Canada’s defence minister has touted in Washington a plan for new military spending that could help the country meet the NATO target of 2% of GDP, something that a report from the parliamentary budget officer has called into question.
“I think I have a clear plan, and I know exactly what I have to invest in. I have to replace my destroyers, my surface ships. We have to [aussi] “replace our submarines,” Minister Bill Blair said on Monday at a conference in Washington, on the eve of the start of the NATO summit.
The minister also mentioned the contracts signed by Ottawa to acquire some 200 military aircraft in recent years, as well as the integration of anti-aircraft missile systems, as examples of major investments that will allow Canada to keep its promise to spend enough on its military.
“All these things will inevitably take us to 2%,” Blair promised. He provided no explanation for his calculations, but repeatedly stressed the importance of “spending well” the money.
All NATO member states have voluntarily committed to spending at least 2% of their gross domestic product (GDP) annually on defence, and to allocating at least 20% of this to the acquisition of new equipment.
The most recent projections presented by Ottawa so far indicated that Canada is far from reaching the 2% target. However, major investments are planned to increase the military budget to 1.76% of GDP by 2029-2030, according to the government’s calculations. However, Canada would simply not be able to spend all of this money, which would cause it to miss its target even further, according to the most recent estimates from the Parliamentary Budget Officer (PBO).
Inflated expenses
In a report published on Monday, the taxpayers’ watchdog estimates that Defence will only manage to spend the equivalent of 1.42% of GDP in 2029-2030 (with a peak of 1.49% of GDP in 2025-2026).
“The DPB is planning a more modest acquisition of major equipment than National Defence, as recent experience and various DPB reports suggest significant risks of delays and underspending,” the document explains.
The parliamentary agent believes that the army will not be able to spend 25 percent of the budget allocated to it by the government on new equipment, an estimate based on the organization’s procurement failures over the past six years.
“It’s just that when we make plans for the defence budget, we are quite optimistic about when the projects will be approved,” explains Philippe Lagacé, a professor at Carleton University and an expert in military procurement.
He compares the situation of the Canadian army to an athlete who has stopped playing sports for a long time: despite his efforts, he will not be able to get back in shape overnight. “Even if we want to increase our capacities significantly, it will take time because it is not easy to buy military equipment,” he analyzes.
The PBO also criticizes the government’s calculation based on an estimate of nominal GDP growth that differs from the projections that the Department of Finance itself uses for its budget, distorting the conclusions. Ottawa, on the contrary, defends its methodology, which is shared by NATO.
Trudeau defends his record
In a speech at the Canadian Embassy in Washington on Tuesday, Prime Minister Justin Trudeau noted that the country spent the equivalent of less than 1% of its GDP on the military when he came to power in 2015.
“We have invested more in our troops, in their capabilities, all this while providing more assistance to our allies,” he said. Contrary to what Minister Blair had said the day before, he did not mention a plan to meet NATO’s 2% requirement.
The office of the Minister of National Defence disputes the calculations of the Parliamentary Budget Officer. “We have implemented new measures to close this gap [de 25 % entre les investissements annoncés et les sommes dépensées, comme] new measures to reform our procurement processes, to move faster,” writes the Duty Blair’s communications director, Daniel Minden.
The Canadian prime minister will be in Washington until Thursday to attend the NATO summit. The meeting brings together American President Joe Biden, who is struggling with a section of his party that wants him to step down ahead of the upcoming presidential elections, and French President Emmanuel Macron, whose country is plunged into political uncertainty after the last French legislative elections.
Justin Trudeau announced last week the appointment of General Jennie Carignan as the first woman to lead the Canadian Armed Forces, starting next Thursday. Several experts have mentioned recruiting and replacing outdated equipment as the priority issues already waiting on his desk.