Canada’s defence spending has come under scrutiny as the nation has consistently failed to meet NATO’s established target of two per cent of its Gross Domestic Product (GDP) since the benchmark was set in 2006. This weekend, matters came to a head when Prime Minister Mark Carney promised to fast track this goal. In his 2022 defence policy statement, he vowed to meet the NATO two percent threshold by 2030 or sooner. As it stands now, intensified negotiations are occurring between U.S. President Donald Trump and Prime Minister Carney. They are singularly focused on building a new economic and security pact between their two countries.
Canada is still three months away from announcing its current defense spending totals. The next defense investment plan will almost certainly need many billions more per year. At the recent NATO defence ministers’ meeting in Brussels, officials floated new spending targets. They have introduced legislation to establish a long-term core defence spending goal of 3.5 percent of GDP, with an additional 1.5 percent on other defence and security-related investments.
President Trump was once quoted as saying that Canada could be making an investment of about US$61 billion on his ambitious new Golden Dome project. This project is designed to give the U.S. a continental missile-defense shield. The proposal has prompted some outrage. It implies that Canada is going to have to take a big financial leap of faith, particularly as U.S. support appears to be running out of steam in the face of Russia’s growing aggressiveness.
Right before the signing, Ambassador Pete Hoekstra helped to illustrate the complexities of this relationship. He noted Canada’s defense procurement has exasperated U.S. partners. “It’s a long shot, we have no expectations at all,” Hoekstra said. He sought to convey the necessity of shared understanding and respect between the two countries.
Negotiations between Trump and Carney are very important at this stage. Both Democrats and Republicans are urging Canada to reinforce its Arctic defense capabilities in light of new geopolitical tensions. The U.S. has expressed appreciation for the sacrifices Canadian troops made during operations in Afghanistan, reinforcing the notion that a strong alliance is crucial for both nations’ security.
“They were fulfilling the commitment that they made to NATO — that when one of us is attacked we are all attacked, and we will defend each other.” – Ambassador Pete Hoekstra
Less often noted is Trump’s legitimate concern with US defence spending. He joked that Canada could defray some of the cost of their Golden Dome conversion by joining the United States as a state. Taken together, this particular comment doesn’t sound like serious policy-making is afoot. It does underscore the increasing pressure on Canada to fall in line behind U.S. strategic objectives.
Ambassador Hoekstra emphasized the relationship shared between both countries. He continued, “Americans and Canadians have so much in common and we look forward to many wonderful days in the future.” He stressed the critical importance of keeping Americans safe. As President, he said, “We need to be much more proactive and put in place the steps that are going to protect our people.”
In response to the Russian invasion of Ukraine, NATO member countries are now scrambling to reassess their defense spending priorities. They’re advocating raising the member spending target on defense to level as high as five percent of GDP. Canada’s ability to adapt to these changing requirements will be watched intently from within Canada’s NATO allies and from south of the border in the U.S.
Against this positive backdrop, Canada still needs to meet the challenges posed by greater funding needs. Simultaneously, it needs to protect its own sovereign interests. The future of Canada-U.S. relations lies in both leaders’ capacity to address key defense challenges collaboratively. As EPA prepares for the road ahead, their collaboration will be key.
