At the recent NATO Summit, Prime Minister Justin Trudeau unveiled a timeline for Canada to meet the alliance’s defence spending target of two per cent of gross domestic product (GDP) by 2032.
During the summit, Trudeau acknowledged the longstanding pressure on Canada to increase its military spending. “Canada fully expects to reach NATO’s two per cent of GDP spending target by 2032,” he stated. The Prime Minister also emphasized the establishment of a regular review cycle in Canada’s defence policies, including a defence policy update in 2028. “Through that process, we will continue to explore opportunities that will further increase defence spending and advance Canada’s strategic interests,” he added.
Currently, Canada allocates approximately 1.37 per cent of its GDP to defence, well below the NATO benchmark. The government has outlined a plan to increase this figure to 1.76 per cent by 2030. However, details on how the country will bridge the gap to reach the full two per cent target by 2032 remain sparse. The Parliamentary Budget Officer has projected that achieving this goal will require an additional $18 billion in annual spending.
Meeting the two per cent target presents significant fiscal challenges. Canada is already contending with annual deficits of about $40 billion, and the government has committed to maintaining a downward trajectory for the debt-to-GDP ratio. How the government plans to reconcile this with the substantial increase in defence spending is unclear. Critics have pointed out the lack of concrete details in the government’s plan, raising questions about the feasibility of such an ambitious commitment.
While specifics are limited, the government has made some commitments. Among them is the purchase of 12 new submarines, though details regarding suppliers and delivery timelines remain undetermined. Additionally, there are plans to acquire new long-range missiles and replace aging tanks and light armoured vehicles.
On the domestic front, Trudeau’s commitment has been met with skepticism. During a press conference, the Prime Minister candidly admitted his reservations about the two per cent target, describing it as a “crass mathematical calculation” that does not fully capture the extent of Canada’s contributions to NATO. “We continually step up and punch above our weight,” he asserted, questioning the value of the two per cent figure as the sole measure of commitment to the alliance.
As Canada looks towards meeting its 2032 defence spending target, the federal government faces the dual challenge of significantly increasing military expenditures while maintaining fiscal responsibility. The upcoming defence policy update in 2028 will be a critical milestone in this process, potentially providing more detailed plans and strategies for achieving the two per cent goal.
For now, the announcement serves as a headline commitment, aiming to address criticism and demonstrate Canada’s dedication to the alliance. However, the path to realizing this commitment remains uncertain, with many details yet to be clarified.