From The Rio Times · Carlos Silva · · 2m
Canada's NATO Spending Target
Canada needs US$112 billion for NATO defense by 2035.
In brief
Canada needs US$112 billion for NATO defense by 2035. Canada’s NATO pledge requires US$112 billion in core defense spending by 2035-36, adding C$63 billion to the deficit. Originally reported by The Rio Times.
Canada's NATO Path Needs US$112 Billion by 2035
The Parliamentary Budget Officer says Canada’s NATO 5% pledge means core defense spending of C$159 billion (about US$112 billion) in 2035-36.
Why It Matters
The PBO puts the extra deficit at C$63 billion (about US$44 billion) in 2035-36, and the plan is a large, long-term procurement stream for US suppliers.
The Numbers
A C$68.2 billion (about US$48 billion) gap over a 2%-of-GDP baseline in 2035-36, or about C$33.5 billion (US$24 billion) more a year on average over ten years.
Who Is Responsible
Prime Minister Mark Carney’s government made the pledge, David J. McGuinty is Minister of National Defence, and François-Philippe Champagne is Finance Minister.
How Canada Got to the 5% Pledge
At the NATO summit in The Hague on 25 June 2025, allies agreed to invest 5% of GDP a year on defence by 2035.
What the Budget Watchdog Calculated
The PBO published its costing on 5 February 2026, assuming core defense spending rises from 2.0% of GDP in 2025-26 to 3.5% in 2035-36.
Core Defence Spending
Core defence spending would reach about C$159 billion (US$112 billion) in 2035-36 on a cash basis.
The Deficit Impact
The deficit would be about C$63 billion (US$44 billion) larger in 2035-36, or 1.4 percentage points of GDP.
Business Stakes for US Suppliers
Canada’s likely shopping list covers areas where US firms already compete, including air defence, surveillance, communications, cyber and munitions.
What It Means for US Readers
For investors in US defence and aerospace companies, the pledge points to years of steady Canadian demand rather than one large order.
What to Watch
The next federal budget is a natural place to look for multi-year defence appropriations rather than headline targets.
The Next Steps
Major contract awards in aircraft, air defence, ships and cyber will show whether spending becomes delivered capability.
The big picture
Canada’s NATO pledge requires US$112 billion in core defense spending by 2035-36, adding C$63 billion to the deficit.
