Canada’s defence minister assured lawmakers on Thursday that the federal government is on track to meet NATO’s politically charged benchmark of spending two per cent of gross domestic product on the military by next spring.
David McGuinty expressed confidence in achieving the target despite skepticism from the Opposition Conservatives, who pointed to the Department of National Defence’s historical difficulties in fully spending its annual budget.
A concrete example of Canada’s path toward the goal emerged as the U.S. Defense Security Cooperation Agency approved a $3.6-billion sale of munitions to Canada. The purchase includes thousands of bombs, including smart munitions compatible with CF-18s and future F-35s or F-39 Gripens, ensuring the Royal Canadian Air Force replenishes its stock and underscoring Canada’s reliance on U.S. weapons.
Last spring, Prime Minister Mark Carney announced plans to meet the NATO target by the end of the fiscal year and added $9.3 billion to the defence budget. The announcement coincided with NATO raising its guideline to five per cent of GDP, divided between military spending and defence infrastructure.
Canada’s total defence expenditure for the current fiscal year is approximately $63 billion, with new investments designed to rebuild weapon stocks depleted over years of underfunding and contributions to Ukraine.
McGuinty emphasized that the department is closely monitoring the spending and remains confident of meeting the March 31 deadline. A significant portion of the additional funding has already gone toward higher wages for military personnel.
Between 2020 and 2023, National Defence was unable to spend about $5.37 billion, with some funds reprofiled for future years and some returned to the federal treasury. Capital spending on new equipment has historically faced challenges, with the Parliamentary Budget Office reporting that $18.7 billion in planned acquisitions under the 2017 Liberal defence policy did not materialize.
Meeting the two per cent target carries political weight, as Canada has faced ongoing pressure from allies, particularly the United States, since the NATO summit in Wales in 2014.
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