The Trudeau government may slash $1 billion from Canada’s annual military budget as part of its spending reduction plan, making its “enduring commitment” to meeting the country’s NATO targets impossible. 

On Thursday, Chief of the Defence Staff Gen. Wayne Eyre and deputy defence minister Bill Matthews testified at the House of Commons defence committee to warn against the repercussions of such cuts to their department.

“There’s no way that you can take almost a billion dollars out of the defence budget and not have an impact,” said Eyre on Thursday. “This is something that we’re wrestling with now.”

Eyre and Matthews warned DND staff in an internal statement that the department would be expected to participate in the government’s spending reduction plan. The military’s budget for 2023-24 is projected to be $26.5 billion. 

The Trudeau government recently reiterated its pledge to meet its NATO commitment, which is to spend two per cent the country’s GDP on defence. To meet that, the government, would have to substantially increase its funding to the DND, not reduce it.

Last year, Canada only spent around 1.3% of its GDP on the military, according to NATO’s latest annual report. 

The underachievement was picked up by the press at the NATO alliance summit in Vilnius, Lithuania and put increased pressure on the government to adhere to its financial commitment from other NATO members. 

Canada is not the only country to fail to meet its NATO spending target, Germany also backed out of its 2% GDP contribution recently, according to CBC News

While speaking with the defence committee, Matthews said that he estimated a spending reduction of “nearly, I think … $900 million and change, [which will] ramp up over four years.”

Matthews believes that the spending cuts can be managed so that “they have the least amount of impact possible,” however he said that “there will be impact.”

Conservative defence critic James Bezan remains skeptical that these cuts can be made without diminishing confidence in the DND’s readiness.

“What’s going to give here on a billion dollars this year?” asked Bezan. “And how are we going to deal with the threat environment that we’re in if we’re going to continue to cut rather than invest in our Canadian Armed Forces?”

Defence Minister Bill Blair also testified at the committee Thursday, saying, “The fiscal environment in Canada right now requires that when we are spending Canadian taxpayers dollars, that we do it carefully and thoughtfully. I’ve always looked upon the expenditure of tax dollars as an investment in creating public value for Canadians.”

In August, Treasury Board President Anita Anand, who previously served as defence minister, said that at least $15.4 billion in government spending needed to be reduced, telling her other federal cabinet ministers that they had until Oct. 2 to come up with areas that would be best suited for the cuts.

Blair claimed that savings could be made by postponing the upcoming equipment spending planned by the DND. 

“We do know that we have to look very carefully at the expenditures,” Balir told the defence committee. “It may actually require some of the investments that we know we have to make, [that] we may have to make over a longer period of time in response to the current fiscal situation.”