Prime Minister Mark Carney has announced that Canada and other NATO allies have agreed to significantly increase defence spending, pledging to reach 5% of GDP by 2035—a major policy victory for U.S. President Donald Trump.
Speaking from the NATO summit in The Hague, Carney emphasized that the commitment is designed to confront rising global threats and safeguard Canadian sovereignty. “With our allies, we must ensure Canada remains strong, unified and ready to confront the threats not just of today but of tomorrow,” he said.
The new spending target—3.5% for core military capabilities and 1.5% for defence-related infrastructure—marks a dramatic shift from Canada’s long-standing contributions to NATO. The plan will be reviewed in 2029 to reassess its alignment with evolving global risks.
Trump, who has long criticized NATO allies for not pulling their weight, welcomed the move. When asked if the increased funding meant he would stand behind NATO’s Article 5 self-defence clause, Trump replied, “I stand with it, that’s why I’m here.”
Canada’s Trade-Offs and Costs
Carney acknowledged that the plan comes with substantial trade-offs. Meeting the 5% target could cost Canada $150 billion annually, including $107 billion for military expenditures and the rest for supporting infrastructure like ports, airfields, and bases.
Asked whether this would mean tax hikes or service cuts, Carney responded that some sacrifices are already being made—particularly by underpaid and underequipped military personnel. “In five or 10 years, if the threats continue to increase, we’ll need a clear and open conversation about what Canadians are willing to compromise,” he said.
Carney also cautioned against rapid spending increases, warning they could lead to supply shortages and higher costs. The government will ramp up defence funding gradually and in coordination with European allies to avoid economic disruptions.
Trump Praised for Driving NATO Reform
NATO Secretary General Mark Rutte publicly credited Trump for driving the alliance’s financial transformation. “Your leadership has already produced one trillion dollars in extra spending since 2016,” Rutte said. “And today’s decision will result in trillions more.”
Canada Looks to Europe for Defence Procurement
Beyond budgeting, Carney signaled a shift in Canada’s defence procurement strategy. He confirmed ongoing talks with European allies about potential purchases of fighter jets and submarines—alternatives to the F-35 deal with U.S. defence giant Lockheed Martin.
A decision on the F-35 review is expected by the end of the summer, while submarine procurement discussions may not be finalized until 2028, Carney said.
Public Opinion and Political Risks
Whether the Canadian public is ready for such a drastic increase in military spending remains uncertain. While Canadians largely supported the previous 2% target, this jump is unprecedented since World War II or the Korean War.
“This move takes a long-standing irritant off the table in U.S.-Canada relations,” said defence expert Dave Perry of the Canadian Global Affairs Institute. “Past administrations asked politely—Trump didn’t.”
As Canada embarks on its most ambitious military transformation in generations, Carney promises transparency and open dialogue with Canadians, particularly if the funding shift impacts public services or the national budget.