Canada to meet NATO 2% defence spending target within 12 months

Canada will meet the existing NATO 2% of GDP defence spending target within a year, according to a 9 June press release from the government. 

Canada has historically lagged behind much of the NATO alliance on defence spending, having spent around 1.4% of its GDP in 2024. 

The new commitment represents an overall CAD9 billion cash increase across the Department of National Defence, Canadian Armed Forces (CAF), and Communications Security Establishment. 

Several priority capabilities are detailed, including Arctic over-the-horizon radar system(s), a joint counter-drone programme, joint support ships, long-range precision strike weapons, increased ammunition production, and new armoured and utility vehicles. 

The rise includes CAD2.6 billion for personnel, CAD844 million for equipment repair and sustainment, and CAD560 million to strengthen digital capabilities, according to a separate government press release. 

In addition, the government states that CAD1 billion will be allocated to “grow and introduce emerging military capabilities”, aligning with other NATO and Five-Eyes members.  

Mirroring efforts underway in much of Europe, Canada is moving to improve its relationship with industry, with a CAD2.1 billion commitment to reduce obstacles for defence manufacturers and “leverage joint NATO procurement mechanisms”.  

The CAF declined to answer DSEI UK’s questions about which obstacles the funds would address. 

Notably, the announcement highlights efforts to reduce the country’s reliance on the US, as it describes efforts to “diversify Canada’s defence partnerships beyond the [US]”, and an aim “to become increasingly self-sufficient”. This initiative is backed by a further CAD2 billion. 

It comes after months of political jostling between Canada and the US. “In an increasingly dangerous and divided world, Canada must assert its sovereignty. We will rapidly procure new equipment and technology, build our defence industrial capacity, and meet our NATO defence commitment this year”, Mark Carney, Prime Minister of Canada, commented. 

NATO looks set to more than double the 2% target 

The announcement that Canada will meet the 2% target – which member states agreed in 2014 – comes ahead of a crunch NATO summit on 24 -25 June in The Hague.  

At the summit, it is widely expected that NATO will call for members to commit 3.5% of their GDP to core defence spending, with a further 1.5% for defence-adjacent investments, such as infrastructure and capacity building. The 5% total is a figure first called for by US President Donald Trump prior to his inauguration. 

Ahead of the summit, NATO Secretary General Mark Rutte delivered a keynote speech to Chatham House in London on 9 June, where he said that “spending more [on defence] is not about pleasing an audience of one. This is about protecting one billion people”.