A Canadian Defense in the 1980s question, lets set the stage...
Brian Mulroney is sworn into office as the 18th Prime Minister of Canada on September 17th 1984.
One of his first meetings is with his new Defense Minister Robert Carman Coates (*facepalm*, small POD, he does not leave those documents in a 'gentlemans club' in Lahr as in OTL). The discussion covers many topics but the biggest one is Canada's commitment to NATO and how it has suffered under the previous Liberal governments. Of particular worry is the age of the naval fleet and of the personal soldiers gear.
The PM knows he must make cuts, but decides DND is not the place for them. He devises a plan with Coates to raise Defense spending to 2.0% of GDP for the next 4 years with the possiblity of keeping it up depending upon the current world situation at that time.
Of particular import is that the equipment should be sourced in Canada where possible, even if the equipment will only be 'good enough', not the ideal the Forces want. Within Canada it is decided that contract awards will be given on specifications/value, regional politics will not play a part in contract awards.
The meeting ends and the Defense Minister goes off to meet with the planners at the DND HQ with a smile.
***No specific overall POD here, maybe words from the other NATO members (GB, Germany?) that would appeal more to a Conservative ear. As for the sourcing changes I claim right of handwave there. Thats how I think it should be run anyways (new Canadian built DHC-5 vs C27J for FWSAR as an example). So don't overthink the 'how we got here', just go with the 'where do we go from here'.***
At the time of Mulroney entering office Canadian defence spending was at about 1.3% of GDP. A bump of 1.2% would be around $20 billion extra per year (forgive me if my math is wrong, I checked about 4 sources to get that rough number).
Where would this extra money be spent?
I think that Canada may have kept it's M109s and had them rebuilt to new standards. The Leopard C1s may have been upgraded earlier as the tech came on the market. The Halifax class (Canadian Patrol Frigate Project) would have happened faster and that the last 4(?) units may have been built with the longer hulls as intended to allow more space for future system enhancements.
Basically put, if Mulroney decided to do a Canadian version of what Ronnie did to the US Military what would it have looked like?