Canada will be the headquarters for a new NATO-linked financial institution intended to help alliance members meet defense spending commitments and reduce the cost of borrowing for military needs, a senior government official said Wednesday.
The official, speaking to The Associated Press on condition of anonymity because they were not authorized to comment before an announcement, said the decision came after negotiations hosted by Canada involving nearly 20 founding members of NATO’s proposed Defense, Security and Resilience Bank, or DSRB.
The official said the financial institution is meant to support NATO members and partner countries by pooling credit strength, with the stated goal of lowering borrowing costs for military spending. The official also said they did not know which city in Canada would be selected as the institution’s headquarters.
Ontario Premier Doug Ford said he hoped the bank would be headquartered in Toronto after citing a report that Canada had been chosen. In a social media post, Ford said Toronto was “an opportunity to put Canada” at the center of global defense finance and manufacturing, adding, “As our nation’s financial capital, with a skilled workforce and unparalleled global connectivity, there’s no better place for the bank to be headquartered than Toronto,” according to the AP account of his remarks.
Federal Prime Minister Mark Carney’s government has said it will meet NATO’s military spending guideline, the AP reported. NATO countries, including Canada, have pledged to spend 5% of their national GDP on defense, and Carney said last year Canada would meet the earlier 2% target this year before later committing to reaching 5% by 2035, the AP reported.
The bank plan and the spending pledges come as European allies and Canada have increased investment in their armed forces, as well as weapons and ammunition, since Russia launched an all-out invasion of Ukraine on Feb. 24, 2022, according to the AP account. The AP also noted that U.S. President Donald Trump has previously complained that Canada does not spend enough on its military.