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The ONW Salon: Is Canada Spending Enough On NATO?

A new report shows that Canada is one of the lowest defence spending nations in the North Atlantic Treaty Organization (NATO), coming 20th out of 28 countries.  In 2014 all countries, including Canada, agreed to work towards allocating 2% of all spending to defence.  However, Canada is currently at just over 1%.  U.S. President Donald Trump has shown only lukewarm support for NATO, in part, he says, because other countries are not paying their fair share.  Should Canada be spending more, and if so, how much? Richard Mahoney, John Capobianco and Karl Belanger weigh in.



John Capobianco:

The issue of today’s discussion is not of insignificant importance to PM Trudeau and his government and is most definitely an issue that will need to be addressed. especially with the new President to the south of us.

I remember during the sunny days of PM Trudeau just being elected his having a well-documented bromance with the outgoing U.S. President Obama. The President made a trip to Ottawa and spoke in the House about their wonderful relationship, but what I remember most vividly was that Obama made a case for Canada to pay up its fair share to NATO. There is a standard that all members of NATO pitch in their share to be active members in good standing and spend 2% of GDP on defence.

Canada is currently at 1.02 percent and that is up slightly from 0.98%. Of the 28 members of NATO Canada has moved from 23rd to 20th in a three-way tie with Hungary and Slovenia. The reason this is a problem is that President Trump has mentioned this on more than one occasion and just recently the head of NATO has made it an issue to ensure all members pay up to meet the 2% criteria.

The challenge for this government is that they don’t want to spend money on defence if they don’t have to, especially because the Canadian government, according to various reports and media stories, spends about $20 billion on defence already and to get to the 2% threshold the government would almost have to double that amount.

No wonder the PM was quoted during his recent trip to Europe as saying “There are many ways of evaluating one’s contribution to NATO." He is saying this because there is no way this government is going to spend $20 billion just to get to 2% - the NATO threshold – for the simple reason that they have way more promises they need to keep that are far more tangible to taxpayers than this particular spend. As well, they’re already behind schedule with the first budget deficit at $30 billion, three times as much as they promised during the election.


Richard Mahoney:

In many ways, John is right. The days of the bromance are over, and the Trudeau government has been shrewdly and carefully dealing with the challenge of Donald Trump. And there is an aspirational goal of all NATO countries to move towards 2 per cent of government spending.

As John also points out, that brings us to about $20 billion. An increase of that amount is not impossible, but there are always competing demands for public resources. Spending on reducing poverty for Canadian children, job-creating investments in infrastructure and skills training and middle income tax relief were all issues that the government campaigned on, and those commitments are and were kept first.

This government's first priority has been to ensure that the men and women in uniform have the training and equipment they need to do their important work on behalf of all of us. It's not just how much they spend, but how effectively they spend it.

The government has recently taken on leadership roles in new NATO missions, including its participation as an enhanced "Forward Presence" nation with the deployment of frigates and aircraft to NATO efforts. They are, of course, involved in enhanced peacekeeping missions and the effort to fight DAESH. They are also making major commitments for new large equipment procurements as part of Canada's commitment to global peace and security.

I think our NATO partners, including the United States, know they can count on Canada to step up. Does that mean things will go smoothly at all times with Trump and our southern neighbours? No, there will be disagreements. But a smart balancing of our international commitments and spending wisely in the interest of all Canadians should guide the government going forward, as I think it has to date.

By the end of some of these larger equipment procurements and international deployments now underway, I think you will see a larger proportion of government spending going to defence and defence related priorities.  


Karl Belanger:

Many Canadians, especially on the progressive side of the spectrum, see the North Atlantic Treaty Organization as a relic of the Cold War. Some go as far as to claim that it is simply a tool of U.S. imperialism. I do not share that view, but believe we can still remain critical of NATO’s actions, objectives and structures. There is a need for a debate in Canada, and indeed amongst all NATO members, about what those are.

As Richard alluded to, a fair case can be made that money is not the only measure of Canada’s support of NATO. For instance, Canada, by offering to lead the NATO mission in Latvia, is taking a good step towards proving that Trump's assertion - that the Baltic states are not defensible - is simply false. As an aside, however, it should be imperative for any such deployment to be brought to Parliament for a debate and a vote.

As John said, it is also true that among NATO's 28 allies, Canada is at the bottom of the list when it comes to defense investments. Only Belgium, the Czech Republic, Iceland, Luxembourg and Spain are spending less. This has to change.

Not only in regards to NATO, mind you. Our troops should have the resources, support, training and equipment that they need to do difficult and dangerous jobs. Trudeau’s Liberals should keep their promise to increase defence spending in the next budget, allocate sufficient funds to support a national shipbuilding strategy and get closer to the NATO target of two per cent of GDP being invested in defence.

It’s only fair to our NATO allies, but most importantly, it is the right thing to do for our brave men and women in Canada’s Armed Forces.


John Capobianco:

I can’t believe I will say this, but I agree with my NDP friend – but only in your last post, Karl. It is the right thing to do and it is critical that our men and women are well protected. This will also become a question of credibility amongst our peers within NATO and will become a constant strain not only with the U.S., given President Trump’s desire to ensure everyone pulls their respective military weight in what is now an “America First” world in which we live.

The budget that Finance Minister Bill Morneau will deliver next week will be watched more for what will be missing than what will be in it, given the heavy spin we are hearing from sources that are already telling us it will be a frugal budget.

However, there needs to be some defence spending in the budget and it will have to be in keeping with the promises the PM made during the campaign. That will go along way in making the argument that this government is serious about our military and NATO.

Now that said, I won't hold my breath on this since there needs to be some control of spending and there are still major infrastructure projects that the government needs to initiate. This doesn't include the health care deals and costs with each province that have been recently reached.


Richard Mahoney:

It is easy to sit in Opposition and call on government to spend more. But all parties have had to grapple with the balancing of spending priorities. The Conservatives, when they were in office, actually cut defence spending in an effort to reduce government spending. The NDP, of course, famously promised a balanced budget in the last campaign. Not only was that the wrong idea for our economy, but to even attempt to balance the budget in these times would involve a serious reduction in defence spending and in the maintenance of our international commitments.

That said, there is much we agree on here. I don’t expect massive new military spending for the sake of increasing the defence spending in Minister Morneau’s budget next week. There are other big priorities that will take up available resources: investments in the economy and helping middle class Canadians access the job market.

The focus on defence matters should be on making sure the men and women in our forces are properly trained and equipped so they can do their job serving our country. We have some massive investments ahead of the government and that will help both equip our troops and create jobs in Canada. The recently competed defence review will help guide the government in its efforts to get the greatest bang for the public’s military buck.

And dealing with Mr. Trump will be an ongoing challenge, dealt with one issue at a time. I am sure most would agree that is no easy feat, regardless of the issue!

All that is to say I think we can expect to see Canada and Canadians stepping up to our obligations internationally, but in the context of a fairly prudent and cost-effective approach to military spending.


Karl Belanger:

Richard is right, there are a lot of competing priorities. Stephane Dion once asked: Do you think it’s easy to make priorities? Indeed, it is not.

However, the Trudeau Liberals made a lot of promises knowing full well they couldn’t deliver everything and stay within their deficit target of $10 billion a year. The Liberal platform didn’t add up. It was irresponsible and Justin Trudeau has already started to break many of his promises. But hiding behind that ballooning self-serving deficit to short-change our men and women in uniform, however, doesn’t cut it.

Of course, there are many ways to find more resources. For instance, the government could recoup tens of billions of dollars lost annually to tax loopholes, deductions, and exemptions that mostly benefit the wealthy. Indeed, Parliament just passed an NDP motion calling on the Liberal government to fix tax measures that primarily benefit the wealthy and specifically calls on the Liberal government to keep their promise and close the stock option deduction loophole for CEOs.

We can’t also forget that, in a joint effort to undermine the fiscal capacity of the state to help people and deliver key services such as a capable military, successive Liberal and Conservative governments went ahead with deep, reckless corporate tax cuts.

Oh, and one other thing. Perhaps the Liberal government should stop spending so much on polling and focus groups. 18 months in, and Trudeau’s Privy Council Office already spent $2.5 million on self-serving surveys of all kinds. That’s more than the Harper Conservatives did in 10 years – and they were already spending more than ever!

The point of the matter is, it is only with a well-trained and well-equipped army that Canada can continue to play an independent role in the world by promoting peace and security. Canada must be a force for stability in this increasingly dangerous world by committing itself to NATO as an alliance that guarantees the defence of all its members. It can do so by getting closer to the 2% of GDP target. If only so slightly.


Richard Mahoney is a lawyer with deep experience in politics and governance.  He is a former senior advisor to the Rt. Hon Paul Martin, a former Campaign Chair and President of the Ontario Liberal Party. John Capobianco is a Senior Partner and National Public Affairs Lead at FleishmanHillard. He has been a Conservative strategist with over 30 years of political activism at all three levels, including as a former federal Conservative candidate. Karl Bélanger is the President of the Douglas-Coldwell Foundation. He is a former National Director of the New Democratic Party of Canada and served as a senior advisor to four NDP Leaders.






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