Canada launches $9.3B defence surge to meet NATO's two percent defense spending; eyes 5 percent target in the future
Prime Minister Mark Carney
announced on Monday (June 9) that
Canada
will meet NATO's 2 percent defense spending benchmark this fiscal year. During the election campaign, Carney pledged to get to 2 percent by 2030.
'This is not about satisfying NATO accountants,' said Carney, framing the $9.3 billion investment in the 2025-26 fiscal year as essential for safeguarding Canadians, not just hitting a target. His announcement arrives ahead of the G7 summit in Alberta and a NATO meeting in June, amid pressure from US President Trump to raise allies' military contributions.
'When it's something as fundamental as defence, defence of Canadians, defence of Canadian interests, you need to act, and that's why we're pulling things forward,' he said.
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Canada currently allocates approximately 1.4 percent of its GDP to defense. The extra funds will modernize aging hardware, as only one of four submarines is operational, and many military vehicles are non‑functional. Carney stressed these investments also build domestic capabilities, from Arctic drones and sensors to Canadian-made steel and ammunition.
The four pillars
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The federal government, according to Carney, will 'rebuild, reinvest and rearm' the Canadian Armed Forces through four pillars.
These four pillars focus on investing in Armed Forces personnel and their equipment, enhancing military capabilities, strengthening the defence industry, and diversifying partnerships.
'Our plan will help ensure that Canada is strong at home and reliable abroad,' he stated. 'We will ensure that every dollar is invested wisely, including by prioritizing made-in-Canada manufacturing and supply chains.'
He also added that the threat landscape facing Canada has grown, with rising challenges from state actors, non-state actors, terrorist groups, and advancing technological developments, making it essential for the country to take action on its own.
A strategic pivot
Carney also signaled a shift away from heavy reliance on US military procurement. 'We'll stop sending 75 percent of capital spending to the US,' he said. Instead, Canada aims to collaborate more with European and domestic suppliers as a part of a broader 'ReArm Europe' and NATO investment pledge Carney backed.
Recent US-Canada tensions have flared after President Trump suggested Canada could become the "51st state," a comment that was swiftly condemned in Ottawa as a threat to sovereignty.
Relations worsened when Trump imposed steep tariffs up to 50 percent on Canadian steel, aluminum, and other goods, prompting retaliatory Canadian tariffs and fueling a nationwide "Buy Canadian" movement.
Pierre Poilievre's response
Conservative Leader Pierre Poilievre welcomed the added spending but called for transparency: 'Show us where the money's coming from and what capabilities we're getting,' he said. Carney, downplaying tax hikes, said, 'We're not raising taxes, we just cut them,' citing recent middle-class tax relief.
Looking ahead
Carney hinted this is just the start and Canada could increase defense spending even beyond 2 percent, aligning with possible new NATO guidelines targeting a 5 percent threshold. Canada remained ranked in the bottom five countries out of the 31 total members in NATO.
The government also plans to create a centralized procurement agency to speed up equipment delivery.
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