Canada pledges to meet Nato's 2% defence spending target within a year

Canada will significantly boost its defence spending to hit a Nato target of 2% of GDP years earlier than planned, Prime Minister Mark Carney has announced.

In a speech at the University of Toronto on Monday, Carney said the action was required to ward off the "multiplying" threats from hostile governments, terrorist entities and cyber criminals.

He also conceded his country was "too reliant" on the United States for defence, adding that Washington was "reducing its relative contribution to our collective security".

Nato Secretary General Mark Rutte is pushing for to agree to a new spending target of 3.5% of GDP at a summit later this month.

In his address, Mark Carney said the world was at a "hinge moment" similar to the end of the Second World War. He said his country must act in the face of an aggressive Russia and China, and threats to Arctic security.

He also accused Washington of looking to "monetise its hegemony" by making access to its market more costly.

Canada spent 1.4% of its GDP on defence in 2024. GDP stands for gross domestic product, and is a measure of all the economic activity of companies, governments, and people in a country.

During the election campaign earlier this year, Carney had pledged to hit the 2% spending target by 2030, while the previous government under Justin Trudeau had promised to meet it by 2032. However on Monday, Carney said the spending goal would be hit by March next year.

The prime minister said Canada's equipment had aged, "hindering our military preparedness".

Only one of four submarines were seaworthy and less than half the maritime fleet and land vehicles were in good working order, he said.

Carney said the new strategy would have four pillars - investing more in soldiers and equipment, expanding the military's capability, strengthening the domestic defence industry, and diversifying Canada's defence partnerships.

This is an age where "middle powers" must act to defend themselves knowing "if they're not at the table, they're on the menu", Carney said.

Carney's announcement comes just a week before Canada hosts the G7 Summit from 15 to 17 June.

Speaking to reporters later, Carney said the government's new plan includes a cash increase of C$9.3bn ($6.5bn, £4.8bn) for this fiscal year, which he said will bring Canada's defence spending to the Nato threshold.

Some of it would be immediately "spendable" on personnel and equipment.

This would include investing in new submarines, aircraft, ships, armoured vehicles and artillery, as well as new drones and sensors to monitor activity in the Arctic and seafloor approaches to the country, he said.

Carney said the government would also create a new defence procurement agency, following criticisms of the current process as slow and unwieldly. The agency would "move more quickly in making procurement decisions" and would focus on building domestic capacity.

A report by a parliamentary committee in June 2024 highlighted that delays, cost overruns, bureaucratic hurdles, a shortage of personnel and the politicisation of the defence procurement process raised concerns about the government's ability to provide the armed forces with the equipment it needed "in a timely and cost-effective manner".

Pierre Poilievre, the leader of the opposition Conservatives, said his party s increased defence spending, and accused the Liberals, who have been in power for a decade, of failing to properly fund the country's military.

Nato have for years pledged to meet the 2% target - now seen as the bare minimum - but Canada has long lagged behind its allies.

Nato Secretary General Mark Rutte arrived in London on Monday where he said the military alliance needed a "400% increase in air and missile defence" to maintain a credible defence deterrence.

Last week, Rutte proposed that Nato spend 5% of their GDP on defence - something US President Donald Trump has called for in the past.