Prime Minister Mark Carney announced Monday that Canada will increase defence spending by more than $9 billion this fiscal year, bringing the country’s military investment to NATO’s target of two per cent of gross domestic product.
The announcement marks a significant acceleration in defence spending, reaching the NATO benchmark five years ahead of the previous government’s timeline. The investment will create thousands of jobs across Canada’s defence industry while addressing critical military capability gaps.
“In an increasingly dangerous and divided world, Canada must assert its sovereignty. We will rapidly procure new equipment and technology, build our defence industrial capacity, and meet our NATO defence commitment this year,” Carney said.
The spending increase comes as employers across defence-related industries prepare for expanded hiring to support equipment manufacturing, maintenance, and technology development. Defence Minister David McGuinty said the investment will grow Canada’s defence industry and create jobs.
Major workforce implications
The plan includes $2.6 billion to recruit and retain military personnel, aiming to expand the Canadian Armed Forces to 71,500 regular members and 30,000 primary reserve members by 2030. This represents an increase of 13,000 personnel across both categories.
The military will also expand its civilian workforce to handle support functions including fleet maintenance, finance, procurement, and digital infrastructure. This shift allows uniformed personnel to focus on operational duties while creating new civilian career opportunities.
Defence contractors and suppliers can expect increased demand as Canada invests $2.1 billion in strengthening relationships with the defence industry. The government plans to reduce regulatory obstacles that currently limit industry’s ability to provide equipment and support to the armed forces.
Technology and infrastructure focus
The investment includes $560 million for digital infrastructure improvements to protect against cyber threats and modernize military technology systems. This funding extends to the Communications Security Establishment, Canada’s cybersecurity agency.
Companies working in artificial intelligence, quantum computing, space technology, and cybersecurity will see new opportunities as the government builds capacity in these areas. The plan specifically mentions developing drones and sensors for Arctic and seafloor monitoring.
Equipment priorities include new aircraft, armoured vehicles, ammunition, and long-range precision strike capabilities. The government will also repair and maintain existing ships, aircraft, and other military assets through an $844 million allocation.
Industry partnerships
Canada will diversify its defence partnerships beyond the United States while maintaining cooperation where beneficial. The government allocated $2 billion for developing stronger defence partnerships with other allies.
The plan includes expanding domestic ammunition production and procurement of logistics vehicles and armoured vehicles, creating opportunities for Canadian manufacturers. Joint projects with NATO allies will leverage shared procurement mechanisms.
“This historic investment will strengthen our sovereignty and invest in the Canadian economy – growing a world-class defence industry that fuels innovation and job creation,” McGuinty said.
The government will also modernize veterans’ benefits and improve credential recognition for military personnel transitioning to civilian careers, addressing workforce mobility between military and private sector employment.
