Canada’s premiers urge federal government step up military spending to avoid possible U.S. tariffs

Canada-U.S. relations made up the bulk of discussions during the final day of meetings between premiers and territorial leaders in Halifax on Wednesday.

Nova Scotia Premier Tim Houston, chair of the committee, said the federal government has to ensure it’s meeting its international obligations when it comes to NATO spending, as failure to do so could have unintended economic impacts for provincial economies.

“What might a U.S. administration (do) – no matter who it is and how might they view Canada as a trading partner – if Canada doesn’t meet it international obligations?” asked Houston. “It’s a legitimate concern among a whole basket of concerns.”

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Houston said meeting international spending requirements on security issues like NATO will put Canada in more a favourable position with trading partners.

“There’s ways we can meet the two per cent,” said Houston.

There’s concern among provincial leaders that if Canada doesn’t spend two per cent of its GDP on NATO obligations, the next US Government could impose harsh tariffs on Canadian exports, hurting provincial goods destined for the American marketplace.

“We rely very, very heavily on – to the tune of close to three quarters of a billion dollars a year worth of trade – with the Unites States, largely in the northeastern parts of the U.S.,” said P.E.I. Premier Dennis King.

Harsh economic penalties like increased tariffs on trade goods would be devastating, says New Brunswick Premier Blaine Higgs, so protecting the new free trade agreement is vital.

“It’s more important that we become one as North America,” said Higgs.

The federal government has said they plan to meet their NATO spending target by 2032.

Manitoba Premier Wab Kinew doesn’t think that’s soon enough.

“I am concerned that if we don’t hit that two per cent target within the next four years, then for (the) next administration in the U.S., it will become an economic issue and trade irritant,” said Kinew.

There was consensus that increasing NATO spending and investing in Canada’s military isn’t just good for security, but could also spur further economic opportunities across the country and in the arctic, while pleasing international partners, said Alberta Premier Danielle Smith.

“These are ways that you can invest for a dual purpose, so not only build up the necessary infrastructure from an economic point of view,” said Smith. “But also be able to probably have that count towards our NATO commitments.”

Last week federal Defence Minister Bill Blair set out a timeline to meet the NATO two per cent (GDP) target by 2032.

“Canada is on track to almost triple its defence spending between 2014-15 and 2029-30 – and we will not stop there,” said Blair in a press statement. 

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