Canada Targets NATO's 2% Military Spending by Next Spring

Post by : Mina Rahman

On Thursday, Canada’s defence minister assured legislators that the federal government remains on course to achieve NATO’s demanding target of allocating two percent of gross domestic product to military spending by next spring.

David McGuinty expressed optimism about meeting this goal, despite concerns raised by Opposition Conservatives regarding the Department of National Defence’s historical issues with fully utilizing its yearly budget.

A significant step toward this target was marked by the U.S. Defense Security Cooperation Agency's approval of a $3.6 billion munitions deal with Canada. This acquisition will include thousands of munitions, such as smart bombs compatible with CF-18s and future F-35s or F-39 Gripens, aimed at replenishing the Royal Canadian Air Force's arsenal and highlighting Canada’s dependence on U.S. arms.

Last spring, Prime Minister Mark Carney revealed intentions to meet NATO's spending goal by the end of the fiscal year, augmenting the defence budget by $9.3 billion. This move coincided with NATO’s adjustment of its guideline to five percent of GDP, encompassing military expenditure and defense infrastructure.

Canada’s total defence spending for the current fiscal year stands at roughly $63 billion, with new investments focused on replenishing weapon inventories that have suffered from chronic underfunding and contributions to Ukraine.

McGuinty reiterated that the department is vigilantly tracking this spending and is hopeful of meeting the March 31 deadline. A considerable portion of the newly allocated funds has already been directed towards increasing military personnel salaries.

From 2020 to 2023, National Defence experienced the inability to utilize approximately $5.37 billion, with some funds postponed for future allocations and others returned to the federal treasury. Historical challenges have plagued capital spending on new military equipment, with the Parliamentary Budget Office citing that $18.7 billion in planned purchases under the 2017 Liberal defence strategy failed to materialize.

Achieving the two percent threshold bears significant political implications, particularly given ongoing pressures from allies like the United States since the 2014 NATO summit in Wales.