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OTTAWA — On the eve of a major NATO summit, the federal budget watchdog says the government is overestimating defence spending and that Canada will be even further than expected from its 2 per cent military investment commitment by the end of the decade.


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Ottawa overestimating defence spending, will only spend 1.42% of GDP on military by 2030: PBO

Government says it will reach 1.76 per cent by 2030, but PBO estimates a gradual decline from a peak of 1.49 in 2025-2026
Author of the article:
Christopher Nardi
Published Jul 08, 2024 • Last updated 6 hours ago • 5 minute read





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Parliamentary Budget Officer Yves Giroux says the Liberal government won't reach the levels of defence spending they claim by 2030. Photo by Adrian Wyld /THE CANADIAN PRESS
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OTTAWA — On the eve of a major NATO summit, the federal budget watchdog says the government is overestimating defence spending and that Canada will be even further than expected from its 2 per cent military investment commitment by the end of the decade.

In a spending analysis quietly published Monday, Parliamentary Budget Officer (PBO) Yves Giroux threw cold water on the Liberal government’s latest military spending projections, saying that they overstate how much the department will realistically spend by the end of the decade.
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In a statement, Defence Minister Bill Blair’s director of communications Daniel Minden said the government “strongly disagrees” with Giroux’s projections and remains “confident” in its projections

The new PBO estimates come on the eve of a major NATO summit in Washington, D.C., set to begin on Tuesday.

Whereas the government says that it will be spending $54.9 billion in NATO-eligible military expenditures by 2029-2030, the PBO estimates that number will more likely be $52.2 billion.

Giroux also found that the government is overshooting how much of its gross domestic product (GDP) it will be spending on NATO-eligible defence expenditures by 2029-2030.

While the government says it will reach 1.76 per cent by the end of the decade, the PBO estimated it would be 1.42 per cent after a gradual decline from a peak of 1.49 per cent in 2025-2026.

In a foreign policy speech Monday, US House Speaker and Republican lawmaker Mike Johnson lambasted Canada for failing to meet its NATO commitments in what could be a preview of the discourse if Donald Trump is elected US president in the fall.

“Shamefully, Canada announced in the last few days … that they won’t be ponying up, they’re not going to do their two per cent. Why? Talk about riding on America’s coat tails,” Johnson said during a speech at Hudson Institute, a Conservative think tank.

“If you’re going to be a a member nation and participant (in NATO), you need to do your part.”

Canada’s NATO allies are reportedly increasingly frustrated with the country’s lack of a clear timeline to hit the two per cent mark.

Monday, Politico quoted a half-dozen unnamed diplomats from NATO countries saying they are “fed up” with Canada’s lagging defence spending and that it will be top of mind during the summit this week.

In May, a bipartisan group of 23 U.S. senators including Mitt Romney, Ted Cruz and Joe Manchin wrote a letter to Prime Minister Justin Trudeau calling on him to up its military spending and respect its NATO commitments.

They said they were “concerned and profoundly disappointed” in the government’s current spending projections, which are higher still than the PBO’s.

“Canada will fail to meet its obligations to the Alliance, to the detriment of all NATO Allies and the free world, without immediate and meaningful action to increase defense spending,” reads the letter.