What Canada’s NATO 5% Commitment Means for You
Congratulations, you are a defence company now! Really. Below, we have five things every Canadian leader needs to know about Canada’s NATO five per cent commitment.
Context
The NATO Summit in The Hague just produced the most significant policy shift in Canada’s postwar history. For the first time in at least 70 years, Canada has committed to spending five per cent of GDP annually on defence and national security by 2035. That means increasing the federal defence budget from $41 billion to more than $150 billion per year. This quadrupling of investment will have sweeping implications for infrastructure, procurement, technology, workforce strategy, and federal–provincial relations.
All 32 NATO countries, including Canada, have agreed to:
Spend 5% of GDP annually on defence by 2035
3.5% on core defence (weapons systems, military capability, infrastructure)
1.5% on defence-adjacent areas (cybersecurity, critical infrastructure, resilience, innovation, industrial development)
Begin reporting annual implementation plans immediately
Undergo a formal review in 2029 to assess progress and strategic alignment
Strategic Impact: 5 Things Every Leader Needs to Know
1. Your government relations and comms strategy must change today.
The scale of change will affect every sector that interacts with government, even if defence isn’t their primary driver. Canada’s economy is getting a re-org, and the new management says: “You’re in the army now!”
Your touchpoints with government are about to change. Businesses and organizations that previously had no interaction with the Department of National Defence (DND) may suddenly see that change. This will mean expanding your rolodex and lexicon to speak their language.
What to do: Begin mapping how your needs and language align with the new 3.5% and 1.5% structure. Reframe to ensure alignment.
2. Critical minerals are now a defence priority.
Carney confirmed that developing Canada’s mineral wealth, particularly lithium, cobalt, graphite, aluminum, and nickel, will be central to hitting the five per cent target. These materials were previously the darlings of clean-tech, but as of today, they are NATO-defined defence assets. Getting those critical minerals to market will also count, with Carney saying: “It’s ports and railroads and other ways to get these minerals out.”
What to do: Companies and provinces with access to critical mineral corridors need to reposition their infrastructure proposals immediately as strategic dual-use assets.
3. Expect new procurement models
With no nation currently spending five per cent of GDP on defence (even the U.S. sits at 3.38 per cent), NATO is rebuilding the spending model in real time. Canada’s new procurement pathways will need to scale 10 to 20 times in speed and volume. Expect fast-tracked authorities, new funding envelopes, and non-traditional suppliers to enter the ecosystem. That creates opportunities for new players.
This period of retooling in our economy is reminiscent of manufacturers shifting at the start of COVID-19 to make masks, syringes and ventilators. This time, the retooling will be about what’s essential to national security and sovereignty.
What to do: Watch for early procurement pilot programs and retooled RFPs from the federal government. Lobbying efforts must be nimble, tactical, and rooted in NATO-aligned capabilities.
4. Arctic sovereignty is now a budget priority.
Canada’s Arctic, once seen as a sovereignty talking point, is now a front-line NATO asset. In bilateral meetings, Carney made it clear that investments in Arctic ports, northern airstrips, telecommunications, and Indigenous logistics partnerships are now defence-essential. Canada’s commitments to transatlantic and Arctic security will increasingly rely on northern readiness.
What to do: Arctic-focused projects must be recast through the lens of force mobility, NATO logistics, and resilience. Indigenous partnerships will become mission-critical – not just in the Arctic, but across all parts of Canada where rights-bearing Indigenous communities have claims.
5. The timeline is tighter than it sounds
While the final target is 2035, NATO will review progress in 2029. That gives Canada less than four years to demonstrate measurable implementation, justify projects against eligibility criteria, and pivot existing spending frameworks.
What to do: Position your organization or project within a Phase 1 implementation window (2025–2029). This is your moment to enter the new defence economy.
Final Strategic Takeaways
The race for five per cent begins today. But will American President Donald Trump demand more, faster or more prescriptive spending in the months ahead? Will the 2029 review change the deadline? Wednesday’s NATO pledge is the new word in global defence spending – not the final word. Expect shifting targets.
Opportunities:
Everything is potentially now defence-relevant.
Early movers can shape how Ottawa implements the 5% rule.
New alliances (with EU, U.K., NATO) open export channels and co-funding for Canadian companies.
Risks:
Projects not aligned with national security will be deprioritized. Especially with Carney’s government still committed to balancing Canada’s budget on the operations side, non-defence funding will be scarce.
Legacy funding envelopes could be repurposed.
The 2029 review could create pressure to defund or reprole sectors that can’t justify alignment.
What To Do Next
Canada’s NATO commitment is a once-in-a-generation restructuring of how the federal government will prioritize, fund, and evaluate everything it touches. This is a moment of tremendous opportunity, but only for those who understand how to navigate it.
Texture Communications recommends the following for executive teams, industry associations, and public affairs leaders:
Book a strategy session with Texture to review how your current positioning intersects with NATO-aligned policy priorities.
Redesign your federal advocacy to map onto the 3.5% and 1.5% structure.
Get ahead of the 2029 review by launching sooner.
Audit your communications and government relations materials: are you speaking the language of defence, resilience, and sovereignty?
And one more for the road... tell your marketing team to order your 2026 corporate swag in CADPAT (Canadian military camouflage).
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