Soldiers of the 41 Canadian Brigade Group fire a Howitzer during training at Canadian Forces Base Suffield in Alberta, east of Calgary, on Oct. 19, 2024.Jeff McIntosh/The Canadian Press
U.S. President Donald Trump announced Thursday the United States will be asking all member countries of NATO — which includes Canada — to increase military spending to 5 per cent of annual economic output.
Such a requirement of members of the western military alliance would require a steep increase in budgetary expenditures for Canada. David Perry, president of the Canadian Global Affairs Institute, estimated Mr. Trump’s proposal would cost Canada $100-billion in additional annual spending.
Canada is still a laggard in meeting the North Atlantic Treaty Organisation’s current target of spending 2 per cent of gross domestic product on defence. Right now it spends about 1.37 per cent, but Prime Minister Justin Trudeau’s government has pledged Canada will reach 2 per cent by 2032.
Canada will meet NATO’s defence-spending target by 2032, Trudeau says, but criticizes the benchmark
“I’m going to ask all NATO nations to increase defence spending to 5 per cent of GDP, which is what it should have been years ago,” Mr. Trump said in a virtual speech Thursday to the World Economic Forum in Davos, Switzerland.
“It was only at 2 per cent and most nations didn’t pay until I came along. I insisted that they pay, and they did, because the United States was really paying the difference at that time, and it was unfair to the United States.”
Mr. Trump has previously threatened to withdraw from NATO if member countries don’t increase defence spending. He did not repeat this threat Thursday.
Mr. Trudeau did not directly respond to Mr. Trump’s 5 per cent proposal but defended Canada’s military spending record, saying his government has raised defence expenditures from the Stephen Harper era and set in motion increases for the years ahead. Canada’s spending as a percentage of GDP dipped to slightly more than 1 per cent in 2014, the year before Mr. Harper ended his term as prime minister, according to NATO figures.
Mr. Trudeau said Canada is on a path to reach 2 per cent. “We’re going to continue with our NATO partners to make sure we’re doing everything necessary to keep Canada safe,” adding later this country in on a strong track to invest in “protecting the North and protecting Canadians in a complicated world.”
The Canadian government under Mr. Trudeau has yet to publish a fully funded plan to raise military spending to 2 per cent of GDP. Defence experts have calculated it would cost Canada $17-billion in additional defence spending just to reach 2 per cent.
Mr. Perry said it was pretty clear at the NATO leaders’ summit in Washington this past July that member countries had already begun a debate about moving the defence spending target beyond 2 per cent of GDP. At the time, then-NATO secretary-general Jens Stoltenberg said at the time that 2 per cent was now the bare minimum. This target was “no longer some kind of ceiling” but “the floor for our defence spending,” Mr. Stoltenberg said last July.
Mr. Perry said Canada is in for a rough ride as one of the few NATO allies that has not yet offered a concrete plan to hit 2 per cent.
“We don’t have any plan to reach 2 per cent so any target beyond that is going to add another degree of complexity and difficulty,” he said.
Mr. Perry said Canada seems to have miscalculated by lagging in even reaching the NATO standard. Regardless of what the new alliance defence spending target turns out to be, he said, Ottawa is going to face serious pressure.
“I think it’s a very real and Canada has significantly misread this to be something that was a phenomenon of the first Trump administration.”
No NATO members currently spend an amount equivalent to 5 per cent of GDP on defence.
The U.S. military budget is currently equal to about 3.38 per cent of its GDP, according to NATO estimates released in the summer of 2024. Poland’s budget is about 4.12 per cent of its annual economic output, according to NATO figures.