Scroll to the top

{{ subpage.title }}

Gov. Tiff Macklem walks outside Bank of Canada building in Ottawa.

REUTERS/Blair Gable

Are Canada & US headed toward soft landing?

Canada's annual inflation rate dropped more than expected to only 2.8% in June, the lowest figure since April 2021. That's good news, right? Well, it depends.

Read moreShow less

A Canadian soldier holds a flag as they wait for the arrival of PM Justin Trudeau along with NATO Secretary-General Jens Stoltenberg in Adazi, Latvia.

REUTERS/Ints Kalnins

What We’re Watching: NATO (still) wants Canada to pay up, critical mineral gold rush, a tale of two banks

Canada is a NATO laggard – but it’s far from alone

The aging defense league is finding a new raison d’etre battling Russian aggression in Ukraine. But Canada still falls short of the 2% GDP military spending goal that NATO Secretary General Jens Stoltenberg recently said is set “not as a ceiling but a floor, a minimum, that we should all meet.”

A recent NATO report estimates that Canada’s share of defense spending declined against its GDP to 1.27% in 2022, down from 1.32% in 2021 and well shy of the 2% target. Several members spend less than the target, but Canada falls toward the mid-to-bottom of that list.

In 2022, the US topped the list at 3.47% of GDP. The US routinely nudges Canada to spend more on defense. Last month, its ambassador to Canada said he was “hopeful” the country would hit the NATO target.

Canada has no plan to reach the 2% target, and its latest budget is still light on defense spending. But the government does tout that it has the sixth-largest NATO defense budget and is a top contributor to the alliance’s common fund. Canada also spent billions on new fighter jets and is making investments in northern and continental defense. NATO doesn’t penalize states that don’t hit the 2% target – and it’s hard to imagine Canada getting thrown out of the club, so all it can do is name and shame in the hope that Canada starts to pull its weight.

Read moreShow less

Subscribe to our free newsletter, GZERO Daily

Latest