New NATO target will require Canada to spend $150-billion annually on defence, Carney says

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A new NATO military spending target to be set this week for alliance member countries will require Canada to spend $150-billion annually on defence-related priorities, Prime Minister Mark Carney said Tuesday – tens of billions of dollars above current levels.

In an interview with CNN as a leaders’ summit of the military alliance got under way in The Hague, the Prime Minister explained nearly a third of the new target is easily attainable because under an alliance formula, Canada will get credit for already planned infrastructure spending.

This leaves about $45-billion to $50-billion in additional core military spending each year – still a major burden for Canada to shoulder.

“It is a lot of money,” Mr. Carney told CNN.

Mr. Carney, however, said he believes it likely that leaders at the NATO summit, a two-day meeting that includes U.S. President Donald Trump, will agree on Wednesday to give each other 10 years to reach this goal.

The Prime Minister cautioned he won’t be spending blindly and will expect NATO to review this target in several years. “I’m not signing a bunch of postdated cheques for the military hardware today,” he told CNN.

On Wednesday, NATO countries are expected to agree to boost military spending, as a percentage of their gross domestic product, to 5 per cent from the current 2-per-cent target.

The NATO summit has been carefully choreographed to deliver the 5-per-cent target for Mr. Trump, who argues other countries rely too much on U.S. military might. Since his 2024 presidential election campaign, he has demanded NATO members hit this benchmark.

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While the top-line commitment being made at NATO will be 5 per cent of GDP, or a country’s annual economic output, this goal is composed of two targets: raising core defence spending to 3.5 per cent of GDP and then defence-related infrastructure investments equivalent to another 1.5 per cent of GDP – a second benchmark that Mr. Carney expects will easily be reached.

Mr. Carney told CNN the nature of warfare is changing so rapidly that Canada doesn’t “need an aircraft carrier” but instead cutting-edge warfare technology, such as drones, which are tied into satellite and aerial warfare systems. He pointed to Ukraine, where drone warfare to resist Russia’s invasion has changed the battlefield.

NATO Secretary-General Mark Rutte on Tuesday said Mr. Trump is committed to protecting the military alliance as long as Canada and Europe follow through on a new pledge to hike defence spending to levels not seen in more than 60 years.

“There is total commitment, by the U.S. President and the U.S. senior leadership, to NATO,” Mr. Rutte told a forum Tuesday.

“However, it comes with an expectation that we will finally deal with this huge pebble in the shoe – this huge irritant – which is that we are not spending enough as Europeans and Canadians,” he said.

He said the United States effectively already meets the new spending target to be cemented at the summit.

Carney to begin talks on NATO spending target as summit starts today in The Hague

“They want us to equalize with what the Americans are spending,” he said of Washington.

The NATO charter’s Article 5 collective-defence clause obliges members to consider an attack against any to be an attack against all, but Mr. Trump in March said he won’t defend allies that are not paying enough for their defence.

Mr. Trump, en route to the NATO summit, declined when speaking to reporters to commit to Article 5.

“It depends on your definition. There’s numerous definitions of Article 5. But I’m committed to being their friends. You know, I’ve become friends with many of those leaders, and I’m committed to helping them.”

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The U.S. President also declined to say if he would be happy with language in the NATO summit declaration about aggression by Russia in Ukraine.

“I’ll have to take a look at it. I’d like to see a deal with Russia,” Mr. Trump said.

Mr. Carney expressed repeated confidence it can meet the 1.5-per-cent GDP goal by claiming infrastructure investments already made as well as related to critical mineral extraction. “It’s ports and railroads, and other ways to get these minerals out,” he said.

The Prime Minister said Canada will get credit for critical mineral infrastructure because the West cannot be dependent on China. “It is obvious to everyone now: The risk from being fully dependent on China for critical minerals, including rare earth magnets, not just for defence industry but for the auto industry,” he said, noting Canada has one of the “biggest and the most varying deposits of critical minerals” in the world.

It’s the 3.5-per-cent target, solely through pure military spending, that will be challenging for Canada, which is only managing to reach NATO’s spending target – 2 per cent of GDP – this year. This new benchmark will require Canada to spend $50-billion more each year on defence – an enormous draw on the federal treasury when the Department of National Defence is already the biggest ticket item in Ottawa’s budget.

NATO leaders are still debating whether countries should be given seven to 10 years to reach the new target.

Foreign Affairs Minister Anita Anand said there is discussion among member countries about evaluating progress toward the target in 2029.

Both Spain and Slovakia have already said they don’t plan to hit the new NATO targets. Spanish Prime Minister Pedro Sanchez said his country can meet its military capability targets by spending just 2.1 per cent of GDP.

His government approved the draft summit statement with the new spending target but made clear it does not intend to spend that much. NATO officials say Mr. Sanchez does not have an opt-out – Spain’s spending will be tracked and if it’s not investing enough to meet the military targets, it will need to improve.

With a report from Reuters