Spend to defend: Decoding Canada’s military spending

Canada has been a NATO laggard for decades, with successive governments pledging to meet the country’s defence spending commitments, then repeatedly failing to do so. Whether or not we want to admit it, it took the second coming of a certain divisive, mendacious and foul-tempered U.S. president for Canada to finally live up to its promises.

Under Prime Minister Mark Carney, Canada’s funding for defence surged to $63 billion in fiscal 2025-26, which was as much about meeting Donald Trump’s demands that allies step up their spending as it was about pursuing an industrial strategy that helps Canada’s tariff-battered economy and reduces the country’s reliance on “foreign suppliers”—namely, our dangerously unreliable neighbours to the south.

NATO’s official barometer of a country’s defence commitment is military spending as a share of gross domestic product. And by that measure, Canada’s spending now surpasses NATO’s old 2% goal line and is on track to meet the organization’s updated 3.5% core defence target for 2035.

But in a new analysis released in August, NATO also measured its members’ commitments another way, and it reinforces how dramatically Canada has shifted its priorities: real core defence spending per capita, adjusted to U.S. dollars for cross-country comparison.

The numbers show how rapidly Canada is closing the gap. In 2014, our real (meaning inflation-adjusted) per capita defence spending amounted to just 22% of what the U.S. spent that year. In 2026, that share has risen to 46%. In 2021 U.S.-dollar terms, that represents a swing from US$598 per person a decade ago to US$1,146 this year.

Nor is Canada alone in playing catch-up. In 2024, nearly half of all NATO members were below the 2%-of-GDP mark. Now only one—Slovenia—is.