Canada won’t meet the defense spending pledge Trudeau made to NATO

Canada will need to increase its defense spending by nearly half if it wants to meet the obligations that Justin Trudeau agreed to as a NATO member state according to a report from the Parliamentary Budget Office. 

Canada’s relationship with its NATO allies has been deteriorating in recent months after the federal government failed to provide a plan for how Ottawa planned to meet NATO’s member state defense spending target. 

The Washington-based think tank Heritage Foundation noted that Western European nations have long drawn criticism for not working to meet the 2% of Gross Domestic Product (GDP) defense spending target NATO member states agreed to work towards in 2014. 

Canada currently spends a meager 1.37% of its GDP on defense spending, far below the 2% spending threshold demanded by NATO despite having the sixth largest economy in NATO. 

“Canada is more than capable of meeting its obligations and has done so before,” The Heritage Foundation noted. “Canada’s continued underinvestment leaves its NATO obligations unmet and weakens the overall defense of both the alliance as a whole and the North American continent.”

In April 2024, Canada released its latest national security policy which revealed that the federal government planned to spend 1.76% of the country’s GDP on defense spending by 2029-2023. 

“This is a significant increase in defense spending and is a major step forward in our effort to reach 2% of GDP, as agreed by NATO members at the Vilnius Summit in 2023,” Canada’s ‘Our North, Strong and Free: A Renewed Vision for Canada’s Defence' national defense policy plan read. 

However, Canada’s spending plan under its new national defense policy was criticized by its allies, especially the U.S., and for good reason. CTV News noted in an October 30th article just how badly Ottawa was failing its NATO allies. 

“All 32 NATO allies have agreed to spend at least that amount on defense, but Canada is one of the only nations that has not presented a plan to reach the target,” CTV News reported, noting 23 allies will meet the 2% spending target by the end of 2024. 

In June 2024, Prime Minister Justin Trudeau pledged that Canada would meet NATO’s 2% spending target by 2032. However, hitting that target would require a near-doubling of the country’s current defense spending according to the Parliamentary Budget Office. 

“We can say with confidence and assurance that we will hit the 2-percent spending mark by 2032,” Trudeau explained during a press conference at the 2024 Washington Summit according to Politico. 

“Allies have been pleased to hear that we have a plan and a timeline to get to the 2 percent, but mostly they’re interested and excited about the kinds of investments we’re making,” Trudeau also said. However, Canada isn’t likely to meet Trudeau’s pledge. 

In a report published by the Parliamentary Budget Office (PBO) on October 30th, it noted that Canada’s defense spending would need to reach $81.9 billion by 2032-2033 to meet its NATO obligation, far higher than the $57.8 billion it is forecasted to reach in 2029-2030.

The Parliamentary Budget Office also reported figures in Ottawa’s new national defense policy were “based on an erroneous GDP forecast” and when adjusted showed that Canada is only likely to allocate 1.58% of its GDP on defense spending in 2029-2030. 

“Using PBO GDP figures, which are broadly in line with the Department of Finance and other independent sources, the recalculated forecast places defense spending at just 1.58 percent of GDP by 2029-30,” the report explained. 

The report also noted that Canada is expected to spend $41 billion on defense in the 2024 fiscal year. CTV News noted that Trudeau has yet to provide a plan on how his government will meet his pledge to NATO. 

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