Canada will need “substantial and sustained” defence spending increases to meet its NATO obligations by 2035, a new report from the Parliamentary Budget Office (PBO) states.
The Liberal government has not yet revealed how it intends to reach the target of spending five per cent of GDP on defence within the next decade — a significant jump that would see core defence spending increase from $95.7 billion in 2030 to $163.7 billion in 2035-36.
Pulling that off, the PBO report suggests, will depend on how well the federal government handles complex procurement projects in a relatively short timeline — historically, a challenge for Ottawa.
The promised increase in defence spending would have significant implications on the federal budgetary picture, the PBO report noted.
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“The PBO estimated that the additional core defence spending would increase the budgetary deficit by $63.7 billion, or 1.4 per cent of GDP, in 2035-36 relative to the (status quo scenario, and) federal debt would be 5.7 percentage points of GDP higher,” the report says.
But the budget watchdog also noted that the massive boost in military spending would have implications for Canada’s “economic activity, industrial capacity” and the domestic defence industry.
“While many aspects of the government’s defence expenditure strategy remain in development, current defence spending already supports economic activity across a range of industries and regions and can inform potential forward dynamics for the Canadian defence industrial base and wider economy,” the report noted.
Canada has for years been a laggard in NATO spending commitments. The military alliance set a target of countries spending two per cent of GDP on defence in 2006 — and Canada consistently failed to meet that target.
Prime Minister Mark Carney promised to change that, and Canada is expected to hit that longstanding two per cent NATO spending target for the first time this year. But the Carney government has been less clear about how it intends to reach the new benchmark of spending five per cent of GDP on defence— or how Ottawa will pay for it.
Asked recently about the lack of transparency around defence spending plans, Finance Minister Francois-Philippe Champagne said more details are expected in the government’s 2026 budget.
“Obviously when we’re going to present Budget 2026 … we’ll be looking at measures to make the Canadian economy strong and make sure that, you know, the systems and procurement we’re doing to meet the NATO requirement, but at the same time that the Canadian economy can finance these big investments,” Champagne told reporters in July.
Instead of giving fn , which is roughly two percent of the population, over 34 billion tax payers dollars annually, should that money go to defense spending instead?
@Anonymous. Impressive way to misunderstand the subject. “Buy Canadian” does not mean refusing every foreign made system. It means buying, where possible, Canadian. With your brilliant defense strategy, you want us to buy everything foreign and slap a Canadian flag on it. That is not soverignty.
Carney won’t deliver. All of his election promises have not been kept so far.
Throwing away money on other militaries isnt gonna cut it?
Well, time to drop that buy Canadian idea and start relying on foreign governments for our military.