Prime Minister Mark Carney walks out of a CC-130 Hercules aircraft while touring IMP Aerospace in Halifax on Thursday. Canada's defence spending is rising sharply.Darren Calabrese/The Canadian Press
The rearmament of Canada is picking up – some – speed, as evidenced by the official spending rankings released by the North Atlantic Treaty Organization last week.
In those rankings, Canada is expected to spend 2 per cent of gross domestic product on defence, the bare-minimum threshold to which alliance members have committed. It’s been at least 35 years, at the tail end of the Cold War, since Canada could make that claim.
That means that this country, rather being dead last on that metric, is now tied for dead last out of 32 countries. Canada still falls below the average spending level of NATO on a GDP basis, even when the outsized military budget of the United States is excluded.
Still, there is no doubt that defence spending is on the rise, and sharply. Using 2021 prices and exchange rates, military outlays are forecast to jump to $43.9-billion in 2025, 76 per cent higher than the $24.9-billion Canada spent in 2022. The emerging issue is the need to better understand how the Liberals propose to spend that money.
Opinion: Ottawa’s defence spending plan has ambition, but half of the equation is missing
It was in February of that year that Russia launched its unprovoked and illegal war of aggression against Ukraine, fundamentally altering the strategic outlook for Canada and the rest of NATO. A land war in Europe involving NATO became a plausible worry for the first time since the 1980s. The return of Donald Trump as U.S. president put further pressure on Canada and other NATO laggards to rebuild their militaries.
Gone is former prime minister Justin Trudeau’s dismissal of NATO spending targets as a “crass mathematical calculation” and an artfully vague plan to meet that target sometime in the next decade (without any credible plan for doing so).
By contrast, Prime Minister Mark Carney is committing serious dollars, immediately. Last fall’s budget projected $84-billion in new funding over five years. Defence analyst David Perry, president of the Canadian Global Affairs Institute, estimates that the new expenditures add up to more than $300-billion over the next 20 years.
That spending is just the start; NATO members have committed to boosting core defence spending to 3.5 per cent of GDP by 2035, with an additional 1.5 per cent of GDP spent on defence-adjacent infrastructure.
Last week, Mr. Carney said the government plans to spend half a trillion dollars over the next decade on everything “from submarines and aircraft to drones, sensors and radar systems.” That one line gives a sense of the breadth of expansion. But details are lacking, a situation further muddied by the varying ways of measuring expenditures. Some spending commitments are stated on a cash basis (when dollars go out the door) while others are tallied on an accrual basis.
A case in point: Four years ago, then defence minister Anita Anand announced a plan to spend $38.6-billion, on an accrual basis, over two decades to bolster Canada’s contribution to NORAD.
Three weeks ago, Mr. Carney announced new details of the NORAD plan in Yellowknife – but the stated price tag was $87-billion, on a cash basis. The difference arises from the two-decade timeframe that Ms. Anand used. Beyond that point, the government would still continue to record expenses on an accrual basis. Eventually, that cumulative tally would intersect with the $87-billion cash cost.
The numbers jumble was bad enough when the Trudeau Liberals used it to muddy the waters on what they were doing (or more precisely, not doing) on defence.
The Carney Liberals have much greater ambitions for national defence, thankfully. But that makes it all the more urgent for a cohesive accounting of the rearmament plan.
That should be grounded in a new defence policy, last updated in the summer of 2024. Much has changed since then geopolitically and fiscally. The government needs to make clear its broad strategic objectives, including how it intends to adapt to the rise of drone warfare. Will Canada focus on traditional types of military power, such as capital ships, for instance? Or will the focus be on supporting the use of unmanned air and marine drones?
Next, a spending roadmap is needed, detailing personnel, equipment and infrastructure outlays, year by year. Canadians cannot be left to fill in the blanks on how that half-trillion will be spent. The Liberals have, at long last, finally gotten the math of defence spending right. Now they just need to show their work.
Editor’s note: An earlier version of this article incorrectly stated the deadline for NATO members to boost defence spending to 3.5 per cent of gross domestic product is 2025. It is 2035. The earlier version also used figures from a 2025 NATO report.