Stephen Saideman – NATO Spending and Doing

This post was originally published on June 24th, 2016 on Saideman’s Semi-Spew:

Yesterday, NATO put out its report on spending by its members. It sets some of the context for the summit later this week. By the traditional measure, the aspiration to eventually spend 2% of GDP on defence, Canada is, um, not doing well. Canada is now under 1%, and there is no chance that it will double its defence budget in the near, medium or distant future.

A closer look at the report suggests that Canada does not suck as much as it appears:

  • Yes, Canada is below 1% and ranks fifth worst on % of GDP.
  • Canada is close to the NATO standard on percentage of budget spent on equipment. Of course, if one spends a lot on getting a little, that is a problem (which I return to below).
  • If one focuses on the total amount spent on defence, controlling for exchange rates and all that, Canada is behind the US, UK, France, Germany and Italy…. and that is it. So, total spending does not look bad.
  • If one focuses on total amount spent per person (controlling for population size), Canada is about the average for non-US members of NATO.

But this exercise does raise questions and concerns.

  • That spending is a lousy measure since it is a measure of inputs, not outputs or outcomes. This is a relatively new but constant theme here at the Semi-Spew–that folks tend to measure what is easily measurable. Spending is easy to measure, but what does it mean for capability or impact? Um, not sure.
  • Spending compared to one’s ability to pay (GDP) makes sense as a way to measure the effort to share the burden, but again, Greece does really well on this, and no one thinks Greece ranks highly as reliable/useful ally. Greece ranks highly because its denominator (GDP) is small. So, if one’s economy does well, the measure here can be deceptive.
  • Spending on what? Canada tends to pay a lot for whatever kit it buys because it does so slowly (defence inflation always bites), it always requires Canadianization for whatever is purchased (making stuff fit Canadian military standards–some of this is reasonable but is all of it?), and the desire for “industrial benefits” means protectionism. And protectionism is always inefficient, leading to higher prices and lesser quality (yes, I am a Classic Liberal when it comes to trade).

I am a big believer in focusing on the doing more than the spending, so Canada did Kandahar and it is doing Latvia while others are not. BUT it is not clear this is sustainable–all these operations plus the relatively fixed costs of procurement (well, commitments that only seem to grow in cost) and personnel (the Minister of Defence has promised not to cut the size of the force despite having an extensive Defence Review) means that there will be less training and maintenance. And that will mean a hollow force that is of whatever size, but not so sharp. And a dull knife is far more dangerous to the user than a sharp one, alas.

So, we can read a lot into the NATO report. The good news is that Trudeau can use the Latvia mission as a shield against criticisms this week. The bad news is that Canada is not spending enough or spending smartly enough. The Navy is facing that crisis right now. The rest of the CAF will face it soon enough.

Stephen Saideman is a Fellow and the Canadian Global Affairs Institute, and the Paterson Chair in International Affairs at Carleton University’s Norman Paterson School of International Affairs

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