Canada achieves the 2% of gross domestic product defence spending benchmark
Press Release + Noah Note
The Government of Canada has achieved the North Atlantic Treaty Organization’s (NATO) 2% of gross domestic product (GDP) defence spending target in the 2025–26 fiscal year, marking a significant milestone in Canada’s approach to national defence and collective security.
Canada is investing more than $63 billion in defence across the Department of National Defence (DND), the Canadian Armed Forces (CAF), and other government partners. This represents a significant increase in defence spending over the past year, driven by targeted investments in military personnel, readiness, equipment, and infrastructure, as well as in the defence industrial base and in eligible defence expenditures across government, consistent with NATO reporting practices.
Canada’s defence spending reflects a coordinated, whole-of-government effort to strengthen national defence and security, while supporting jobs, innovation, and economic growth across the country and positioning the CAF to meet evolving security demands at home and abroad.
In addition to investments in the CAF, many federal departments and agencies contribute to capabilities that support defence objectives, including cyber, intelligence, maritime security, and support to veterans.
In 2025–26, over $14 billion in spending from other government departments contributed to Canada’s defence expenditures, including investments in cyber security, space, procurement, and support to veterans.
Key contributors include Veterans Affairs Canada, the Communications Security Establishment, and Global Affairs Canada, reflecting the broad scope of Canada’s defence and security activities.
These investments support not only military capability, but also critical enabling functions, such as intelligence, infrastructure, innovation, and industrial capacity.
Funding provided through initiatives such as the Defence Industrial Strategy is helping to strengthen Canada’s industrial base, supporting jobs, innovation, and supply chain resilience.
What these investments are delivering
Canada’s defence investments are generating measurable economic activity across the country while strengthening the foundations of long-term defence capability.
In 2025–26, approximately $18.3 billion in defence-related spending—focused on infrastructure, major capital acquisitions, and investments under Canada’s Defence Industrial Strategy—has been modelled to generate an estimated 65,000 jobs and $7.7 billion to Canada’s GDP. These impacts reflect industrial activity associated with defence projects, as well as broader economic effects through supply chains and consumer spending.
This modelling captures a significant portion of defence investments, but does not include all eligible expenditures, such as compensation for CAF members and operational costs. As a result, the overall economic contribution is broader than what is reflected here.
Major projects are contributing to economic growth and job creation across multiple sectors. Examples include:
$22.2 billion invested in the first three River-Class Destroyers, which will provide the Royal Canadian Navy with advanced, modern combat capability for decades to come. The first ship is anticipated in 2032–33. The River-Class Destroyer Implementation Contract is estimated to contribute nearly $1.3 billion annually to Canada’s GDP and create or maintain close to 9,500 jobs annually over the life of the project.
Up to $1.24 billion invested in the Cormorant Mid-Life Upgrade to modernise the Cormorant search and rescue helicopter fleet, extending its operational life and enhancing mission effectiveness. The first upgraded aircraft is expected in 2027. The project is expected to support approximately 650 jobs in 2025, contributing to Canada’s aerospace sector.
$2.2 billion invested to deliver a new fleet of Fixed Wing Search and Rescue aircraft, improving the CAF’s ability to respond to incidents across Canada’s vast territory. Delivery of the final (16th) CC-295 Kingfisher aircraft is expected in 2026–27. The project supports approximately 1,800 jobs, contributing to Canada’s aerospace and maintenance sectors.
$2.74 billion invested to modernise the Canadian Army’s logistics vehicle fleet, improving mobility and sustainment capabilities in support of operations. The first equipment deliveries are expected in fall 2027. The Logistics Vehicle Modernisation project is estimated to contribute $180 million annually to Canada’s GDP and create or maintain 950 jobs annually over the 2025-2031 seven-year period.
The Polar Max project is estimated to contribute close to $440 million annually to Canada’s GDP and create or maintain over 3,250 jobs annually over the 2025-2031 seven-year build period.
The FACT project is estimated to contribute close to $320 million annually to Canada’s GDP and create or maintain approximately 2,660 jobs annually for Industrial and Technological Benefit recipients and their Canadian suppliers over the 2024-2048 period.
Together, these investments are stimulating economic growth, supporting Canadian industry, and building the industrial capacity required to deliver and sustain defence capabilities over the long term. These impacts will continue to grow over time and are already contributing to jobs, innovation, and economic activity across Canada.
Economic impact of defence infrastructure investments
Canada’s defence infrastructure investments are expected to generate significant economic activity and job creation across the country over the next decade.
Approximately $59 billion in infrastructure-related spending associated with Canada’s defence investment plan is expected over ten years. This investment includes both construction labour and materials, with most of the spending occurring within Canada.
Based on available Statistics Canada multipliers, this level of investment is estimated to support approximately 340,000 jobs over the next decade, including both direct and indirect employment across the construction sector and related supply chains.
These impacts will be felt across the country, including in Northern and remote communities, where infrastructure investments play a critical role in supporting local economies and strengthening Canada’s operational footprint.
*Estimates are based on available economic modelling and should be interpreted as indicative of overall impact.
Where has Canada invested: the numbers
Over the past year, Canada has increased defence spending through targeted investments in personnel, readiness, capabilities, and sovereign industrial capacity, including:
People and workforce
Canada has made significant investments to support CAF members and the broader Defence Team, addressing long-standing challenges and improving quality of life and institutional capacity:
$2 billion to deliver the most significant compensation and benefits package in a generation for CAF members, supporting recruitment, retention, and force sustainability
Expanded access to military housing, including 7500 new units built at 25 locations across Canada, including Esquimalt and Comox, British Columbia, and the launch of the second phase of a national housing construction program valued at over $3.7 billion
Infrastructure and research facilities
$328 million investment in new Defence Research and Development Canada (DRDC) facilities in Valcartier, Quebec, including a 31,000 m² complex with 80 modern, multi-disciplinary laboratories, consolidating nearly 500 personnel into a state-of-the-art research environment
The DRDC Valcartier project supported up to 750 jobs during construction and is nearing completion, with staff already transitioning into the new facility
$93 million investment to renovate and modernise Hangar 14 at the Ottawa International Airport, supporting the relocation of the Aerospace Engineering Test Establishment (AETE) and enabling continued testing of military aircraft and equipment
The AETE Hangar project created approximately 150 jobs in the National Capital Region and is now complete and fully operational, while preserving the heritage features of the 1955 Recognised Federal Heritage Building
$1.1 billion investment to replace the aging A and B jetties in Esquimalt, British Columbia, supporting Royal Canadian Navy operations and future fleet requirements
B Jetty was commissioned in early 2025 and is fully operational, and work is underway to replace A Jetty, including demolition and site preparation, with construction scheduled from 2027 to 2031
The Esquimalt jetty project is expected to support approximately 1,280 jobs during construction and will deliver modern, seismically resilient infrastructure on the Pacific Coast
Today, Prime Minister Carney announced more than $3 billion in infrastructure and defence-related investments across Atlantic Canada.
In Nova Scotia, we are making major, targeted investments to modernise critical infrastructure, build new facilities to support the next generation of naval and air fleets, and expand training and operational capacity. We are investing:
$1.2 billion to modernise critical power and municipal service infrastructure at CFB Halifax Dockyard and Stadacona – upgrading essential services and facilities to ensure the base has sufficient power and utilities and support new capabilities and future naval operations. Once completed, the new heating plant and upgraded municipal services will support the Royal Canadian Navy (RCN) training and operations at CFB Halifax, including Jetty NJ and NB, Combatant Training and Integration Centre – Atlantic, and more, to support the next generation of ships for the RCN.
$648 million to construct two new aviation support facilities at 14 Wing Greenwood – supporting the Royal Canadian Air Force’s CP-8A Poseidon fleet and CQ-9B Guardian with modern hangars, maintenance, and operational infrastructure. Once completed, the approximately 8,600 m2 and 10,000-m2 facilities will feature workshops, offices, administrative spaces, meeting rooms, classrooms, maintenance bay facilities, aircraft maintenance labs, one combined wash and maintenance bay, storage, as well as personnel vehicle parking, and more.
Over $180 million to build the Combatant Training and Integration Centre –supporting training, operations, and integration for the Royal Canadian Navy’s future river-class destroyers. The facility will house advanced simulators and training systems, allowing sailors to train for above-water, underwater, and maritime war fighting.
$82.5 million to acquire Halifax Gate in Dartmouth to support current and future Royal Canadian Navy operations, including the movement of personnel, ships, and supplies. The property, adjacent to CFB Halifax’s Shearwater property, is roughly 475-acre waterfront industrial site and addresses a lack of available space His Majesty’s Canadian Dockyard.
$60 million for a new, 140-unit apartment complex for CAF members, near 12 Wing Shearwater to address the current shortfall of housing available to CAF members and their families. Substantial completion of the building is expected in summer 2026, with occupancy expected to begin in fall 2026.
In New Brunswick, we are investing more than $1 billion in the CFB Gagetown Range and Training Area:
$871 million to recapitalise the CFB Gagetown Range and Training Area – this project will upgrade and modernise training areas, shooting ranges, and roads at the 5th Canadian Division Support Base. It will help Regular and Reserve military units across Eastern and Atlantic Canada by keeping essential space and facilities available for realistic training and preparation. The work will be done gradually over several years to manage costs, keep training areas usable, and reduce impacts on military operations.
$172 million to develop a ground-based air defence system at CFB Gagetown – this system will provide tactical air defence protection to personnel and vital installations, during expeditionary and domestic operations, against increasingly diverse air threats. The system will allow the CAF to defeat threats posed by rocket, artillery and mortar munitions, air to surface missiles and bombs, and uncrewed aircraft systems with attack aircrafts and helicopters as secondary targets
$20.2 million investment at CFB Gagetown to create a modern 1,537 m² building, centralising transition services to better support CAF members and their families during their transition either back to duty or to civilian life. Construction has been underway since June 2024 with completion expected in March 2026.
Readiness and sustainment
Readiness reflects the Canadian Armed Forces’ ability to conduct operations in support of Canada’s national interests. It depends on having the right people, equipment, training, and sustainment in place. Recent investments are focused on strengthening these core elements across the board, recognising that readiness is built through their combined effect. While improvements will take time, these efforts are beginning to reinforce the foundations of readiness and support the CAF’s ability to generate and sustain forces over time:
$1.4 billion in domestic ammunition production to rebuild sovereign munitions capacity, including key components such as nitrocellulose and 155mm artillery ammunition
More than $8 billion in active infrastructure contracts through Defence Construction Canada, supporting projects across bases, wings, and training areas
The $2 billion Aurora Incremental Modernisation Project, upgrading mission systems and sensors to full operational capability
Capabilities and equipment
Canada is equipping the CAF with modern capabilities to address evolving threats. These projects are contributing to economic activity, supporting jobs and strengthening industrial capacity across multiple sectors. Canada is equipping the CAF with modern capabilities to address current and evolving threats:
A $753 million contract to acquire six Canadian-built Global 6500 aircraft for the Royal Canadian Air Force. These Canadian-built jets, with an option for four more, will be used for official transport, aeromedical evacuations, and humanitarian missions, with initial deliveries expected in 2027
A $32 million contract to support the delivery of ground-based optical capability under the Surveillance of Space 2 project, strengthening Canada’s space surveillance capacity. This project will deliver a system of sensors to detect, track, and monitor objects in Earth orbit, strengthening Canada’s space surveillance capabilities, supporting Royal Canadian Air Force operations, and contributing to allied burden sharing
An additional $81 million investment (for a total of $213.45 million) to support the delivery of six modern tug vessels in support of Royal Canadian Navy operations, with the first three vessels already delivered, and a fourth expected in November 2026
A $118 million contract to deliver advanced digital periscopes for Victoria-class submarines, with installation of the periscopes to begin in 2030, and expected to be completed by the end of 2033
Major projects generate measurable economic benefits, supporting thousands of jobs and contributing to GDP through supply chains and industrial activity. These investments are advancing major projects, strengthening operational capability, and supporting Canadian industry and jobs.
Defence industry and innovation
Defence investments are contributing to the economy while supporting innovation and industrial growth. Canada’s defence industry contributes nearly $10 billion to GDP and supports over 81,000 jobs nationwide. Pieces such as Canada’s Defence Industrial Strategy are strengthening domestic supply chains and supporting Canadian businesses, and investments in innovation are advancing capabilities in aerospace, quantum technologies, and advanced manufacturing. Every dollar invested in defence supports Canadian workers, strengthens industry, and contributes to a more resilient economy, including:
$6.6 billion over five years, starting with $2.1 billion in 2025–26, to strengthen Canada’s defence industry through the Defence Industrial Strategy
$6 billion through the Business Development Bank of Canada’s Defence Platform to support Canadian companies working in defence and national security
$379.2 million to establish the Regional Defence Investment Initiative to help small and medium-sized enterprises integrate into defence supply chains and enhance industrial and innovation capacity in support of Canada’s defence and security needs.
$241 million through the National Research Council Industrial Research Assistance Programs (IRAP) Defence Industry Assist to support innovative small and medium-sized enterprises to produce new technologies to give the CAF the advantage they need while providing high tech jobs.
$92 million through the Canadian Quantum Champions Program to help anchor top Canadian quantum companies and talent at home, helping Canada stay ahead in this transformative field and ensuring the benefits of quantum computing reach all Canadians
$29.4 million to establish the Maritime Defence Innovation Secure Hub, a pilot initiative focussed on resilience and collaboration
A $200 million agreement supporting a dedicated space launch facility in Canada. This investment enables independent satellite launches, reducing reliance on foreign providers, with 90% of funds ($180M) benefiting Canadian industry
Arctic and sovereignty
Canada is strengthening its presence and capabilities in the Arctic and North, a region of growing strategic importance. These efforts strengthen Canada’s ability to operate effectively in the North while working in partnership with allies and Indigenous and Northern communities.
Continuing investments as part of Canada’s North American Aerospace Defense Command (NORAD) Modernisation Plan announced in June 2022, which provides $87.4 billion cash over 20 years – the largest investment in Canada's NORAD capabilities in a generation.
As part of NORAD modernisation $32 billion plan to strengthen Arctic sovereignty, infrastructure, and long-term development, designed to move Canada "from reliance to resilience," reducing dependence on the United States for Arctic defence while boosting infrastructure for both military and economic purposes
Canadian Armed Forces presence around the world
Canada continues to contribute to global security and support allies and partners.
$2 billion in additional military assistance to Ukraine
Extended and expanded Operation UNIFIER until March 2026 and further to 2029 focusing on training, mentoring, and capacity building for the Armed Forces of Ukraine, with a surge in Canadian Armed Forces personnel up to 400, focusing on combat engineering, medical training, and leadership training.
Continued contributions to NATO operations through Operation REASSURANCE, which was renewed in August 2026 for another three years.
These efforts reinforce Canada’s role as a reliable and credible ally.
Improving serviceability and operational readiness
Readiness reflects the CAF’ ability to conduct operations in support of Canada’s national interests. It depends on having the right people, equipment, training, and sustainment in place. Recent investments are focused on strengthening these core elements, recognising that these efforts will take time, and that readiness is built through their combined effect.
Increased availability of spare parts, equipment, and supplies is supporting the serviceability of ships, aircraft, vehicles, and facilities
Maintenance backlogs are being addressed, and infrastructure upgrades are underway across the country
Domestic ammunition production is being expanded to strengthen sustainment and supply chain resilience
More than $8 billion in infrastructure contracts are advancing projects across Canada
These efforts are restoring the foundations required to sustain operations at home and abroad.
Beyond the 2%: Looking ahead
Reaching 2% is not an endpoint—it marks the beginning of a sustained effort to rebuild, rearm, and reinvest in the CAF and Canada’s defence ecosystem.
Canada is now on a clear path toward meeting NATO’s Defence Investment Pledge of 5% of gross domestic product by 2035, strengthening its ability to defend Canadians, support allies, and contribute to global security.
Noah Note: Well they certainly made a better lost than mine didn't they? I covered most of my points in my post earlier, however we so have some new info and investments here… sort of. Most of the announcements made here were things already planned or committed to before that we've talked about.
Things like Greenwood, Halifax and the Combatant Training and Integration Centre were already in the plans, and in many cases funded. The amount of investment going into Halifax that was announced here is higher than I had expected, however isn't coming out of nowhere.
Updated price tags are always appreciated, something that can be missed in reannouncements. While I know many hate them, there are times when they can provide a valuable update to those of us who try to track these things. That can include new info, updated or new price tags, and additional details.
Something I wanna point out given some comments lately. For most of you I know they suck, however there are times when they're of value. To speak to the primary new thing here, Halifax Gate is something that I had to look up. I didn't know what they were talking about at first.
The property itself is the former Valero Energy refinery adjacent to Shearwater and the CN Autoport. It's seemingly sat idle on the market for several years now, thiugh this is the first time I am hearing about it being in the DND sights.
It features both Trans-Canada access and adjacent rail access to CNs Dartmouth Subdivision. The property is divided into 442 acres of industrial harbour lands and a 33 acre waterlot. The property itself has access to a "T-shaped" dock with a 300 metre pier and 100 metre dock parallel to the channel.
Given the lack of space in Halifax proper, and the growing size of the fleet that the Royal Canadian Navy anticipates to have, locking down available waterfront space for future development is a smart move to make. Even if there were limited plans that existed now, it adds a potential, fairly large property where the CAF now has some access too.
It'll also be a short ways away from the future Hartlen Point Testing Facility for the future River-class Destroyers, providing some synergy with ongoing developments along the Eastern Passage area.
Also mentioned here is a new Ground-Based Air Defence Capability to be set up at CFB Gagetown. The description of this sounds very closely like the Uplift UOR, however as far as I know UPLIFT still have a focus on Latvia. Is this a shift? An expansion? It's own thing with very similar requirements? I can't say yet, though I have reached out to the DND for durther details.
I would be far more concerned by the ongoing lack of progress on the CAFs CUAS Initative over proper Air Defence at Gagetown myself. That to me represents far more realistic and concerning of a threat, and one far easier to tackle and achieve results in if we perhaps trusted in Industry a bit more to support the rapid aquisition and trialing of CUAS equipment.
If only we had some sort of sandbox…. I digress. I guess we await answers. I won't argue an expansion of Uplift because a single battery is bullshit. It's absolutely hilarious to say to people. Expand that to two, go ahead. I won't complain if it's stuck in Gagetown so long as it exists. Contract award for that is supposed to come this year anyways.
Also unmentiomed here but mentioned by the Prime Minister is the expectation that a submarine award will come by Q2. This aligns to the May/June announcement we've been reporting for a few months now. Everyone expects it to happen in May, but I don't know. CANSEC would make a lot of sense here.
When I get updates for the GBAD I'll make a seperate post. Until then this is a good rounduo of recent developments, and I recommend keeping it saved for future reference. Most of the announcements aint new, but the few things that are provide some interesting news and ideas to float in the head.
I'm glad you addressed the "ground-based air defence system at CFB Gagetown," because I was going to ask. It sounds interesting, but frustratingly vague. Looking forward to reading what you find out.
Well, it’s all good news and it sure beats the low point of defence percentage of GDP under Stephen Harper. At 0.9%. With further increases the Forces can now chart a long range path forward. Everyone is doing well thus far.