Canada Faces Mounting Pressure on Defence Spending Ahead of NATO's 75th Anniversary Summit

With the North Atlantic Treaty Organization (NATO) set to convene in Washington D.C. for its landmark 75th-anniversary summit, a familiar issue is once again casting a shadow over Canada's participation: defence spending. Amid a volatile global security environment shaped by the ongoing war in Ukraine and rising geopolitical tensions, Canada is facing increasingly public and persistent pressure from its allies to meet the long-standing commitment of spending at least 2% of its Gross Domestic Product (GDP) on defence.

The 2% guideline is not new. It was first pledged by NATO members at the 2014 Wales summit, a direct response to Russia's initial aggression and annexation of Crimea. The agreement was for all members to halt declines in defence spending and aim to move towards the 2% mark within a decade. However, Russia's full-scale invasion of Ukraine in 2022 transformed this guideline into a hard-and-fast requirement in the eyes of many allies. NATO Secretary General Jens Stoltenberg has repeatedly stated that 2% should be considered a "floor, not a ceiling."

Currently, Canada's defence spending sits at approximately 1.37% of GDP. While the federal government has acknowledged the need for increased investment, its recent defence policy update, titled "Our North, Strong and Free," stops short of providing a concrete timeline for reaching the 2% target. The policy pledges an additional $8.1 billion over the next five years and nearly $73 billion over the next two decades. However, even with these new investments, official projections, including those from the Parliamentary Budget Officer, indicate that spending will only reach about 1.76% of GDP by 2029-30.

This shortfall has not gone unnoticed. The United States, Canada's closest ally and the largest contributor to NATO, has been particularly vocal. The U.S. ambassador to Canada, David Cohen, has publicly stated on multiple occasions that while Canada is a valued ally, there is growing impatience in Washington over its lagging defence expenditures. Other NATO members, especially those on the front lines in Eastern Europe like Poland and the Baltic states, which spend well over the 2% target, view Canada's position with concern, arguing that collective security requires equitable burden-sharing.

The pressure on Ottawa is multifaceted. Beyond the core issue of funding, the debate touches upon Canada's role and reputation on the world stage. The debate over NATO contributions comes as Canada also navigates its role in other international security frameworks. For instance, questions have been raised about Canada's potential involvement in Indo-Pacific security pacts like AUKUS, which is considering expansion. A perceived failure to meet commitments in one key alliance could impact its credibility in others, suggesting that Canada is at a crossroads not just within NATO, but across the global security landscape.

The Canadian government argues that its contributions to the alliance go beyond simple dollar figures. Officials point to Canada's significant operational commitments, such as leading the NATO battle group in Latvia, its naval deployments, and its contributions to training Ukrainian soldiers. Prime Minister Justin Trudeau has emphasized a holistic view of contributions, including humanitarian aid and financial support for Ukraine. Furthermore, the government faces significant domestic pressures, with competing demands for funding in critical areas like healthcare, housing affordability, and climate action. A massive and rapid increase in military spending would require difficult political and fiscal trade-offs.

However, the strategic landscape is shifting. The security of the Arctic, a vast region where Canada has significant sovereignty, is becoming a major concern for NATO. Modernizing the North American Aerospace Defense Command (NORAD) in partnership with the U.S. requires substantial investment. These are areas where Canada is expected to lead, and allies argue that fulfilling these responsibilities adequately is impossible without meeting the 2% spending threshold.

As Prime Minister Trudeau and the Canadian delegation prepare for the Washington summit, they will be walking a diplomatic tightrope. They will need to reassure allies of Canada's unwavering commitment to collective defence while managing domestic political realities. The summit's final communiqué is expected to feature strong language on burden-sharing, and Canada will be under scrutiny to demonstrate a clear and credible path toward meeting its obligations. The outcome will not only define Canada's standing within NATO but also signal its broader ambitions as a serious player in global security for years to come.