Canada to Increase Defence Spending by Over $9 Billion for 2025-26

Prime Minister Mark Carney and Minister of National Defence David McGuinty announced on June 9, 2025, that Canada plans to increase defence spending in the 2025-26 fiscal year. According to the federal government, over $9 billion in new investments will bring total defence spending to 2% of gross domestic product.

This budget announcement includes significant financial allocations for the Canadian Armed Forces (CAF), the Department of National Defence (DND), and the Communications Security Establishment (CSE). Officials attribute the spending to ongoing efforts to staff the military, maintain and modernize equipment, adopt new capabilities, and develop partnerships.

According to government figures, $2.6 billion is designated for military recruitment and retention. The objective is to bring the total to 71,500 Regular members and 30,000 Primary Reserve members in the CAF by 2030, which would require increasing personnel by 13,000. Funding is also set aside for civilian roles that support military operations, such as fleet maintenance, policy, finance, security, and digital and infrastructure requirements.

The government reports that $844 million is allocated for repairing and maintaining military equipment. Part of this budget is to be distributed through Phase 2 of the National Procurement Program for the upkeep of key CAF vehicle and equipment fleets in the land, maritime, and aerospace sectors.

For digital modernization and cybersecurity, $560 million is planned for strengthening digital systems and cyber resilience for DND, CAF, and CSE.

A further $1 billion is allocated by the government to develop and deploy new military capabilities, with a stated focus on Arctic operations and working with Canadian suppliers.

According to government documents, $2.1 billion is budgeted for establishing a Defence Industrial Strategy and working with Canada's defence suppliers. The government states that this includes funding to improve equipment support and expand joint procurement with NATO partners.

Government plans also include $2 billion to diversify defence partnerships beyond the United States. The government says it will continue cooperation with the US as needed, while pursuing additional international partnerships.

The government release notes that for the 2025-26 fiscal year, $135 million is planned for defence-related investments in other federal departments and agencies.