Canada will meet NATO’s 2% defence spending target in 2025, five years early, with a $9.3B investment to strengthen its military and security.
Canada Accelerates Military Investment
Prime Minister Mark Carney announced Monday that Canada will meet NATO’s benchmark of spending 2% of GDP on defence in the 2025-26 fiscal year. The decision advances the timeline by half a decade, marking a pivotal shift in the country’s defence policy and budget priorities. The government plans to inject $9.3 billion in new military spending this fiscal year to meet the target.
Defence Spending Boost Tabled in Parliament
The funds are being introduced through supplementary estimates, allowing Parliament to authorize interim financing before the formal budget. Carney emphasized that this increase is not a one-time milestone but part of a sustained investment strategy aimed at long-term national security and readiness.
Four Pillars of the New Defence Strategy
The plan focuses on four key pillars: enhancing Armed Forces personnel and equipment, boosting military capabilities, reinforcing the domestic defence industry, and expanding international partnerships. “Our plan will help ensure that Canada is strong at home and reliable abroad,” said Carney, pledging to prioritize Canadian manufacturing and supply chains.
New Procurement Agency to Speed Up Delivery
A newly proposed defence procurement agency, led by Secretary of State for Defence Procurement Stephen Fuhr, aims to centralize decision-making and streamline delivery of critical equipment. Carney said this “structural change” will ensure predictability in defence investments and fast-track acquisition processes.
Responding to Emerging Threats
The Department of National Defence will draft a new defence policy reflecting modern threats, including cyber attacks, terrorism, and Arctic sovereignty. Carney announced increased Canadian presence in the North across land, sea, and air, along with expanded Coast Guard operations and a new research bureau named Borealis.
NATO Alignment and Global Role
The announcement comes ahead of the NATO leaders summit, where nations may consider raising defence targets to 5% of GDP. Currently, no country meets that level. In 2024, Canada’s defence spending was at 1.45%—ranking in the bottom five among NATO’s 31 members. Carney stressed that the motivation for Canada’s increase is national defence, not simply meeting NATO metrics.
Political Reactions and Fiscal Impact
Opposition Leader Pierre Poilievre expressed conditional support for boosting military funds but demanded clarity on financing. He urged the government to cut bureaucratic waste rather than raise taxes or debt. Carney confirmed that taxes would not increase, referencing a recent middle-class tax cut passed in Parliament.
Canada Eyes Broader Transatlantic Cooperation
Carney highlighted Canada’s growing commitment to transatlantic security, citing its participation in ReArm Europe and the upcoming Canada-EU summit. He said Canada would support NATO’s new defence industrial pledge and leverage its strengths in critical minerals and cyber capabilities.
“We’re Doing This for Us”
Carney concluded by underscoring the self-directed nature of the investment: “We’re doing this for us… and we’re standing shoulder to shoulder with our NATO allies.” The statement reflects a shift toward a more proactive and independent Canadian defence posture, reinforced by long-term planning and global collaboration.
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