The federal government should consider a one-to-two-point increase in the GST and slower growth in non-defence spending to finance a massive jump Canada’s military budget, according to a new report from the C.D. Howe Institute.
“Some combination of tax increases, spending cuts, or taking on more debt is required,” wrote authors Colin Busby and Nicholas Dahir.
The analysis warns that meeting Canada’s commitment to raise defence spending to five per cent of GDP by 2035 will require “hard fiscal choices,” including potential GST hikes and tighter limits on non-defence programs.
