Canada has officially reached NATO’s defence spending target of 2 percent of gross domestic product for the first time since the benchmark was established more than a decade ago.
According to NATO’s latest annual report, Canada spent more than 60 billion dollars on defence in 2025, bringing its military spending to 2.01 percent of the country’s GDP.
Prime Minister Mark Carney is expected to highlight the milestone during a visit to Halifax, where he will tour a Royal Canadian Navy frigate. Although Canada’s fiscal year ends on March 31, the spending data was submitted to NATO ahead of the final accounting period.
The report marks a significant shift for Canada, which has long faced criticism from allies for failing to meet the defence spending guideline established during NATO’s 2014 Wales Summit.
In 2024, Canada’s military spending stood at 1.47 percent of GDP, placing it among 11 NATO members that had not yet reached the alliance’s recommended level of defence investment.
This year’s NATO report indicates that all 32 member countries have now met the 2 percent benchmark.
Pressure from the United States has played a major role in pushing allies to increase military spending. During his first presidency in 2018, U.S. President Donald Trump repeatedly warned that Washington might reconsider its commitment to NATO if member countries failed to meet their financial obligations. At the time, only seven nations were meeting the 2 percent target.
Trump renewed the pressure during his 2024 presidential campaign, suggesting the United States might not defend NATO members that did not contribute sufficiently to the alliance’s collective defence.
Amid heightened geopolitical tensions and Trump’s renewed criticism of Canada, Prime Minister Carney has made defence investment a key pillar of his economic and national security strategy.
The Canadian government last summer announced plans to “rebuild, rearm and reinvest” in the Canadian Armed Forces, setting an ambitious goal to reach the NATO target by the end of the 2025 fiscal year.
To achieve that goal, Ottawa allocated an additional 9.3 billion dollars in defence spending. Approximately 2 billion dollars was directed toward pay increases for military personnel, while the remainder funded new equipment purchases including aircraft, armoured vehicles, ammunition, drones and advanced communications technology.
Funding was also earmarked for improvements to housing on military bases and maintenance of existing ships and aircraft.
Carney’s predecessor, former prime minister Justin Trudeau, had previously projected that Canada would reach the 2 percent target by 2037, a timeline that drew criticism from NATO allies and U.S. lawmakers.
In 2024, a leaked Pentagon document reported that Trudeau had privately told NATO officials Canada would likely never meet the target without a major shift in domestic political support.
That revelation intensified pressure from Washington. A bipartisan group of 25 U.S. senators later sent a letter urging Canada to develop a concrete plan to meet its obligations, warning that failure to act would harm both NATO and the broader democratic alliance.
During the same period, U.S. House Speaker Mike Johnson publicly criticized Canada, accusing it of relying too heavily on American military support.
Although criticism intensified during Trudeau’s tenure, Canada’s reluctance to commit to the 2 percent target dates back to the Conservative government of former prime minister Stephen Harper.
When NATO first introduced the benchmark at the 2014 summit, Harper declined to pledge that Canada would meet the goal within the alliance’s ten-year timeline.
At that time, Canada was spending about 1 percent of its GDP on defence, roughly 20 billion dollars annually.
More than a decade later, Canada’s defence spending has more than tripled, reaching over 60 billion dollars per year.
However, the alliance is already raising expectations again. NATO members have recently agreed to work toward a new long-term goal of allocating 5 percent of GDP to defence by 2035.
Prime Minister Carney has endorsed that target, estimating that Canada would eventually need to spend around 150 billion dollars annually on military capabilities to meet the new benchmark.
