OTTAWA — It’s a race to two per cent.
A day after Liberal leadership candidate Mark Carney pledged he would hit Canada’s long-delayed defence spending target by 2030, two other leadership rivals declared they would achieve that threshold even faster.
In a statement Thursday, former finance minister Chrystia Freeland unveiled her own plan to boost Canada’s defence spending to the equivalent of two per cent of gross domestic product (GDP) by 2027.
That’s five years faster than the Liberal government’s current promise, and three years sooner than what Carney pledge to do in a policy announcement on Wednesday.
“The world is increasingly volatile and dangerous,” Freeland’s statement said. “We must scale up quickly to defend our sovereignty, meet our international commitments and support the brave men and women who serve in uniform.”
Karina Gould, the former government House leader who is running for the Liberal leadership, also said Thursday she would meet the spending target set by the North Atlantic Treaty Organization (NATO) for its members by 2027 — in part by improving the compensation of Canadian soldiers.
“One of the ways that I’m going to help increase defence spending is by increasing the salaries of our Canadian Armed Forces,” she said.
The CAF has been missing recruiting targets for years, and currently has about 16,000 unfilled positions. Gould said she would also ensure CAF members have the right equipment and promised to appoint a procurement czar to address that issue.
“We need to really clean up and streamline our military procurement so that we can accelerate our commitment to two per cent,” said Gould.
Freeland said she would increase the wages of CAF members by 50 per cent, improve health care and housing for soldiers, and speed up recruitment so the armed forces grows to a total of 125,000 members.
The CAF reported last year that it had about 63,500 regular members and 22,500 reserve forces.
Freeland promised to use urgent requirement exemptions to speed up defence procurement, and use defence spending to boost Canadian industry. She said she would “buy Canadian, wherever possible” for military spending, create a new defence industrial agency, and proceed with new infrastructure in the north and the purchase of new submarines, drones, missile defence systems and “heavy lift aircraft.”
Frank Baylis, a former Liberal MP who is running for the leadership, said Thursday that he would push to hit the two per cent target by 2030, the same timeline promised by Carney.
“I think that goes without saying, if we sign these agreements, we should meet them,” Baylis said.
Under Prime Minister Justin Trudeau, the Liberal government has promised to spend the equivalent of two per cent of Canada’s GDP on defence by 2032.
The commitment was first made in 2014, and in the years since, Canada has become one of a shrinking number of allies that have failed to hit the NATO target.
NATO figures published last year showed Canada — despite committing tens of billions of dollars to defence since the Liberals took office in 2015 — spent 1.37 per cent of GDP, or roughly $41 billion, on defence in 2024.
Based on GDP projections from the government’s most recent fiscal update, Canada would need to add more than $17 billion in annual defence spending to hit the two per cent threshold by 2027.
Defence Minister Bill Blair has said Canada could hit the target sooner than 2032 once it makes decisions promised in its most recent defence policy, such as the acquisition of new submarines for the Royal Canadian Navy.
In recent weeks, however, NATO Secretary General Mark Rutte has said the alliance needs to increase its spending target amid tensions with Russia and China. U.S. President Donald Trump, meanwhile, has suggested his country might not help protect allies that don’t meet their spending commitments.
Trump has also said NATO members should spend at least five per cent of GDP on defence — a threshold that no alliance member, including the United States, has hit, according to NATO figures.
Gould also said Thursday that she would increase funding for co-operative housing and make another round of Housing Accelerator grants available to cities across the country. The accelerator program gave cities money in exchange for speeding up building approvals, relaxing zoning rules and generally adding more homes to their communities.
Gould pledged to reinstate and expand the government’s first-time homebuyer incentive program, which ended last year and gave homebuyers significant help with down payments in exchange for the government receiving an equity stake. The program offered funds equal to five or 10 per cent of a home’s purchase price, but Gould said it needs to be expanded to 50 per cent to be more effective.
“In a community like Toronto, where it is extremely expensive to get into the market, this will help first-time homebuyers get a toehold in and increase their equity over time,” she said.
The leadership contenders face another financial deadline on Friday, when they must pay $125,000 to the Liberal party as part of the $350,000 entry fee.
Representatives of Carney and Freeland said they have paid that instalment, but Gould said she is still working to raise the funds.
“The party has put forward an extremely aggressive fundraising deadline. They have tried to make it as hard as possible,” she said.
The $350,000 entry fee is the highest any leadership race has set, and Gould suggested the Liberal party was trying to limit the field to just a few deep-pocketed candidates.
“What I can tell you is my campaign is powered by people. Eighty-five per cent of my donations are $200 or less,” she said. “We’re doing everything to meet those fundraising deadlines and I have to say that I am buoyed by the incredible support that I am getting from everyday Canadians.”
Baylis told a news conference Thursday that he would meet the fundraising goals and did not repeat Gould’s criticism of the party’s entry fee.
“I understand the party, it’s in a very difficult position,” he said, referring to how the Liberals are running a leadership race on a tight schedule while the country grapples with tariff threats from Trump.
“I respect what the party is doing, and we’re going to work within the confines of the rules that the parties laid out.”
Baylis also promised to improve Parliament by setting 10-year term limits for MPs and senators. He said he would redistribute power that has become “concentrated” in the hands of party leaders, so that members of Parliament and the House Speaker have more authority, and he would create a new legislative chamber so the business of government can proceed quicker.
The new leader is scheduled to be elected on March 9.
