Prime Minister Mark Carney is poised to announce that Canada will meet NATO's spending target of two percent of its gross domestic product by the end of the current fiscal year in March. This significant commitment will be detailed in a speech scheduled for this morning in Toronto, according to a confidential source who spoke to Radio-Canada but was not authorized to comment publicly. The Globe and Mail first reported on this plan.

A key aspect of Carney's announcement will be the introduction of a new defense industrial strategy. This strategy aims to bolster Canada's military capabilities through domestic production. The prime minister is expected to reveal plans for acquiring additional drones, armored vehicles, aircraft, and underwater sensors, all intended to enhance surveillance capabilities in the Arctic region.

In a notable shift, the Canadian Coast Guard will be integrated into the Department of National Defence, a move that aligns with practices in other countries. Currently, the Coast Guard operates as a special agency under the Fisheries Department, with an annual budget of $2.5 billion.

Military personnel are also likely to receive a pay raise, fulfilling a promise made by the Liberal government during the last election campaign. Federal ministers have been hinting at this two percent commitment for several weeks, signaling a clear path forward.

Carney's announcement comes as Canada seeks to align itself with a broader military buildup in Europe, with expectations set for a July 1 timeline. Defense Minister David McGuinty has indicated that Carney will address Canada's defense spending targets ahead of the upcoming NATO leaders' summit in The Hague.

Historically, Canada has faced criticism from its NATO allies for not meeting the two percent GDP target, a commitment first agreed upon in 2014. This issue was highlighted during last year's leaders' summit in Washington, where members of the U.S. Congress from both parties criticized Canada for lacking a concrete plan to meet the target, unlike its allies.