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.”