Thank you, Mr. Chair.
Good afternoon, members of the committee.
Thank you for the invitation to appear before you today. We are pleased to present the findings of our report entitled “Canada's Military Expenditure and the NATO 2% Spending Target”, which was published on June 9, 2022.
With me today I have the lead author of the report, Christopher Penney.
Consistent with the PBO's legislated mandate, my office prepared an independent forecast of the military expenditures needed for Canada to meet the North Atlantic Treaty Organization's (NATO) 2% defence spending target for the period from 2022-23 to 2026-27.
In 2006, NATO members agreed to the policy goal of setting their annual defence spending to at least 2% of GDP. This target includes, in addition to Department of National Defence spending, expenditures for veteran pensions and benefits, as well as the Coast Guard, among others.
We estimate that total Government of Canada military expenditures will increase from $36.3 billion in the 2022-23 fiscal year to approximately $51 billion in 2026-27. The corresponding increase in the share of military expenditures to GDP is from 1.33% in 2022-23 to 1.59% in 2026-27. In order for military expenditures to reach 2% of GDP, the Government of Canada would need to spend an additional $75.3 billion over the next five years.
Chris and I would be pleased to respond to any questions you may have regarding this report or other PBO work.
Thank you, Mr. Chair.