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Canada promises to spend 5% of GDP on defence by 2035 in pact with NATO leaders

Sarah Taylor by Sarah Taylor
June 24, 2025
in Canadian news feed
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Canada promises to spend 5% of GDP on defence by 2035 in pact with NATO leaders
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NATO leaders — including Canada — have approved a plan to dramatically increase defence spending across the Western alliance to five per cent of the gross domestic product over the next decade, a decision that has given U.S. President Donald Trump a significant policy victory.

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They gathered behind closed doors in the Netherlands on Wednesday, where the final details and potential grievances were hashed out.

Members of the alliance, however, were expecting something in return — a fervent commitment from Trump on NATO’s self-defence clause, Article 5.

Senior Canadian officials, speaking on background following the meeting, said the allies seemed comfortable with the U.S. president’s reassurances, despite his equivocating in public about whether Washington would come to the defence of its allies in a crisis.

On his way to the summit, Trump was asked whether he supported Article 5, and he responded that the self-defence clause has many definitions. In fact, the language is quite clear — saying an attack on one member is considered an attack on all NATO allies.

After the announcement, Trump was asked again if he would now stand behind Article 5, given that NATO leaders have agreed to boost military funding. 

“I stand with it, that’s why I’m here, that’s why I’m here,” Trump said. “If I didn’t stand with it, I wouldn’t be here.” 

NATO Secretary General Mark Rutte opened the shortened summit by praising Trump for leading the charge on increased defence spending.

“For too long, one ally, the United States, carried too much of the burden of that commitment —  and that changes today,” Rutte said. “President Trump, dear Donald, you made this change possible. Your leadership on this has already produced one trillion dollars in extra spending from European allies since 2016. And the decisions today will produce trillions more for our common defence.”

The move to five per cent of gross domestic product, 3.5 percent for core military spending and 1.5 for defence related infrastructure, will take place over the next 10 years. 

That is a compromise for allies — including Canada — who are finding such a big increase hard to swallow.

Prime Minister Mark Carney revealed on Monday during an interview with CNN that meeting the new defence spending goal of five per cent of GDP would cost the federal treasury $150 billion per year. 

That translates into roughly $107 billion in direct military spending, with the rest earmarked for defence infrastructure, such as ports, bases and airfields.

NATO debates higher defence spending target that Trump thinks is happening

Carney noted the increased spending will mean increased security and also boost the domestic economy, creating new industries and new jobs. 

“The world is increasingly dangerous and divided. Canada must strengthen our defence to better protect our sovereignty, our interests, and our Allies,” Carney said in a statement at the conclusion of the meeting. “If we want a more secure world, we need a stronger Canada.”

Canada has not seen this kind of massive military spending increase since the Second World War or Korean War, says defence expert Dave Perry, of the Canadian Global Affairs Institute.

Whether the Canadian public is prepared for it is another matter. 

Public opinion had been overwhelmingly supportive of hitting the old two percent NATO target.

And Perry said Canadians will have to try and look past the fact that this is Trump’s deal.

“This is finally taking off the table what has been an enduring, serious irritant with the United States government of multiple administrations,” he said. “I had an American former State Department official complaining last night of, we asked nicely for years and nobody did anything — until Trump stopped asking nicely.”

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