As Canada celebrates meeting the North Atlantic Treaty Organization (NATO) target of spending two per cent of GDP on defence, it’s important to remember this spending isn’t counted within the concept of what’s known as social GDP, an alternative metric focused on measuring a nation’s social development, well-being and sustainability rather than just monetary production.
Excessive military spending, in fact, can harm economic and social development, which raises concerns about NATO’s new five per cent target by 2035, transitioning to 3.5 per cent by 2029.
GDP measures the total value of goods and services produced in an economy. It’s an accounting of economic activity, not a judgment of social value. Therefore, military expenditures are included in the GDP.
