What happened
A recent report by the Parliamentary Budget Office (PBO) states that Canada will need a substantial and sustained increase in defence spending to meet NATO's target of 5 percent of GDP by 2035.
The report highlights that meeting this target will require significant increases in core defence spending, including personnel, operations, and equipment, as well as ancillary defence and security-related spending.
According to the PBO, the target of 4 percent of GDP by 2030-31 will require Ottawa to spend $95.7 billion, which is a 50 percent increase from the $63.5 billion spent in 2025-26.
Furthermore, the report estimates that meeting the 5 percent target will increase the annual federal deficit by $63.7 billion and add substantially to the federal debt.
The PBO also raises questions about the government's ability to spend the additional money on schedule, citing historical shortfalls in defence spending.
