Ottawa Signals Major Military Spending Increase too Meet NATO Obligations – Canada is poised for a considerable increase in defence spending, driven by pressure from NATO allies and a commitment to reach the alliance’s target of 2% of GDP by 2035. The move is expected to inject billions into the Canadian defense industry, sparking debate about economic benefits and responsible spending.
The commitment to the 2% GDP target, initially made at the 2023 NATO summit in Vilnius, Lithuania, represents a meaningful shift for Canada, which has consistently fallen short of the benchmark. Current estimates suggest Canada’s defense spending is around 1.39% of GDP, equating to approximately $30.8 billion CAD in 2023-24. Reaching the 2% goal by 2035 would require an additional $30 billion annually, based on Canada’s current GDP of roughly $2.14 trillion CAD.
While the increased investment is welcomed by defense industry stakeholders, concerns remain about ensuring value for money. Industry representatives emphasize the importance of maximizing the economic impact of these expenditures within Canada.
We must think about the impact of this money on the Canadian economic situation
said Chris Pogue, president of Calian Defence and space, a Kanata, Ontario-based company specializing in defense and security solutions.Pogue, a former Royal Canadian Air Force pilot, stressed the need for strategic procurement.
The increased spending could also be motivated by a desire to diversify Canadian trade relationships, particularly considering ongoing trade tensions with the United States. The US currently accounts for approximately 75% of Canada’s exports.
Quebec Premier François Legault has expressed hope that the increased defense budget will benefit Quebec-based companies, particularly those in the aerospace and critical minerals sectors. Quebec’s aerospace industry, concentrated in the Montreal region, employs over 40,000 people and generates approximately $15 billion in annual revenue.
I do not think that we should let the urgency take precedence over smart purchases, but things can evolve quickly if we have a clear idea of the management we want to take and the type of capacity we need
Pogue added, advocating for a deliberate and focused approach to defense procurement.
Source: CBC News, by Karina roman
