(Washington) Ignoring criticism, Defense Secretary Bill Blair is defending his government’s commitment to invest $60 billion annually starting in 2032, a promise made earlier this week at the end of a NATO leaders’ summit in Washington, DC.
“This number didn’t come out of nowhere,” Blair reiterated Friday after returning to Toronto. “It’s the result of a lot of hard work.”
Prime Minister Justin Trudeau announced Canada’s new defence budget plan on Thursday, just hours before the end of a three-day summit and after days of pressure from NATO countries.
PHOTO ADRIAN WYLD, THE CANADIAN PRESS
Defence Minister Bill Blair stands with Justin Trudeau at a press conference Thursday as part of the NATO summit.
Alliance members agreed to spend at least the equivalent of 2 percent of their national gross domestic product on defense. Canada was the only participant to arrive at the summit without a plan to meet the goal.
While Mr. Trudeau’s commitment was not detailed, Mr. Blair announced Friday that it would amount to about $60 billion a year starting in 2032, based on projections that Canada’s GDP would be just over $3 trillion that year.
Mr. Blair said the estimated projection came from NATO. It uses models from the Organisation for Economic Co-operation and Development, of which Canada is also a member.
“It was important to be realistic about the time it would take to make these investments, and to do it in the right way,” the minister said. “We thought the best and most verifiable date we could provide to our allies was 2032.”
Assurance and distrust
The announcement brought some reassurance, with NATO Secretary General Jens Stoltenberg stressing at a news conference on Thursday that it meant all allies now had a timetable.
PHOTO ELIZABETH FRANTZ, REUTERS
NATO Secretary General Jens Stoltenberg
British High Commissioner to Canada Susannah Goshko and US Ambassador to Canada David Cohen both posted praise for the commitment on social media.
But some also worried that the promise would violate at least one of the federal government’s budgetary goals.
Randall Bartlett, senior director of Canadian economics at Desjardins, published an online analysis showing that the plan could jeopardize Ottawa’s need to maintain a declining deficit-to-GDP ratio for 2024-25 and keep deficits below 1% in 2024-25, 2026-27 and beyond.
He noted that the federal government “can increase revenues or reduce spending elsewhere to finance increased defense spending without increasing the size of the deficit.”
Conservative Leader Pierre Poilievre has announced his refusal to commit to meeting the alliance’s spending target if he comes to power, saying he does not want to make promises he cannot keep.
He said he would first have to put out the “dumpster fire” in Canada’s finances when he came to power before considering such a spending increase.
The 10 Labors of Ottawa
Mr. Blair did not provide details or figures on how Ottawa will keep or pay for its promise, but outlined 10 goals that Canada wants to achieve that were included in the April defence policy update.
These include strengthening ground-based air defense, modernizing artillery capabilities and acquiring a suite of surveillance and strike drones.
By far the most expensive item is the renewal and expansion of Canada’s submarine fleet.
Mr. Trudeau and Mr. Blair announced this week that Canada was beginning the procurement process to buy up to 12 conventionally powered submarines that can navigate under ice.
Mr Blair would not say on Friday how much it might cost.
Lack of details
The lack of details attached to the new timetable has raised skepticism among some business leaders and stakeholders about the reality of expecting increased spending.
Business Council of Canada CEO Goldy Hyder said the target year alone does not “clarify how new defence investments will be financially sustainable.” He added that it was unlikely to allay the concerns of international leaders.
Matthew Holmes of the Canadian Chamber of Commerce called the announcement “disappointing, to say the least.”
Responding to criticism, Blair said increased defence spending means the government has an opportunity to build better relationships with Canadian industry and workers.
“It’s not just about spending money as quickly as possible,” he said. “It’s about investing.”