How NATO's defence spending benchmark turned into an international PR exercise

It's the bureaucratic equivalent of searching behind the couch cushions for loose change: the semi-regular exercise of finding federal expenses to include in Canada's annual calculation of defence spending.

And it appears federal officials have gotten quite good at it.

Documents and briefing notes released to CBC News under access to information legislation follow the bureaucrats as they follow the money in an effort to account for every defence dollar.

It is a curious, deliberate exercise meant to make Canada's ratio of military spending to gross domestic product look better to our NATO allies — principally the Americans.

There is an obvious political imperative now to squeeze every last dime out of the balance sheet.

The administration of U.S. President Donald Trump has been pressuring alliance members to meet the NATO defence spending benchmark of two per cent of GDP. In 2014, Ottawa pledged to meet that level of spending within a decade.

It hasn't. In fact, at 1.27 per cent of GDP, Canada's defence spending is nowhere near that level; it didn't even reach it during the height of the Cold War. The Canadian government makes no pretence of meeting that benchmark — but routinely points in its own defence to how much it contributes to the military alliance in terms of personnel and leadership in high-profile missions.

Still, the show-me-the-money reflex in Washington these days is strong.

"U.S. taxpayers are spending almost four per cent of our GDP to defend ourselves and our allies, and two per cent is a fair minimum of what our allies should be paying," Robert O'Brien, White House national security adviser, said recently at the Halifax International Security Forum.

It was a rare public rebuke from the Americans — reasonably polite but pointed.

"We're grateful for what Canada has done," O'Brien said, "but we would like to see Canada meet that commitment, because it's not just great for Canada, it's great for the free world."

Ahead of this week's NATO leaders' summit in London, Germany became the latest high-profile nation to announce it will aim to get to two per cent defence spending by the early 2030s.

And while the U.S. would like to see Germany move faster, O'Brien said, "at least they have a plan to get there."

Canada doesn't — not one that's public, at least. Which is where shaking the couch cushions comes in.

Every two years, NATO carries out what's known as the "defence capability survey," which inventories what each country spends on defence and what it can contribute to its allies. The latest one was completed this year.

The definition of what constitutes defence spending has become more elastic over the last few years, as Trump's demands for higher contributions from allies have grown more strident.

Moving the goalposts

In early 2018, NATO's definition was updated to include "all payments, including pensions, made by a national government to meet the needs of its armed forces, regardless of the ministerial budgets from which those payments are made."

With that in mind, starting in 2017 Canada began including in its estimate of defence expenditures its spending on: pensions (both military and civilian defence); the country's electronic spy service (the Communications Security Establishment); veterans benefits, including death benefits for survivors; Global Affairs and RCMP expenses for peacekeeping; and the costs borne by other government departments when they support the Department of National Defence.

That added another $4.9 billion annually to Canada's calculation of defence spending.

NATO further revised its definitions in February 2018. That allowed Canada to begin counting as a defence expenditure the $5 million it spends on the Afghan National Army Trust Fund, which is intended to support and train the army of that beleaguered nation.

One set of documents, dated June 5, 2018, shows the alliance doesn't allow countries to get away with charging whatever they like — and has even declared some expenses submitted by Canada to be "ineligible."

Naming and shaming

When it was originally conceived, the two per cent benchmark was meant to serve as a measure of burden-sharing, of what each nation brought to the table in the name of the collective defence of Europe.

It has since evolved — particularly since the arrival of Trump — into a somewhat tortured accounting exercise that drives nations to demonstrate their worth to avoid international naming-and-shaming.

The White House does recognize the needle has moved since Russia's annexation of Crimea jolted the now-70-year-old alliance out of its post-Cold War celebratory haze.

It would never have happened, O'Brien claimed, without American hectoring, mostly by the current president.

"NATO member states, other than the United States, have invested $120 billion more over a four-year period than they otherwise would have," he said.

"It's a major success story, not just for the United States but for our allies. It took President Trump to encourage our allies to recognize they need to be responsible for things."

But is the two per cent benchmark about maintaining collective security or burnishing a political image? Canada's former top military adviser to NATO, retired vice-admiral Bob Davidson, said Trump is mostly interested in boasting rights.

"Donald Trump wants to make a point. He wants a win on the NATO side," said Davidson. "He wants it to look like his threats and cajoling has actually worked so that he can brag about it at the next election."