Canada, NATO partners ‘meet or exceed 2% target’ for defense spending – National
Prime Minister Mark Carney says NATO’s confirmation that Canada has reached its goal of spending two percent of its GDP on national defense is “very encouraging.”
For the first time since the end of the Cold War, Canada is spending nearly two percent of its GDP on national defense — a key commitment NATO ally Ottawa has previously failed to meet.
NATO accounting estimates released Thursday show the Carney government has met a key spending target by 2025 by spending just over $63 billion.
“That’s the biggest year-over-year increase in defense investment in generations,” he said after visiting a naval ship in Halifax.
Defense Minister David McGuinty said the announcement marks “the beginning of a new era of defense for Canada.”
“Canada needs to act with strength, purpose and urgency. We need to be ready, ready to defend. Ready to lead and ready to defend the most important thing,” he said.
At NATO’s 2025 summit in The Hague, members “committed to investing in five percent of GDP annually in primary defense needs and defense and security-related expenditures by 2035.”
NATO states that the allies “will allocate at least 3.5 percent of GDP annually based on an agreed definition of NATO defense expenditure in 2035 to implement core defense needs and meet NATO Capability objectives.”
“If you look at the two percent we’re spending now, it’s primary defense, and that needs to go, and this is a big step,” Carney said. “Obviously our economy will be bigger then. But it needs to reach 3.5 percent by 2035. So, in 10 years, another 1.5% is used for defense.”
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Canada has come under pressure in recent years from its allies – and particularly from the US – to significantly increase its military spending.
NATO Secretary-General Mark Rutte said that all members of the alliance have met the goal of spending money for the first time – all this is due to the speech of the US President Donald Trump about free riders in the alliance.
“I don’t believe that without the current administration of the United States NATO as a whole would have met two percent by the end of 2025,” Rutte told reporters at a press conference in Brussels on Thursday.
“Major economies like Spain and Italy and Belgium and Canada were far from two percent.”
Rutte said that for a long time, Europe and Canada were “too dependent on American military power.”
Carney campaigned during the Liberal leadership race to set an earlier deadline to meet NATO’s goal – 2030, two years before the target date set by Justin Trudeau’s government.
Carney suddenly announced last summer that his government would meet with it immediately, moving the program forward by years.
Not long ago, federal politicians talked about the two percent target as if it was unattainable.
Former defense minister Bill Blair said he would not have been able to spend all that money in one year – even if the Treasury had given it to him.
“Obviously, if the Treasury had come to me and said ‘OK Bill, you can make two per cent this year, here’s $14 billion,’ there was no way to spend that,” Blair said after the military transition ceremony in 2024.
“I wasn’t able to find the skills that the Canadian Armed Forces were quickly identifying.”
At a separate event that year, Blair said it was “really hard” to convince his cabinet colleagues and Canadians that this “magical” level of spending was the “right goal” at a time when housing was dominating the political agenda.
In July 2024, Trudeau dismissed the coalition’s policy as “freakish math” that “makes for easy headlines and calculations that don’t actually automatically make us safer.”
At the 2014 NATO summit in Wales, Ottawa pledged to its allies to increase defense spending by two percent within ten years, after falling behind the pack in the 32-member alliance.
The story is not new. American politicians have made headlines since the 1970s for accusing Canada of being a free rider on defense.
But the situation really began to change when Canada came under constant pressure from US political figures to increase defense spending.
In 2023, a Pentagon document leaked to the Washington Post revealed that Trudeau told US officials that Canada “will not” meet the two percent commitment.
Trump also warned NATO countries not to expect the US to help them if they don’t pay their share of defense.
Carney’s first budget earmarked nearly $82 billion for defense spending in the coming years, and added another $9 billion in spending tables last summer to meet the 2 percent goal.
Meeting the two per cent rate is only the first step in a long climb to renewing Canada’s military — and maintaining such high levels of military spending every year.
Carney also committed to reaching NATO’s new target – an increased spending rate of 5 percent of GDP – by 2035.
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