NATO's second Wales pledge asks allies to put at least 20% of defence spending into major equipment — a gauge of whether the money buys new capability or is absorbed by salaries and running costs. On the 2025 estimate Canada devotes 22.6% of its defence budget to equipment, clearing the 20% line for the first time — but that still ranks 27th of the 29 allies reporting a 2025 figure, ahead of only Portugal and Belgium, and a fraction of Poland's 54%.
Where the headline 2% measures the size of the defence budget, the equipment share measures its quality: you can hit 2% of GDP and still field an ageing, hollow force if the money goes to payroll and upkeep. NATO breaks every ally's budget into four buckets — equipment, personnel, infrastructure, and operations — on the common definition, and the 20% equipment guideline is the modernisation benchmark. The figure is lumpy by nature: a single big procurement of ships or jets can spike a country's share in one year, which is why it reads best as a trend, and why Poland — recapitalising its whole force at once — sits near 54%.
Ranked by equipment share, with the 20% guideline marked. Canada lands near the bottom: it now meets the floor, but the modernising allies — Poland, Finland, Hungary, Lithuania — devote roughly twice as much of their budgets to new capability. Step through the years to see how lumpy procurement makes the ranking move.
Canada's equipment share sat between 10% and 18% for eleven years, never reaching the 20% guideline, before the 2025 estimate lifts it to 22.6% — the first time the country has crossed the line.
The flip side of a low equipment share is a budget weighted toward running the force rather than re-equipping it. Operations and maintenance has been Canada's largest category throughout, and personnel its second; equipment was the smallest major slice every year until the 2025 estimate, when its rise and a falling personnel share began to rebalance the mix.
Canada's equipment share hit 22.6% in the 2025 estimate after eleven straight years below the guideline (a 10–18% range across 2014–2024). Like the 2% spending target, it is a line crossed only in the latest year.
At 22.6%, Canada ranks 27th of the 29 allies with a published 2025 figure — above only Portugal and Belgium. The modernisers spend roughly double: Poland 54%, Finland 46%, Lithuania 46%, Hungary 45%.
On the 2025 mix, about 40% of Canada's defence spending goes to operations and upkeep and 36% to personnel, with just 1% on infrastructure — leaving 23% for equipment, the smallest major slice, though now climbing.
Equipment share jumps with one-off procurements, so a single strong year is not modernisation. Holding above 20% will take steady recapitalisation, not a one-time bump — the pattern that keeps the eastern-flank allies high.