The most powerful business lobby group in Canada on Wednesday sentan open letter to Prime Minister Justin Trudeau warning that Canada faces “diplomatic isolation” if it doesn’t come up with a plan to raise defense spending to meet NATO's target of 2% of GDP.
Next month, NATO leaders will meet for a summit in Washington, DC, where Trudeau can be expected to face more of this pressure. Canada has traditionally come up short of NATO spending guidelines, relying on Uncle Sam’s continental defense to stay safe.
Liberal plans to increase spending will bring the level only to 1.76% of GDP by the end of the decade. With Trudeau facing financial pressure from all sides, there’s little prospect of that changing.
Why is the Business Council of Canada weighing in on an issue like this? It says that failing to spend enough “will put lives and livelihoods at risk.”
But the specter of a second Trump presidency is probably also at work here: Business leaders may be worried that Trump, who famously has little patience for NATO spending laggards, might take out his frustration on Canada in other areas of policy such as trade or investment.