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Canada’s defence spending falls short of NATO target, new PBO report finds

Ottawa (Ontario), June 9, 2022

The Parliamentary Budget Officer (PBO) today released an independent forecast of the military expenditures needed for Canada to meet the North Atlantic Treaty Organization’s (NATO) 2% Defence Spending Target.

Despite the significant increase in military spending between 2014 and 2021, the PBO estimates that the federal government would need to spend an additional $75.3 billion over the next five years in order for Canada to reach the 2% of GDP benchmark suggested by NATO.

In 2006, NATO members agreed to the policy goal of setting their annual defence spending to at least 2% of GDP.

Based on information provided by the Government, the report forecasts that Canada’s total military expenditures will increase from $36.3 billion in the 2022-23 fiscal year to approximately $51.0 billion in 2026-27.

“Based on our analysis, the target of 2% of GDP remains out of reach over the medium term,” said Yves Giroux, PBO. “However, we project that the gap between military expenditures as a percentage of GDP and the 2% benchmark will decrease over the next five fiscal years.”

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report presents fiscal analysis of achieving the North Atlantic Treaty Organization\u2019s 2% Defence Spending Target.","abstract_fr":"Ce rapport pr\u00e9sente une analyse financi\u00e8re concernant l\u2019atteinte de l\u2019objectif de d\u00e9penses de 2 % de l\u2019Organisation du Trait\u00e9 de l\u2019Atlantique Nord.","highlights":[{"content":{"en":"Canadian military expenditure has increased significantly between 2014 and 2021, rising approximately 40% in nominal terms across this period;","fr":"Les d\u00e9penses militaires du Canada ont consid\u00e9rablement augment\u00e9 entre 2014 et 2021, soit d\u2019environ 40 % en termes nominaux au cours de cette p\u00e9riode;"}},{"content":{"en":"PBO projections of military expenditure show an increase in total military spending from $36.3 billion in 2022-23 to $51.0 billion in 2026-27;","fr":"D\u2019apr\u00e8s les projections du DPB, le total des d\u00e9penses militaires passera de 36,3 milliards de dollars en 2022-2023 \u00e0 51,0 milliards de dollars en 2026-2027;"}},{"content":{"en":"Accordingly, Canada\u2019s military expenditure as a percentage of GDP is projected to increase from 1.33 percent to 1.59 percent over the same period;","fr":"Par cons\u00e9quent, les d\u00e9penses militaires du Canada en pourcentage du PIB devraient augmenter au cours de la m\u00eame p\u00e9riode, de 1,33 % \u00e0 1,59 %;"}},{"content":{"en":"In order for Canada to reach the 2% of GDP benchmark suggested by NATO, the government would need to spend between $13 and $18 billion more per year over the next 5 years.","fr":"Pour atteindre l\u2019objectif de 2 % du PIB recommand\u00e9 par l\u2019OTAN, il faudrait que le gouvernement du Canada d\u00e9pense de 13 \u00e0 18 milliards de dollars de plus par ann\u00e9e pendant les cinq prochaines ann\u00e9es."}}]},"bills":[],"bibtex":{"en":"@techreport{PBO-RP2223010S,\n author={Penney, Christopher},\n title={Canada\u2019s Military Expenditure and the NATO 2% Spending Target},\n institution={The Office of the Parliamentary Budget Officer},\n year=2022,\n \n address = \u0022Ottawa, ON\u0022\n}","fr":"@techreport{DPB-RP2223010S,\n author={Penney, Christopher},\n title={D\\\u0027{e}penses militaires du Canada et objectif de d\\\u0027{e}penses de 2 % de l\u2019OTAN},\n institution={Bureau du directeur parlementaire du budget},\n year=2022,\n \n address = \u0022Ottawa, ON\u0022\n}"}}