The Trudeau government won praise Monday along with some European allies who have chosen to put more into their militaries, despite only promising to increase defence spending by a whisker in the current budget year.

New figures released by NATO ahead of this weekend's leaders' summit show Canada inhabits the lower third of NATO membership in terms of defence spending, with the government planning to spend an additional .01 per cent of the country's gross domestic product on defence.

The increase, which is only anticipated because the 2016 budget year is just getting underway, will see Canada's defence spending rise to .99 per cent of GDP from .98 per cent.

To put that in perspective, the North Atlantic military alliance has established two per cent of GDP as its annual investment benchmark. Canada is ranked 23rd out of 28 member countries, wedged between Hungary and Slovenia.

It has been a source of frustration for the Americans, something that manifested itself last week in U.S. President Barack Obama's speech to Parliament, where he pointedly called on the Trudeau government to meet the NATO measure because "the world needs more Canada."

Obama: 'The world needs more Canada' 1:21

The irritation was also felt in Brussels, where NATO Secretary General Jens Stoltenberg has struggled to convince hesitant allies to pry loose cash in the face of a resurgent Russia.

"Last year, after a long period of decline, we saw a small increase in overall defence spending by NATO's European Allies and Canada," the secretary general said Monday.

'A very long way to go'

Stoltenberg, who has regularly but diplomatically rebuked nations for failing to meet the two per cent standard, chose to focus his praise on what's known as "real" defence spending — the total dollars each ministry pours into its budget without accounting for the corrosive effect of inflation.

He said NATO is pleased to see an expected increase of three per cent in defence spending by European Allies and Canada in 2016. That amounts to about $8 billion US, and 22 of the allies are planning bigger budgets.

"So, we are both spending more and we are spending better," he said. "But we have a very long way to go and we must keep up the momentum."

According to NATO figures, Canada will set aside $20.3 billion for defence in 2016, an increase from $19.4 billion last year.

Stoltenberg's praise raised a few eyebrows among defence experts, who point out it comes just a few days after the Liberal government committed to send troops and headquarters formation to a NATO high-readiness brigade, which is slated to deploy to eastern Europe.

Troops from the U.S. Army's 173rd Infantry Brigade Combat Team parachute from a Boeing C-17 Globemaster III during a NATO-led exercise held together with Canada's 3rd Battalion and Princess Patricia's Light Infantry, and Poland's 6th Airborne Brigade in southern Poland in May 2014. (Kacper Pempel/Reuters)

"If we were not going to take a leadership position on one of NATO's key priorities, I imagine that we would be having a very different conversation right now," said Dave Perry, an analyst with the Canadian Global Affairs Institute. "We have been getting a free pass on our actual budget commitments because we are heavy lifters when it comes to operations."

Perry noted the country's No. 23 ranking at NATO and said there's little in the Liberal government's plans or public statements that will change that.

Risk of a 'hollow force'

During the 2015 election campaign, Justin Trudeau promised not to cut defence expenditures and to live up to Conservative pledges of an additional two per cent annual increase, starting in 2017.

The government is in the midst of a strategic defence review, which could be completed in time for the next budget, but Perry said the Liberals seem to have other priorities.

"Our allies will remain disappointed with the actual amount of money we put on the table, and I suspect we can fob off the criticism by showing up for operations," he said.

But Perry warned that strategy runs the risk of further wearing down equipment and personnel, creating a "hollow force."

A spokeswoman for National Defence responded that government agreed at the 2014 NATO summit in Wales that bigger budgets were in order, but that committing to a "fixed target" was not something Canada was prepared to do.

Dominique Tessier said the NATO two per cent benchmark is "a statement of aspirations" and the prodding by allies was meant "to reverse the trend of falling spending on defence among allies and to optimize the use of available funds."

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