By Paul Vieira
OTTAWA--Canada said Monday it intends to ramp up military expenditures in the near- and long-term to position the country closer to meeting its spending requirements as a member of the North Atlantic Treaty Organization.
The spending plans, unveiled by Prime Minister Justin Trudeau, could help allay concerns among NATO members that Canada is not pulling its weight in helping defend western allies against threats posed by China, Russia and other hostile actors. Recent NATO data indicate Canada is the only country among the 31-member alliance that is not spending at least 2% of its gross domestic product on defense; and failing to invest at least 20% of defense outlays on equipment.
According to documents, Canada said it would increase defense expenditures by 8.13 billion Canadian dollars, or the equivalent of $6 billion, over a five-year period. By 2030, Canadian officials said spending on its armed forces would equate to 1.76% of its GDP, a notable rise from its current 1.33% level but still short of NATO's 2% target. Planned spending on equipment would exceed NATO's 20% threshold, officials said.
Over the next two decades, officials said Canada intends to spend C$73 billion on its armed forces.
Canadian Prime Minister Justin Trudeau defended the spending plans, saying the C$8.13 billion represents "a significant investment in our armed forces right now," when combined with previously announced commitments to allocate C$40 billion over 20 years to shore up its defense of the North as part of the North American Aerospace Defense Command, or Norad; and to acquire 88 88 F-35 combat jets manufactured by Lockheed Martin.
The Biden administration applauded Canada's defense-expenditure plans. The U.S. Ambassador to Canada, David Cohen, said the financial commitments "represent some of the most significant investments in defense spending in recent Canadian history." He added the policy measures "articulate a substantial down payment toward Canada's pledge to meet its NATO commitment to spend at least 2% of GDP on defense."
In February, Cohen said "that NATO and the world is watching" how Canada intended to meet its 2% goal - a threshold alliance members originally agreed to in 2014 and reaffirmed last year after Russia's invasion of Ukraine.
Bill Blair, Canada's Defense Minister, said the initial focus would be on shoring up the country's defenses in the Arctic, where Russia's air force has increased activity and Chinese vessels are collecting data about the region. Among the items the new money could go toward, officials said, was the acquisition of new submarines with under-ice capabilities, helicopters, and long-range air- and sea-launched missiles.
Among the items the new money could go toward, officials said, was the acquisition of new submarines with under-ice capabilities, helicopters, and long-range air- and sea-launched missiles.
Even with new money, defense analysts have warned it might take a decade or more for Canada's military to replenish its underwhelming capacity. According to officials, Canada's armed forces face a 16,000 troop shortfall, and about half of its military equipment is deemed as unserviceable.
"This is a big commitment of funding that will move Canada much closer to 2% of GDP - if it can be executed as outlined," said David Perry, president of the Canadian Global Affairs Institute and a defense-policy analyst.
The near-term spending is mostly backloaded toward the end of this decade. Finance Minister Chrystia Freeland presents the government's annual budget plan next week, and has vowed to keep the budget deficit at C$40 billion amid renewed spending on housing construction and weaker economic growth. In the past week, Trudeau and Freeland have unveiled new spending measures for the 2024 budget plan totaling about C$25 billion.
The incumbent Liberals are struggling in public-opinion polls - trailing the Conservative Party by a significant margin - and face an election no later than October of next year.
Write to Paul Vieira at paul.vieira@wsj.com
(END) Dow Jones Newswires
04-08-24 1321ET
