost of gas spiked 48 percent year over year, and shelter costs rose by 7.4 percent.
As explained by David Macdonald, a senior economist with the Canadian Centre for Policy Alternatives, the rising costs of living are being caused by two main factors: higher input costs — driven by both supply chain issues and the war in Ukraine — and corporate profits.
The second factor, Macdonald explains, is fueled in large part by corporate oligopolies — such as large grocery chains — that wield pricing power to not only offset input costs but to also pad out their profit margins. In many sectors, corporate profits have trended upward since the start of the pandemic recession.
The Cost of Weapons
The war in Ukraine — and its global impact on living costs — is showing no signs of ending anytime soon. Western countries continue to show little interest in facilitating peace talks with Russia while pouring billions of dollars’ worth of weapons into the region. Since the start of Vladimir Putin’s illegal invasion, Canada has committed $650 million worth of direct weapons transfers and other military aid to Ukraine at a volume and speed “unprecedented in recent Canadian history,” according to the antiwar monitoring group Project Ploughshares.
It’s not only direct weapons transfers to Ukraine that have fueled Canada’s ballooning military spending, however. The 2022 federal budget hiked the overall military budget by upward of $8 billion, an increase that was initially projected to bring the share of Canada’s GDP military expenditures closer to the 2 percent figure demanded by NATO. In April, the Parliamentary Budget Office (PBO) flagged a further $15 billion of “unexplained military spending” in the budget.
Still, these increases were not enough for NATO secretary-general Jens Stoltenberg, who released a report last month suggesting that Canada’s military spending will decline as a share of GDP this year. The NATO report did not explain the reason for this estimated decline, or whether the $8 billion spending increase in the federal budget had been considered. According to the PBO, the federal government would need to increase military spending by another $75.3 billion before 2027 to meet NATO’s target.
Regardless of that target, correctly dismissed as arbitrary by some opposition members of Parliament, militarization is very much on the rise in Canada, and the price tag is soaring.
War Pigs at the Public Trough
In March, the federal government announced it was in the “finalization phase” of procuring eighty-eight new F-35 jets from American weapons manufacturer Lockheed Martin. This acquisition was green-lit in spite of Prime Minister Justin Trudeau promising on the election campaign trail of 2015 that he would not buy the planes. The price tag for the fleet of glitch-prone jets is officially pegged at $19 billion, but critics of the purchase have argued that the true lifetime cost could be as high as $77 billion.
Government officials have branded the F-35 purchase as necessary for defending Canada’s Arctic region, with Putin’s invasion of Ukraine commonly invoked to justify purchasing the new stealth jets. However, Canadian military officials themselves have admitted that the risk of a Russian incursion in the Arctic region is currently “very low.”
Arctic defense is also commonly referenced in narratives seeking to justify increased spending on NORAD, the joint US-Canada aerospace and maritime military command. In June, Canadian defence minister Anita Anand announced that plans to “modernize” NORAD would cost Canada $40 billion over two decades. This estimate comes with no guarantee that costs won’t run even higher. The cost for the modernization program had originally been estimated between $10 and $20 billion.
The NORAD modernization plans have prompted a flurry of lobbying activity this year by some of the same weapons manufacturers that have enjoyed ballooning stock prices on the back of the Ukraine war. Those arms dealers are now seeking lucrative NORAD modernization contracts with the Canadian government.
Oil and gas companies have also used the Ukraine war as a pretext to lobby the feds for even more favorable trade policies. These companies are the very entities that are responsible for a large portion of the greenhouse gas emissions that are fueling the climate crisis that poses a very real threat to the Arctic region.
The cost for a fleet of fifteen new Canadian Surface Combatant ships, meanwhile, has skyrocketed to $100 billion from an original estimate of $26 billion in 2011. Irving Shipbuilding, a subsidiary of the billionaire family–owned Irving conglomerate, is also asking for an extra $300 million in public funds to upgrade its manufacturing facilities to fulfill the contract.
Fat for Weapons Contractors, Lean for the Poor
In a June speech addressing inflation, Canada’s finance minister, Chrystia Freeland, who also serves as deputy prime minister, re-announced $8.9 billion in financial support as part of an “affordability plan” that the federal government had already pledged in the 2022 budget.
Direct support measures included boosting a refundable tax credit for people on low incomes, indexing federal benefits like OAS, which were already insufficient to cover basic costs, to inflation. OAS will also be boosted by a further 10 percent for those aged seventy-five and over. At age seventy, however, Reynolds won’t be eligible for that extra increase.
The Liberal government is also promising a means-tested dental care program and a long-awaited $10 per day childcare system. Neither of these measures will be fully rolled out until 2025, an election year.
Additionally, the Liberal government is introducing a onetime low-income “housing affordability payment” of . . . $500. For perspective, that sum covers less than one-third of one month’s average rent for a one-bedroom apartment in Guelph, where Reynolds lives. In a country beset by some of the highest housing costs in the OECD, the idea that this is a meaningful fix is laughable.
The hard times are particularly visible to those who volunteer in meal programs and food banks. Teresa Ganna, who helps run a church meal program in Newmarket, Ontario, says that before the pandemic, around thirty-five guests would visit for food on a typical night. Now more than one hundred guests regularly come in for meals, including families with small children. “It means that there are children going hungry,” Ganna notes.
For those living on fixed incomes, she continues, it is impossible to absorb the rising costs of food that are fueling supermarket chains’ surging profits. “If they are living on a very limited income, they’ve got a lot less to spend on food,” said Ganna.
Speaking to CBC News on June 26, Freeland explained that she believes it is time for the federal government to balance existing support for low-income Canadians with “fiscal restraint.”
“I have to strike a balance. One is supporting Canadians with affordability challenges and the other is fiscal restraint, because I don’t want to make the Bank of Canada’s job harder than it already is,” Freeland told CBC. She did not mention military spending.
For the Trudeau government, “restraint” evidently does not apply when it comes to lining the pockets of weapons contractors and fueling the war that is worsening the global cost of living crisis. Poor and low-income Canadians, on the other hand, are expected to go hungry while the war profiteers get rich.