Prime Minister Mark Carney says Canada will meet NATO’s two per cent defence spending target this fiscal year as part of a wider announcement increasing spending on the country’s defence and security.
Carney made the announcement Monday, saying they would achieve the goal “half a decade ahead of schedule” and would accelerate investments in the years to come.
“When it’s something as fundamental as defence, defence of Canadians, defence of Canadian interests, you need to act and that’s why we’re pulling things forward,” he said.
The plan amounts to a cash increase of $9.3 billion in defence in the 2025-26 fiscal year.
Carney said the funding is being tabled in Parliament as part of the supplementary estimates, which are routine submissions made by the government to effectively bridge financing for programs and departments in between budgets.
“This is not about getting to two per cent, full stop,” Carney stressed. “It’s about defending Canada. Our ability to defend Canada is not at a point in time, it’s going to require sustained investment and as I said in my remarks this morning, we’re getting to this level with this $9.3 billion, but we expect a further acceleration.”
The federal government, according to Carney, will “rebuild, reinvest and rearm” the Canadian Armed Forces through four pillars.
Those four pillars include investments into members of the Armed Forces and the equipment they use, enhancements to military capabilities, strengthening the defence industry and diversifying its partnerships.
“Our plan will help ensure that Canada is strong at home and reliable abroad,” he said. “We will ensure that every dollar is invested wisely, including by prioritizing made-in-Canada manufacturing and supply chains.”
During a press conference Monday afternoon, the prime minister said this plan will provide “greater predictability” and commitment to the scale of investment, types of capacity being built, and a “structural change” through creation of a defence procurement agency.
That agency, under Secretary of State for Defence Procurement Stephen Fuhr, would centralize decision making and “move at a pace to get our Armed Forces the equipment they need,” Carney said.
The Department of National Defence will also design a new defence policy that, Carney said, will reflect “both today’s and tomorrow’s threats.”
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He said the plan includes ensuring Canada’s North is protected with a larger sustained year-round presence on land, sea and air, and expanding the reach and security mandate of the Canadian Coast Guard.
As part of this, he said Borealis — the Bureau of Research, Engineering and Advanced Leadership in Innovation and Science — would be established as part of the “new strategic approach.”
The announcement by Carney comes just a week after NATO defence ministers met and endorsed new spending targets to as much as five per cent of GDP, something leaders are expected to commit to at the NATO leaders summit later this month.
No country meets the five per cent figure at this time, including the U.S., whose president, Donald Trump, has called for the hike.
According to NATO Secretary-General Mark Rutte’s annual report released in April, Canada’s defence spending likely hit 1.45 per cent last year.
Those same estimates show Canada remained ranked in the bottom five countries out of the 31 total members.
During the announcement, Carney said the goal of increasing spending is not only to ensure Canada is strong at home but to also not send three-quarters of defence capital spending to the U.S.
The issue of how Canada should craft a new economic and defence framework with the U.S. also was raised during the afternoon press conference, with Carney saying that the U.S. is providing a lower degree of collective security.
But he added the threat landscape facing Canada has increased including from state, non-state and terrorist actors, as well as technological developments, which is why the country needs to take action for itself.
“First and foremost, we’re doing this for us,” he said. “Relatedly we’re doing it as a strong NATO partner, we’re a firm believer in NATO, and we’re standing shoulder to shoulder with our NATO allies, we’ll continue to do so. And, of course, the United States is a fundamental ally of the country. So I think it’s very complementary to the process of developing that new economic and security partnership with the Americans.”
Asked how the plan will be paid for and if taxes, program cuts or additional debt could be coming, Carney did not comment on cuts or debt, but did not appear to signal taxes would be applied.
“We’re not raising taxes, we just cut taxes,” he said, referring to the recent middle class tax cut passed by the House of Commons last week.
The prime minister went on to say the federal government was working to strengthen transatlantic security, noting the country’s recent announcement to participate in ReArm Europe.
He said the upcoming Canada-European Union summit would be important and will see Canada support the new NATO defence industrial pledge that is set to be negotiated.
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“Canada is confident that our economic strategy and our many strategic resources from critical minerals to cyber will make major contributions to NATO security,” Carney said. “We will support tangible commitments from our allies to provide NATO with the necessary resolve to deter aggression and protect against all adversaries in all domains.
“Our fundamental goal in all of this is to protect Canadians, not to satisfy NATO accountants.”
Conservative Leader Pierre Poilievre, in reaction to the announcement, said his party supports added money for the Canadian Armed Forces.
However, he reiterated his call for the federal government to put forward a budget that shows where the money comes from while he said shows cuts to waste on things like bureaucracy to ensure the military funding doesn’t create an “inflationary burden.”
He said the party would need to examine the supplementary estimates that contain the defence spending increase before deciding whether to support it.
“Let’s focus on what we get done with the money we spend,” Poilievre said. “It shouldn’t simply be a question of the dollar figure.
“I want to focus on our capabilities. Yes, we’ll hit the two per cent and then we can discuss how much higher to go after that. But the focus of NATO and our country has to be what extra defence capabilities are we able to add.”
— With files from The Canadian Press
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