Carney Says Canada Met NATO’s 2 Percent GDP Defence Spending Benchmark

Prime Minister Mark Carney, left, and National Defence Minister David McGuinty make an announcement aboard HMCS Margaret Brooke at HMC Dockyard Halifax in Halifax on March 26, 2026. The Canadian Press/Darren Calabrese

Canada has hit NATO’s defence spending target of 2 percent of GDP, after a year marked by the biggest jump in military expenditures “in generations,” Prime Minister Mark Carney says.

“For the first time since the fall of the Berlin Wall, we'll be spending that 2 percent of GDP on defence,” Carney said at a press conference in Halifax on March 26, noting Canada has spent more than $60 billion on defence and security to meet the target. He said this fiscal year saw the “largest year-on-year increase in defence investment in generations.”

Carney also announced $3 billion in additional funding for infrastructure and defence-related initiatives in Atlantic Canada.

The 2 percent milestone follows criticism from U.S. President Donald Trump and other NATO allies over Canada’s failure to reach the defence spending benchmark. It also came on the same day as NATO announced in an annual report that all allies who have reported defence expenditure met or exceeded the target, with many members making “steep increases” in defence spending.

Despite the boost, Canada remains among the lowest defence spenders, in line with countries such as Portugal, Spain, Albania and Belgium. The NATO report indicates Canada’s defence expenditure hit exactly 2 percent of GDP this fiscal year, which ends March 31.

Carney said Canada now aims to work toward NATO’s new target of spending 5 percent of GDP by 2035. That target includes 3.5 percent on core defence and 1.5 percent on defence and security-related infrastructure.

The NATO report says three allies have already met the 3.5 percent portion of the target, including Poland, Lithuania and Latvia.

The $3 billion in additional spending Carney announced includes $1.2 billion to modernize power and municipal infrastructure at the military base in Halifax, more than $1 million for infrastructure at the military base in New Brunswick, and $648 million to build two new aviation support facilities, among other initiatives.

The United States ranked seventh in terms of defence expenditure, spending 3.19 percent of its GDP on defence. The country accounted for 52 percent of NATO allies’ combined GDP and 60 percent of combined defence expenditure.

“I expect Allies at the next NATO Summit in Ankara to show they are on a clear and credible path towards the 5% objective,” NATO Secretary General Mark Rutte said in the report.

Conservative MP James Bezan, who serves as his party’s defence critic, commented on Canada hitting the 2 percent target, saying it “doesn’t mean that Canada is any stronger“ and that the increased defence spending is ”actually an illusion.”

“We know that through creative accounting, that government spending in national defence has increased by over $10 billion. That hasn’t actually resulted in increased capabilities for the Canadian Armed Forces,” Bezan said at a press conference on March 26. “It has not actually increased our own security or made us safer here at home.”

He said Ottawa has created more bureaucracy through initiatives like the defence investment agency and has not yet met critical defence commitments such as the procurement of new fighter jets, submarines, and armoured vehicles.

Commitments

The 2035 NATO target, set at the alliance’s June 2025 summit in The Hague, Netherlands, includes 3.5 percent to fund core defence areas, such as investments in the Canadian Armed Forces, upgrading military equipment and technology, bolstering Canada’s defence industries, and diversifying defence partnerships.

In addition, 1.5 percent is to be spent on defence-related areas, including critical defence and security-related infrastructure such as airports, ports, telecommunications, emergency preparedness systems, and other dual-use military-civilian initiatives.

Former Parliamentary Budget Officer Jason Jacques said in a Feb. 5 report that meeting NATO’s 5 percent target by 2035 would require additional defence spending of approximately $33.5 billion per year over the next 10 years, and would increase the budgetary deficit by $63 billion in 2035.

Carney’s government committed to meeting NATO’s targets this fiscal year in the face of strained trade relations with the United States, and said Canada had become “too reliant” on its southern neighbour.

Carney said Canada should no longer “send three quarters of our defence capital spending to America,” and that it should make more investments in new aircraft, ships, armoured vehicles, artillery, and drones.

Canada had long been criticized for low military spending. Former NATO Secretary General Jens Stoltenberg called on Canada in 2024 to boost spending amid the most “dangerous security environment for generations.” U.S. President Donald Trump has also been critical of countries that fail to meet the goal. Pressure from the president has motivated NATO allies to spend more on defence.

Carney’s government presented its first budget last November, which included more than $81 billion in funding over five years to build up the Canadian Armed Forces, and pledged to “put Canada on a pathway” to meet NATO’s 5 percent target by 2035.

The government made several defence spending announcements this month, prompting a reporter to ask about the apparent “last-minute spending spree.” McGuinty countered that the announcements came as part of a “systematic rollout” and a plan that “was devised some time ago.”

Matthew Horwood contributed to this report.