What items and programs are covered by Canada’s proposed $60 billion defence spending for 2025–2026?
Executive summary
Canada’s government says defence spending for 2025–26 will rise sharply to meet NATO targets, with announcements pointing to roughly CAD 62.7–63 billion for 2025–26 and an $81.8‑84+ billion, five‑year package that includes a CAD 9 billion top‑up for the current year [1] [2] [3] [4]. Public documents and analyses list broad program areas — procurement, Arctic and NORAD modernization, recruiting and retention, a new Defence Investment Agency, and increased capital equipment spending — but provide few line‑by‑line itemizations for the CAD 60–63 billion figure [1] [5] [3] [6].
1. Big picture: headline numbers and what they mean
The Carney government’s June and Budget 2025 announcements combined a >$9 billion one‑year cash increase to push 2025–26 spending to about CAD 62.7 billion (presented as meeting NATO’s 2% target) and a longer five‑year defence package variously reported at CAD 81.8–84 billion [1] [2] [3] [4]. Analysts note that the CAD 62.7 billion number mixes Department of National Defence (DND) and other government department (OGD) defence‑related spending and that precise allocations remain opaque [7] [6].
2. What the government explicitly lists as 2025–26 investments
DND’s June release and Budget 2025 cite specific priorities for the 2025–26 cash top‑up: billions for modernizing NORAD and Arctic capabilities, investments to diversify defence partnerships (CAD 2 billion), additional defence industry and procurement funding, and support for Communications Security Establishment as part of the overall package [1] [5]. Budget documents also highlight recruiting and retention money for the Canadian Armed Forces and the creation of a Defence Investment Agency to manage large procurements [5] [8].
3. Procurement and major equipment: a clear emphasis, but few project details
Officials stress that Canada will increase the share of defence spending going to major equipment and will “exceed NATO’s 20% target” for equipment expenditure in 2025–26, and DND’s longer‑term capital plan shows a large build‑up of planned capital spending [9] [10] [11]. However, Budget 2025 and related releases give limited, non‑itemized sums for specific platforms (submarines, ships, aircraft, vehicles) in the CAD 60–63 billion yearly context; independent commentators and the Parliamentary Budget Officer say detailed mapping of projects and authorities is still needed [12] [7] [6].
4. New institutions and industry policy: the Defence Investment Agency and ‘Buy Canadian’
Budget materials commit funding to establish a Defence Investment Agency (DIA) to focus on procurements above CAD 100 million and to strengthen domestic industrial capacity; small, specific amounts to stand up the DIA and expand industrial security capacity are cited (e.g., CAD 30.8 million over four years for the DIA and CAD 52.5 million to modernize the Industrial Security Program) [5]. External reporting and government releases present this as part of a strategy to direct the large five‑year package toward domestic supply chains [8] [3].
5. Personnel, readiness and operations: money beyond hardware
The budget signals substantial spending on people and operations as well as infrastructure: multi‑year funding for recruitment and retention (reported as CAD 20 billion over five years in some reporting), renewals of overseas commitments such as Operation REASSURANCE, and spending on resilience‑type projects that NATO counts as defence‑related are all mentioned [2] [5] [4]. The government also counts certain OGD defence‑related investments (communications, emergency preparedness) toward NATO pledges, complicating comparisons to pure military spending [1] [4].
6. What’s missing, contested, or unclear
Multiple sources say the headline sums are aggregate and lack year‑by‑year, project‑by‑project line items; CBC and PBO reporting emphasize that the budget offers “rough fiscal sketches” and that Parliament’s supplementary estimates and further mapping are required to verify whether Canada will hit NATO targets [12] [7]. The Parliamentary Budget Officer and analysts note uncertainty over whether amounts are new cash, accelerations of existing projects, or re‑labelling of OGD spending; they are actively seeking the detailed mapping [7] [6].
7. Competing perspectives and implicit agendas
Government framing presents the package as the “largest defence investment in decades” to strengthen sovereignty and the domestic industrial base [3] [4]. Critics and independent analysts warn the numbers may be gestalt projections rather than confirmed authorities and stress the need for transparency to assess delivery and long‑term sustainment; some outlets report broader five‑year totals (CAD 81.8–84 billion) that differ slightly by source [3] [4] [2]. The Defense Ministry and Finance teams appear motivated to demonstrate rapid alignment with NATO commitments while also promoting industrial policy objectives [1] [8].
Limitations: available sources do not provide a full, line‑by‑line breakdown of every item funded within the CAD 60–63 billion 2025–26 figure; the PBO and media call for more detailed mapping and parliamentary authority tracking to confirm specific project allocations [7] [12].