Abstract
This report presents fiscal analysis of achieving the North Atlantic Treaty Organization’s 2% Defence Spending Target.
Highlights
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Canadian military expenditure has increased significantly between 2014 and 2021, rising approximately 40% in nominal terms across this period;
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PBO projections of military expenditure show an increase in total military spending from $36.3 billion in 2022-23 to $51.0 billion in 2026-27;
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Accordingly, Canada’s military expenditure as a percentage of GDP is projected to increase from 1.33 percent to 1.59 percent over the same period;
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In order for Canada to reach the 2% of GDP benchmark suggested by NATO, the government would need to spend between $13 and $18 billion more per year over the next 5 years.
