One of Prime Minister Mark Carney’s first major announcements after the April 2025 election was to confirm that Canada would spend 2% of GDP by the end of the fiscal year. The announcement was welcomed by NATO, but overdue; Canada was expected to get there in 2024, but it handed its homework late. Meanwhile, the goal posts have shifted. The June 24-25 Summit in the Hague has amped NATO’s defence investment pledge to 5% by 2035. In terms of specifics, this is 3.5% for core defence capabilities (with a focus on air defences, munitions, and tanks) while 1.5% is intended for investments related to national security and defence. What brought on this remarkable transformation?
The full-scale invasion of Ukraine in 2022 certainly was a wake-up call for NATO’s European allies and most rallied to spend more on defence getting close or beyond the 2% mark. For Canada, that wake-up call came in 2025, when President Trump took office and started to call Canada the 51st state. Canadians paid attention and embraced the idea of greater strategic autonomy on security and defence. Ensuring our national sovereignty comes at a cost: it entails increasing our capabilities, presence and surveillance to effectively deter and defend against any threats to Canada’s territory and across domains (air, sea, land, cyber, space, information).
Beyond safeguarding national sovereignty, NATO will expect its allies to do much more to counter the rapid military buildup of China and Russia, to send military aid and equipment to Ukraine, while replenishing national stocks of weapons and ammunitions. On June 25, 2025, all NATO allies signed on to the 5% goal in the official Summit Declaration, which is an important show of unity and resolve. Issued by all 32 heads of state and government, the Declaration will hold allies to account with “annual plans showing a credible, incremental path to reach this goal”.
If Heads of state and government agree, allaying the worst fears of a US withdrawal from NATO, how will this news be received by the Canadian public? Across the alliance, there is general support for NATO and defence spending, though it varies significantly. Predictably, NATO states closer to the Russia border have embraced the 5% benchmark, while others like Spain or Belgium, will face more resistance at home. Moreover, even if publics are supportive in the short term, how enduring will this support be over the next decade as trade-offs become clear? NATO leaders will deploy arguments about the need for security to ensure continued economic prosperity and point to an increasingly tumultuous international environment where hard power is the backbone of effective collective deterrence and defence. Yet people are central to the new defence equation.
It is up to the Carney government to clearly explain to Canadians that the peace they have long benefited from now comes at a cost. It demands a clear articulation of what those new defence commitments entail, how they will be met, and what they mean for Canadians. Indeed, pledging the money is one thing, spending it quickly to acquire critical capabilities when they are needed, is quite another. Some of the initial prescriptions are clear: accelerate defence procurement, quickly set the conditions to drastically increase Canada’s defence industrial base, and coordinate with allies to deliver new capabilities faster and at a lower cost. Joining ReArm Europe is a step in that direction.
For the Canadian defence industry, it is now time to show that they can meet demand, delivering with speed and predictability. Both government and industry must also deepen engagement with the scientific community and research sector to make sure these substantial investments lead to innovation. Canada needs cutting-edge technologies, not just bulk purchases. Clearly, this is a whole-of-society endeavour with sectors that have vastly different professional cultures (governments, armed forces, industry, research-intensive universities). However, if done right, it will yield significant economic benefits in communities across Canada, contributing to economic security, enabling growth and productivity, while creating jobs. The call to action in The Hague was clear: to prevail in the face today’s threats, the Alliance must harness the best of what the world’s leading democracies have to offer.
Stéfanie von Hlatky is Full Professor and Canada Research Chair at Queen’s University and a Board Member of the CDA Institute.
Gaëlle Rivard Piché is the Executive Director of the Conference of Defence Associations (CDA) and the CDA Institute
