By Spencer Van Dyk and Mike Le Couteur
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OTTAWA (CTV Network) — Canada will boost defence spending by billions of dollars to meet NATO’s two per cent of GDP target this fiscal year, Prime Minister Mark Carney announced Monday. The pledge comes ahead of next week’s G7 summit.
“We will further accelerate our investments in the years to come, consistent with meeting our new security imperatives,” Carney announced during a speech at the Munk School in Toronto.
“We will ensure every dollar is invested wisely, including by prioritizing made-in-Canada manufacturing and supply chains,” he added.
Canada has never met NATO’s existing spending target, despite its 2014 pledge to do so, and has faced public pressure from member countries for years to meet its commitment.
NATO allies initially signed on to hit the two per cent target by last year — when former NATO secretary general Jens Stoltenberg then said the figure should be a floor instead of a ceiling — but former prime minister Justin Trudeau’s government said Canada wouldn’t get there until 2032.
Carney’s new timeline comes well ahead of that 2032 goal, and of the 2030 target he pledged during the federal election.
Canada spending on submarines, aircraft, artillery
Part of Carney’s spending plan includes Canada’s participation in the $234-billion (€150 billion) ReArm Europe program, a commitment that was highlighted during the speech from the throne late last month.
The prime minister added it will help to diversify Canada’s military suppliers with “reliable European partners.”
“We should no longer send three quarters of our defence capital spending to America,” Carney said during his speech.
Canada is also expanding Canadian Coast Guard’s mandate to better integrate it into Canada’s NATO defence capabilities. Carney says it will “better secure our sovereignty and expand maritime surveillance.”
The prime minister said Canada will be boosting its defence spending by investing in new submarines, aircraft, ships, armed vehicles and artillery. Carney said there will also be investments in new radar, drones, and sensors to monitor the seafloor and the Arctic.
Canada is also planning to support the new NATO Defence Industrial Pledge, which is expected at the next Canada-EU summit later this month. That pledge will include both defence expenditure and investments in strategic infrastructure.
“Our fundamental goal in all of this is to protect Canadians, not to satisfy NATO accountants,” Carney said.
Defence spending on NATO summit docket
Defence spending is expected to be a major focal point at the NATO summit in The Hague later this month, where Secretary General Mark Rutte has signalled he will propose an overall investment plan that would increase defence investment to five per cent of GDP — 3.5 per cent for core defence spending and 1.5 per cent in defence-related investments like infrastructure.
The most recent NATO figures show Canada spent 1.45 per cent of its GDP on defence in 2024. Most other NATO allies, 22 of the 32 member countries, meet or exceed NATO’s current two per cent target.
According to National Defence, Canada is projected to spend $52.3 billion on defence in the 2025-26 fiscal year.
A report released last fall from the parliamentary budget officer stated the federal government would need to spend $81.9 billion to hit the two per cent of GDP target by 2032-33.
New defence policy coming
“Canada’s Department of National Defence will immediately design a new defence policy that reflects both today’s and tomorrow’s threats,” Carney said.
The new policy comes just 14 months after Trudeau’s government released “Our North, Strong and Free: A Renewed Vision for Canada’s Defence.”
With files from CTV News supervising producer Stephanie Ha
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