As pressure mounts on the United States and its allies to take strategic action against the Islamic State in Iraq and the Levant, commonly known as ISIS, Canada’s financial contribution (or lack thereof) to Western democratic defence is taking severe heat in political forums and the media. In response, Canadian Prime Minister Stephen Harper has pledged further action in support of growing international efforts to combat ISIS and the persistent threat of Islamic extremism in the Middle East. Harper’s promise came this week while speaking with other world leaders in London, England in response to the horrific execution of a second US freelance journalist, Steven Sotloff. Calls for an increase in Canada’s financial contribution to Western defence are reportedly growing stronger from within the North Atlantic Treaty Organization (NATO), putting the nation in an awkward and touchy situation. In today’s post we briefly examine the economics of Canada’s post-1945 defence policy, to provide a historical perspective to this most recent predicament.