Carney says Canada will meet 2% NATO spending target by March
$9.3B in new spending includes military recruitment, pay increases for personnel
Saying that the era of the United States' dominance on the world stage is over, Prime Minister Mark Carney committed his government on Monday to meeting the NATO benchmark target of two per cent of the country's gross domestic product by the end of the current fiscal year in March.
The prime minister outlined his vision of Canada moving more closely toward European allies in a speech in Toronto.
"We stood shoulder to shoulder with the Americans throughout the Cold War and in the decades that followed, as the United States played a dominant role on the world stage. Today, that dominance is a thing of the past," Carney told an audience of foreign policy thinkers, national security officials and defence industry business leaders on Monday morning.
Carney said the world is at a turning point — a hinge moment — and that it's time for Canada to chart its own path.
"The United States is beginning to monetize its hegemony: charging for access to its markets and reducing its relative contributions to our collective security," Carney said.
"In parallel, the world's trade routes, allegiances, energy systems and even intelligence itself are being rewired. Rising great powers are now in strategic competition with America. A new imperialism threatens. Middle powers compete for interests and attention, knowing that if they are not at the table, they will be on the menu."
Carney reiterated pledges made during the election campaign to rearm the Canadian military with new submarines, armoured vehicles, drones and other technology. He provided no additional specifics during the speech.
Much of the new $9.3 billion in defence spending is foundational, allowing the military to increase recruitment, give current soldiers a pay raise and set the stage for major equipment purchases — as well as an expansion of the Canadian defence industry.
There was speculation that the Liberal government would fold the Canadian Coast Guard entirely into the Department of National Defence — something other countries do. The coast guard is currently a special operating agency under the Fisheries Department with an annual budget of $2.5 billion.
At a technical briefing for the media, senior defence officials said the coast guard would remain where it was and there would be no need to arm the civilian agency. However, senior federal officials insisted a more fundamental reorganization of the service would take place.
One of the biggest questions on the minds of the opposition parties, whom Carney called to support the plan, was how the dramatic increase would impact the federal budget. Carney said the government would not raise taxes, but acknowledged some cuts would be made elsewhere within the federal government.
Even more fundamental, defence expert Dave Perry said, is that the Defence Department has had trouble in the past being able to spend additional money.
"I think the Government of Canada now has to actually try to come to grips with whether or not it can actually move this money that the prime minister talked about this morning," said Perry, president of the Canadian Global Affairs Institute, who's spent more than decade tracking defence spending.
"If bureaucracy proceeds like normal, the way it has been over the past decade and a bit, this money is unlikely to be spent. We're going to have to actually see concrete change across the Canadian government."
Federal ministers have been quietly signalling the pathway to a two per cent commitment for the last couple of weeks.
The former head of NATO, George Robertson, speaking on CBC's Rosemary Barton Live on June 1, said Industry Minister Mélanie Joly had assured him that Canada would reach the alliance goal, which was first agreed upon in 2014, by the end of the year.
Last week, at NATO headquarters in Brussels, Defence Minister David McGuinty signalled Carney would address Canada's defence spending targets before the upcoming leaders' summit in The Hague.
Hitting the two per cent NATO target would require an investment of between $18 billion and $20 billion.
In his speech, Carney said Canada will sign on to NATO's defence industrial pledge. Last year, NATO said it wanted its members to develop national plans to bolster the capacity of their individual defence industry sectors, a concept Canada has struggled with — or avoided outright — for decades.
"Our goal is tangible commitments from our allies to provide NATO with the necessary resolve to deter aggression and protect against all adversaries in all domains," Carney said. "Our goal is to protect Canadians, not to satisfy NATO accountants."
Canada under former prime minister Justin Trudeau faced regular criticism from allies for not meeting NATO's current target of two per cent of GDP.
The dispute became public at last year's leaders' summit in Washington when members of the U.S. Congress from both sides of the aisle called out Canada for not having a plan to meet the goal, unlike all other allies.
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