How to fund increased defence spending? There’s nothing wrong with borrowing

opinion

Prime Minister Mark Carney walks out of a military truck at Fort York Armoury, in Toronto, June 9.

Guio Jacinto is a political economist and the economic and trade policy analyst with the United Steelworkers.

The federal government’s plan to raise defence spending to 5 per cent of GDP by 2035 has reignited debate over how it should be funded. Predictably, the right urges prioritizing national security over social programs, implying budget cuts, while the left proposes raising revenue by closing tax loopholes that benefit the wealthy.

The federal government, for its part, does not appear eager to raise taxes. And their proposals to cut public expenditures – by reducing the size of the public service – are unlikely to generate sufficient savings.

That leaves borrowing. Canada’