Canadian defence spending among lowest in NATO despite small increase last year

Prime Minister Justin Trudeau, Minister of National Defence Harjit Sajjan and Rear Admiral Art McDonald walk up to speak to media after meeting with members of the Canadian Forces at CFB Esquimalt in Esquimalt, B.C., on Thursday, March 2, 2017. (THE CANADIAN PRESS/Chad Hipolito)

OTTAWA -- The head of NATO threw down the gauntlet Monday, saying he expects all members to increase what they spend on their militaries even as a new report showed Canada lagging behind most of its allies.

Speaking in Brussels where he released his annual state-of-the-alliance report, NATO Secretary General Jens Stoltenberg said it is incumbent on all members to spend two per cent of GDP on defence.

That is the target all NATO members, including Canada, agreed to work towards in 2014.

"All our efforts must be underpinned by adequate resources and fair burden-sharing," Stoltenberg said.

"It is realistic that all allies should reach this goal. All allies have agreed to do it at the highest level. It can be done."

Stoltenberg's report said Canada saw a small bump in defence spending in 2016, which pushed the percentage of its GDP spent on defence to 1.02 from 0.98.

The increase helped Canada move up to 20th from 23rd in terms of spending among NATO's 28 allies, putting it in a three-way tie with Hungary and Slovenia.

But it was still the smallest share of GDP that Canada has spent on defence since 2012, while only Belgium, the Czech Republic, Iceland, Luxembourg and Spain spent less.

The figures have taken on new importance following the election of U.S. President Donald Trump, who has complained about NATO allies not spending enough on defence.

Prime Minister Justin Trudeau appeared to all but dismiss the two per cent target during a visit to Germany last month, saying: "There are many ways of evaluating one's contribution to NATO."

That is the message the government has repeatedly delivered, emphasizing Canada's military contributions to Latvia, Ukraine and Iraq in lieu of large spending increases.

While Liberal insiders say Canada's message has resonated in Washington, Stoltenberg was unwavering in his insistence that all allies meet the two per cent target.

At one point during Monday's news conference, he listed the many ways that Spain has contributed to NATO operations and security, which includes contributing troops to a Canadian-led battle group in Latvia.

"Having said that, of course Spain, as many other allies, invests too little in defence," Stoltenberg said.

"And that's exactly why we decided in 2014 to stop the cuts, gradually increase, and move towards spending two per cent of GDP on defence. And I expect that Spain will deliver on that."

A former prime minister of Norway, Stoltenberg acknowledged the difficult choices politicians must make when it comes to spending limited taxpayer dollars.

He said politicians prefer to spend on education, health and infrastructure and many countries cut defence spending as tensions eased in the wake of the Cold War.

"But my message is that if we are decreasing defence spending in times with reduced tensions, we have to be able to increase defence spending when tensions are going up and now tensions have gone up."

Canada spends about $20 billion a year on defence and would need to double that to reach the NATO target.

Defence Minister Harjit Sajjan recently revealed that he has ordered officials to look at how Canada calculates its defence spending compared with other NATO countries.

Only five NATO members currently spend two per cent of GDP on defence, though several have committed to reaching the target in the next few years.