Canada has officially hit NATO’s 2% of GDP defence spending benchmark for fiscal 2025-26, ending roughly 35 years of underperformance and marking the first time since the end of the Cold War that Ottawa has met the alliance’s core spending threshold.
NATO’s Thursday spending report said Canada is now spending just over $63.0 billion on defence, placing it at the long-missed target first agreed by alliance members in 2006 and reaffirmed in 2014.
As recently as 2024, Justin Trudeau’s government was telling allies the country would need until 2032 to reach 2%. Mark Carney, after taking office in 2025, moved the timetable forward dramatically. He first campaigned on reaching the target by 2030, then announced last summer that Canada would meet it immediately.
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Carney’s first budget last November included more than $84.0 billion in new defence spending over five years, directed toward military pay raises, precision-strike capabilities, aging infrastructure upgrades and cyberdefences.
NATO’s estimates show the spending surge was large enough to push Canada over the line in 2025.
The political pressure intensified with President Donald Trump, who repeatedly accused allies of free-riding on US defence commitments. NATO Secretary-General Mark Rutte said Thursday that every member is now meeting the 2% target for the first time and explicitly credited pressure from the current US administration for the shift.
In 2024, former defence minister Bill Blair said there was no practical way to spend an immediate extra $14.0 billion fast enough to hit the benchmark in a single year, citing procurement and delivery constraints. Trudeau, that same year, dismissed the alliance metric as a “crass mathematical calculation,” arguing the headline number did not automatically translate into greater safety.
Meeting 2%, however, closes one gap only to open a larger one. NATO leaders last June agreed to a new core defence spending target of 3.5% of GDP, which will require tens of billions of dollars more in annual Canadian defence spending. On top of that, members pledged another 1.5% of GDP for defence- and security-related infrastructure with dual civilian and military uses, including ports, bridges, roads, cybersecurity systems and energy pipeline protection.
The prime minister has said existing plans can cover that 1.5% infrastructure commitment, bringing Canada’s total defence-related spending objective to 5% of GDP. He has also committed to reaching that broader NATO goal by 2035.
Carney was expected to mark the milestone Thursday in Halifax with a visit to a Royal Canadian Navy vessel and a further defence spending announcement.
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