The head of NATO has praised Canada for agreeing to take a leadership role in the standoff with Russia, even as new figures show Canadian defence spending has fallen to record lows.

The Liberal government announced last week that Canada would join Germany, the United Kingdom and the United States in leading a 4,000-strong NATO force in Eastern Europe.

Canadian troops are expected to be deployed to Latvia, where they will make up the majority of a 1,000-strong battalion that will also include forces from other NATO members. Germany, the U.K. and the U.S. will lead similar units in Lithuania, Estonia and Poland.

The government’s decision came after significant pressure from European and American allies, with U.S. President Barack Obama stating in his address to Parliament last Wednesday that “NATO needs more Canada.”

Speaking in Brussels on Monday, NATO Secretary General Jens Stoltenberg said Canada’s promise to lead one of the four battalions sends a clear signal that the alliance is strong and united.

“This is a great contribution to our common security and a clear signal that our nations will defend one another on both sides of the Atlantic,” Mr. Stoltenberg said at a press conference held days before NATO leaders, including Prime Minister Justin Trudeau, meet at a summit in Poland.

Even as Mr. Stoltenberg was thanking Canada for its leadership in Eastern Europe, new figures produced by the alliance show Canada near the back of the pack in terms of defence spending.

All NATO countries, including Canada, agreed in 2014 to stop cutting military budgets and work towards spending two per cent of GDP on defence. The goal was intended to ensure all alliance members were doing their fair share, which includes investing enough to field a modern military.

The target has taken on added importance thanks to Russia’s own military buildup, as well as criticisms in the U.S. from senators and Republican presidential hopeful Donald Trump about some members not pulling their weight.

Mr. Obama also gently rebuked Canada in his address to Parliament last week, saying: “As your ally and as your friend, let me say that we’ll be more secure when every NATO member, including Canada, contributes its full share to our common security.”

The new figures show Canadian defence spending fell to 0.98 per cent of GDP in 2015, the lowest level in decades. While the alliance estimates spending will increase slightly this year, to 0.99 per cent of GDP, that will still leave Canada 23rd out of the 28 NATO members.

Mr. Stoltenberg said while the alliance was moving in the right direction in terms of defence spending after years of decline, there was still a long way to go.