Canadian Prime Minister Mark Carney
CPAC
The Carney Liberals have announced they are spending $2 billion on Ukraine’s war effort as Canada slides further into economic hardship.
“We're investing today $2 billion in new military assistance for Ukraine,” said Prime Minister Carney on August 24 at a Kyiv, Ukraine press conference.
“$800 million of this will help strengthen Ukraine's arsenal for the most urgently needed defense equipment, drones, ammunition, armoured vehicles."
"And we had a discussion today about specifying and targeting that assistance where it will have the greatest impact, and we will do so. As the president mentioned, we're proud to be the first non-European nation to participate in NATO's PURL (Prioritized Ukraine Requirements List) program.”
Carney added, “The package of the most urgently needed military assistance that will be delivered here next month, we'll also fund over $200 million for the joint production of defense materials in our two countries, particularly advanced drones, using Canadian suppliers, and another $165 million for critical multilateral efforts, including again, enhancing drone resources, as well as more money for humanitarian assistance to support civilians affected by this horrific war.”
As Carney spends billions on Ukraine, Canada's economy is facing significant challenges, primarily driven by U.S. tariffs and trade uncertainty, leading to economic stagnation and a per capita recession.
Real GDP growth has been flat or slightly negative, with a reported contraction of 0.1% in April and May 2025, and an estimated 1.5% annualized decline in Q2 2025.
Unemployment has risen to 6.9% as of June 2025, with 41,000 jobs lost in July, particularly in trade-sensitive sectors like manufacturing, which saw a 1.9% output drop in April. Per capita GDP has declined by 3.4% from Q2 2022 to Q4 2023, reflecting stagnating living standards and weak productivity growth, which has averaged only 0.3% annually under the current government.
Inflation remains close to 2%, but underlying pressures have pushed it to 2.5% excluding indirect taxes in June 2025, driven by higher non-energy goods and shelter costs. Business investment is at its lowest level since World War II, and Canada ranks poorly in G7 investment in intellectual property and technology, exacerbating long-term competitiveness issues.
Meanwhile, Canada's military is critically underfunded, with defense spending at approximately 1.39% of GDP in 2024, well below the NATO target of 2%, resulting in outdated equipment and personnel shortages. This underinvestment has weakened national security and strained Canada's ability to meet international commitments, with only $8 billion in new defense funding pledged over five years, deemed insufficient by analysts.