Canada's Defence Spending Target Faces Challenges

A report by Canada's Parliamentary Budget Officer (PBO) indicates that the government must nearly double its defense spending to meet NATO's target of 2% of GDP by 2032, rising from a projected $41 billion to approximately $82 billion. The PBO critiques the government's earlier projections, which estimated military spending would reach 1.76% by the end of the decade, stating that these were based on erroneous GDP growth forecasts suggesting a recession from 2025 to 2030. Instead, the PBO forecasts defense spending will only achieve 1.58% by 2030, leaving a significant gap to the NATO target. This situation may compel Prime Minister Justin Trudeau's government to accelerate spending plans to assure NATO allies of Canada's commitment. The report's findings come at a time when pressure is mounting on Canada to fulfill its defense obligations, particularly as many NATO members are expected to exceed the 2% threshold this year.