OTTAWA — Canada is conducting a comprehensive review of its defense spending as pressure mounts from allies to increase military expenditures to levels not seen since the Cold War. Defence Minister David McGuinty announced on Thursday that the federal government is evaluating its budget “from top to bottom.” He indicated that more information regarding Canada’s defense spending commitments will be released soon.

"Canada is revisiting all of its expenditures presently, from top to bottom," McGuinty told reporters at NATO headquarters in Brussels. He emphasized that the government is collaborating with international partners to implement necessary changes and will provide financial updates shortly.

McGuinty is attending the NATO defense ministers’ meeting, which is the last significant gathering before the leaders' summit later this month. At this summit, NATO members are expected to agree on a substantial increase in defense spending targets. U.S. Secretary of Defence Pete Hegseth and NATO Secretary-General Mark Rutte expressed confidence that the alliance will adopt a new defense spending commitment equivalent to five percent of GDP, a target that U.S. President Donald Trump has been advocating for months.

“I have total confidence we will get there on the five percent and we will hammer out some of the details we still have to work on,” Rutte stated after the meeting. He added, “We all know we will be safe for the next couple of years, but then we need to use those years to learn Russian if we don’t do this.”

Hegseth echoed this sentiment, stating, “To be an alliance, you’ve got to be more than flags. We're here to continue the work which President Trump started, a commitment to five percent across this alliance, which we think will happen — it has to happen — by this summit at The Hague later this month.”

The NATO summit is scheduled for June 24 and 25 in the Netherlands. However, no member country, including the United States, is currently close to meeting the five percent benchmark. Canada has struggled to meet the existing two percent benchmark, spending only 1.33 percent of its GDP on defense in 2023, according to a recent NATO report. The report also projected that Canada’s defense spending would rise to 1.45 percent in 2024.

Canada has fallen behind its allies, with 22 NATO members expected to meet the defense spending benchmark in 2024, a significant increase from just three in 2014. The plan proposed by Rutte at the summit includes provisions for member countries to allocate 3.5 percent of their GDP to core defense needs, such as aircraft and weaponry, and 1.5 percent to defense-related areas like infrastructure and cybersecurity.

Historically, Canada has not spent five percent of its GDP on defense since 1957, according to the Stockholm International Peace Research Institute. The last time Canada met the two percent target was in 1990. The previous government, led by Prime Minister Justin Trudeau, suggested that acquiring up to 12 new submarines to replace aging vessels could help Canada meet the two percent target. However, the timeline for these purchases remains uncertain, with a contract for the new submarines expected to be awarded by 2028.

Prime Minister Mark Carney has pledged to accelerate Canada’s timeline for achieving the two percent threshold from 2032 to 2030 or sooner. During the NATO meeting, defense ministers also established "capability targets," which outline the types of military equipment the 32 member nations need to procure, including air and missile defense systems, artillery, ammunition, and drones.

McGuinty acknowledged the shifting global security landscape and the increasing geopolitical risks. "We are under no illusions about the scale of the challenges ahead," he said. He highlighted the destabilizing effects of Russia's war against Ukraine, China's assertive behavior in the Indo-Pacific, and the unpredictable actions of regimes like North Korea and Iran. "In the face of these growing threats, we must all do more."