Canada faces funding challenge for increased defense spending

Canadian premiers are united in calling for increased federal defense spending, partly to meet NATO commitments and address U.S. concerns. The current defense budget is projected at $41 billion, or 1.35% of GDP, with plans to rise to $57.8 billion by 2029. To meet NATO's 2% GDP target by 2032, Canada would need to increase defense spending to $81.9 billion. The Business Council of Canada suggests aiming for 2.5% of GDP, which would require a budget of $110 billion by 2034. Funding options include strategic spending to boost economic growth, reallocating existing funds, and cutting other government programs. Raising taxes or borrowing could also support increased defense spending, but these choices may lead to significant trade-offs in other areas.