Donald Trump, with his fondness for made up facts, may find it amusing. For about a nanosecond.
It turns out the defence spending numbers that Canada has been feeding its NATO allies — already criticized for being far too low — have been wildly inflated by the Department of Defence, deliberately, or more likely, by mistake.
When it comes to defence, Canada is the parachute of nations, always letting its allies down gently.
Trump has warned about the consequences for countries that don’t meet NATO’s two-per-cent military spending target, if he is re-elected.
“No, I would not protect you. In fact, I would encourage (the Russians) to do whatever the hell they want,” he said he told the leader of a “delinquent” nation.
The point has been reiterated by his vice-presidential pick, JD Vance, who said “there will be no more free rides for nations that betray the generosity of American taxpayers.” And by the former ambassador to Ottawa during the first Trump administration, Kelly Craft, who said on CTV’s Question Period this weekend that Canada’s timeline of hitting the two per cent target by 2032 is not good enough.
Knowing all this, the Department of Defence has somehow fluffed the numbers to make Canada’s relative lack of spending look less egregious.
Last April, Ottawa released its five-year defence plan, Our North, Strong and Free, that committed to spend an extra $8.1 billion on increased capability to protect the homeland.
By DND’s calculations, this (and already planned increases) would push defence spending from $41 billion this fiscal year to $57.8 billion, or 1.76 per cent of GDP by 2029/30.
At the NATO summit in Washington in July, Prime Minister Justin Trudeau committed to Canada hitting the two-per-cent target by 2032, without offering a clear plan on exactly how this would be achieved.
The bottom line is that Canada has a problem whoever wins the White House on Tuesday
But a new report from the Parliamentary Budget Office (PBO) explodes the myth that we are well on the way to two per cent.
The PBO said that the 1.76-per-cent figure (for 2029/30) is based on an erroneous GDP forecast by DND that assumes nominal GDP growth averaging just 1.7 per cent over four years, which is below the rate of inflation and implies a four-year recession.
Substituting the erroneous GDP forecast with the PBO’s own figures, which are comparable to the Department of Finance’s numbers, the $57.8 billion in defence spending forecast for 2029/30 accounts for just 1.58 per cent of GDP.
To meet the target of two percent by 2032/33 would mean military spending has to nearly double from current levels to around $81.9 billion.
You can see why Trump might be mildly amused at the native cunning.
If you’re being criticized for not spending enough as a share of the economy, and you aren’t willing or able to spend more, simply shrink your denominator and, voila, you’ve hit your target.
DND says it was using OECD figures, yet those appear to be in line with the PBO’s projections. Either it was deliberate, or the Defence Department needs some new number-crunchers.
The bottom line is that Canada has a problem whoever wins the White House on Tuesday.
The letter to Trudeau earlier this year from 23 U.S. senators expressing their “profound disappointment” at the lack of a plan to meet the two-per-cent target was signed by representatives of both parties in Congress.
The bipartisan view in Washington is that Canada never buys its round.
Kamala Harris as president may go easier on Ottawa than Trump would, but there will still be pressure on her to use the review of the United States-Mexico-Canada (USMCA) trade deal in 2026 to extract more defence spending.
Trump threatens to be as big a nightmare for the Trudeau Liberals on trade as he will be on security.
If he wins, he has promised to use tariffs to keep out foreign goods, just as he did in his first term, when Canada was subject to a 25-per-cent tariff on steel and 10-per-cent levy on aluminum.
The same economic advisers — Robert Lighthizer and Peter Navarro — are still with Trump and the results are likely to be similar. “The U.S. has no allies, only competitors who cheat and dump,” Navarro told The Economist.
The Trudeau government has tried to insulate Canada by raising tariffs to 25 per cent on Chinese steel and imposing a 100-per-cent tariff on Chinese vehicles.
But Chinese steel still leaks into Canada, according to local producers, and a Trump administration will likely seek retaliation for the Liberal government’s new digital services tax that even the Democrats consider to be discriminatory against their tech giants.
Both Republicans and Democrats are keen to overturn the dispute-resolution panel decisions that have gone against them recently, so trade relations are unlikely to go smoothly when the USMCA is reviewed, whatever happens this week.
But it is on defence that the starkest divisions can be found.
John Bolton, Trump’s former national security adviser, said on X that, while it would be a catastrophic mistake, U.S. withdrawal from NATO is a “real possibility” in a second Trump administration.
Craft said on Sunday that the Republican leader will not allow the American people to carry the burden of the NATO coalition.
That is ominous, given the U.S. outspends the rest of NATO more than two to one.
Other NATO countries have responded by increasing defence spending by more than eight per cent last year. Donald Tusk, the Polish prime minister, said on social media, whatever the outcome of the U.S. election, “the era of geo-political outsourcing is over.”
Trump reportedly told European Commission president, Ursula von der Leyen, that “NATO is dead.” If he lives up to his threats, Canada will be left out in the cold, regretting that it has not bolstered its defence budget more swiftly.
It is wearisome to list the shortcomings in the Forces but there appears to be a constituency in the governing party that is impervious to this country’s lack of preparedness for the world we find ourselves in.
Canadian Forces cannot defend themselves against tanks, drones or aircraft. The Navy is serviceable for training and readiness requests around half the time; the Army for slightly more and the Air Force for much less. There are not enough Halifax-class frigates to live up to commitments to NATO and the new Indo-Pacific strategy. The CF-18 jet fleet is considered operationally obsolete.
Only 4,000 new recruits were accepted to join the Forces last year, even though 70,000 people applied. There remains a 16,000-personnel shortfall.
DND has ordered 88 new F-35 jets and 15 frigates, but the first new jet won’t arrive until 2026 and the ships are likely a decade away.
A verbal commitment has been made to buy 12 new submarines but, with typical procurements taking 18 years, it could be into the 2040s before they arrive.
Bill Blair, the defence minister, has said the sub project alone would help take Canada over the two-per-cent target. He might have to take another look at that statement, given the Defence Department’s fun with numbers.
But since the average build time is eight years, that contract is not likely to flatter the spending numbers until well into the next decade.
There have been some big commitments made in recent years. Canada will contribute $29 billion over 20 years to modernize the North American Aerospace Defence Command, paying for two of six Arctic radar installations and funding infrastructure like hangers and runways that will allow F-35s to operate in the North.
But there is no money committed yet to invest in integrated air and missile defence capabilities to protect Canada’s critical infrastructure.
The world has shifted, the U.S. is overstretched and wants its allies to shoulder their own burden.
Whoever wins the White House, Canada has to stop outsourcing its defence obligations.
Trudeau’s claim that defence spending has doubled on his watch counts for nothing in Washington.
More to the point, it counts for even less with the Chinese and Russian icebreakers on manoeuvres in the Arctic, challenging NATO’s presence in the polar region.
Get more deep-dive National Post political coverage and analysis in your inbox with the Political Hack newsletter, where Ottawa bureau chief Stuart Thomson and political analyst Tasha Kheiriddin get at what’s really going on behind the scenes on Parliament Hill every Wednesday and Friday, exclusively for subscribers. Sign up here.