June 9: Prime Minister Mark Carney announced a landmark shift in Canada’s defence policy on Monday, confirming that the country will meet NATO’s long-standing target of allocating two per cent of GDP to military spending this year — five years ahead of schedule. Speaking in Toronto, Carney unveiled a sweeping $9 billion increase in defence funding, citing a rapidly changing global security landscape and waning reliance on the United States.
Carney warned that Canada has become overly dependent on the U.S., which he described as becoming less committed to collective defence and more focused on monetizing its global dominance. In response, Canada plans to deepen defence ties with European allies and strengthen its domestic defence manufacturing, with a focus on using Canadian steel and aluminum — two sectors currently affected by trade tensions with the U.S.
Canada had long failed to meet NATO’s 2% benchmark, last reaching it in 1990, and currently spends only 1.45% of its GDP on defence. But with rising pressure from allies and a possible increase in NATO’s spending goal to 5% of GDP at the upcoming summit in the Netherlands, Carney said urgent action is necessary. The move marks a significant departure from former Prime Minister Justin Trudeau’s position, as leaked documents in 2023 had revealed that his government had no intention of reaching the two per cent target.
To support the new goal, Carney outlined a robust defence investment plan, which includes $2.6 billion for recruiting and retaining personnel in the Canadian Armed Forces, $1 billion for enhancing combat capabilities, $2.1 billion for a new defence industrial strategy, and $2 billion aimed at expanding Canada’s defence partnerships beyond the United States.
In addition, Carney revealed that the Canadian Coast Guard would be more deeply integrated into the national and NATO defence framework to strengthen sovereignty, though it will not be armed. A new defence research centre — BOREALIS — will also be established to drive innovation in artificial intelligence, quantum computing, and other advanced technologies critical to modern warfare.
Industry leaders welcomed the announcement, calling it a long-overdue development for Canada’s defence sector. However, they cautioned that success will depend on how efficiently government departments implement spending and streamline procurement. The Department of National Defence, which has historically struggled to utilize its full budget, will undergo reforms to ensure the new funds are deployed effectively.
Carney emphasized that the increase in spending is fully funded, with no need to raise taxes or rely on financial gimmicks. He reiterated that the investments will be real and transparent, not merely designed to appease NATO partners on paper. He also pledged a new defence policy framework that will align with Canada’s industrial base and ensure long-term national security resilience.
The announcement reflects a significant policy reversal under Carney, who only assumed office in March. It also builds on efforts started earlier this year by former Defence Minister Bill Blair, who had begun meetings with top defence industry leaders to explore how Canada could meet its international commitments faster than previously planned.
As global tensions rise and NATO allies prepare for even higher spending demands, Carney’s bold move signals a new era in Canadian defence strategy — one focused on readiness, independence, and global collaboration.
