As Justin Trudeau prepares to attend the next NATO summit in three weeks, a report warns that the North Atlantic Treaty Organization’s goal of seeing its member countries invest 2% of their GDP in military spending “remains out of medium-term reach” for Canada. To achieve this, the Canadian government should increase its defense budgets by $75 billion over the next five years. A prospect that is not impossible, but very improbable, believes the Parliamentary Budget Officer.
The federal government will spend $36.3 billion on military spending this year — equivalent to 1.33% of Canada’s gross domestic product (GDP). This envelope should reach 51 billion in 2026-2027, according to the government’s budget forecasts – or 1.59% of GDP, predicts the office of the Parliamentary Budget Officer (PBO).
However, to reach 2% of GDP, defense spending would have to be increased by $18.2 billion this year. The sum would shrink somewhat successively for the following years, to amount to 13 billion additional expenditures in 2026-2027.
Justin Trudeau’s government could always make the political decision to significantly increase its military budgets, if it so wished. “I would personally have doubts about the ability of the departments to deliver the goods in the short term”, however observed the Parliamentary Budget Officer, Yves Giroux, in a virtual press conference Thursday to present his report.
Because the Ministry of Defense is already struggling to recruit as many new members of the Armed Forces as the objective it had set itself. Spending on new projects provided for in the latest federal defense policy, unveiled in 2017, has also been delayed, recalls Mr. Giroux. Defense expert David Perry agrees with this reading.
The Trudeau government promised in its last budget to work on a new defense policy. The last had increased military spending by 70% over ten years. But even if the federal government promises new increases in investment, the lion’s share of these may well not be expected until the end of the projected decade, further notes in an interview with Mr. Perry, who chairs the Canadian Global Affairs Institute.
Isolated within NATO
Canada is currently ranked 25e rank of the 29 NATO member countries in terms of military spending. Eight countries are currently exceeding the spending target of 2% of their GDP, the Alliance reported this spring based on 2021 budget estimates.
However, seven countries that were at the bottom of the pack with Canada have recently pledged to increase their military spending to meet or exceed the 2% target, reports David Perry.
According to him, this could mean that the discussions at the NATO summit, scheduled for Madrid at the end of June, dwell less on the perpetual question of the sharing of the contributions of the member countries within the Alliance. Especially since the war in Ukraine and Finland’s and Sweden’s applications for NATO membership will be top priorities.
“But the situation is such that Canada finds itself increasingly isolated. This could increase the level of discomfort for Canadians in these meetings,” observes Mr. Perry.
The Trudeau government injected an additional $8 billion for defense in its spring budget. A sum which, however, did not make it possible to significantly approach the NATO objective.
The Atlantic Alliance also encourages its member countries to devote 20% of their expenditure to military equipment. In this regard, Canada is 27e rank of the 29 partners, its expenditure having increased between 2014 and 2021 but only by 13% to 18% according to the PBO.