Peter MacKay, in an interview with Reuters, said both Canada and Nato had learned tough lessons about counter-insurgency during their efforts to maintain stability after the removal of the Taliban from power in 2001.
He said the Afghan mission, and the Nato air campaign in Libya last year, would prompt the organisation to proceed with changes needed to tackle security issues worldwide.
"We are big believers in Nato as the pre-eminent security establishment, security body. It has its shortcomings - what organisation doesn't?" MacKay said on the sidelines of the Shanrgi-La Dialogue in Singapore, devoted to international security issues.
"There appears to be a willingness and desire to reform Nato and take on board some very serious lessons learned over the course of this mission.
"I think it will modernise in a way that will increase its flexibility, its deployability and, dare I say it, its accountability."
At its Chicago summit last month, Nato sealed an agreement to hand control of Afghanistan to its own security forces by the middle of next year.
Nato will then face questions over its future role in a post-Soviet world as governments cut defense spending to reduce budget deficits, and the United States focuses on security issues in Asia.
MacKay said Nato had played a major part in helping nations emerge from years of what appeared to be intractable conflict, some of which were now standing in line for membership.
Aspirant Countries
"There are aspirant countries that want to be part of the Nato family. Consider Croatia, which was a recipient of Nato forces, is now a contributing nation," he said.
"This is not to suggest that we are going to see Afghan forces participating in Nato missions anytime soon. But dare to dream. There is hope."
MacKay said the capacity of Afghanistan's security forces "has grown exponentially" ahead of the 2014 Nato pullout.
"Hopeful is the word I would use. I am not Polyanna-ish or overly naive about the extent of the challenge," he said.
"But I do have an abiding confidence in the will of the Afghan people to find a lasting peace. I think there is tremendous fatigue on the part of the population having endured literally decades of conflict."
Canada's force, which peaked at around 3,000 troops, was based in the southern region of Kandahar, the spiritual heartland of the Taliban and the target of numerous deadly attacks.
The contingent's losses stood last month at 158, the third highest after the United States and Britain, and proportionately one of the highest among Nato member states making up the force.
Many Nato countries, led by the United States, intend to keep advisers in Afghanistan beyond the end-2014 departure of most foreign combat troops, but MacKay said there were no plans to maintain any Canadian personnel.
He said Canada's feeling leaving Afghanistan was "one of introspection in what we take away from this mission for further counter-insurgency missions, which are very difficult to say the least ... It was a major, major undertaking for our country."
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The absence of a formal defence alliance like Nato, the annual Shangri-La Dialogue in Singapore serves as an annual gathering in the Asia-Pacific region on security issues and defence diplomacy. For the participants one of the great benefits of this gathering is that unlike a formal summit there is no communiqué to be worked on. Canada's defence minister Mackay isn't too much concerned about the Afghanistan dilemma. His country, with its some 3.000 troops is not a significant contributor to the ISAF in Afghanistan. Canada pursues a foreign policy that is distinct from that of its powerful southern neighbour and has less to say within the Nato.
What crush are you talking about NATO, you have made Taliban stronger, you havent crushed them, they have been crushing you every now and than. i must say that you have crushed innocent men, women and children of Afghanistan more. Taliban are still stronger and they are getting stronger and they have more support now than back in 2001. One more thing, you call people who are fighting against you as TALIBAN and even i call them, but people of afghanistan are calling them MUJAHIDEENS ( Freedopm fighters), people say MUJAHIDEEN are fighting against the infidals and taking revenge of the destroying afghanistan villages with bombing and killing more tahn 1 million muslims all over the world. they say its start of the final war, a bug was is coming. this is just the start.