U.K. defence secretary urges Canada to hit NATO military spending target

Britain's defence secretary delivered a polite but pointed reminder Thursday of NATO's expectations of its member states — including Canada — when it comes to defence spending.

And Ben Wallace did it in front of his Canadian counterpart, Defence Minister Anita Anand.

The two met in London as part of Anand's visit to the United Kingdom this week ahead of the July 11-12 NATO leaders' summit in Vilnius — where the issue of defence investments is expected to be a major topic of discussion.

The western military alliance agreed in 2014 that all members need to have a plan to spend as much as two per cent of their gross domestic product on their militaries.

"I will say to my friends in Canada, and in France, and in Germany, and in Denmark, and in all those other countries that are not at two per cent — you should try and get there," Wallace told reporters. "Of course, we want all NATO countries to be above two per cent."

Wallace noted that Canada's 2017 defence policy committed the Liberal government to increasing defence spending by 70 per cent. But that was before Russia fully invaded Ukraine and upended the security climate in Europe.

"It's for individual countries to decide when they're going to get to that target and that's up to them," Wallace said. "But ultimately the key here is, if we all spent our two per cent, we could deter Russia and any other adversaries better."

Allies have been pressing Canada behind closed doors to meet the two per cent target. According to the parliamentary budget officer, meeting that target would require the federal government to invest an additional $18 billion annually.

Canada spent 1.29 per cent of its GDP on defence in 2022. According to NATO, that's roughly what it was spending on defence in the late 1990s.

The Washington Post reported in the spring that Prime Minister Justin Trudeau had privately indicated to NATO allies that Canada would not meet the benchmark. The report was based on leaked intelligence reports.

The defence spending benchmark is likely to be a source of tension at NATO's Vilnius summit. Most NATO allies do not meet the goal and Canada ranks in the bottom third of NATO nations in terms of percentage of GDP spent on defence appropriations. In dollar terms, however, Canada has the sixth-largest defence budget in the alliance.

NATO leaders are expected to discuss whether the two per cent target should be the floor or the ceiling.

"Only seven allies currently meet those spending commitments, although that's projected to increase to around 20 allies next year," said Sean Monaghan, a visiting fellow at the Center for Strategic and International Studies in Washington.

He described the upcoming meeting as "the beginning of a discussion about what this new spending target" will look like.

Monaghan said he suspects allies will settle on something in the three per cent range, given that Eastern European countries like Poland and the Baltic states have indicated that's where they are headed.

"So Vilnius will begin that conversation," he said.