Just two weeks after Canada finally pledged to meet NATO’s 2% of GDP defence spending target, the military alliance has moved the goalposts.
What happened: Canada, alongside NATO’s 31 other member nations, signed a joint statement in The Hague yesterday committing 5% of its annual GDP to defence spending by 2035. Prime Minister Mark Carney previously said that meeting this goal will cost the feds up to $150 billion a year.
-
For context, Canada plans to spend just $62.7 billion on defence in the 2025-26 fiscal year to hit the old 2% target.
Big picture: The 5% target is split into two buckets, with 3.5% going to core military spending (munitions, jets, other things that go boom), and 1.5% on defence-related infrastructure.
-
Meeting the latter target shouldn’t be too big of a reach as it can be used on dual-purpose civilian or business infrastructure, like ports, airports, and telecoms.
-
Meeting that 3.5% target could prove tricky, though Carney said he was using the meeting to discuss potential purchases of European fighter jets and submarines.
Why it matters: Carney openly said that trade-offs will be necessary as defence spending ramps up near the end of the decade, though he didn’t say what areas might see cuts. Ultimately, it’s the price the country might have to pay to appease its military allies.—QH