Canada promises to spend 5% of GDP on defence by 2035 in pact with NATO leaders

NATO leaders — including Canada — have approved a plan to dramatically increase defence spending across the Western alliance to five per cent of the gross domestic product over the next decade, a decision that has given U.S. President Donald Trump a significant policy victory.

They gathered behind closed doors in the Netherlands on Wednesday, where the final details and potential grievances were hashed out.

"As the global landscape shifts, the collective security created by the [NATO] alliance remains the strongest and most effective way of protecting Canadian sovereignty and protecting the security of Canadians," Prime Minister Mark Carney said in The Hague Wednesday. "With our allies we must ensure that Canada remains strong, unified and ready to confront the threats not just of today but of tomorrow."

Members of the alliance, however, were expecting something in return — a fervent commitment from Trump on NATO's self-defence clause, Article 5.

Senior Canadian officials, speaking on background following the meeting, said the allies seemed comfortable with the U.S. president's reassurances, despite his equivocating in public about whether Washington would come to the defence of its allies in a crisis.

On his way to the summit, Trump was asked whether he supported Article 5, and he responded that the self-defence clause has many definitions. In fact, the language is quite clear — saying an attack on one member is considered an attack on all NATO allies.

After the announcement, Trump was asked again if he would now stand behind Article 5, given that NATO leaders have agreed to boost military funding.

"I stand with it, that's why I'm here, that's why I'm here," Trump said. "If I didn't stand with it, I wouldn't be here."

Carney said the move to five per cent of gross domestic product, 3.5 percent for core military spending and 1.5 for defence related infrastructure, will take place over the next 10 years but will be reviewed in 2029 to ensure those targets still align with the threats Canada is facing.

That is a compromise for allies — including Canada — who are finding such a big increase hard to swallow.

Carney revealed on Monday during an interview with CNN that meeting the new defence spending goal of five per cent of GDP would cost the federal treasury $150 billion per year.

That translates into roughly $107 billion in direct military spending, with the rest earmarked for defence infrastructure, such as ports, bases and airfields.

Watch | Carney asked about public support for major defence spending increase:

Prime Minister Mark Carney, speaking from a NATO summit after allies agreed to a major increase in defence spending, said the spending — including a portion that will go to defence-related infrastructure and not core military spending — is aimed at protecting Canadians in an 'evolving threat environment.'

When asked what sacrifices Canadians will have to make to meet this funding commitment, Carney said there will be trade-offs — but he noted certain sacrifices are already being made.

"The people making sacrifices have been the men and women of the Canadian Armed Forces, because they have not been paid to reflect what we are asking them to do, they haven't been operating with the right equipment in many cases," he said.

Canada is making up for those shortcomings by investing in Canada's defence budget this year, but in five or 10 years, if the threats to Canada's security continue to increase, Carney acknowledged Canadians may have to make compromises when it comes to public spending.

Those trade-offs, the prime minister said, would likely happen toward the end of the decade and into the next and if they do, he said there would be "a very clear and open conversation" about where people are willing to compromise.

Canada has not seen this kind of massive military spending increase since the Second World War or Korean War, says defence expert Dave Perry, of the Canadian Global Affairs Institute.

Whether the Canadian public is prepared for it is another matter.

Public opinion had been overwhelmingly supportive of hitting the old two percent NATO target.

And Perry said Canadians will have to try and look past the fact that this is Trump's deal.

"This is finally taking off the table what has been an enduring, serious irritant with the United States government of multiple administrations," he said. "I had an American former State Department official complaining last night of, we asked nicely for years and nobody did anything — until Trump stopped asking nicely."

WATCH | For years, the U.S. has pushed NATO leaders to boost military spending:

NATO members are meeting this week to debate more than doubling defence spending targets to five per cent. But a text exchange between U.S. President Donald Trump and the alliance’s secretary general appears to indicate it's already a done deal.

NATO Secretary General Mark Rutte opened the shortened summit by praising Trump for leading the charge on increased defence spending.

"For too long, one ally, the United States, carried too much of the burden of that commitment — and that changes today," Rutte said. "President Trump, dear Donald, you made this change possible. Your leadership on this has already produced one trillion dollars in extra spending from European allies since 2016. And the decisions today will produce trillions more for our common defence."

Carney noted the increased spending will mean increased security and also boost the domestic economy, creating new industries and new jobs.

"The world is increasingly dangerous and divided. Canada must strengthen our defence to better protect our sovereignty, our interests, and our Allies," Carney said in a statement at the conclusion of the meeting. "If we want a more secure world, we need a stronger Canada."