# Canada's NATO Spending Target

> Canada needs US$112 billion for NATO defense by 2035.
- Title: Canada's NATO Spending Target · The Rio Times | Shortify
- Summary: 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…
- Keywords: canada, nato, defence spending, parliamentary budget officer, federal deficit, core defense spending, gdp, news, world, politics, Canada's, Spending
- Source: The Rio Times — https://riotimesonline.com/canada-defence-spending-nato-target-explained-2026
- Author: Carlos Silva
- Published: 2026-10-08T17:26:40+00:00
- Read time: 2 min
- Topics: canada, nato, defence spending, parliamentary budget officer, federal deficit, core defense spending, gdp, news, world, politics
## 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.
## Key takeaway

Canada’s NATO pledge requires US$112 billion in core defense spending by 2035-36, adding C$63 billion to the deficit.