United States President Trump is complaining about Canada and other allies not spending enough on their military operations. This brings into play the NATO goal of each country spending two per cent of Gross Domestic Product (GDP) on defence.
Aside from the ridiculous new idea of doubling that goal, there are two problems with this two per cent of GDP figure. First, meeting it would increase defence spending by approximately two-thirds in Canada, and secondly, it is the wrong measurement for capabilities and contributions to NATO.
A two-thirds defence expenditure hike would necessitate either substantial tax increases and/or significant reductions in other government programs and services, including social support measures. I consider that unrealistic and unacceptable.
GDP can go up or down, or it can be stagnant. If we have robust economic growth over the next decade, getting to two per cent will become even more expensive and challenging. If we unfortunately experience a recession, then our percentage of GDP for military expenditure can increase without spending a dollar more.
What sense does that make in terms of measuring capabilities and contributions? Also, only four of 29 NATO countries currently meet the two per cent goal. And the goal is not compulsory, or as the Harper government said after the last summit in Wales, it is “aspirational.”
In my five years serving as minister of National Defence in the Chrétien cabinet, I never came to appreciate that two per cent of GDP was the appropriate way to measure our contributions as a member of the alliance. That was verified by NATO officials Simon Lunn and Nicholas Williams who wrote: “the two per cent takes no account of the ebbs and flows of economic fortunes; is vulnerable to changing circumstances and domestic pressure, both in terms of the security requirements and the economic base; encourages creative accounting to satisfy targets; and provides zero guidance concerning precisely what capabilities are needed to counter the threats and challenges that NATO faces.”
If not two per cent of GDP, then what?
We could for example, measure per capita expenditures, in which case Canada ranks ninth out of 29 member states, or a percentage of the federal government expenditures, in which case Canada ranks sixth. In either case, we rank above the NATO average if you exclude the United States, which is really in a league of its own, spending more than double on defence than all the other NATO countries combined.
Better still, shouldn’t we be measuring outputs and outcomes rather than input percentages? As Lunn and Williams suggest, the important measurement should be based on capabilities and contributions.
it comes to capabilities, our Canadian Forces personnel are some of the best in the world. They are motivated, highly skilled, and dedicated to their roles. Our allies around the world, including the U.S. military, recognize this.
We are no laggard when it comes to joint military exercises and contributing to multilateral missions. We don’t need all the equipment in the world — we work with our allies — but what’s important is the interoperability with them that strengthens the capabilities of our troops.
On the issue of equipment, NATO does want member countries to update their assets and the government has started to implement that request with budget increases this year and thereafter. This commitment is real investment in the equipment of our Forces, one that is not tied to GDP but reflects actual military expenditures, and again contributes to capabilities.
When it comes to recent contributions we have sent troops and equipment, along with our NATO allies, to operations in Afghanistan, Bosnia, Kosovo, and are currently leading a mission in Latvia. And now with the United Nations they are headed to Mali.
It is these and other capabilities and contributions to the defining conflicts of our time that armed forces should be measured by — not something as flawed as a financial yardstick that is tied to GDP.
Senator Art Eggleton is a member of the Canadian Senate from Toronto. He currently serves as chairman of the Senate’s standing committee on social affairs, science and technology.
