Carney lays out defence boost, says era of U.S. dominance over

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Prime Minister Mark Carney said Canada is too reliant on the United States for security as he announced a significant boost in military spending to meet NATO’s 2-per-cent military expenditure target this fiscal year, five years ahead of schedule.

Declaring that the U.S.’s predominant role on the world stage “is a thing of the past,” Mr. Carney said Canada must take matters into its own hands and work more closely with European allies. He said his government will increase the 2025-26 allocation for the Department of National Defence by $9.3-billion, on top of its existing budget of just under $40-billion.

This new spending, plus existing defence-related spending in other departments of around $14-billion, pushes total expenditures to $62.7-billion for 2025-26, which equals 2 per cent of Canada’s gross domestic product, the government said.

NATO chief calls for 400% increase in air and missile defences to counter Russia

The Prime Minister said that Ottawa is not finished with new defence outlays. He is heading to a NATO Leaders Summit in late June where the alliance is discussing raising the NATO spending target to 3.5 per cent of GDP. He did not commit to a further expansion, but told reporters Monday his government expects a “further acceleration of spending.”

Mr. Carney’s government has promised new equipment, including submarines and additional icebreakers, as well as other gear not funded in Monday’s announcement.

Much of the new money is for operational spending, rather than capital expenditures for equipment Mr. Carney has said he plans to buy. It’s money designed to lay the foundation for a bigger military with a higher degree of readiness, including through maintenance and upgrades.

“Only one of our four submarines is seaworthy,” Mr. Carney said in a speech to the University of Toronto’s Munk School on Monday. “Less than half of our maritime fleet and land vehicles are operational.”

He said the new spending includes a “well-deserved pay raise” to Canadian Armed Forces personnel, a measure he predicted would help recruit and retain members.

“They defend our coasts and waters. They patrol the Arctic, and support our allies on Russia’s borders. They do so under difficult conditions and, too often, with inadequate equipment,” he said. “They deserve better and they will have better.”

Also, the Prime Minister’s Office announced it will transfer the Canadian Coast Guard to National Defence from Fisheries and Oceans as part of its commitment to protect borders and sovereignty.

PMO spokesperson Emily Williams said “the Prime Minister will soon initiate the process of moving the Canadian Coast Guard to the leadership of the Minister of National Defence,” a change she said will permit the agency to “better fulfill both its civilian and security responsibilities.”

Mr. Carney said his government’s planned spending increase is necessary in an increasingly “dangerous and divided world,” where threats are unravelling the rules-based international order.

“The long-held view that Canada’s geographic location will protect us is becoming increasingly archaic,” he said.

“Threats which felt far away and remote are now immediate and acute,” Mr. Carney said, citing “Russia’s barbaric invasion of Ukraine” and threats to security and sovereignty not only from Moscow but also from “an increasingly assertive China.”

He said Ottawa wants to reduce its purchases of U.S. military goods. This, he said, is why the government is joining a European Union defence procurement program.

“We should no longer send three-quarters of our defence capital spending to America,” he said.

The Monday announcement contained no commitment to joining U.S President Donald Trump’s new Golden Dome integrated missile shield program. Mr. Carney confirmed in May that Canada has been in talks with Washington on this.

Mr. Carney said the U.S. became Canada’s closest ally and dominant trading partner during the United States’s ascension as the major global power.

But, he said, Mr. Trump’s protectionist tariffs – which levy fees on countries wanting to sell goods to the United States – are disrupting future relations.

“Now the United States is beginning to monetize its hegemony: Charging for access to its markets and reducing its relative contributions to our collective security,” the Prime Minister said.

The new spending includes $2.6-billion to accelerate recruitment and help retain Armed Forces members, and to invest in the civilian work force who support the military. The Forces face a shortage of 13,000 to 14,000 personnel.

It also includes $844-million to repair and upgrade existing Forces infrastructure and critical equipment in both maritime and aerospace.

The plan includes another $544-million to strengthen the Department of National Defence and the Armed Forces’ protection against cyber threats. It includes funding for Communications Security Establishment.

Another $1-billion will be allocated to make the military more self-sufficient in defending Canadian territory and citizens, particularly in the Arctic.

At the NATO Leaders Summit, which will take place in The Hague, member countries are expected to raise the Western alliance’s military spending target even higher – to 3.5 per cent of GDP, plus another amount equivalent to 1.5 per cent for security-related investments, for a total of 5 per cent.

And on Monday, NATO Secretary-General Mark Rutte warned that Russia could be ready to attack the alliance within five years and said member countries need a 400-per-cent increase in air and missile defence.

Mr. Carney said Canada is confident it will be able to meet the emerging 1.5-per-cent target, given investments in what he called “foundational elements of defence,” such as critical minerals, artificial intelligence and quantum technology.

Another $4.1-billion will be used to lay the groundwork for a comprehensive “Defence Industrial Strategy,” and to strengthen partnerships with industry to enable private companies to build and supply more critical equipment inside Canada, as well as diversify co-operation beyond the U.S., the government said.

Mr. Carney’s announcement represents a rapid shift in defence spending. Former prime minister Justin Trudeau had pledged to reach 2 per cent by 2032, and Mr. Carney’s Liberal Party during the recent federal election campaign had promised to accelerate this to 2030.

Asked how he could move so quickly to reach 2 per cent, Mr. Carney rejected the suggestion that “creative accounting” was a factor. He said foundational spending, such as better pay, better benefits, and money for housing and munitions is at the heart of these new investments.

Conservative Leader Pierre Poilievre said he supports reaching NATO’s 2-per-cent target as soon as possible, and that his party will support the additional funding. He called on the Prime Minister to table a budget to explain where the money is coming from, and to demonstrate that it doesn’t add to everyday costs for Canadians.

Mr. Poilievre told reporters that whether Canada can or should go further to hit the 5-per-cent target requires a discussion about what Canada would be getting for its money.

Kelly Craft, a former U.S. ambassador to Canada, on Monday told Intersect 2025, a conference hosted by The Globe and Mail, that Canada needs to take more responsibility for its own defence and security if it doesn’t want Mr. Trump to talk about annexing it as the “51st state” in the union.

“I’m just going to answer you as if for Donald Trump, because he would say, ‘Well, then don’t act like a state. Pay your fair share of NATO,’” she said.

Pete Hoekstra, the U.S. ambassador to Canada, told CBC’s Power & Politics that Mr. Carney’s announcement “is a clear indication that things are moving in the right direction.”

David Perry, president of the Canadian Global Affairs Institute, said Monday’s announcement represents a “good first step” that enables Mr. Carney to avoid being regarded as a shirker at the upcoming NATO summit. He said it appears Ottawa has found more spending in departments outside National Defence that counts toward Canada’s NATO target.

He said this number, which is about $14-billion now, was only $8-billion or $9-billion several years ago.

With a report from Stephanie Levitz