Prime Minister Mark Carney says Canada and its NATO allies have agreed to substantially hike their defence-spending target to five per cent of annual GDP by 2035.
Carney says Canada can no longer rely on its geography to protect it as new weapons and threats emerge on the wold stage.
NATO Secretary-General Mark Rutte put forward a plan that says allies will invest 3.5 per cent in core defence needs — such as jets and weapons — and 1.5 per cent in defence-adjacent areas, such as infrastructure and cybersecurity.
The new five per cent target represents a massive jump from the previous target of two per cent, which Canada has struggled to meet for years.
Carney has said the new NATO agreement will see the nation’s annual defence budget increase to roughly $150 billion.
He said that the new pledge will be reviewed in 2029 to “ensure that the commitments align with the global security landscape.”
Canada has not spent the equivalent of five per cent of GDP on defence since the 1950s and currently no member of NATO — not even the U.S. — spends five per cent.
Before Wednesday’s meeting, Britain, France, the Netherlands and Germany had all committed to the five per cent target. NATO countries closer to the borders of Ukraine, Russia and its ally Belarus also pledged to do so.
Some countries, like Spain and Slovakia, expressed concerns about the target.
Before Wednesday’s official meeting of the North Atlantic Council, Carney held bilateral meetings with Prime Minister Christopher Luxon of New Zealand and Prime Minister Kristen Michal of Estonia.
Carney was seen chatting with several leaders in the room at Wednesday’s meeting, including French President Emmanuel Macron and British Prime Minister Keir Starmer. Foreign Affairs Minister Anita Anand also went over to speak for a few minutes with U.S. Defence Secretary Pete Hegseth.
A short video played before Rutte delivered remarks to the leaders assembled around a large table. He said the meeting was coming at a dangerous time, citing wars in the Middle East and Ukraine.
“This decision is deeply rooted in our core mission and is required to resource our plans and readiness,” Rutte said. “This will also make NATO fairer, to ensure anyone and everyone contributes their fair share for our security.
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“For too long, one ally, the United States, carried too much of the burden of that commitment. And that changes today,” he added, saying that U.S. President Donald Trump “made this change possible.”
Rutte said the allies will agree to further increase defence production so that its armed forces have “everything they need.” He said decisions include continuing allies’ support to Ukraine and called on Russia to “end its aggression.”
Dutch Prime Minister Dick Schoof added that the NATO allies were “about to write history” by making decisions leading to an “unprecedented increase” in its collective defence spending and a new financial balance in its alliance.
“Both are urgent, both are necessary and both will help make our transatlantic bond even stronger,” Schoof said.
Noting the war in Ukraine, Schoof said there is a “renewed awareness” that peace can’t be taken for granted and that it needs to be protected.
“And yes, peace comes at a cost,” Schoof said, urging members to stand united and “embrace” the plan. “We must act on this swiftly and decisively.”
Carney told CNN International on Tuesday that Canada will reach the target in part by developing deposits of critical minerals and that some of the work will be done in partnership with the European Union, EU member states, the U.K. and other allies.
He also said five per cent of GDP would mean a $150-billion defence budget for Canada. NATO said in 2024 Canada spent $41 billion.
All 32 NATO member counties have to agree on a new spending target and will also have to debate the timeline for its implementation.
Earlier this year, U.S. President Donald Trump suggested the U.S. might abandon its commitments to the alliance if member countries don’t meet their defence spending targets.
The president generated more uncertainty Tuesday when he said his commitment to the mutual defence guarantee in the NATO treaty “depends on your definition” of that guarantee.
Pressed later by reporters, Rutte said he has no doubt about the U.S. commitment to NATO and Article 5, the portion of the NATO treaty which says an armed attack on one member is an attack on all.
Trump, who has long accused the alliance of not paying its fair share toward the cost of its defence, is also the key driver behind the plan to hike members’ defence spending target.
At a dinner event with NATO leaders Tuesday, Rutte thanked Trump for pushing for a spending hike and getting Europe to “truly step up.”
Kerry Buck, the former Canadian ambassador to NATO, told The Canadian Press that it’s in the interests of Canada and European allies to keep the U.S. in NATO as “deep and as long as possible.”
“Whatever we can do to get through this NATO summit with few public rifts between the U.S. and other allies on anything, and satisfy a very long-standing U.S. demand to rebalance defence spending, that will be good for Canada because NATO’s good for Canada,” Buck said.
Britain, France, the Netherlands and Germany have all committed to the five per cent goal. NATO countries closer to the borders of Ukraine, Russia and its ally Belarus have also pledged to do so.
But some are balking, including Spain and Slovakia.
Rutte warned Monday that no country can opt out of the target and that progress made toward the new target will be reviewed in four years.
— With files from The Associated Press and The Canadian Press’ Kyle Duggan in Ottawa.
© 2025 The Canadian Press
