To meet the NATO objective | Canada expected to increase military spending by $75 billion in five years
(Ottawa) The federal government should increase military spending by $75.3 billion over the next five years to meet the NATO objective of spending 2% of its GDP on defense.
This is a considerable increase and out of reach in the medium term, estimates the parliamentary budget officer, Yves Giroux, in a report published Thursday on the country’s military spending.
“According to our analysis, the 2% of GDP target remains out of reach in the medium term. However, we expect the gap between military spending as a percentage of GDP and the 2% target to narrow over the next five fiscal years,” Mr. Giroux said in his report.
According to figures provided by the federal government, Canada’s military spending will increase from $36.3 billion in 2022-2023 to approximately $51 billion in 2026-2027. This 15 billion increase will increase the country’s military expenditure from 1.33% of GDP to 1.59%.
Since Russia declared war on Ukraine, there has been increasing pressure on the Trudeau government to dramatically increase defense spending so that Canada can meet NATO goals.
Other countries such as Germany have revised their military spending upwards in order to increase their security in the face of Russian expansionist ambitions.
In her latest budget, Finance Minister Chrystia Freeland announced $8 billion in new defense investments over the next five years and launched a review of defense and national security policy.
A large part of this sum, $6.1 billion, is to be used for the modernization of the North American Aerospace Defense Command and in support of NATO. The exact amounts have not yet been determined as they must be negotiated with Canada’s allies, but the budget indicated that some of this money will be used to purchase new equipment for the Canadian Armed Forces and to invest in the technology they need.
In 2006, NATO members agreed to set a goal of devoting at least 2% of their GDP each year to defense spending.
In his report, the Parliamentary Budget Officer notes that Canada’s nominal defense spending increased by 67% between 2014 and 2021. It was therefore up about 40% in 2021 compared to 2014, or 1.4 % of GDP versus 1.0%.
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