Canada’s Defence Spending Surges to $63 Billion Under Carney, Exceeding NATO Targets
Under Prime Minister Mark Carney, Canada’s defence funding has reached $63 billion for fiscal 2025-26. This increase, driven by U.S. President Donald Trump’s demands and a strategy to reduce reliance on foreign suppliers, pushes Canada past NATO’s old 2% GDP goal and onto a track to meet the updated 3.5% target for 2035.
Canada’s military budget has seen a dramatic rise under Prime Minister Mark Carney, with defence funding surging to $63 billion in fiscal 2025-26. This significant increase is largely motivated by efforts to meet demands from U.S. President Donald Trump for allies to boost their spending, alongside a domestic industrial strategy aimed at reducing reliance on foreign suppliers.
The surge in spending has pushed Canada’s military expenditure as a share of GDP beyond NATO’s previous benchmark of 2%. The country is now on track to meet the alliance’s updated core defence target of 3.5% of GDP by 2035. A new analysis highlights that while nearly half of all NATO members were below the 2%-of-GDP mark in 2024, currently only Slovenia remains below that threshold.
Data indicates a substantial narrowing of the gap between Canadian and U.S. defence expenditures. In 2014, Canada’s real per capita defence spending was equivalent to just 22% of what the United States spent. By 2026, this figure had risen to 46%. In terms of purchasing power, using 2021 U.S.-dollar values, Canada’s per capita defence spending increased from US$598 a decade ago to US$1,146 this year.
This financial shift supports broader economic goals, including aiding Canada’s tariff-battered economy through its industrial strategy. The move signifies a decisive step toward greater self-sufficiency in defence procurement and closer alignment with NATO’s evolving security expectations.