Canada to Spend 5% of GDP on Defence by 2035 in NATO Deal

Canada has pledged to dramatically boost its defence spending to 5% of its annual GDP by 2035, joining NATO allies in a landmark agreement unveiled during the 2025 NATO summit in The Hague, Netherlands.

GDP — Photo via THE CANADIAN PRESS/Sean Kilpatrick: Prime Minister Mark Carney takes part in a meeting of the North Atlantic Council during the NATO Summit in The Hague, Netherlands, on Wednesday, June 25, 2025.

Prime Minister Mark Carney announced the commitment, stating that the goal is to ensure Canada remains “strong, unified, and ready” in an evolving global threat environment.

A Landmark NATO Pact

The agreement, championed by U.S. President Donald Trump, calls on all NATO members to meet the 5% spending target—3.5% for direct military investments and 1.5% for infrastructure like bases and ports.

NATO Secretary General Mark Rutte credited Trump for pushing the alliance to act. “For too long, the U.S. carried the burden. That changes today,” he said. The decision is expected to generate trillions in additional defence funding over the next decade.

What It Means for Canada

Meeting the 5% target will cost Canada an estimated $150 billion per year by 2035, according to Carney. Of that, $107 billion will go toward core military spending, with the rest allocated to support systems and infrastructure.

The plan includes a midpoint review in 2029 to assess evolving threats and make necessary adjustments.

Sacrifices and Strategy

Carney acknowledged that reaching this target will require trade-offs. In his words, “sacrifices are already being made” by the under-resourced Canadian Armed Forces.

He hinted that future public spending in other areas may be affected if security threats continue to rise:

“We will have to make considerations about what less the federal government can do.”

To avoid waste and inflation, Carney promised a “measured pace” in scaling up spending, coordinated with allies to prevent supply shortages and cost spikes.

Political Fallout and Public Opinion

The deal gives Trump a clear political win, but also places pressure on him to publicly reaffirm Article 5—NATO’s mutual self-defence clause. Trump responded, somewhat ambiguously:

“I stand with it… that’s why I’m here.”

Back home, Canadian support for the previous 2% NATO target was strong, but it remains unclear how the public will respond to a jump to 5% and the potential budget trade-offs.

Defence expert Dave Perry noted the significance:

“Canada hasn’t committed to this level of military spending since WWII.”

Exploring New Defence Deals

As part of a broader strategy to diversify Canada’s defence supply chain, Carney said his government is reviewing the country’s planned purchase of 88 F-35 fighter jets from the U.S. He also hinted at a possible shift toward European-made submarines and aircraft, with decisions expected as soon as this summer for jets and by 2028 for submarines.

Looking Ahead

The NATO pact not only reshapes Canada’s military future, but also redefines its global role. As Carney put it, the alliance’s deterrence power has now “substantially increased”, and with it comes a new era of responsibility—and scrutiny.

Do you support Canada’s plan to raise defence spending to 5% of GDP? Or should priorities lie elsewhere?

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