NATO says Canada met its vow to spend 2% of GDP on defence

NATO says Canada has finally met a key alliance commitment for the first time since 1990.

Accounting estimates released by NATO say Canada met the commitment by spending roughly two per cent of its GDP on defence in the last fiscal year, or $63.4 billion.

NATO Secretary General Mark Rutte’s 2025 annual report confirms Canada has met the spending level for the first time since 1990.

“We have made significant progress on defence investments, and NATO is stronger today than it has ever been. In 2025, for the first time, all allies met the goal agreed in 2014 to invest at least two per cent of their GDP on defence, and many went much further. In fact, we saw a 20 per cent increase in what Europe and Canada spent on defence in 2025 as compared with 2024,” said Rutte.

Hitting the two per cent benchmark by the end of the fiscal year was a promise Carney made in the face of that pressure from the U.S. and other allies.

One expert says defence spending wasn’t a priority for the federal government in years past, but the new world order is changing that now – and for the future.

“It’s an important moment, one shaped by an ever changing and complex world,” said David McGuinty, Canada’s minister of national defence.

Speaking in Nova Scotia today, McGuinty and Prime Minister Mark Carney said Canada has invested more in defence recently than it has in decades.

“In 10 months we have invested over $60 billion in our defence and security – that’s the largest year-on-year increase in defence investment in generations,” said Carney.

This comes after Canada has come under heavy pressure in recent years from its allies to dramatically ramp up military spending – the United States being the nation pushing especially hard.

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“I think if you take the Trump piece out of the equation, meaning the specific pressure about two per cent, which wasn’t just aimed at Canada, it was aimed at other NATO members as well. The odds are we probably would still be trying to hit two per cent. But I would also say the odds are we might have not hit it right now,” said Jane Boulden, professor at the Royal Military College of Canada.

According to NATO, Canada still sits in the bottom one-third of the alliance when it comes to defence spending.

This is due to years of previous governments setting defence spending aside.

“Both types of government, liberal and conservative, fell into this trap or fell into this pattern where there was a willingness in the context of the need to cut spending. There was a willingness to do that with defence rather than with other issue areas,” said Boulden.

Much of the government’s recent defence spending focused on things like infrastructure, salary increases and longer term projects. Carney says there’s more to come.

“Over the next decade Canada will unleash a half a trillion dollars – I’ll repeat – a half a trillion dollars in defence and defence related investment; from submarines and aircraft, to drones, sensors and radar systems. We will build the essential infrastructure that our security needs,” said Carney.

Carney says he is committed to reaching the new, even steeper, NATO spending target of five per cent of GDP by 2035.

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