NATO report says Canada met 2% defence spending target for first time in decades

Canada met NATO’s benchmark of spending two per cent of its gross domestic product on defence in the last fiscal year, according to the alliance’s latest annual report.

The 2025 report from NATO Secretary General Mark Rutte states Canada spent approximately $63.4 billion on defence, reaching the alliance target for the first time since 1990. The two per cent benchmark is a long-standing commitment among NATO members aimed at ensuring collective security and military readiness.

According to the NATO report, Canada’s increased spending reflects sustained federal investments in military capabilities, personnel, and equipment. The spending level has been a point of pressure from allies in recent years, particularly as geopolitical tensions have intensified.

The federal government is responsible for defence policy and budget allocations, with spending decisions overseen by Parliament through the appropriations process. It remains unclear whether Canada will maintain or exceed the two per cent level in future fiscal years.

For cities such as Surrey, Edmonton, Calgary, and Winnipeg, federal defence spending can have local impacts through military bases, procurement contracts, and employment tied to defence industries.