Canada will meet NATO’s 2% defence spending goal in 2025, investing CA$62.7B to modernize the military and shift away from U.S. reliance.
Canada NATO Defence Spending Reaches 2% in 2025
In a major policy shift, Canadian Prime Minister Mark Carney announced that the country will meet NATO’s defence spending target of 2% of GDP in the 2025 fiscal year—five years ahead of the original schedule. The announcement was made during a speech at the University of Toronto on Monday.
“This is the time to act with urgency, force, and determination,” Carney stated, signaling a proactive stance on national defence amid increasing global tensions.
Military Overhaul Backed by CA$62.7 Billion
Canada will inject CA$9 billion in additional funding this year, raising total defence spending to CA$62.7 billion. This includes CA$2.5 billion allocated to departments such as the Canadian Coast Guard, which will now be incorporated into the broader defence framework.
The investment plan includes acquisitions of submarines, fighter jets, ships, armed vehicles, artillery, and advanced monitoring technologies such as radar, drones, and seafloor sensors.
Addressing Equipment Failures and Recruitment
Carney acknowledged Canada’s long-standing military readiness issues, noting that only one of its four submarines is operational and that much of its equipment is outdated. A substantial portion of the new budget will focus on repairing damaged infrastructure, improving pay, and addressing a recruitment crisis within the armed forces.
“We allowed our military assets to rust and deteriorate,” Carney admitted, pledging immediate action to rebuild operational capacity.
A Strategic Pivot from U.S. Reliance
The announcement underscores a notable pivot away from Canada’s traditional reliance on the United States for defence. Carney criticised America’s shifting posture under President Donald Trump, warning that U.S. leadership is becoming transactional and less committed to collective security.
“Canadian leadership will now be defined not only by our values but by our strength,” Carney declared, adding that Canada must reduce the flow of its defence capital to American firms.
Preparing for NATO’s Evolving Standards
Carney’s remarks come as NATO allies consider increasing defence commitments beyond the current 2% GDP target. NATO Secretary-General Mark Rutte recently noted growing support for a 5% benchmark, largely driven by U.S. advocacy.
Carney confirmed that Canada will engage in these discussions at the upcoming NATO summit, but clarified that the current 2% target remains the official benchmark Canada will meet this year.
Exploring New Partnerships in Europe
To diversify its defence procurement strategy, Canada is reassessing its commitment to purchasing U.S.-made F-35 fighter jets and is actively exploring European alternatives. Negotiations with the European Union are underway to participate in joint security and procurement initiatives that would further reduce U.S. dependence.
This shift aligns with broader Western defence trends following Russia’s 2022 invasion of Ukraine, which has prompted increased investment in weapons and infrastructure among NATO allies.
Analysts Call Move Bold but Challenging
Defence experts have largely welcomed the announcement. Margaret McCuaig-Johnston, a senior fellow at the University of Ottawa, called the early target “a long-overdue announcement,” while cautioning that implementation will be a major logistical and fiscal challenge.
Carney concluded his speech with a stark warning about rising global threats: “The belief that geography alone can protect Canada is outdated. We face a new kind of imperialism that demands new defences.”
