Canada must significantly increase its defense spending to meet NATO’s 2% GDP target while also reducing reliance on U.S.-made military equipment, argued candidates vying to replace Justin Trudeau as prime minister.
During the final Liberal Party leadership debate ahead of the March 9 decision, contenders Mark Carney, Chrystia Freeland, Karina Gould, and Frank Baylis clashed over how quickly Canada can realistically achieve this goal.
Urgent Need for Defense Investment
“We need to act with the fierce urgency of now,” said Freeland, referencing former U.S. President Donald Trump’s comments suggesting Canada could become the 51st state. “I don’t think any of us wants to be the leader who was asleep at the wheel and didn’t get Canada defended.”
Freeland stressed that military investments should prioritize Canadian industries, ensuring that the funds boost the country’s domestic defense sector.
Carney echoed the need for enhanced defense capabilities, emphasizing that Canada must also “protect our Arctic, which is under threat not just now from the Russians and the Chinese, but from potential U.S. incursions.”
He also suggested Canada leverage critical minerals and clean energy as diplomatic tools to strengthen alliances with Europe and Asia.
Meeting NATO’s 2% Target: Feasibility & Timeline
Currently, Canada spends about 1.33% of its GDP on defense. Trudeau previously announced that Canada does not plan to meet NATO’s 2% target until 2032. However, leadership candidates are pushing for a more ambitious timeline.
Freeland and Gould pledged to accelerate the deadline to 2027. Gould criticized Carney for proposing 2030 as his target year. “We don’t have time to wait for this,” she argued.
Carney responded by emphasizing the logistical challenges of rolling out billions in military spending efficiently. “We will do it faster if we can deploy it faster,” he said. “It’s a matter of delivery capacity, not just pushing money out the door.”
Baylis also cast doubt on the feasibility of reaching 2% by 2027, citing the complexities of large-scale procurement projects—especially if limited to Canadian firms. “I don’t think that’s doable in an intelligent way,” he remarked.
U.S. Trade Threats & Economic Retaliation
Beyond defense, the debate also focused on Trump’s threats to impose tariffs and disrupt the Canada-U.S. trade relationship, which sees over $900 billion in goods and services exchanged annually.
“If you hit us, we will hit back—but our retaliation will be a lot smarter than their dumb tariffs,” Freeland said. She vowed to impose 100% tariffs on Teslas, Wisconsin dairy, and Florida orange juice to trigger a U.S. stock market reaction.
Carney proposed a different approach, highlighting Canada’s leverage as the United States’ largest supplier of energy, electricity, and uranium. “There are the first signs in the United States now of the economic impact of the Trump policies. We will amplify that and that will begin to create the leverage,” he said.
Countdown to New Leadership & Possible Early Election
With the leadership race concluding on March 9, the new Liberal leader will face immediate political and strategic decisions. Trudeau has announced his resignation, setting the stage for a shift in Canada’s political landscape.
Parliament is set to resume on March 24, and opposition parties have signaled their intention to push for an election at the earliest opportunity. However, the new Liberal leader could preempt this by calling an early election before Parliament reconvenes.
Carney has hinted at this possibility, suggesting in interviews that an early mandate from voters may be necessary to counter potential U.S. trade threats.
As Canada prepares for new leadership, defense spending and trade relations with the U.S. remain at the center of the national conversation. The coming weeks will be critical in shaping the country’s security and economic strategy.
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