OTTAWA — For the first time since the end of the Cold War, Canada is spending roughly two per cent of its GDP on national defence — a key NATO alliance benchmark Ottawa previously failed to meet.
NATO’s annual report, released Thursday, contains estimates stating Prime Minister Mark Carney’s government met the key spending benchmark for 2025 by shelling out just over $63 billion.
Canada has come under heavy pressure in recent years from its allies — and especially from the U.S. — to dramatically ramp up its military spending.
“For the last 10 months, Canada’s new government has been working with unprecedented speed and scale,” Carney told a press conference in Halifax on Thursday. “We’re just getting started.”
Carney said his party ran for office “recognizing the world had changed” and kept its promise to boost defence spending “half a decade ahead of the original schedule.”
Carney campaigned during the Liberal leadership race on meeting the NATO target by 2030, two years earlier than the target date set by Justin Trudeau’s government. Then the prime minister abruptly announced in the summer his government would hit the target within the year.
Better late than never, said former U.S. ambassador to NATO Ivo Daalder.
“Great. Just two years late,” Daalder said. “Canada has a lot of catching up to do after decades of underinvestment in defence, but it’s good to see a government in Ottawa taking its defence and NATO obligations seriously.”
NATO Secretary-General Mark Rutte credited U.S. President Donald Trump and his loud rhetoric about free riders in the alliance for convincing every alliance member to meet the spending target this year.
“I don’t believe that without the present American administration the whole of NATO would have been meeting the two per cent at the end of 2025,” Rutte said in Brussels Thursday.
Conservative defence critic James Bezan said Trump shouldn’t be the reason Canada invests in the military.
“It’s no question Mark Carney is responding to the person in the White House. That’s the wrong reason,” Bezan told reporters on Parliament Hill Thursday. “We were supposed to be here as a nation more than two years ago. We shouldn’t have been dragging our feet and dithering.”
At the 2014 NATO Summit in Wales, Ottawa promised its allies it would meet the target within a decade but made little progress until this year.
Allies noticed and Canada came under sustained pressure from U.S. political figures to quickly pick up the pace.
A Pentagon document leaked to the Washington Post in 2023 revealed Trudeau told U.S. officials Canada would “never” meet the commitment.
Trump also has repeatedly warned NATO countries not to expect the U.S. to come to their aid if they don’t pay their share on defence.
Bezan accused the Liberal government of allowing the military to atrophy. He also said the government engaged in “creative accounting” to meet the target by counting funding for the Canadian Coast Guard and veterans’ pensions.
Eugene Lang, an assistant professor at Queen’s University and former chief of staff to two Liberal defence ministers, said other NATO countries are taking the same approach to defence accounting.
Carney’s first federal budget laid out nearly $82 billion in new defence spending over the coming years. That includes an extra $9 billion he announced for defence last summer.
Lang said adding such a large sum to the fiscal framework outside the normal budget cycle was a “recipe for lapsing funding,” so the “fact they got it out the door is very impressive.”
“I didn’t think they’d be able to do it, to be honest with you,” Lang said. “Most people I’ve talked to who know anything about this world were skeptical they’d make it.”
Defence Minister David McGuinty said he set out to tackle a stream of individual projects, “hitting singles every morning — no home runs.”
The minister rattled off a list of spending items big and small: a $307-million contract to buy new army rifles, $1.4 billion in public funding for munitions, and money to improve Wi-Fi access at military bases.
“We broke all this down into bite-sized, implementable pieces and that’s one of the reasons I think we were successful,” McGuinty told The Canadian Press.
The minister also said rolling out the military’s first significant pay hike since 1997 was a significant step.
“The speed with which we moved was a little bit unusual,” he said. “The plan to execute on (the pay hike) was done in like 101 days. I’ve been around Ottawa a long time — it’s the fastest I’ve ever seen.”
Not that long ago, Canadian politicians spoke about the NATO target as if it were almost out of reach.
Former defence minister Bill Blair said he never would have been able to get all of that money out the door in a year.
“If the finance department had come to me and said ‘OK Bill, you can make two per cent this year, here’s $14 billion,’ there was no way to actually spend that,” Blair said in 2024.
At a separate event that year, Blair said it was “really hard” to convince his cabinet colleagues and Canadians reaching the “magical” spending ratio was a “worthy goal.”
In 2024, Trudeau himself dismissed the target as a “crass mathematical calculation” that “makes for easy headlines and accounting practices” but doesn’t “actually make us automatically safer.”
Meeting the two per cent benchmark is just the first step in a long, uphill climb to rearm Canada’s military — and to sustain such high military spending levels every year.
Carney has committed to reaching the new NATO target — an even steeper spending level of five per cent of GDP — by 2035.
This report by The Canadian Press was first published March 26, 2026.
Kyle Duggan, The Canadian Press
