The Paikin Podcast - World on Edge: Is Canada’s Military Ready for the New Chaotic Global Order?

Episode Date: November 13, 2025

Former MP and Conservative Party Leader Erin O’Toole joins Janice Stein to discuss the historically huge increase in military spending from last week’s budget, what we should focus spending it on, whether we should buy submarines or drones, why we need a Made-in-Canada approach, if we should take the 51st state rhetoric seriously, if we are on the precipice of war with either Russia or China, how to assert our sovereignty in the Arctic, the end of the rules-based order and globalization, and why Canada needs to step up its spending and meet its NATO commitments. Follow The Paikin Podcast: YOUTUBE: https://www.youtube.com/@ThePaikinPodcastX: x.com/ThePaikinPodINSTAGRAM: instagram.com/thepaikinpodcastBLUESKY: bsky.app/profile/thepaikinpodcast.bsky.socialEmail us at: [e-mail]

My suspicion is if there's one thing Canadians took away from last week's first budget from the new Mark Carney government, it's the historically huge increase in military spending. That is not something Canadian governments of any political stripe traditionally do, but it's happening now. We want to find out why, and with potentially so many billions in new spending put forward, what should we be investing that money in? That's our subject for this week's World on Edge on the Paken podcast. Coming right on. As always, happy to welcome back, Janice Stein from the Monk School of Global Affairs and Public Policy. And this week's special guest, Aaron O'Toole, the former leader of the Conservative

Party of Canada. Aaron is now president and managing director of Addit North America. That's a globally integrated risk advisory firm. They specialize in strategic intelligence, international trade, due diligence, security, compliance, et cetera, and perhaps, more importantly for this discussion, I want to say, Aaron, is a graduate of the Royal Military College in Kingston, and was an officer in the Royal Canadian Air Force. He flew sea king helicopters, sail with the Royal Canadian Navy. And as I welcome you, Aaron, let me just start by saying, if it's appropriate, thank you for your service to Canada in the military. Welcome aboard. It's good to see you again. Great to join two great Canadians. And thank you for that, Steve. We're in the days after Remembrance Day.

so we appreciate those who serve for our country and its values. Absolutely. Aaron, let me start with you. What do you think about the federal government earmarking almost $82 billion over five years to what they call rebuild, rearm, and reinvesting in the Canadian military? What do I think, Steve? You know, can I go back to Parliament now? Because I was asking for us to take defense more seriously for 10 years.

And it was hard for us as a country because we relied so heavily on the United States, of course, and NATO. And there wasn't a lot of drive, particularly within senior ranks of the civil servant and politicians to really spend what we needed to be spending, to be sovereign, to be able to defend ourselves, to play our role in these alliances. So I actually thought the defense portion of the budget was a pretty good road. roadmap for us to be taken seriously again internationally, but also to show domestically how we should be maintaining certain capabilities in terms of defense industry here in Canada and really giving the men and women a uniform, the equipment they need, and the timeline to show industry that this isn't a one-off press conference or a tagline in a tweet. This is a commitment to really rebalancing the Canadian armed forces

and for Canada to play a serious role at home and abroad. Janice, it's an almost unprecedented amount of money in peacetime. We're not at war right now. For a government of Canada to allocate to budget, what did you think when you sell those numbers? I agree with Aaron completely this is long overdue. And it's interesting, see, if you're right that we're not at war, But if you spend any time in Europe, the discussion is we are in the lead-up to very scary times.

There is almost a war preparation mentality. And in Canada, we're dealing with an unprecedented situation in North America. So the sense that we need to reinforce and frankly rebuild sovereign capabilities. in a much more threatening world, I think Canadians get it after all this time. I think they get it. Can I just jump in on that? When you say we're at the precipice of war, I mean, it's whom? So Europeans, whether it's Finland or it's Sweden or it's Poland or it's the Baltic states

or it's Romania, you know, the whole of Central Europe is focused on the fact that they are dealing with a newly aggressive Russia. And some of their restraints are simply off. And it's not limited only to Ukraine when you talk to Europeans. And we don't hear enough of that in Canada, really. But when you talk to Europeans, it's Ukraine is the front line and is holding the line for all of us. But already there are what they described as gray warfare, right? whether it's drones in civilian airspace,

whether a whole set of covert activities that Russia is engaged in, and they feel they are genuinely alarmed about the next five years and worried about the fact that the United States has withdrawn as a credible deterrent. Yeah. So we can I build on what Janice said?

Please, sir. Yes. Because she's laid out European threat quite well. And in fact, if you speak to folks in the Baltics or Poland, they've seen this movie before with Russia. And so their countries are already at 5% of GDP spending on defense. They know Putin's longer term plan if we're not able to support Ukraine and curtail his ambitions there. But I would add, the South China Sea and China, you know, if you speak to the Americans, their war planners look at China potentially blockading or taking actions vis-a-vis

Taiwan in the 27 time frame. That's the time frame they use, Steve. And why is that important? All of the trade disruption, or a good portion of the trade disruption, really relates to the fact that Americans, going back to President Obama, have realized their defense capacity, the arsenal of democracy that they built in World War II to help come in and finish the war is lagging. They weren't able to build ships. You know, China in one year and one shipyard built more ships than the U.S. has built since World War II. So all of the control over steel,

aluminum, shipbuilding, auto, this is a result of their pivoting to be ready for potential conflict in the Indo-Pacific. So Europe is on shaky ground, as Janus outlined, and the situation in the Gulf is stabilizing, thankfully, but there's a lot of people concerned about the South China Sea and 70% of the world's trade goes through that body of water where China has built islands on some reef, coral reefs. So it's a very uncertain world. You can talk about the Arctic and we may talk about the Arctic as being a geopolitical hotspot and Canada wasn't doing enough to assert our sovereignty there. So there's, there is a recognition that we've got to, we've got to have this sovereign capability to defend ourselves

and to participate in multilateralism. And maybe I'm going to do one more, let me have one more dimension just to the scene here. Because with respect to our neighbor, the United States, There is now a concern that we have sovereign economic capabilities on issues that are really, really core to it, right? We have to be able to secure, for instance, our communication structure, especially in prime areas, whether it's government, whether it's finance. There's a cyber element where can rely on the United States in many ways to do this. this, Steve, and just can't do it anymore. So defense is important for defense, as Aaron just

said entirely. But defense is important because, in fact, defense is our industrial strategy going forward. So it's much bigger than it was. Well, I guess I'm heartened to hear both of you not say that you think we're on the precipice of war with the United States. That's very encouraging. And it doesn't look like we're going to the war in the Middle East either, which is also good news. Having said that, okay, Aaron, let me push you a little bit more on this because Jenna said we could be on the precipice. And the precipice is not some potential date 25 years from now. The precipice is standing right in front of us. Do you think we're that close to a potential war with Russia or China? I think, you know, we have to be prepared for that

outcome. And we have to be sufficiently ready to have the deterrent value. to prevent war. So peace is sometimes achieved through deterrence and through alliances and through projection of power. And with the U.S. becoming isolationist, as Janice mentioned earlier, Putin is counting on NATO crumbling. He's counting on the fact that Europe is now trying to replace the gap that the Americans may have played traditionally going, you know,

to the sort of geopolitical order that was established coming out of World War II, the alliance of NATO played a big part of that. So my hope is that by strongly defending our own borders and our own Arctic and our own territories and maritime areas, we are then showing that aggression will be met with force and with a response. And that could hold back Putin. And, you know, it was interesting, Prime Minister Harper, when I was in the government with him and in the cabinet, he was quite worried about how Europe, particularly Chancellor Merkel, was allowing this phony war in the Donbass and the invasion of Crimea. You know, so the invasion, the full invasion that came in early 2020, Steve, of Ukraine, didn't just start when the tanks will.

It started years in advance, as Janice said, with disrupt. and gray warfare, cyber attacks, foreign influence, taking out the grid, and then led to an occupation of Crimea on false terms and circumstances. There was the downing of the jetliner while the war in the Donbass was being fueled by Russian operatives posing as people living in Ukraine. We kind of allowed him to slowly push and push and push to the point that he did not feel that the NATO alliance would step up. Ukraine's not in NATO, but they certainly wanted to be in NATO for that protection like Poland and Baltic states. So this is about making sure that we show that aggression will be met with a response. And that's a peace plan. And we're not

talking mutually assured destruction in the language of the Cold War, but we're talking about a serious response and the ability for the United States and or other allies to respond to aggression in Europe. The same will happen in case of Taiwan. U.S. has this policy called strategic ambiguity. Will they respond? President Biden a few times actually resolved the ambiguity by saying he would, and then they walked that back. But planners that I've spoken to in some of my talking, the United States feel that if China moves, it would be in that timeline. It would probably be with some sort of blockade or naval action. And then the West will have to decide how to meet that action. So equipping our militaries, modernizing, being more self-sufficient, trying to keep

the U.S. engaged multilaterally, Canada should be playing a role in doing all of this as we get our own house and order. Well, to that end, Janice, let me circle back to the budget here. And just because I'm in a bit of a smart alecky mood this morning. I want to ask you whether you think part of the explanation behind the significant increase in defense spending in Canada is because we need to show the United States that they shouldn't get any ideas about playing fast and loose with us. They have, after all, threatened to annex us. Is part of our defense spending meant to show them that they ought not to try anything against

us? You know, I am not one of those who believes that there is a military threat coming from the United States. We have defense planners, like everybody else, and defense planners have an obligation really steep to plan for every conceivable conditions. They're remiss if they don't do it. And if I were, you know, in government, I would say, go plant, go do it because you have to have a plan. But if you ask me, do I think the United States is going to send a little green man over the Great Lakes into Canada? Well, they'd be red, white, and blue men.

They wouldn't be green. Whatever they are, right? I really don't. I think that is such a low probability. I think there is pressure from the United States, but it's not because they're going to use military instruments against us. Because they pressed all their allies to step up defense spending in NATO. And Canada was in a terrible position.

Let's be honest. It was at the bottom of the heap. And we weren't there just by bit. We were there by a yard. we had to move if we were going to be credible in Washington and our European allies were telling us the same thing. Are you serious? Are you real? So it was pressure to live up to our obligations, but not because we face any kind of, I don't believe, short term or even a long-term military threat from the next. Okay. Well, I did tell you, I was being in a bit of a smart idea. Anyway,

there you go. Okay, Aaron, this question I think is right for you because you're a former parliamentarian and part of your responsibilities would have been in the past to review budgets that governments put forward and test them to see whether or not there was adequate specificity in them for your liking. So let me put that to you. This budget has a very large global budget number, but it doesn't break it down year by year by year, and it's also not specific on what the money would go towards. How problematic is that for you? The proof will be in the pudding. I don't think it's problematic is I will give the government credit here. They've indicated that there's an envelope for defense spending. And that is giving a predictable timeline to not just members of the

Canadian Armed Forces, but industry to plan around that. So that is good. The questions, though, Steve, that you're rightly asking is they've announced this former RBC executive will be running the defense investment agency, they've announced BDC, which for years would not touch, actually had a mandate not to support defense, will be deploying a billion dollars. There are a lot of indications that they're going to have some sort of planning and structure, but they've yet to release the defense industrial strategy. That's coming, Aaron. That's coming.

Yeah, it's coming. My worry is, though, there's three departments that are having some sort of touch on this strategy. industry, defense, and public work, PSPC. So this will be the real test. How are we going to deploy this in a way that really not only stimulates economic activity in parts of the country, which is part of his defense industrial plan, but gives us the equipment and the scaling up of the existing industry that we need to do well. So about 25% of the new spending will go to the salary increases.

and some personnel decisions, base infrastructure, some of the housing and accommodations on our bases, as the Auditor General just reported last month, Steve, is abysmal. I'm sure it was already old and decrepit when I was there in the early 90s. I'm sure it hasn't been touched because budgets have been so thin. So I think about probably 30 to 40% will just be on improving the quality of life and the accommodations and things that are important when you're, trying to recruit in people.

The Navy is short, 30% of the trades they need for these new ships and submarines. So 40% will be for our people and for the morale and for the quality of life. What is the rest of that going to do in terms of building capacity and making sure that if we're buying submarines from Europe, for example, or Europe or South Korea are the two finalists, what are we selling in return? If we're scaling up our industry, we need to be part of rearm Europe. both ways, not just buying stuff from them. We need to be able to sell into that ecosystem, which is 1.3 trillion Canadian is what Europe has committed to their rearm Europe initiative.

So we've got to really get these plans rolling quickly, Steve. And I don't want it to be three or four mandrons in Ottawa choosing who the winners are. We should really rely on the private sector or a fusion between public and private to really move quickly and have success. To that end, you raised the issue of submarines, so let's go there now. And one of the reasons I wanted to put you two together is that you two were on the agenda, the show I used to host on TVO several months ago, and even before the taping began, you two started to argue about submarines, which I thought was terrific. I was kind of sad the cameras weren't rolling then because you got no good debate about it.

But, okay, I've got you back together now, so let's talk about that. How many should we be buying? should we be buying them from South Korea or the German-Norwegian consortium? Should they be diesel-powered or greener? Can I start, Steve, because, you know, Janice is one of the smartest Canadians. I'm fortunate to call her a friend and someone that I learn a lot from. And she's changed my view on this, which is really hard to do with me, because I'm a bit of a 52-year-old cremugin on defense issues.

but the plan is to get 12 traditional conventional submarines which are diesel powered and I was pushing for that for coverage we've got more coastline than any other country in the world but she's brought me around to her position I actually think both for submarines and for fighter jets we're at a bit of a pivot point what the prime minister likes to call a hinge moment on do we buy just the traditional what we've been using for 50 years or do we build in an autonomous component and do what Australia is doing, doing this sea shark autonomous submarine component, we could do the same for fighter jets. So that debate on the one of the final agenda shows and continued chats with Janice actually has me in a position

where I think we should probably get eight of the traditional submarines and then use that budget room allocated for the 12 to come up with a made in Canada autonomous version. So the more time I spend with Janice, it's hard to resist her good argument. So I just wanted to give her full kudos right off and start. Aaron, I can't tell you. I can't. Hang on. I got to say, I got to put on the record right here and now how disappointed I am in that answer, Aaron. I was so looking forward. After that big buildup, I was looking forward to a big confrontation here, but alas, I think it may not happen. Anyway, Janice, but okay, let's pick up where Aaron left off, which is to say, if we have to buy 12, all right, go ahead, take it away. Let me pick up on a comment.

Aaron, I actually made an answer to your prior question, right? Because I think that's really such an important issue. Aaron said we have to scale up, right? And that's really the critical issue. If this, we have to meet our defense needs deep, but we also have to grow the community. economy it doesn't we can't buy kit and maintain it if we're not at the same time growing in productivity in our economy these two are when you say buy kit that's a military expression yeah by all the equipment then our our sailors and our airmen and our ground forces need right

but if we if we're not if we're not growing our productivity we won't be able to sustain that it'll rest out um as the equipment that we've had before has rested so kind of Coming back to the submarines, and that's where Erin and I had a really, you know, productive discussion, let me put it that way. The battlefield is changing, too. War is changing, and Ukraine has given us a glimpse into the future. There's, you know, really important equipment that we need, like aircraft and submarines, but they are now operating in a surround, where there were swarms of small, smart weapons. And we're not quite at the swarming threshold yet, despite everything everybody says.

That's just the next major technological job. So when we think about submarines to come to this, you know, there will be thousands of smart, autonomous, underwater submersibles with no crew in them by the time the majority of these submarines are delivered. So eight submarines will leave room, frankly, if we do that. We'll leave room to actually invest in Canadian companies that are leading the edge here in new, smart, small, autonomous weapons. We could describe it that way. We could say making submarines smarter, right? But the key is that we invest in it's so important in Canadian companies.

There's a long history in this country, frankly, and Aaron knows it very well. You buy from abroad. Don't, don't worry, we're going to create jobs in Canada. A company moves to Canada, creates jobs while the bill that's going on. But as soon as the build is over there, gone, we can't do that again this time, given the magnitude of the money that we're going to invest here. Let me do a follow up. Let me do a follow up with Aaron on that aspect of it.

If, well, you tell me, the political sensitivities of Canada and NATO country purchasing a fleet of submarines from, let's say, South Korea, not a NATO country, favoring that contract potentially over Germany, a NATO country, what's the political optics around all of that? Well, there's political optics around all of it, Steve. This will be a government-to-government state-backed contract. however it flows. I think there's pros and cons on both sides. I was fortunate to go as part of the Harper government to finalize that our first free trade agreement in Asia was with South Korea. In fact, 513 Canadians gave their life in the Korean War. We were part of the coalition that fought in that war and we got amazing ties. Of course, the NATO angle and German and their Norwegian German connection is more of our traditional alliance.

in the North Atlantic. So there's pros and cons on both sides. But to build on what Janice was saying, Steve, I think a lot of people will start hearing terms like sovereign capability. We've shown around. There's also a term called attritable. So these are affordable, smaller aspects like drones that will start being what is more and more common in modern warfare,

where you're having autonomous, so you're not losing life. and these attritable assets are more affordable loss items. So look at the damage that Ukraine is inflicted on Russia deep into Russia. We saw those videos of the drone attacks and taking out aircraft on tarmacs and things like that. Quite incredible. And we need to show a little bit of ambition in Canada because there's a U.S. company, Andrel, that is selling a big autonomous submarine to Australia, one of our closest ally. And you know what, Steve, 50% of their supply is a Canadian company called Cracken.

We've got incredible ability to do these things ourselves here. The same goes for what's called the loyal wingman or the collaborative combat aircraft, so smaller drones that fly with a fighter. So if you have an F-35, sitting back doing the mapping, the linkage with others with a pilot, You could have two or three of these collaborative aircraft, these loyal wingmen who are autonomous, who could go into the more trickier situation, take risks because there's no human involved. And especially with submarines, protecting the humans is most of the work of the submarine. If you take the humans out, they're actually, you can do a lot with less. And what I like about what Janice was proposing and won me over to is even if we choose German, South Korean,

these aren't going to arrive in Canada until 2034, 2035 at the beginning. We could come up with the autonomous option and have it in the Northwest Passage in two years, Steve. And now that would just be for surveillance and monitoring. It wouldn't be for any kinetic engagement. But part of the benefit of a submarine is when your opponents know you have one, they have to assume it's there and they avoid excursions into that way. water. So at a time when even the Americans won't acknowledge our sovereignty in the Northwest Passage, we need to get assets up there quickly. And so if we can have a traditional fleet

of subs and fighters smaller, but supplemented by these attritable assets developed in Canada, there's no reason why we then couldn't sell them to all the NATO partners. So let's build these autonomous subs in collaborative combat aircraft here. We've got bombarding. We've got crack and we've got tons of suppliers that are world class let's just show a little bit of ambition i i i this is that to say that we will not be able really to assert our sovereignty in the far north until we get at least those you know unmaned or what do you call them now unstaffed uh autonomous submarines up there autonomous submarines up there not to mention the bigger ones 10 years from now yeah to be fair to the government here and from what i understand whichever the order

there are one or two ready to roll submarines that we could get within two to three years. So we would get an advance on one or the other. But that doesn't change, frankly, the fundamental point that Aaron is making. We have the capacity in Ghana. There is an ecosystem here of technology companies and bombarding others, right, that actually have the assets to make equipment that we need, Steve. How are we going to grow these companies? As I come back to that word scale, how are we going to grow these companies in Canada

if the government is not the first customer when there's a viable Canadian alternative? And I think we haven't made that argument strongly enough in public. I'm glad we're doing this show. I am going to, you know, I think it's really important. We continue to make it. I think sometimes we underestimate our own capability and we don't invest in our own companies and we go abroad and then jobs come to this country for a brief period of time and then they're gone. We need a growth strategy for the economy. So Aaron referred to the defense industrial strategy. he's quite right that there are lots of fingers in that pot. And, you know, we're going to stand

up a new defense procurement agency. So how all this is going to work? Boy, is the devil in the details. And I think always is. And I think there's a group of people in this country that are going to keep a closer watch on this time than we normally might and really, you know, get down to the nitty-gritty of the details because that will determine everything. You know, Erin, quickly mentioned one thing, let's go back to it for a moment because it's so important and it didn't get any attention really in all the noise of the budget. A billion dollars went to the business development council BDC. What's the job of the BDC? The BDC job is to invest in and promote Canadian companies so that they can scale. They couldn't do anything in defense.

Now how perverse is that? Now, what does defense mean anyway? It's mostly dual-use. use technology so that it's, the technology make in one sector migrates to the other. Here's what I'm hoping that that billion dollars, and boy, we need to check. And I think, but that billion dollars is going to go into a special envelope. And it's going to be nimble. So smaller companies in this country, and we have a lot of talent in this country. If they were in the United States, they go through a special window in the Pentagon, What does that mean? Put your proposal in, we will tell you within six weeks, whether we're going to fund you or not. Six weeks, right? Nothing again happens since six weeks. And then the funding will start to flow in six months. Well, why does that matter? Because if you're a company with 15 or 20 employees, you can't wait three years for funding, you'll be gone. And I know where you'll go to, you'll go through that Pentagon window. Now, that's an example.

You know, something that's so detailed, but so fundamentally important to the future of the industrial sector in this economy and fixable. It should have happened years ago. Aaron, let me get your take on something the prime minister did that I'm not sure I've seen previous prime ministers ever do. And that is he actually went to South Korea and he toured the plant where the submarines potentially, if we sign a contract with them, would be made. he did the same thing at Germany. He actually went, he got a firsthand, first person look at everything that was going on over there, was able to ask questions of the company executives and so on. What did you make of that?

I thought it was great. You know, what we really have to do is make sure that we show our allies that we mean business. And one thing Canada hasn't done very well historically is giving that full state and that leadership backing of our strategies. And the U.S. do it, the French do it, the Brits do it, where they will tie right into their prime minister and senior leadership full backing. Sometimes state support or contract guarantees, so the government-to-government dealings. And that's heard us historically. It heard us way back, you know, the famous Abro-Aero. But even our nuclear technology, AECL, we weren't backing it to the same way, the French were with Arriva and the Americans were in this race

for influence globally. So I think that was really, really good. And he's also done the same in Germany. And so I don't think they're showing favorites, but they're showing a seriousness. The one thing I praise, you know, it's weird for me as the former conservative leader saying positive things, the liberals. But this moment calls for patriotism, not partisanship. In my I love the fact that in the 10 days, Mark Kearney was Prime Minister before he went to the election. He did three trips to Paris, London, and Nunavut, Ekalowit. Because one thing, Mr. Trudeau really, really let the momentum stop. Stephen Harper had done quite a bit in the Arctic, in fact, in investments.

And it went up for Operation Nunuk every year, the Canadian Armed Forces exercise in the Arctic. with Mr. Trudeau, he kind of ignored it. And Mark Carney was sending a totally different message. So the only tour he had in Canada as prime minister before calling election was the Arctic. And I've commented that sent a signal of seriousness. So that is what we need. And to Janice's point, we have an ecosystem in Canada. I mentioned Cracken.

It's a Newfoundland-based company, Steve. Cellular Robotics is another leader in this. That's a west coast, B.C. So our coasts have great maritime traditions, not just for shipbuilding, which we're building back. The Irving Yard in Halifax is the most modern shipyard right now in all of North America. At a time, the Americans are obsessed with shipbuilding. So we have the ability to not only be sovereign, but to actually work shipbuilding and defense industrial capacity into a new deal with the U.S. for U.S. MCA, a deal on the tariffs and we'll use our aluminum to help you accelerate your shipbuilding

aspiration. So I'm quite optimistic. We just have to make sure that the traditional Ottawa way of slowing things down doesn't impede the progress we're seeing. And to Janice's point, the U.S. is reducing an already faster procurement cycle in the U.S. that we have to follow and show that same ambition. Okay. Let me get you to on. what I suspect, now that billions apparently more are available for procurement going forward, I need to get you to, on the biggest decision I suspect the Canadian military will have to make going forward. And that is, are we going to buy the next generation of F-35 planes from the United States or because they've been treating us so poorly since January, are we going to try to stick it to

them and go to Saab in Sweden and buy the planes from them instead? Janice, advise me if I'm the Minister of Defense. What do I do? Okay. As long as you put it that way, because I mean, nobody knows the answer to that. And where are we? We bought and paid for the first 18 of them because we're committed, but then the contract. The F-35. Yeah, yeah. But 18 planes, 18 aircraft. Okay. But the contract, we were originally going to buy 88. So the real issue is And this, and it has to do very much with the tensions between the United States. That's what the issue is. And people talk about a fact that, you know, the president has the capacity to walk us.

Oh, there's a kill switch. That's just not the issue, Steve, at all. I'll tell you what the issue is. You have that little phone in your pocket? How long is that good for if you don't get updates? Well, the F-18, the F-35. is updated all the time. It's a flying computer, basically.

It's a flying computer. Everything is a computer wearing different clothes today, right? And the F35 is the world's most advanced flying computer. And so the concern is if the United Relationship with the United States continues to be tense, and there's a worry that in a nightmare scenario, we would be shut out of the update. Now, how realistic is that? Who knows? But it's, again, for planners, they can't afford to ignore it.

My hunch is that we will diversify to a European ally. And it will be very much focused again. What are the aircraft for? Because they're multi-purposes that an aircraft can be used for. There's a lot of surveillance. There are really important. search and rescue issues. There's domain awareness, which really matters. And there are other alternatives. There are other alternatives. It's an own goal by the United States, frankly. And it's not

only Canada. It's the, it's European allies. We're making the same kinds of decisions. If we diversify our aircraft purchases harder, we're a small country. Air Force, nobody knows better than and running two different kinds of aircraft that could conceivably have difficulty talking to each other doesn't make your life easy, but it's the industrial benefits and the capacity to work with Canadian companies and going to come back to it is going to be, I think, determining in this for the F-35, there are industrial offsets, but there's not partnership of the same kind that's possible were we in a diversity. And that argument is telling right now. Aaron, I guess, again, one of the reasons I'm glad you're here to comment on this is that with your

political background, you would understand the optics and the political nuances of this decision, which is to say, part of the decision surely will be, how do we reward the Americans by giving them a multi-billion dollar contract to buy 70 more planes from them, given the way they've been treating us over the past year. Does it look like we're rewarding their bullying if we give the F-35 updated contract to the U.S.? Well, we never should make critical decisions for our military and for the safety of our men and women based on emotion, Steve. So there's no one more frustrated with the 51st state rhetoric than me. You know, someone who joined the military at 18. I'm a patriot. But I really think we have to look at it this way. We buy.

fewer of them, based on what we've been talking about, this moment, this hinge moment that we're at. So from what I understand, I think Janice at 18, I think it's 16 that we're actually committed to buying. And then the remainder of the 88, you know, it's another 65, or I'm sorry, Harper was going to buy 65. So Trudeau, when he finally went saying, we're not going to buy it, we're going to buy it, they went to 88. We had been fighting for 65, and I fought a lot in the House of Commons to push that forward. I think now we should probably buy in the 60 to 65 range, so buy fewer. And the cost per unit of the F-35 got to such a high amount that we could use that fiscal envelope, again, just like with the submarines,

to build in this collaborative loyal wingman or collaborative combat aircraft made at home. home where we have the attritable assets, the cheaper per unit drone that accompanies the fighter jet. That's what all major air forces are doing now, Steve. We could actually be the leading edge of the non-American NATO ally selling this into Europe, if we're smart. The F-35 is a fifth-generation aircraft. It's going to be used by all of our allies in the north, including Denmark. they're putting up with the same sort of rhetoric surrounding Greenland.

So we need that interoperability. We need, if we're going to buy a new jet, it should be fifth generation, not a fourth generation like the Gripon. I do understand why people are looking at an alternative, buy it from an ally that's not poking us in the eye. But I think we can actually buy a smaller amount, make sure our fighter fleet is about as advance as it can be

at a time we talked about the uncertainty in all parts of the world right now, but really build up this autonomous option and have a Canadian champion. I think this is the time to look at that. I know a lot of people are. And Canada is the fourth largest aerospace industry in the world, Steve.

Montreal is a global hub. Winnipeg is a global hub for engine, building an engine refurbishment. Toronto, we've got CAE and flight simulators. we are a real powerhouse still here. So if anyone's going to step up to this next generation product, it should be Canada. We just have to show a bit of ambition, a bit of financial support. And the government seems to be doing that now.

And make that decision now that we're going to have a collaborative combat aircraft made in Canada, whichever way the other decision goes, because a bit of lead time. and step up, as Aaron is saying, so that we get, we send the signal to other hours. Here's where we're going. You know, we have something that you're going to do anyway. We've got the assets in this country. Partner. Exactly.

Okay. How do I put this? Donald Trump may be a narcissistic, graceless authoritarian president of the United States, but I want to ask both of you, does he get credit for publicly shaming the government of Canada into actually meeting the 2% of GDP on military spending target? Finally, Aaron. Well, I remind people that the first person that came in our house and chided us over defense spending was a guy named Barack Obama, who said it in his famous address in the House of Commons.

Now, everyone preferred to focus on, you know, what Justin Trudeau called the bromance. The bromance, yes. Dude diplomacy. I found a lot of what he said, cringe, to be honest with his team. But President Obama was quite subtle in the way he did it. Donald Trump doesn't do anything subtly. But the point he is making is valid. Canada is a key founding nation in NATO.

Louis Saint Laurent was critical to the Christian. creation of NATO, Steve. I mean, people don't realize post-war, we punched well above our weight diplomatically and militarily. You know, we left with, I think, the third largest Air Force and the fourth largest Navy in the world at the end of the world. We were key, as Churchill described as this linchpin to bring the Americans into a permanent posture of defense, which became the North Atlantic Treaty Organization. We left that atrophy. The last time we spent 2% was under Prime Minister Mulroney. And when we took the Cold War dividend and closed our bases in Germany, for example, Steve, we just kept going.

A lot of other countries took their Cold War dividend, you know, reduced after the dissolution of the Soviet Union. We just kept going. And I think it was a bit unfair. The Martin government, which was famous for balancing the budget, they did it by two reasons. They cut health transfers to the provinces, made Mike Harris look like the bad guy, and they cut defense radically. And when the world started to shift again, especially in the early 2010, Steve, and you saw an aggressive China, you saw Putin posturing, we should have been paying a lot more attention. The Americans wanted us to, and they nudged and pushed. And so they're right to be a bit frustrated with us.

I don't think that gives the president any license to denigrate his neighbor and ally. I really don't like seeing that. But we should step up. We should not be a free rider. We never were. I would remind the Americans we were in both wars before the United States. And my grandfather deployed to Alaska to defend the Americans. We defended their turf before they ever came to defend ours.

that was the Aleutian campaign. Japan actually occupied a little corner of North America, and most people don't even know that. My grandfather won the Air Force Cross for that. We sent the Devils Brigade all the way to Kiska to kick the Japanese out, but by the time they got up there, they had already left. But we were a valid, valid partner. And what's sad, Steve, the alert, our basin alert,

the due line, all those weather stations, the Cold War infrastructure we have in the north, we built that all in partnership with the Americans. How can we get back to that partnership? It's by showing we're going to step up in our own right and maybe looking at proposals of jointly managing the Northwest Passage, looking at ways we can do Arctic defense together again, the North Warning System, which we finally signed on to.

These are all ways that I think if we show a seriousness, I think our allies will quickly see that Canada is really back to use another Trudeau term. And I think it's long overdue. What's your grandfather's name? George Woods. I wrote about him in the post. I'll send it to you, Steve,

because even I didn't know about his history there. He said he never deployed overseas. Well, some of that flying in the Arctic Ocean looking for Japanese patrols with some of the hardest flying historians say in the war. And we had a little X, it was called X Squadron. It was originally based at Sea Island, which is now Vancouver International, and then they went up to Kodiak and a number of the bases in Alaska. And it was Canadians, RCAF, defending the United States.

So years ago, I presented a beautiful war art piece to Senator Dan Sullivan from Alaska, who had been complaining about Canada for many years. But he actually loves Canada. And when I showed him, he's still a Marine Corps JAG officer. When I showed him this print and told him about my grandfather's story, that's when the Americans say, yeah, let's get back to that partnership. That's what they want to see. And I hope we will. Great. Janice, Donald Trump, does he get credit for getting us to 2%?

You know, there is a graceless quality. It's too polite. And when you push people and you do it by shaming them and saying, where are you? You can do it with grace or you can do it, frankly, in quite an ugly way. When you do an ugly way, you may get what you want in the short term, but you leave a lot of hurt feelings behind you. And the public is a big part of the story. And they do not like a bully and they don't want to be bullied, Steve. So I think the way Donald Trump did this, there's no question.

He's changed NATO, and he's changed the willingness of NATO partners to finally step up and do what many of them, including us, and we were among the worst, should have been doing for a long time. But at the same time, NATO was fractured now as a result of the way Donald Trump did. The U.S. commitment to Europe is no longer credible in the same way. So it was a very, very, very heavy cost. You know, let me return to something that Aaron just said. The United States cannot defend the content without partnership with Canada, frankly. They need us. Anything that's going to come from Asia, in the worst nightmare scenario, will come over the north.

Okay? And it will come over Canada first. And if they are not partnered with us and interoperable, which means working close together, in the same systems with us, they will have to take it on alone in a scenario that is much less favorable to them than working with us. So beneath the rhetoric of Donald Trump, there's a long history, close collaboration. They ever knows it better than anyone else of senior officers in this country with their American counterparts. They're friendships. They go to each other's kids' weddings and, you know, it's that kind of really, really close

collaborative. That's still there, Steve. It's still there. Great, great point. On 9-11, Steve, it was a Canadian on charge on duty in Cheyenne Mountain in the United States. I met the American NORAD commander a number of years ago. I think it was General Shaughnessy, if I think the name correctly.

He was actually born in Canada and had family in my family. my riding in Oshawa, but he was the U.S. General Empire. So these relationships, as Jenna said, are far more important than anyone leader, anyone era. I've been to Arlington where Canada installed a monument, the Canadian Cross of Sacrifice, for the tens of thousands of Americans who came north to fight with our units in World War I. So we have a monument in Arlington, their most hallowed ground. I laid wreaths there as minister. And there's just this bond and this kinship that we can get back to. And other people were warning about it. You know, President Macron years ago called NATO brain dead because so many of the leaders weren't doing

it. Trump was talking about it. And unfortunately at the time, what was our prime minister saying, Justin Trudeau? It came out in diplomatic communiques that he was telling all other leaders that we will never make our NATO 2% target. What type of signal does that send, right? So our allies had good reason to be frustrated with us. I just think, and part of the reason I support the prime minister's efforts in this regard, I'll criticize them on other things, you know, as a good conservative. But I want us to be taken seriously again, and I appreciate the fact that this budget,

bringing it back to your original question is showing a serious approach to doing that and that international travel and that senior executive commitment to this from the prime minister right through to several cabinet ministers is showing that Canada is taking these issues seriously again. Got a couple of minutes left here. And Aaron, I want to ask you one of these sort of, oh, I don't know, touchy-feely questions. Janice and I have been exploring these issues since we started up this podcast in July of 2025, and she has certainly shared her knowledge about trying to describe the new geopolitical order that we now find ourselves in the middle of as 2025 comes to an end. How would you, if I put it to you, describe the kind of geopolitical

order we're in, neck deep in right now, one year into Donald Trump, barely into Mark Carney's tenure as Prime Minister of Canada, given what's going on in your Europe, what's going on in Russia, what's going on in China, the Middle East, et cetera. How would you describe it? Well, first, I'm an avid listener, first time caller to the podcast, Steve, so it's great seeing you guys regularly. When I speak on these geopolitical issues, and that's, I now work for a company that's based in Paris, but that has Canadian shareholders as well, and we have a global footprint.

I use the term de-globalization a lot, and I think de-globalization. and great power competition would be the best way I'd describe this. Most of the rules-based order, you know, that we've talked about being flaunted, not just by the Americans, but by others, is winding down. Trade is gone from increasingly being liberalized to now being managed, managed either through tariffs, some of which we hope will come down, managed through security considerations. So having a domestic steel and aluminum, as I said, the Americans want that shipbuilding

capacity. They don't want to hollow out their capacity. And managed through sanctions with the Magninsky sanctions, we're sanctioning tools of capital and other things that are either oligarchs or coming from nefarious origins. And so trade is being managed. There's rising new powers. You know, we haven't even spoken about India in this conversation yet. But the rise of India, soon, you know, the world's largest population, something that is rapidly developing military capability. You're seeing new powers emerge, older powers fighting for relevance and power like the Putin regime in Russia. Many of them hollowed out by demographics. So both China and Russia, in 10, 15 years deep, they will not be able to sail

their Blue Water Navy's and their military. So this is their final ability to control their near abroad, basically dominate their neighbors or even take them over in some cases. So the next 10 plus years will be deeply uncertain. And this de-globalization, the rules-based order on everything from GATT to the World Trade Organization through to NATO, everything has to be modernized or defended. because it's being attacked. And the final thing I'll say, the biggest thing that concerns me

actually, Steve, is actually digital warfare. The foreign influence we see on our social media platforms, I saw it in the interference in the 2021 election. But if you look and see how divisive conduct is on X, how young men are being brought into very, very, very troubling narratives on women, on on immigration, on sort of pluralism, our adversaries are using gray warfare as Janice said against us, and we don't even know it. So the TikTok debate in the U.S. has shown people a little bit of it. TikTok has changed how the Middle East and the situation in Gaza was viewed by politicians dramatically. And in a lot of cases, these are being influenced by our adversaries to destroy our social cohesion.

So we not only have to equip our military, we have to have a serious debate on how algorithms and foreign influence are undermining our institutions and even our trust in one another. So perhaps that's a whole other conversation, Steve, I don't mean to end on doom and gloom. I think Canada's got an incredible future,

provided we go into it eyes wide open. Janice, anything you'd add to that? No, you know, you just maybe to put one little twist to add to your vocabulary here and here. In a way, we're in the age of geo-economics, right? Yeah. Right. And so these sectors in time of globalization, economy operated relatively autonomously from either political or security concerns. Now what we're seeing, and we're going to live this in Canada for the next one, frankly, at a minimum.

Now what we're seeing is the economy is fused with security that derives from geography, where you are in the world, where regions are very, very important. So the whole conversation we had, you know, in this class, in a time we just spent together, Steve, is an understanding of our defense strategy as, simultaneously an industrial strategy. The degree that we've never, that's never been true to the degree that it is now, it makes it harder, but it puts the facts at the center now in a way that it hasn't been in Canada since World War II. Gotcha. I have time left enough to ask one last question to Air No Tool because I can't have

the former leader of the Conservative Party of Canada here without asking him a question about how he thinks the current leader of the Conservative Party of Canada will deal with his date with destiny in two months' time when his leadership is reviewed in Calgary at the conservative gathering that will take place out there. And just before you answer and let the record show that I'm not ambushing you with this question. You and I talked before we started recording about whether I had your permission to ask this question. And you said, leave it to the end and let's not dwell on it. And so that's what we're doing. We're leaving it to the end. And how do you think Pierre Paliab's going to handle January in Calgary?

Listen, Steve, I'm having connectivity problems now. I'm having a harp on that. Look, I think Pierre is very safe at his vote in Calgary. Really, the party, as it stands now, has never had a leader that commands so much kind of respect within it. The challenge he faces, and I know that this is what some in caucus are looking at, is if you're going to build a broad coalition to win government, to win the 416, the 905 here where we are, you're going to have to have a bigger tent.

And the bigger tent is not just going for the right and dealing with voices that are frustrated from the convoy or anti-vax. You have to be able to bring in more from the middle. And that's something Pierre will really have to commit himself to. I know there's short-term focus on the vote in Calgary, but as we saw in the election just five months ago or so, it was that voter that left those high poll numbers and gave Mark Carney a near majority.

So how do we win them back? And I think it's making sure that moderate, conservatives are not just reflected in the party, but some of the policies that come from that branch of the party really is what gave Stephen Harper his majority. And I was a part of that majority. So making sure that you're speaking to the whole country is something that's going to have to be key. Is Pollyev capable of doing that? I believe so, yeah. In fact, Gair was a really, really good performer in the house and would really practice and polish his approach on issues you know, with a work ethic that was second to none.

The issue right now, though, is he was so focused on the things that Trudeau had done poorly and, you know, that had really put the country in a bad position. And I agree, the country is really unequipped economically and strategically right now. But when Mr. Trudeau left and you have to offer a bit of a vision, you have to be able to carve a path yourself. So I really would like to see the party put forward some great ideas on defense on the Arctic. Mr. Carney has, you know, taken some of mine from 21, and I'm more than happy because politics is not just about cutting the ribbons. It's about changing the conversation. So I think the conservatives can actually offer a vision to tackle the world of geo-economics, as Janice is saying.

So critique where you need to. That is what the opposition has to do. Sometimes it's hard to not seem negative when you're the official opposition, but propose, too. Propose and provide a vision that's a positive one. Because soon, Prime Mr. Carney will have to start saying, you know, here's my deal with the Americans. Here's what we're doing on defense. Here's what, here's the pipelines I've kind of promised. Soon, he will have to defend his own record.

What we should really offer is a bit of hope and optimism for a Canada that, It's not broken, a Canada that has opportunity that's not being tapped yet. And I think if he takes that message coming out of Calgary, it'll be not just good for the party. It'd be good for our parliamentary democracy. Thank you for a great discussion about defense policy in this country to both of you. And Aaron, thank you for indulging my little curiosity about what's going to happen in 2006 in Calgary for the conservative leader today. Janice, Aaron O'Toole, great to have both of you on the Pagan podcast. as we'd like to say in this new medium, like, subscribe, and send us an email to the Paken Podcast

at gmail.com if you've got anything to say. Peace and love, everybody. Until next time. Bye-bye. Thank you, Steve. Thanks, Janice.