Canada's pledge to increase defence spending to 2% of GDP by 2032 is welcome news, but could leave the North American country saddled with massive debt.
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| During Justin Trudeau's nine years as Prime Minister , total Canadian government spending increased by 75%. (Source: AP) |
Prime Minister Justin Trudeau has pledged Canada will stick to its deadline to reach its defence budget target of 2% of GDP after coming under increasing pressure from the United States and other allies in the North Atlantic Treaty Organization (NATO).
On July 12, Reuters news agency reported that, although encouraging, Canadian economic experts warned that efforts to meet the above target could push the North American country deeper into a budget deficit or force large-scale spending cuts, and Ottawa, not very pleasant options.
To meet the aforementioned target by 2032, the North American country will have to allocate an additional CAD 15-20 billion (about USD 11-14.7 billion) over the next eight years, and that step cannot be achieved by raising taxes alone. Canada currently spends about 1.4% of its GDP on defense.
During Justin Trudeau’s nine years as prime minister, total Canadian government spending has increased by 75%, with the extra money going primarily to public health programs, social services and government employee salaries. Plans to build more housing and provide health care are expected to add to the pressure in the coming years.
The recent spending increase has pushed Canada's budget deficit from CAD 550 million (USD 403 million) to nearly CAD 40 billion (USD 29 billion), while increasing the North American country's debt to 42% of GDP last year, compared to 31.5% in 2014-2015.
Source: https://baoquocte.vn/chay-theo-nato-canada-vua-mung-vua-lo-278544.html
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