Canada’s uphill battle to meet NATO’s defence spending target looks like it's about to get a lot steeper.
What happened: NATO allies are drafting an agreement for member nations to boost defence spending to 5% of their GDP by 2032. If allies agree to the new benchmark, it would mark the biggest increase in Western defence spending since the end of the Cold War.
Catch-up: Canada is one of eight NATO countries that still haven’t hit the target of spending 2% of GDP on defence set out in 2014. Ottawa spent about 1.37% of GDP on defence last year, or $41 billion, but Prime Minister Mark Carney has committed to hitting the 2% target by 2030.
- President Trump, who has driven the push for the new 5% target, has repeatedly called out Ottawa’s failure to hit the target and said the U.S. won’t protect countries that underspend on defence.
Why it matters: Nearly tripling defence spending would inevitably crowd out other priorities like housing and healthcare — but continuing to miss the NATO defence targets could hurt Canada’s standing with its allies and anger an already volatile U.S. administration.
Zoom out: The feds have claimed that the Department of National Defence is so understaffed that it can’t even spend the money it already has. Until that changes, it’s hard to imagine handing over another ~$70 billion a year.—LA