Canada Enters a New Defence Phase Amid U.S. and NATO Pressure

Canada is moving into a new defence era, driven by rising pressure from Washington, stronger NATO expectations and a changing global security landscape. What was once a long-running debate over whether Ottawa was spending enough on defence has now become a broader shift in policy, procurement and international positioning.

Prime Minister Mark Carney’s government says Canada has now reached NATO’s long-standing target of spending 2% of GDP on defence, a benchmark Ottawa had faced years of criticism for missing. The Prime Minister’s Office described the 2% level as a foundation rather than a ceiling, with Canada also committing to a wider NATO framework that combines higher defence spending with investments in critical infrastructure.

The shift comes as NATO members face sustained pressure to carry a larger share of collective defence. Canada has also said it is on track toward NATO’s new 5% defence-related target, made up of 3.5% for core defence spending and 1.5% for critical infrastructure such as roads, ports and other assets that support security and military mobility.

One of the clearest signs of Canada’s new posture is the proposed Defence, Security and Resilience Bank, a Canada-led initiative designed to provide long-term, lower-cost financing for defence, security and resilience projects. The Prime Minister’s Office said eight countries have committed to supporting the initiative, while Reuters reported that nine countries are involved when Canada is included. The bank is expected to be based in Canada and aims to become operational as early as 2027.

According to Reuters, the proposed bank could seek to raise up to £100 billion, or about US$134 billion, to help allied countries expand defence production and reduce financing costs. The move reflects a wider concern among NATO partners that military supply chains and defence industries are not scaling quickly enough to meet the demands created by Russia’s war in Ukraine and other security threats.

Canada is also moving ahead with one of the largest military procurement files in its history. The government has selected Germany’s Thyssenkrupp Marine Systems as the preferred supplier for the Canadian Patrol Submarine Project, which could include up to 12 new submarines. Ottawa says the project is intended to strengthen Canada’s ability to protect its coastlines, maritime approaches and Arctic interests.

The Arctic is becoming a central part of Canada’s defence calculation. In June, Reuters reported that Australia had agreed to sell Canada advanced over-the-horizon radar technology in a major defence export deal, with the system intended to improve Canada’s surveillance capacity in the Arctic region. The deal fits into a broader effort to strengthen northern security at a time when Russia, China and NATO allies are all paying closer attention to Arctic access and military readiness.

Ottawa is also seeking a larger role within NATO’s European defence structure. The Prime Minister’s Office has highlighted Canada’s deployment through Operation REASSURANCE as the country’s largest sustained military presence in Europe in more than three decades, underlining Canada’s role in supporting deterrence on NATO’s eastern flank.

Ukraine remains another major driver of Canada’s defence agenda. The war has pushed NATO countries to rethink ammunition supplies, equipment production and long-term military support. For Canada, the question is no longer only how much aid to send to Kyiv, but how to rebuild domestic and allied defence capacity so that support can be sustained over time.

Still, the new defence direction comes with political and economic challenges at home. Higher military spending may strengthen Canada’s credibility with NATO allies, but it also raises questions about federal budget priorities at a time when many Canadians are concerned about housing, health care, food prices and public services.

The larger issue is whether Canada can turn new promises into real capability. Spending targets, submarine projects and defence financing initiatives may signal ambition, but they will be judged by delivery: faster procurement, stronger industry, better readiness and a clearer strategy for protecting Canadian sovereignty.

For now, Ottawa’s message is clear. Canada does not want to be seen as a hesitant NATO partner anymore. Under American pressure and amid a more dangerous global environment, the country is trying to reposition itself as a more serious defence actor — one that spends more, leads new initiatives and prepares for a security reality that is no longer distant from Canadian interests.