From left, U.S. President Joe Biden speaks at an event with G7 leaders next to Ukrainian President Volodymyr Zelensky and Prime Minister Justin Trudeau to announce a Joint Declaration of Support for Ukraine during the NATO Summit, in Vilnius, Lithuania, on July 12.Paul Ellis/AFP/Getty Images
Lots of important milestones are arbitrary. A 10th wedding anniversary, a four-minute mile, or losing 20 pounds are all artificial, to an extent (a 4:01 mile is nothing to sneeze at, after all). But that doesn’t mean they do not signify something important: Devotion to one’s partner, athletic excellence, improving one’s health – or, say, the strength of Canada’s commitment to contributing to the security of the West.
There’s no question that the NATO goal of member countries spending at least 2 per cent of gross domestic product on defence is an arbitrary target. Those who make that point to oppose an expansion of Canadian military expenditures are right about that.
But at the same time, there’s no question that what that goal signifies is crucial, a point overlooked by those who attempt to wave away Canada’s failure to meet the 2-per-cent threshold.
The NATO communiqué from last week’s summit in Lithuania spelled out a number of things, including the shift from language in 2014 that called the 2-per-cent target “aspirational” to an “enduring commitment to invest at least” that amount annually. Just as importantly, the communiqué – endorsed by Canada – spelled out why: There is a “a radically changed security environment” because of Russia’s war of aggression against Ukraine, but also because of China’s “coercive policies.” As a result, “we are strengthening NATO’s collective defence, against all threats, from all directions.”
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That is the strategic imperative; the goal of 2 per cent of GDP is merely the signifier. Still, why should this particular benchmark be used? Why not, for instance, focus on total military expenditures?
On that front, Canada comes off relatively well, with the sixth-highest expenditure in NATO as measured by dollars. In seventh place is Poland, whose military outlays are just over two-thirds of Canada’s. But the Polish economy is barely one-third the size of our country’s. (That means Poland is well above the 2-per-cent threshold.)
In public finance in Canada, there’s a consensus that those with greater means should contribute more. That belief is at the core of the income tax system, where higher-income people pay not just more tax, but higher rates of tax. That same basic principle – from each according to their ability, as someone once wrote – is at work with NATO’s goal.
That’s not to say there aren’t issues with using GDP. A sharp recession, for instance, would push up military expenditures as a proportion of GDP, all other things being equal. Still, using national income as a proxy for fiscal ability is a fair measure, and one that allows for the great disparity in the size of NATO members’ economies.
But there is still the question of an arbitrary goal of 2 per cent. To an extent, that criticism has some weight: there’s no magical transformation that takes place if a nation’s expenditures tick up from 1.99 per cent of GDP to 2 per cent.
However, the critique of that specific goal ignores two big facts. First, Canada is losing ground, not only compared with its own recent expenditures but within NATO. In 2017, Canada spent 1.44 per cent of GDP on defence, close to the NATO average (excluding the United States) of 1.48 per cent. But five years later, in 2022, that gap had widened considerably, with Canada spending 1.29 per cent of GDP while the NATO average excluding the U.S. had risen to 1.65 per cent.
Second, NATO now describes the 2-per-cent threshold as a floor, not a ceiling, with the communiqué stating that “in many cases” higher expenditures will be needed “to remedy existing shortfalls.”
Without a doubt, Canada is one of those cases. Our land forces lack modern equipment, even basic supplies. The navy lacks sailors, not to mention modern submarines. The air force has yet to receive modern jets. More broadly, the federal Liberals have not even managed to deliver their updated vision for defence spending, never mind actually committing dollars. (More on that tomorrow.)
There is one last reason the 2-per-cent goal cannot be ignored: The government of Canada has given its word. Until Vilnius, the Liberals might shrug at the (somewhat fuzzy) commitment that the Harper government made in 2014.
But it was Prime Minister Justin Trudeau who signed on to last week’s communiqué. Canada has made a pledge to its allies. The goal may be arbitrary, but Canada’s commitment to it cannot be.
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