Federal budget maps out defence spending surge, but questions remain over NATO target
$157B in annual defence spending projected by 2030, little other clarity offered
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clarity → map → 2030
The new federal budget sets Canada on a path to spend slightly more than four per cent of its gross domestic product on defence per year — roughly $157 billion — by the end of the decade.
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budget → set → decade
The roadmap forecasts annual direct spending on the military will amount to $99.2 billion by 2030-31, with an additional $58.3 billion for defence infrastructure in the same year.
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spending → forecast → year
Prime Minister Mark Carney's government has been under pressure to outline how the country will meet the NATO target of spending five per cent of GDP on defence (3.5 per cent on the military and 1.5 per cent on defence-related expenses) by 2035.
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country → outline → 2035
Finance Minister François-Philippe Champagne's fiscal plan is heavy on details about how the Liberal government intends to build up the country's defence industry, but light on specific rearmament plans for the Canadian military.
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government → intend → military
The budget references the already planned purchase of up to 12 submarines, airborne early warning jets, armoured vehicles and drones, but doesn't address other urgent equipment shortfalls and operational pressures.
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budget → reference → shortfalls
We are investing in the capabilities we need to defend our country, particularly in our North and Arctic," Champagne said in his budget speech.
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Champagne → invest → speech
"We are strengthening our defence industry here at home, so that Canada makes more of what our Forces, and our allies, need to do the job.
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Forces → strengthen → job
We are taking greater responsibility for our own security, just as we are for our economic future."
Direct spending on the military in the ongoing budget year is expected to ring in at $75 billion (with an additional $50 billion for defence infrastructure).
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spending → take → infrastructure
In the coming budget year (2027-28), it is expected to rise to $89 billion (and $52 billion).
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it → come → billion
Analysts are skeptical the federal government will remain on the path toward five per cent after 2029.
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government → remain → 2029
That's the year NATO has set for a review of the commitment, which was insisted upon by the Trump administration.
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which → set → administration
Will Canada meet NATO's spending target?
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Canada → meet → target
When asked on a couple of occasions prior to the budget about the five per cent commitment, Carney reaffirmed Canada's commitment but hedged somewhat and pointed to the review year.
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Carney → ask → year
I think there's some other indicators in here that the current government's commitment to national defence is not fiscally limitless," said Dave Perry, a defence analyst and president of the Canadian Global Affairs Institute.
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Perry → think → Institute
The commitment to five per cent of GDP, made at the 2025 NATO summit in The Hague, envisions a gradual rise and Perry said "Canada is basically living up to that mark exactly," but there's no plan for growth beyond 2030 when the fiscal lifting will be harder.
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lifting → make → 2030
Canada looking to Germany for 8 submarines up front and 4 later: sources
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Canada → look → submarines
Senior commander warns alliance must adapt faster to deter Russia
Sahir Khan, an executive vice-president at the University of Ottawa's Institute of Fiscal Studies and Democracy, said as the Trump administration winds down between now and 2029, there could be less pressure on allies to hold fast on the target.
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administration → warn → target
"For those that were incredibly optimistic about where that defence envelope could go in the future, three-and-a-half, five per cent, I think we are going to find it will start to get tempered a bit," Khan said.
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Khan → go → future
Khan said he believes that there will be less of an appetite among Canadians for higher defence spending in five years' time.
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he → say → time
"As this starts to eat up more and more of the federal budget, it's going to mean rationing" of federal funds, Khan said.
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Khan → start → funds
"If you ask Canadians after the Trump administration ends, you know, whether they want more in defence versus health care, the answer is going to be health care, right?
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answer → ask → care
The budget puts a figure on an important previously announced defence drone initiative, setting aside $2.3 billion over five years, starting next year, to accelerate "the discovery, acquisition and deployment of uncrewed and counter-uncrewed capabilities.
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budget → put → capabilities
It also puts more money — $25 million — into military health services in order to support victims of the fire at the training range in Wainwright, Alta., and their families.
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It → put → Wainwright
And another $3 million will go directly to the Wainwright Military Family Resource Centre.
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million → go → Centre
The federal government recently extended the deployment of Canadian troops in Latvia to 2031.
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government → extend → 2031
The fiscal plan puts a figure of $7.1 billion on that NATO mission.
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plan → put → mission
The money, however, will come out of the Defence Department's annual budget.
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money → come → budget
Ottawa's sluggish bureaucracy leaves critical gaps in Canadian military ammo supply:
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bureaucracy → leave → supply
AG
Direct spending on Canadian military could reach more than $163B by 2035: budget watchdog
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spending → reach → 2035
In the past, during the Afghan war for example, the federal government would top up defence through supplementary appropriations.
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government → top → appropriations
Perry said, outside of the investments to build up the defence industrial base and create the Defence, Security and Resilience Bank (DSRB), there's little clarity about which specific direction the federal government intends to take the Canadian military.
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government → say → military
He said he suspects the public might get a better glimpse when the revised defence policy is released sometime in the next few weeks.
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policy → say → weeks
Feds 'very clear' on plan to reach spending targets
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Feds → reach → targets
In a media availability, Champagne defended the level of detail in the budget when it came to military spending.
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it → defend → spending
There was, the minister said, "more transparency than most G7 and countries."
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minister → be → G7
The figures are all laid out.
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figures → lay → ?
"You can see the spending on a cash basis for every year until 2030," Champagne said.
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Champagne → see → 2030
"So, we've been very clear how we're going to reach the four per cent target by 2030."
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we → go → 2030
Khan said he believes the government has been forthright in this budget about its plans for defence and that he hopes it will set the bar for disclosure on other major initiatives where the government has been less than transparent.
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government → say → initiatives
…and 3 more, not listed.
The Aporia
