Canada under pressure: NATO’s new spending target could break the bank

Can Canada even afford it?

Can Canada even afford it?, A substantial increase, Angry allies and partners, A recent defense increase, Growing concerns, Spending 0 billion annually, How the 5% target breaks down, A huge defense budget increase, How Canada will meet the target, Infrastructure and mineral development, Benefitting Canada’s economy

On June 22, NATO confirmed plans to increase its defense spending target to five percent of gross domestic product by 2035, a commitment also endorsed by Canada. However, achieving this target could prove challenging for Ottawa.

A substantial increase

Can Canada even afford it?, A substantial increase, Angry allies and partners, A recent defense increase, Growing concerns, Spending 0 billion annually, How the 5% target breaks down, A huge defense budget increase, How Canada will meet the target, Infrastructure and mineral development, Benefitting Canada’s economy

Canada has underspent NATO’s 2% defense spending target ever since it was agreed upon by the alliance in 2014, and while the spending target was never binding for member states, Canada’s lack of spending did upset many of its allies.  

Angry allies and partners

Can Canada even afford it?, A substantial increase, Angry allies and partners, A recent defense increase, Growing concerns, Spending 0 billion annually, How the 5% target breaks down, A huge defense budget increase, How Canada will meet the target, Infrastructure and mineral development, Benefitting Canada’s economy

The United States may be the most important ally angered by Canada’s inability to get with the program and meet NATO’s spending targets; the issue certainly caused a lot of friction between Donald Trump and Justin Trudeau in their past. 

A recent defense increase

Can Canada even afford it?, A substantial increase, Angry allies and partners, A recent defense increase, Growing concerns, Spending 0 billion annually, How the 5% target breaks down, A huge defense budget increase, How Canada will meet the target, Infrastructure and mineral development, Benefitting Canada’s economy

On June 9th, Canada’s new Prime Minister Mark Carney announced that Canada would meet NATO’s 2% spending goal in a wide-ranging speech revealing a $9.3 billion dollar increase in defense spending, according to a report from CBC News. 

Growing concerns

Can Canada even afford it?, A substantial increase, Angry allies and partners, A recent defense increase, Growing concerns, Spending 0 billion annually, How the 5% target breaks down, A huge defense budget increase, How Canada will meet the target, Infrastructure and mineral development, Benefitting Canada’s economy

Critics were already concerned about how Canada would be able to handle the Prime Minister's new defense budget increase. That criticism has only grown louder when it comes to the recent reports about NATO's plans to up its defense spending target, which was long expected. 

Spending $150 billion annually

Can Canada even afford it?, A substantial increase, Angry allies and partners, A recent defense increase, Growing concerns, Spending 0 billion annually, How the 5% target breaks down, A huge defense budget increase, How Canada will meet the target, Infrastructure and mineral development, Benefitting Canada’s economy

Prior to ‘The Hague Summit Declaration’, which officially announced the alliance’s new defense spending target, Carny signaled the increase would cost Canada roughly $150 billion dollars a year, a figure that the Prime Minister believed Canada could shoulder. 

How the 5% target breaks down

Can Canada even afford it?, A substantial increase, Angry allies and partners, A recent defense increase, Growing concerns, Spending 0 billion annually, How the 5% target breaks down, A huge defense budget increase, How Canada will meet the target, Infrastructure and mineral development, Benefitting Canada’s economy

According to CBC News, the 5% increase breaks down into a 3.5% defense spending goal set to go toward direct military funding while another 1.5% of the total will fund an increase of defense infrastructure in each NATO member state.

A huge defense budget increase

Can Canada even afford it?, A substantial increase, Angry allies and partners, A recent defense increase, Growing concerns, Spending 0 billion annually, How the 5% target breaks down, A huge defense budget increase, How Canada will meet the target, Infrastructure and mineral development, Benefitting Canada’s economy

Canada’s National Defense Budget after Carney’s $9.3 billion dollar boost puts the total annual appropriation at $62 billion dollars. This means that Ottawa will need to provide another $45 billion to $50 billion in order to meet NATO’s spending target. 

How Canada will meet the target

Can Canada even afford it?, A substantial increase, Angry allies and partners, A recent defense increase, Growing concerns, Spending 0 billion annually, How the 5% target breaks down, A huge defense budget increase, How Canada will meet the target, Infrastructure and mineral development, Benefitting Canada’s economy

According to CTV News, Carney believes that Canada will be able to hit NATO’s increased defense spending goal because much of the increases involved will be in infrastructure projects Ottawa is already working on, or developing to help exploit the country's key minerals. 

Infrastructure and mineral development

Can Canada even afford it?, A substantial increase, Angry allies and partners, A recent defense increase, Growing concerns, Spending 0 billion annually, How the 5% target breaks down, A huge defense budget increase, How Canada will meet the target, Infrastructure and mineral development, Benefitting Canada’s economy

“Some of the spending for that counts towards that five per cent. In fact, a lot of it will count toward that five per cent because of infrastructure spending — its ports and railroads and other ways to get these minerals out,” Carney said during an interview with CNN. 

Benefitting Canada’s economy

Can Canada even afford it?, A substantial increase, Angry allies and partners, A recent defense increase, Growing concerns, Spending 0 billion annually, How the 5% target breaks down, A huge defense budget increase, How Canada will meet the target, Infrastructure and mineral development, Benefitting Canada’s economy

“So that’s something that benefits the Canadian economy but is also part of our NATO, our new NATO responsibilities,” Carney added. CTV News noted NATO published a list of 12 key minerals in 2024 that the alliance believes are critical for defense. 

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