- Equipment share of spending — how much of the defence budget goes to capital and equipment.
- Military personnel — the size of the uniformed force.
The 2% of GDP guideline has anchored NATO burden-sharing since the 2014 Wales Summit. Every ally reports against NATO's single common definition, and NATO recalculates each country's spending onto that basis. That removes the comparability problem in national defence budgets, where what counts as "defence" varies widely, and it is why this figure can be read straight across the Alliance. Canada sat below the 2% line for the entire decade after Wales, and crosses it only in the 2025 estimate. Meanwhile the target has risen. At the June 2025 Hague Summit allies committed to 5% of GDP by 2035 (at least 3.5% on core defence plus 1.5% on defence- and security-related spending).
Ranked by the 2026 estimate, Canada lands 20th of 31, one place above the bottom third. Nineteen allies spend a larger share of GDP on defence — led by frontline and eastern-flank states such as Lithuania (5.33%), Estonia (5.10%), Latvia (4.92%) and Poland (4.68%), which spend more than twice Canada's rate. Ten allies sit between the 2.00% floor and Canada's 2.13%, and two of them (Belgium and Spain) sit exactly on it.
Canada's defence share drifted between 1.0% and 1.5% for eleven years after the Wales pledge, peaking at just 1.44% in 2017 and sitting at 1.41% in 2024, before the 2025 estimate jumps to 2.03% and the 2026 estimate to 2.13%. Those are the only two years the country clears the 2% guideline.
Canada's share hit 2.03% in the 2025 estimate and 2.13% in 2026, after eleven straight years below the line. Across 2014–2024 it never exceeded 1.44%, leaving Canada among the late movers on the Wales pledge.
At 2.13%, Canada ranks 20th of the 31 allies in the 2026 estimate; 19 spend more. The 11 below it are Italy, Portugal, Hungary, North Macedonia, Croatia, Luxembourg, the Slovak Republic, Czechia, Belgium, Spain and Slovenia, most of them clustered just above or on the 2.00% floor. That puts Canada in the middle third, so the verdict is Watch, but only barely: one place lower would put it in the bottom third.
The NATO average is 2.86% and the new floor is 5% by 2035. Clearing 2% still leaves Canada 0.73 points below the alliance average and about 2.9 points short of the 2035 commitment. That is among the widest gaps in NATO.
In 2014 only three allies met 2%; on the 2026 estimate all but one do, and the target itself has been raised. Canada's absolute share rose sharply (real core defence spending grew 46% in 2025 and a further 6% in 2026 on NATO's figures), but its relative standing improved only from 23rd to 20th of 31.
Canada cleared 2% for the first time in 2025 and ranks 20th of 31 allies: in the middle third, but only by one place, and 0.73 points below the NATO average.
- Compared with
- The 31 NATO allies that report defence spending on NATO's common definition. Iceland, which has no armed forces, is not in NATO's tables.
- Where Canada sits
- 20th of 31 on the 2026 estimate, with 19 allies spending a larger share of GDP. That is the lowest rank in the middle third. At 2.13%, Canada is 0.73 points below the NATO average of 2.86%.
- Which way it is moving
- Up. 1.41% in 2024, 2.03% in 2025 and 2.13% in 2026 (estimates). Real core defence spending grew 46% in 2025 and 6% in 2026. Canada's rank rose from 23rd to 20th.
- What the verdict follows
- Position in the peer set. The rise is real, but the bar is rising too: all but one ally now meet 2%, and the commitment is 5% by 2035, about 2.9 points away. One place lower would put it in the bottom third.
- Data basis
- NATO, Defence Expenditure of NATO Countries (2014–2026), published 7 July 2026. The 2025 and 2026 figures are NATO estimates. Page last reviewed September 2026.
Primary sources
- NATO — Defence Expenditure of NATO Countries (2014–2026), Table 3 (core defence expenditure as a share of GDP and annual real change). Provides the common-definition share of GDP for every member, 2014–2025e.
- NATO — Defence expenditures and NATO's 5% commitment. Background on the 2% guideline (Wales 2014) and the 5%-by-2035 commitment (The Hague, June 2025).
Methodology notes
- Definition. NATO defines defence expenditure as payments made by a national government specifically to meet the needs of its armed forces, those of allies, or of the Alliance. It includes major equipment and the R&D devoted to it, and pensions paid to military retirees. All allies report against this single agreed definition, and NATO recalculates national figures onto it, so the share-of-GDP figures are directly comparable across members.
- Comparability. This metric is deliberately scoped to NATO members only, because the common definition is what makes the comparison hold. Non-NATO economies (e.g. Japan, Australia) report on different bases and are excluded rather than spliced in. The 2025 and 2026 figures are NATO estimates, not finals. Every ally except Iceland (which maintains no armed forces and does not appear in NATO's defence-expenditure tables) reports both years, so 31 allies are ranked. Basis change: the 2014–2026 edition reports core defence expenditure throughout, reflecting the split agreed at The Hague between 3.5% of GDP on core defence and 1.5% on defence- and security-related spending. Figures for earlier years have been restated on that basis, which is why Canada's 2024 reading is 1.41% here against the 1.47% published in the previous edition, and its 2025 estimate 2.03% against 2.01%. Comparisons with figures quoted from the 2014–2025 edition should account for that. Slovenia's figures from 2026 carry a NATO footnote: they are the position at the inauguration of the new government on 4 June 2026 and are to be reprogrammed. This page tracks NATO's defence-expenditure tables, leaving 31 allies ranked.
- Companion workbook. The full 2014–2025 series for every member, the 2025 ranking with gap-to-target calculations, and Canada's trend live in Securing_Defence-Spending_Data.xlsx.
