As NATO firms up military spending target, Canada is trying to broaden what counts: sources

Canada has quietly and consistently lobbied major NATO allies for months to expand the definition of what it can include under the military alliance's defence spending benchmark, defence and government sources have told CBC News.

The notion of being able to include what the country spends on space, cyber and artificial intelligence (AI) research has been an important topic of conversation, particularly with the United States, said two sources with knowledge of the discussions.

CBC News is not identifying the sources because they were not authorized to speak publicly.

The conversations were separate from intense negotiations among allies over the revised defence spending plans that NATO leaders are expected to support this week at the upcoming summit in Vilnius, Lithuania. 

A report published Friday by Reuters quoted two diplomatic sources in Brussels as saying countries had reached an agreement to raise the alliance's target for military spending to at least two per cent of a nation's gross domestic product, with the sources calling it "an enduring commitment."

Canada has been "very active" in trying to expand the definition of what's covered by the two per cent benchmark, the government and defence sources told CBC News.

The matter was raised in the bilateral meeting between Defence Minister Anita Anand and U.S. Defence Secretary Lloyd Austin last fall at the Halifax International Security Forum and "had resurfaced recently," the sources said.

The response from Washington has been "a flat no."

At the moment, Canada spends 1.29 per cent of its GDP on defence — far less than the current suggested goal of two per cent — and a long way from what's about to become the expected standard. 

Canada's Parliamentary Budget Officer, Yves Giroux, said last year that NATO's definition of defence spending is broad and encompasses more than just direct military spending. In Canada, for example, both the Canadian Coast Guard and veterans' pensions were recently included in the country's calculation of military spending.

To meet NATO's goal of spending two per cent of the country's GDP on defence, Giroux estimated last year that the federal government would have to spend an additional $75.3 billion before the end of 2027. 

Precisely what elements of space, cyber and AI research Canada wants counted is unclear. However, it could amount to several hundred million dollars annually.

The entire budget of the Canadian Space Agency is more than $530 million per year, while the federal government has in recent budgets announced different tranches of funding for cybersecurity and artificial intelligence.

For example, the 2022 federal budget pledged $875.2 million over five years, and $238.2 million ongoing, to address "the rapidly evolving cyber threat landscape."