Canada will miss defense funding targets, the report says

This was disclosed in a report by Parliamentary Budget Officer (PBO), Yves Giroux, published on Thursday.

The PBO notes, however, that Canada’s military spending has increased significantly since 2014. Thus, nominal defense spending increased by 67% between 2014 and 2021, even though this increase corresponds to a 40% increase in GDPas indicated by PBO.

Also, according to the projections of PBO overall, Canada’s military spending will increase from $ 36.3 billion in 2022-2023 to $ 51 billion in 2026-2027, representing spending of 1.33% to 1.59% of GDP from Canada.

Even with the massive investment and budget increase of the Department of National Defense, there is a huge gap to reach 2% of GDP, agreed the Parliamentary Budget Officer. Ottawa will need to add $ 18 billion to the defense budget in 2022-2023, and $ 13 billion in 2026-2027.

The PBO notes that Ottawa will need to invest an additional $ 75.3 billion over the next five years to achieve spending of 2% of its gross domestic product.

New costs, new equipment

The largest portion of the Department of National Defense’s budget is devoted to its personnel, according to the report PBO. The share of the budget allocated to the purchase of new equipment has been increasing since 2014, but it is less than the 20% budget mark requested byNATO in member states, including Canada.

In 2017, Ottawa made a commitment to long -term investment in the Canadian Armed Forces along with its Defense, Security, Engagement (PSE) policy. The government wants to maintain and further increase the capabilities of the Canadian army. Investments under this policy are expected to total $ 553 billion over 20 years-to 2036-2037.

Acquisition of new military equipment, planned for the PSE, will amount to $ 164 billion, according to the PBO.

The requirements ofNATO in terms of funding the armed forces, however, includes various categories of expenditure, such as pensions paid to veterans. These also include public spending on paramilitary forces such as the Canadian Coast Guard, and contributions to peacekeeping and humanitarian activities, as well as payments to security agencies, whether in Canada or elsewhere.

This method of calculating defense expenditures increased Canada’s military budget by $ 7 billion in 2017, and these are recurring expenditures, the PBO in his report.

Forecasting defense spending as a percentage of GDP is quite a simple calculation, the declared PBObut even with investments of 1.59% of GDP in 2026-2027, Canada will remain low on its commitment toNATO.