NATO Secretary-General Mark Rutte arrives at the 6th European Political Community summit at Skanderbeg Square in Tirana, Albania, on May 16.Leon Neal/Reuters
NATO member countries will agree to a steep new defence-spending target of 5 per cent of annual economic output during the June leaders summit, the military alliance’s top civilian official predicted Monday.
Such a commitment would represent a significant rise in financial obligations for Canada but would also recognize that the NATO alliance is spending too little, given the threat to Europe that Russia poses as the aggressor in Ukraine as well as its growing ties with other authoritarian powers.
It would also signal NATO’s acquiescence to U.S. President Donald Trump, who has been pressing allies to boost their defence spending and reduce reliance on U.S. military assistance.
“Russia has teamed up with China, North Korea and Iran,” Secretary-General Mark Rutte told a NATO parliamentary assembly forum in Dayton, Ohio, Monday.
“They are expanding their militaries and their capabilities. They are preparing for long-term confrontation,” he said.
To meet this challenge, and others, Mr. Rutte said, “we are finalizing a plan to dramatically increase defence spending across the alliance.”
This new pledge has yet to receive public assent from the North Atlantic Treaty Organization’s member-country leaders, who are set to meet at The Hague June 24-25.
The Secretary-General’s comments suggest the target could be set at 3.5 per cent on hard military spending, plus another 1.5 percentage points on defence-related items, for a total of 5 per cent. The second category would be things such as security-related infrastructure.
Even 3.5 per cent of gross domestic product would pose an enormous burden for the Canadian government, which still falls far short of the current NATO target of 2 per cent of GDP.
The Canadian government is among the alliance laggards in meeting the existing goal. Canada currently spends about 1.37 per cent of its annual economic output on defence.
Prime Minister Mark Carney’s Liberal Party pledged during the recent federal election campaign to hit the 2-per-cent target in 2030 – an effort that alone would require an additional $20-billion in spending going forward.
Mr. Rutte said Monday he expected the target set during the June summit would be a combination of two kinds of defence spending.
“I assume that in The Hague we will agree on a high defence-spend target of in total 5 per cent,” he said.
“Let’s say that this 5 per cent, but I will not say what is the individual breakup, but it will be considerably north of 3 per cent when it comes to the hard spend, and it will be also a target on defence-related spending,” he added.
Asked for comment on Mr. Rutte’s predictions, the Carney government said it would surpass NATO commitments within five years but did not address the new targets.
“This government was elected on a strong mandate to rebuild Canada’s defence capacity, rearm the Canadian Armed Forces, and invest in the Canadian defence industry,” Andrew Green, director of communications for Defence Minister David McGuinty, said in a statement. “The Prime Minister was clear that this government will invest to put Canada on track to exceed our NATO defence spending target before 2030.”
The United States does not spend 5 per cent of GDP on defence or even 3.5 per cent. The NATO Secretary-General’s annual report for 2024, published in 2025, said the U.S. spent an amount on defence equivalent to 3.19 per cent of its GDP.
David Perry, president of the Canadian Global Affairs Institute, a think tank, said the looming NATO meeting and its steep new target represent a wake-up call for Canada.
“We are viewed by allies as wealthy cheapskates,” Mr. Perry said.
Finance Minister François-Philippe Champagne last week in Banff, Alta., signalled that The Hague meeting could affect Canadian government finances when he said the NATO summit would “have an impact on defence investments” and Ottawa’s fall budget.
Raising defence spending to 3.5 per cent of GDP would require Canada to spend many tens of billions more annually on military expenditures on top of the $20-billion required to each 2 per cent of GDP, Mr. Perry said.
Reuters reported in early May that Mr. Rutte has proposed a two-tier spending plan where NATO members hike core military spending to 3.5 per cent of their GDP, and also agree to a further 1.5 percentage points of expenditures on broader defence-related items to meet Mr. Trump’s demand for a 5-per-cent target. It said this could allow Mr. Trump to claim victory but avoid committing European countries and Canada to a 5-per-cent pledge on hard military spending that many see as politically and economically unviable.
Mr. Carney pledged during the election campaign to buy new submarines and heavy-duty icebreakers and create a defence purchasing agency that speeds up military equipment procurement and prioritizes buying Canadian gear and materials whenever possible. The Liberals also promised a “first class drone capability” that would build and deploy uncrewed airborne and seaborne vehicles “to defend our Arctic, our undersea infrastructure, our borders, and our allies.”
With reports from Reuters