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Defence spending

NATO Summit to Set New Military Spending Target, Requiring Canada to Spend $150 Billion Annually

Strategic Insights

— 2 min read

As the leaders' summit of the North Atlantic Treaty Organization (NATO) gets underway in The Hague, Prime Minister Mark Carney has announced that Canada will be required to spend $150-billion annually on defence-related priorities under the new NATO military spending target. This figure is tens of billions of dollars above Canada's current levels of military spending. The new target is set to require member countries to spend 5% of their gross domestic product on defence, up from the current 2% target. The target is composed of two benchmarks: raising core defence spending to 3.5% of GDP and then defence-related infrastructure investments equivalent to another 1.5% of GDP.

Key Takeaways:

  • The new NATO military spending target will require Canada to spend $150-billion annually, which is tens of billions of dollars above current levels.
  • The target is composed of two benchmarks: raising core defence spending to 3.5% of GDP and then defence-related infrastructure investments equivalent to another 1.5% of GDP.
  • The Prime Minister, Mark Carney, emphasized that the nature of warfare is changing, and Canada needs to focus on cutting-edge warfare technology, such as drones, rather than traditional military assets like aircraft carriers.
  • Canada is expected to get credit for already planned infrastructure spending, which will account for nearly a third of the new target.
  • However, Canada's core defence spending for 2025-26 is only $62.7-billion, leaving about $45-billion to $50-billion in additional core military spending each year.
  • The NATO summit has been carefully choreographed to deliver the 5% target for US President Donald Trump, who has argued that other countries rely too much on US military might.
  • Spain and Slovakia have already indicated that they do not plan to hit the new NATO targets, making it unlikely that all member countries will meet the increased spending requirements.
  • NATO Secretary-General Mark Rutte emphasized that the US President is committed to protecting the military alliance as long as Canada and Europe follow through on their increased defence spending commitments.

Statistics:

  • Current NATO military spending target: 2% of GDP.
  • New NATO military spending target: 5% of GDP.
  • Breakdown of new target: 3.5% of GDP for core defence spending and 1.5% of GDP for defence-related infrastructure investments.
  • Current defence spending for Canada: $62.7-billion (2025-26).
  • Additional core military spending required for Canada: $45-billion to $50-billion per year.
  • Current share of GDP for NATO countries' defence spending: around 1.3%.
  • New target for NATO countries' defence spending: 5% of GDP.

Sources:

  • Prime Minister Mark Carney's interview with CNN
  • NATO Secretary-General Mark Rutte's statement at a forum
  • US President Donald Trump's statement to reporters
  • Reuters report

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