When NATO leaders gather in The Hague next month, the pressure on Canada will be intense—and deserved. For years, Canada has lagged behind in meeting its defence spending obligations to the alliance. Now, with a dramatic proposed increase on the table—from the current 2% to a staggering 5% of GDP—Prime Minister Mark Carney will be forced into the spotlight, inheriting a problem that is no longer just political—it’s reputational.
At last year’s summit in Washington, then-Prime Minister Justin Trudeau found himself on the receiving end of scathing rebukes from allies, particularly the United States, for Canada’s continued failure to hit the 2% spending target. Despite lofty promises to meet that threshold by 2032, and vague talk of purchasing a dozen submarines (still without a timeline), Trudeau’s approach was seen by many as performative rather than practical.
Enter Carney—a former central banker with a reputation for financial credibility but a newcomer to NATO politics. During the recent spring campaign, he pledged to hit the 2% target by 2030, trimming two years off Trudeau’s already-criticized timeline. Yet with NATO now inching toward a 5% target, his promise may already be obsolete.
Carney’s defenders might argue he deserves breathing room. After all, he’s only just taken office and inherited a fiscal mess. As former Governor of the Bank of England, he was far from Canada’s defence file when past decisions were being made. He can reasonably point to years of underinvestment and strategic inertia under Trudeau. But NATO leaders are unlikely to entertain excuses.
As David Perry from the Canadian Global Affairs Institute put it, “We’re such an outlier now.” Indeed, Canada’s defence spending stood at just 1.3% of GDP in 2024—putting it near the bottom among member states. Worse, Canada also failed to meet NATO’s separate equipment spending benchmark. According to NATO’s own data, only one other nation failed on both counts.
This isn’t simply a bureaucratic lapse—it’s a message. Canada, by falling so far behind, signals to its allies that it’s more comfortable enjoying the protections of NATO than contributing to them. That’s a dangerous perception to let fester, especially at a time when the alliance is facing renewed threats from Russia, a volatile global economy, and rising geopolitical instability.
Complicating matters is former President Donald Trump’s reemergence as a dominant voice in U.S. foreign policy circles. Trump has long criticized NATO partners for freeloading, and he’s now pushing for a five percent GDP benchmark—a goal that borders on fantastical for most, but especially for Canada. With trade tensions simmering and a potential Trump presidency looming, Ottawa may have to balance defence commitments against economic protectionism. Anessa Kimball of Laval University rightly notes that Carney could try to leverage Trump’s obsession with military spending to push back against tariffs. But that’s a diplomatic gamble, not a strategy.
Ultimately, Carney has inherited more than a fiscal shortfall. He’s facing a credibility crisis. While allies may grant him some grace as the new face of Canadian leadership, they will not ignore Canada’s long history of pledging much and delivering little.
The time for symbolic gestures and long-term promises is over. If Carney wants to restore Canada’s standing in NATO, he’ll need to deliver a concrete, funded, and accelerated plan to meet the alliance’s evolving expectations. Anything less—and Canada risks not only falling behind, but being left out of the future of collective defence.
