Wednesday, June 25, 2025

Canada will struggle to meet its new NATO defence spending committments

With military hawks like Donald Trump and Mark Rutte in charge (Rutte is a big Trump fanboy, his cringey fawning performance at the NATO summit has to be seen to be believed), it's no surprise that NATO is now calling for members to spend 5% of their GDP on military and defence spending (3.5% on direct, or core, military spending, and 1.5% more on industrial and infrastructure-related military investments). 

This is partly to counter the treat of Russian expanionism, but it is mainly to keep Donald Trump happy, and to keep the USA in NATO. So, 5% is the new 2%. It is due to be reviewed in 2029, the year Trump's presidential term comes to an end.

A few members, like Spain and Slovakia, are balking at that, saying out that such a target is just impractical and unachievable. In fact, Spain has bravely drawn a line in the sand at 2.1% and, amazingly, obtained an exemption from the 5% target. Slovakia has gone down another route and basically declared that neutrality is a better option for it than bankrupting the country with a 5% promise (other NATO members are still trying to process what that actually means). But there is a lot of pressure on countries to go along with it.

Canada's Mark Carney may be trying a perilous third route, and is apparently relying on some creative accounting to get the country through it. Canada - which has only just accepted the need to achieve the old 2% target, and still has one of the lowest defence expenditures in NATO - has in fact signed up for the 5% target, to be reached by 2035, which would amount to a massive $150 billion bill each year that the country can ill afford. 

But it seems that Mark Carney thinks that "dual-use technologies" like AI and cybersecurity will be acceptable expenditures towards the target, which would surprise me, frankly. He seems to think that much currently planned spending - on "ports, airports, infrastructure to support the development and exportation of critical minerals, telecommunications and emergency preparedness systems" - would be accepted, at least as part of the 1.5% component. But can you imagine Donald Trump (or even Mark Rutte) accepting that for one moment?

Don't get me wrong, I'm not a big fan of spending such a huge amount on the military. But if we sign up for these things, we have to accept what it really means, and not just fudge our way through.

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