Premiers push federal government to accelerate NATO defence spending

Nova Scotia Premier Tim Houston chairs a meeting with Canada's premiers during the Council of the Federation meetings in Halifax on Tuesday, July 16, 2024. (Darren Calabrese / The Canadian Press)

Premiers are urging the federal government to move up its NATO commitment to spend two per cent of GDP on defence spending by 2032.

The calls are happening at Canada's Premiers summit in Halifax, where the future of the Canada-U.S. trade relationship has been discussed amid the looming U.S. presidential election in November.

"I’m encouraging the federal government to move more quickly," Manitoba Premier Wab Kinew told reporters on Wednesday. "I think the timeline we have to think about is the next administration, whoever that may be, in the United States of America. So let’s hit that target in the next four years with a credible plan to do so."

Ontario Premier Doug Ford also said he would like to see the federal government accelerate its 2032 deadline.

"I think we can move forward as quickly as possible. It’s great when you have everyone around the table in a consensus after we discuss it," Ford said.

Last week at the NATO summit, Prime Minister Justin Trudeau said Canada is expected to reach two per cent of its GDP on defence by 2032, but specific cost details on how Canada will get there have yet to be provided.

The commitment came after months of public criticism from NATO and its alliance members. Until last week, Canada was the only member without a deadline to reach the two per cent target.

Back in May, a group of 23 bipartisan U.S. senators issued a rare open letter to Trudeau, imploring him to make good on his commitment. Former U.S. President and current Republican presidential candidate Donald Trump also caused alarm earlier this year after encouraging Russia to do "whatever the hell they want" to any NATO member who does not meet the defence spending commitment.

"NATO was busted until I came along," Trump said at a rally. "I said, 'Everybody's gonna pay.' They said, 'Well, if we don't pay, are you still going to protect us?' I said, 'Absolutely not.' They couldn't believe the answer."

At the closing press conference for the premiers’ meeting on Wednesday, other premiers also stressed how Canada’s defence spending impacts its relationship with the United States.

"I think in terms of the NATO obligations and the two per cent, a lot of the focus is on defence, but I think it's broader for Canada in its relationship with the United States," Nova Scotia Premier Tim Houston said. "We're significant trading partners, and we want them to respect us fully in all aspects, including our ability to honour our obligation."

Speaking to reporters on Friday, Conservative Leader Pierre Poilievre said he would not commit to meeting the two per cent target if he were to be elected prime minister.

"I make promises that I can keep and right now we are, our country, is broke," Poilievre said. "I'm inheriting a dumpster fire when it comes to the budget.

In 2014, Canada was spending below one per cent of GDP on defence.

Trade concerns amid potential Trump re-election

The U.S. is Canada's largest trading partner, with nearly $3.6 billion worth of goods and services crossing the border daily.

In his 2016 presidential campaign, Trump campaigned on tearing up the North American Free Trade Agreement. Canada later renegotiated the deal in 2018, which changed to the Canada-United States-Mexico Agreement (CUSMA).

The winner of this November's U.S. presidential election will be part of the upcoming review of CUSMA in 2026.

This year, Trump has promised to slap a 60 per cent tariff on all goods from China and a 10 per cent tariff on all goods from other countries if he is re-elected. In 2020, Trump re-imposed a 10 per cent tariff on some Canadians aluminum products only to drop the plan one month later.

Can Canada reach the target?

Defence researchers are skeptical as to whether or not Canada can even reach the shortened deadline the premiers have in mind.

The government's defence policy review, Our North, Strong and Free, set a road map for spending 1.76 per cent of GDP until 2030. It also outlined potential areas for further military investment including acquiring new vehicles capable of travelling on ice and snow, buying ground-based defences and long-range air and sea-launched missiles, as well as establishing a light armoured vehicle production program.

The review took two years to develop, while the 2032 target was set following political pressure from allies at the NATO Summit. In reaching the target, Defence Minister Bill Blair announced plans to buy up to 12 conventional submarines that can patrol under Arctic ice, but he did not provide details about costing or deadlines for delivery.

Blair also announced a trilateral partnership with Finland and the United States to build dozens of icebreakers.

Dave Perry, the president of the Canadian Global Affairs Institute, says getting to the two per cent target is possible if "it's actually a priority and the government is serious."

"If we're going to do it in the near term, you got to figure out basically a way to find 10 to 15 billion dollars to go towards defence. You could do that by raising revenue. You could do it by spending less on other functions of government and providing a fiscal offset, or you could borrow more money," Perry said.

But Richard Shimooka of the McDonald-Laurier Institute has a less optimistic outlook. He says the Canadian Armed Forces is still facing a shortage of 15,000 troops.

"We can literally buy F-35s and have them delivered in two years and have no pilots to put in the seats."

But what Shimooka is certain of is that a Trump administration will not "trash" the CUSMA, because he made it, but "Canada's lack of defence spending will most certainly be a grievance for Trump to pick at."