Canada's commitment to increasing defense spending to 2% of its Gross Domestic Product (GDP) by 2032 is welcome news, but it could leave the North American nation burdened with significant debt.
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| During Justin Trudeau's nine years as Prime Minister , total government spending in Canada increased by 75%. (Source: AP) |
Prime Minister Justin Trudeau has pledged that Canada will adhere to its deadline of achieving a defense budget target of 2% of GDP, following increasing pressure from the United States and other NATO allies.
On July 12, Reuters reported that, while encouraging, Canadian economists warned that efforts to meet the target could plunge the North American nation deeper into budget deficits or force large-scale spending cuts, and Ottawa, these are not pleasant options.
To meet the aforementioned goal by 2032, the North American nation would need to allocate an additional CAD 15-20 billion (approximately USD 11-14.7 billion) over the next eight years, and that cannot be achieved simply by raising taxes. Canada currently spends about 1.4% of its GDP on defense.
During Justin Trudeau's nine years as Prime Minister, Canada's total government spending increased by 75%, with the additional funds primarily allocated to public health programs, social services, and government employee salaries. Plans for further housing construction and healthcare are expected to add further pressure in the coming years.
The recent spending cuts have pushed Canada's budget deficit from CAD 550 million (USD 403 million) to nearly CAD 40 billion (over USD 29 billion), while also increasing the North American nation'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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