By now it’s no secret—Canada and its NATO allies have shaken up the old defence-spending playbook, agreeing to a stunning five per cent of GDP by 2035. That’s a figure so high it hasn’t been touched by Canada since the early Cold War era of the 1950s. And while this move might be historic, it’s also deeply controversial, especially for a country that’s never met even the previous two per cent target.
Prime Minister Mark Carney is betting big, arguing that in a world of rapidly shifting threats—from cyberattacks to hypersonic missiles—geography no longer offers the protection it once did. And he’s not wrong. The comforting illusion that Canada’s vast landmass and oceans shield it from global conflict is crumbling fast. Whether it’s China’s aggressive posture in the Indo-Pacific, Russia’s ongoing war in Ukraine, or rising tensions in the Middle East, Canada can’t afford to play defence by staying on the sidelines.
But five per cent of GDP? That’s about $150 billion annually—more than triple Canada’s current defence budget of $41 billion. It’s a staggering increase, and one that will need to be reconciled with competing domestic priorities like healthcare, housing, and climate action. Carney has suggested that a good chunk of this spending will be met through new economic development, such as mining critical minerals—an optimistic assumption that could easily fall short.
Still, it’s clear that NATO is realigning itself for a more dangerous and unpredictable world. The push for this new target didn’t come out of nowhere. U.S. pressure, particularly from Donald Trump, has loomed large over the alliance. Trump has made it clear—often in blunt terms—that the U.S. won’t keep footing the bill for Europe’s (and Canada’s) security if others don’t pull their weight. NATO Secretary-General Mark Rutte acknowledged this reality, saying the burden can no longer fall so heavily on one ally.
And in fairness, Rutte’s plan does try to balance the scales: 3.5 per cent of GDP toward direct defence (planes, weapons, troops), and 1.5 per cent for adjacent priorities like infrastructure and cybersecurity. That split makes sense, especially as modern warfare increasingly extends into digital and logistical realms.
Some allies, like the U.K., France, and Germany, have already pledged to meet the new target, while front-line states near Russia and Belarus are understandably on board. Others—Spain and Slovakia, for instance—have raised concerns. And rightly so. Meeting the target will require long-term political will and sustained economic growth, neither of which are guaranteed.
For Canada, this pledge is a gamble. On one hand, it shores up our reputation within NATO, responds to years of U.S. complaints, and ensures we’re not freeloading off American protection. On the other hand, it sets the country on a path toward a colossal military build-up—one that may not align with public opinion or fiscal reality.
Carney’s pledge includes a built-in review in 2029, which is wise. It gives Canada and other allies a chance to reassess whether the five per cent target still fits the global security landscape. But make no mistake—this isn’t just about money. It’s about Canada redefining its role in a more volatile, multipolar world.
NATO is evolving, and if Canada wants to be a relevant player at the table, it can no longer pretend that “peacekeeping” is enough. This new commitment may be uncomfortable, expensive, and politically risky—but in a world where peace is increasingly fragile, it might also be necessary.
Still, Canadians deserve an open, transparent debate about what exactly we’re signing up for. Defence spending is not just about dollars; it’s about values, priorities, and the kind of country we want to be. Let’s make sure that conversation happens before the cheque is written.
