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If there’s one thing Canada’s premiers have always agreed on, it’s that the federal government needs to respect provincial jurisdiction.
If there’s a second thing they now agree on, it’s that (notwithstanding their belief that governments should mind their own business) the federal government should spend substantially more on national defence — not least because doing so might appease the incoming president of the United States.
“He wants us to meet our 2 per cent NATO spending commitment,” Alberta Premier Danielle Smith said in an interview with the CBC’s Power & Politics on Tuesday, referring to Donald Trump.
“If Canada is not upholding our obligation, in terms of what we invest in the Canadian Armed Forces, the Trump administration is going to use that as something to hit us over the head with in the trade conversation,” Manitoba Premier Wab Kinew said.
“I think that will be a really big thing to show that we’re serious about what their concerns are,” Prince Edward Island Premier Dennis King said.
However much the premiers might be straying from their own lane, these calls add to a quickly growing consensus that Canada needs to spend more on its military and defence.
“Nobody has to argue with me that we need to spend more money,” Defence Minister Bill Blair said on Monday.
That same day, the Business Council of Canada, which represents some of this country’s largest companies, called on the government to aim beyond the NATO target while “investing in a strong and sovereign defence industrial base.”
Even if the NATO target is somewhat arbitrary, there are good arguments for increasing defence spending — beyond the fact that doing so might strengthen Canada’s arguments with the United States and appease the president-elect.
But this consensus on the need to spend more on defence still leaves a rather significant question unanswered: How should the federal government pay for it?
Every conversation about defence spending has to include some mention of Canada’s long-standing procurement challenges — boosting defence spending is not a matter of sending the minister over to Canadian Tire to pick up a few tanks. But even if the federal government can get better at spending money, it will still have to make allowances for a much bigger defence budget.
Facing growing frustration from the U.S. and other NATO allies, Prime Minister Justin Trudeau says Canada is ‘on a clear path’ to reaching its spending commitment to the military alliance of two per cent of GDP. Defence Minister Bill Blair also suggested Ottawa could accelerate its timeline.
The parliamentary budget officer recently estimated that the federal government’s projected defence spending in the current fiscal year — $41 billion — would be equal to 1.35 per cent of GDP. Going forward, the federal government sees defence spending rising to $57.8 billion in 2029, which the PBO believes will be equal to 1.58 per cent of GDP.
Getting to two per cent of GDP in 2032 would require increasing the defence budget to $81.9 billion, according to the PBO’s analysis. But the Business Council of Canada argues the federal government should aim for at least 2.5 per cent of GDP —
