This extra cash should be in addition to the new money pledged to the military by the Liberal government in last spring’s budget – a funding boost aimed at tackling the growing global instability caused by Russia’s invasion of Ukraine. NATO allies have long measured their defense spending as a percentage of the size of their national economies. NATO urges Member States to commit two per cent of gross domestic product (GDP) to maintaining and operating their armed forces. Canada spends almost that amount. It spent about 1.4 percent of GDP on the military in 2021. The budget of the Liberal government, which is coming for final approval in the House of Commons, will contribute an additional $ 8 billion in defense credits over the next five years. This barely moves the needle towards the two percent target of NATO. will bring Canada’s defense spending to 1.59 percent of GDP.
“It’s a matter of policy choices”
Parliamentary Budget Officer Yves Zirou said on Thursday that the federal government could achieve the alliance’s goal if it chooses to do so. “If the government wanted to achieve this goal, it could decide to allocate extra money to achieve that goal,” Zirou told reporters after his office’s assessment was published. “If he could do it this year, [it’s] very unlikely given the capacity constraints, but in the medium term if they wanted to. It’s a matter of policy choices. “ Parliamentary Budget Officer Yves Zirou expects to appear before the Communities Finance Committee at Parliament Hill in Ottawa on March 10, 2020. (Adrian Wyld / The Canadian Press) The invasion of Ukraine and the growing international tension with Russia have turned the spotlight on defense spending. Many of Canada’s NATO partners are committed to achieving the two per cent target, which was set in 2006 and then strengthened in 2014 following Moscow’s annexation of Crimea. The sense of urgency among the allies is better demonstrated by Germany, which – like Canada – has failed to achieve this goal. In the spring, Chancellor Olaf Solz reversed decades of German foreign policy, agreeing to send weapons to Ukraine and pledging to meet the two per cent defense spending target. The Liberal government in Canada has faced constant criticism – from Opposition Conservatives and some allies, especially the United States under former President Donald Trump – for not having a plan to achieve NATO’s goal. Allied leaders can expect new pressure to hit the target when they meet in Madrid, Spain later this month to discuss the war in Ukraine and plans to modernize the military alliance after 2030. Zirou said NATO’s definition of defense spending is broad and includes more than direct military spending. In Canada, for example, both the Canadian Coast Guard and veterans’ pensions are included in the calculation of the country’s military spending. While the federal government’s plans for defense spending have been detailed, the plan to renew the Coast Guard fleet – which will require the addition of up to 18 ships – is less clear. Giroux said that, depending on how Coast Guard spending increases, there could be an impact on Canada’s total military spending. Some of the Coast Guard’s plans “could well be beyond the five-year horizon” of the report presented on Thursday. “But yes, you are right,” he added. “Coast Guard spending could help Canada achieve its two percent target.”
