Why are we letting NATO bankrupt Canada?

PM Carney’s spending plans are “unsustainable,” says PBO

Sep 27, 2025

a jet flying in the sky leaving a trail of smoke — Photo by nader saremi on Unsplash

Canada’s Defence Minister was at the Pentagon this week working out untold arrangements with his mercurial American counterpart, Trump’s Secretary of War, Pete Hegseth (yes, “war” is part of his new job title).

Canada’s media seems to have little interest in what Minister David McGuinty was discussing, whether it was

PM Carney’s promised review of the controversial $28-billion F-35 jet fighter contract (which is now overdue),
joining Trump’s “cockamamie” Golden Dome missile shield for $100-billion CAD, or
buying billions more U.S. military equipment, like long-range HIMARS missiles.

No matter what was discussed: it’s sure to cost Canada’s treasury a fortune.

The U.S. Embassy issued a statement about the meeting that highlighted Canada’s massive military spending jump, “to increase defense spending to five percent of gross domestic product and planned investments to deliver on this promise by 2035.”

Prime Minister Carney himself told a European audience last month that Canada’s military spending “would quadruple” by 2030.

Parliamentary Budget Officer raises the alarm

Meanwhile in Ottawa, the independent Parliamentary Budget Officer (PBO) was telling Members of Parliament that Prime Minister Carney’s military spending plans, tax cuts and program cuts are, “alarming,” “stupefying,” and “unsustainable.”

A new PBO report projects the deficit will “increase sharply” from $51.7-billion in 2024-25 to $68.5-billion in 2025-26, thanks to the combination of economic weakness, tax cuts, and planned spending, reports The Hill Times.

PBO overlooks full NATO commitment and Golden Dome

And that dire calculation doesn’t even count the military spending increase to 5% GDP as the U.S. Embassy crowed about, according to the PBO. The Golden Dome cost was not even mentioned.

“The outlook does not include incremental measures to achieve the North Atlantic Treaty Organization (NATO) Defence Investment Pledge of investing 5 per cent of annual gross domestic product (GDP) by 2035.”

The bad economic hit comes with Canada simply meeting the previous, 2% of GDP military spending goal, which PM Carney has pledged to meet this year.

“Our outlook includes $8.3 billion in increased funding to the Department of National Defence in 2025-26 announced on June 9 and provisions $6.6 billion annually, on average, on an ongoing basis,” says the report.

One-quarter of military spending boost going to Ukraine

The PBO notes that fully $2 billion of Canada’s $8.3 billion increase to military spending is not going to our armed forces – but will be in the form of military aid to Ukraine.

Up to half of the aid will be used to buy U.S.-made weapons, including some armoured vehicles made by a U.S. branch plan in southern Ontario.

The 2% GDP military boost will add $26-billion to the deficit by 2029-30

All tolled, the PBO reports that simply reaching NATO’s previous target of 2% GDP in military spending will push the deficit upward, “adding $26.0 billion to the budgetary deficit over 2026-27 to 2029-30.”

The astounded PBO head, Jason Jacques, said that the upcoming federal budget is very important.

“It’s one of the most important budgets that we’ve probably seen…I’ve probably seen since I started working in the Department of Finance in 1998.”

The federal budget will be released on November 4. Three-quarters of PeaceQuest readers said there are “very concerned” about the budget, and what it might mean Canadians.

Leave a comment explaining your vote.

Readers worried Russia might provoke war

Concerns over Russian overflights of NATO airspace, and unexplained drones over airports in Denmark, has put NATO political and military leaders on edge.

Last week I asked readers, “Might Russia provoke a shooting war with NATO, either by accident or intent?” Nearly half (44%) said they were somewhat concerned, and many others said they were very concerned (39%). One-in-ten were not concerned.