In the run-up to the forthcoming NATO summit, defence ministers have agreed to significantly raise the level of NATO’s capabilities. Under the strong pressure of Donald Trump and growing concerns about the Russian threat to Europe, they decided on an ambitious defence investment plan. In this plan, the Allies committed “to invest 5% of GDP in defence, including 3.5% on core defence spending, as well as 1.5% of GDP per year on defence and security-related investment, including in infrastructure and resilience”[1].
It is most likely that some of this spending will have to be allocated to research and innovation in light of the new NATO Science and Technology Strategy, also endorsed by the defence minister at their meeting in Brussels on June 5 to maintain “NATO’s military and technological edge”[2]. An ambition that was first enshrined in 2022 in NATO’s Strategic Concept purpose and principles for fulfilling the Alliance’s core tasks and facing up to strategic competition.
The NATO Summit, a Pivotal Moment
The 2025 NATO summit could well mark a turning point, not only with an agreement on a significant increase in defence investment, but with its new formula offering flexibility and recognizing the diversity of spending. Such an approach may mobilize countries that invest little in their defence, such as Canada, by enabling them to leverage their investments in defence innovation. With NATO’s growing interest in technology, Canada must seize the moment to invest in defence innovation, a niche in which it could stand out with spinoffs for both Canada and the Alliance. Especially now, with the Carney government’s decision to increase defence spending to 2% of GDP[3].
Already strategically positioned in many of the NATO’s priority technology areas, from artificial intelligence and autonomous systems to quantum technologies, biotechnology and space, Canada could certainly make a significant contribution to NATO’s ambitions. Clearly, now more than ever, Canada has a great opportunity to invest more in its defence sector, which could boost NATO spending and enable Canada to play a leading role in consolidating NATO’s initiatives and partnerships related to emerging and disruptive technologies. Leadership that can only benefit Canadians too.
Engaging in Initiatives
In line with the new Science and Technology Strategy, NATO has already moved closer to the commercial sector, supporting non-traditional, in most cases civilian, companies that have become the driving force behind military innovation. Following the decision at the 2021 NATO summit in Brussels, two key initiatives have been launched: the Defence Innovation Accelerator for the North Atlantic (DIANA) to stimulate transatlantic cooperation in innovation and facilitate interaction with academia, researchers, and the private sector, entrepreneurs, and the NATO Innovation Fund to enable investment in start-ups developing dual-use technologies in key areas[4].
While DIANA’s European regional office is in London, UK, Canada hosts the North American office in Halifax, demonstrating Canada’s interest in playing a leading role in this sector. A beneficial commitment as in 2025, seven Canadian companies have been selected to “receive funding to develop their (dual-use) technology and have access to the NATO DIANA network of accelerators and test centres across the Alliance”, some of which are based in Canada[5]. This should encourage Canada to go even further in this direction and join the NATO Innovation Fund to which 24 NATO countries already contribute. This is a one-of-a-kind, billion-euro venture capital that supports start-ups and “deep-tech innovation systems” with strategic investments in participating countries. Unfortunately, for the time being, Canada is depriving itself of these investment opportunities for its high-tech and defence sector, which could offer a clear return on investment. Moreover, its contribution to this fund could be an effective way of meeting NATO’s new budget target.
Enhancing Partnerships
In addition to implementing these initiatives, NATO has also developed cooperation with its partners on emerging and disruptive technologies, and Canada could stand out well here too. First, with the European Union (EU), which shares NATO’s view of strategic competition through technology in the international environment and the importance of defending its technological sovereignty by reducing vulnerabilities.
The EU and NATO have agreed to strengthen their strategic partnership by integrating emerging and disruptive technologies into their political dialogue. The aim is to ensure mutual understanding of their action and to exchange best practices. Canada, through its strategic partnership with the EU covering technological innovation and defence, and as a member of NATO, is certainly in a key position to contribute to reinforcing this cooperation. Helping to strengthen EU-NATO cooperation in this sector could certainly also strengthen the EU-Canada partnership as suggested by the latest EU-Canada summit on June 23[6].
We have also seen the emergence of new collaboration in recent years with partners from the Indo-Pacific region: Australia, Japan, New Zealand and the Republic of Korea. Since 2022, they have been invited to all NATO summits to take part in discussions on common global security challenges, including technology. On June 24, 2025, on the margins of the summit, they are expected to participate in the NATO Summit Defence Industry Forum with defence ministers, government representatives and industry leaders from NATO countries to discuss strengthening the defence industry and innovation[7]. In this context, the Secretary General, Mark Rutte, visited Japan in April 2025, where he reiterated the importance of strategic cooperation between NATO and Japan, including in emerging and disruptive technologies. Considering its close affinity with the Indo-Pacific region, and mobilizing its strategy towards this region[8], Canada can certainly play a leading role here too.
Conclusion
In short, the idea of recognizing the diversity of defence-related spending to achieve a new target of 5% of GDP for NATO Allies is certainly easier to sell to the public, particularly in countries where investment levels have historically been among the lowest, such as Canada. Support for innovation can certainly be seen as a lever to strengthen not only NATO’s capabilities, but also Canada’s leadership within NATO and its own technological ecosystem by creating jobs and stimulating research & development.
[1] https://www.nato.int/cps/en/natohq/news_235900.htm?selectedLocale=en
[2] https://www.nato.int/cps/en/natohq/news_236107.htm
[3] https://www.canada.ca/en/department-national-defence/news/2025/06/canadas-new-government-is-rebuilding-rearming-and-reinvesting-in-the-canadian-armed-forces.html
[4] https://www.nato.int/cps/en/natohq/topics_184303.htm
[5] https://www.canada.ca/en/department-national-defence/news/2024/12/minister-blair-congratulates-successful-canadian-innovators-joining-the-2025-nato-diana-cohort.html
[6] https://www.consilium.europa.eu/en/meetings/international-summit/2025/06/23/
[7] https://www.nato.int/cps/en/natohq/235800.htm
[8] https://www.international.gc.ca/transparency-transparence/indo-pacific-indo-pacifique/index.aspx?lang=eng
Chantal Lavallée is Associate Professor of International Studies and Director of the Centre for Security and Crisis Governance (CRITIC) at the Royal Military College Saint-Jean in Canada.
