Canada to Accelerate Military Spending Plans Amid NATO Demands, PM Carney Says

By Paul Vieira

OTTAWA--Canada will have to speed up defense spending plans amid demands from the U.S. and the North Atlantic Treaty Organization, Prime Minister Mark Carney said.

In the campaign that led to his election victory last month, Carney pledged to hit the threshold set by the North Atlantic Treaty Organization — military spending equal to 2% of gross domestic product — before 2030. Prior to Carney taking office, Canada had come under sharp criticism from U.S. lawmakers and other allies for its low defense spending, which NATO estimates equals about 1.4% of GDP.

This week, NATO Secretary-General Mark Rutte said member countries would likely agree to a sharp increase in their military spending, given the threat posed by China, North Korea and Iran, to about 5% of GDP.

"We are going to have to spend more sooner," Carney said in an interview with the Canadian Broadcasting Corp. that aired Tuesday. He has cited the coming NATO summit next month in The Hague as one reason his Liberal government wouldn't introduce its 2025 budget plan until the fall, to incorporate revised defense-spending plans among Western allies.

"NATO partners are going to be asked to spend more to do more to for mutual protection. We're going to participate in that," Carney said.

Canada's parliamentary budget watchdog warned last year that defense spending would need to double from current levels to reach the 2% NATO threshold early next decade. A 5% threshold would require additional spending in Ottawa to an annual total of roughly 122 billion Canadian dollars, or the equivalent of $88.33 billion. Budget documents presented in the Canadian legislature this week indicate the national defense department's anticipates spending in the 2025-26 fiscal year of at least C$35 billion.

Carney has said one of his government's top priorities will be markedly slowing public-sector spending — or outlays on the day-to-day administration of the bureaucracy — to 2% a year from the roughly recent average of 9%.

Write to Paul Vieira at paul.vieira@wsj.com