Once a 'crass mathematical calculation,' NATO's spending target is now an article of faith for Liberals

CBC

08-02-2025

NATO's two per cent defence spending target, derided only last summer as a "crass mathematical calculation" by Prime Minister Justin Trudeau, was feverishly embraced this week by the Liberal leadership hopefuls vying to replace him.
The statements represent a remarkable conversion for the governing party, which has looked upon the gross domestic product goal — even under intense allied pressure and the occasional public shaming — as arbitrary and meaningless.
"We've always questioned the two per cent as the be-all, end-all of evaluating contributions to NATO," Trudeau said last July in Washington — after meeting with allied leaders and leading U.S. lawmakers and after belatedly committing to reach the benchmark by 2032.
What a difference six months and a presidential election makes.
This week, it looked somewhat like a policy bidding war as candidates attempted to out-promise each other on when they could get the country over the elusive line, which could run the federal treasury anywhere from $55 billion to $81.9 billion per year, depending on the year and the economic outlook.
Former central bank governor Mark Carney set 2030 as his mark — two years ahead of the current plan. The next day, Chrystia Freeland, the former deputy prime minister and finance minister, claimed Canada could get there by 2027.
"The world has changed. We need defence spending now — not in the next decade," said Freeland in a campaign statement. It is hard to look at that as anything other than a dig at her former boss.
Defence analyst Richard Shimooka, a senior research fellow at the Ottawa-based Macdonald-Laurier Institute, said you can't understate the degree to which attitudes have changed.
"There's a clear understanding now that defence and security really is the bedrock of our foreign relations," Shimooka said.
"Until just very recently, I don't think that many people within the Liberal Party fully appreciated that … there was always a real reticence to actually spend to the two per cent mark."
With a defence budget of just over $33 billion in 2024-25 and when spending on the Canadian Coast Guard and Veterans Affairs is added in, Canada hits roughly 1.37 per cent of GDP on the defence scale.
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Freeland, who was until just recently in cabinet, proposed increasing the size of the military to 125,000 members and giving the regular force a 50 per cent pay bump.
It's clear from Defence Minster Bill Blair's remarks in Washington on Thursday that some elements of the idea have already percolated as a quick and easy way to move the needle on defence spending.
"Part of our planning is to invest — first of all — in the men and women of the Canadian Armed Forces," Blair said, while acknowledging the longstanding bottleneck in recruiting and training that has stymied efforts to rebuild the military.
All branches of the military continue to suffer an acute shortage of personnel. Last fall, the top military commander told a parliamentary committee that as of the end of August, there were a total of 92,798 people in uniform out of an authorized strength of 101,500.
Chief of Defence Staff Gen. Jennie Carignan said once enrolled, the military only has the capacity to put 6,400 recruits through basic training each year.
On Friday, the Department of National Defence released figures that show the military will only grow by 1,100 regular members this year when attrition is factored in. It is hoping to enroll 6,496 new recruits by the end of the fiscal year in March.
In a statement, the department said the military expects to reach the current authorized strength of 71,500 regular and 30,000 reserve by 2029.
Freeland is proposing a force of 125,000. Shimooka said that's not going to happen any time soon.
Much of what's being proposed — especially the 2027 benchmark — is beyond the capacity of the system to deliver, he added.
Both Carney and Freeland pledged to remove the obstacles that have made buying military equipment a painful and glacial exercise.
That is interesting because the Liberals pledged in both the 2015 and 2019 elections to fix defence procurement.
Responding to the rising anti-American public sentiment around President Donald Trump's tariff threat, the two leadership contenders promised a pivot away from the U.S. defence industrial complex, where possible.
Carney said 80 per cent of defence purchases made by this country involve the U.S. and that has to change.
"It's not just about setting the target between now and the end of the decade, but it's also spending that money wisely and effectively. And above all, as much as possible, potentially the majority of the increase in that money spent here in Canada as opposed to the United States," Carney said on Wednesday.
Defence ties to U.S. run deep
Surprisingly, while would-be prime ministers were floating those ideas, Blair and Innovation Minister François-Philippe Champagne were trying to preserve and deepen the existing ties.
Blair told reporters on Thursday the ministers had "really important conversations" with colleagues in Congress and the U.S. Senate — as well as representatives from the military and aeronautic industries.
"We have been able to impress upon them the importance of the integration with Canadian industry and Canadian workers," Blair said.
"We talked about the things that we have to do in our military, but the importance of working together and collaboratively and making sure that every dollar spent is seen as an investment, not only in capability, but investment in our industries, our workers and our economy."
The Liberal government has most recently faced calls to reconsider or cancel major Canadian contracts with the U.S., including a more than $19-billion deal to buy 88 F-35 fighter jets with U.S. defence company Lockheed-Martin.
Disentangling Canada from the U.S. defence industrial complex is not going to happen any time soon — if ever, Shimooka said.
Many of the high-end military capabilities — from fighter jets to drones to sophisticated command and control systems — are primarily manufactured in the United States.
Turning to Europe is a possibility, but Shimooka said even those countries are to some degree reliant on American technology.
"The reality of the Canadian defence industrial base is that since the 1950s it's been highly integrated into the United States," he said.
"Disentangling oneself, it makes a good sound bite, but the reality is that it's effectively impossible, except in the very long-term — and even then, it's unlikely to occur."