The Canadian Forces is receiving a major boost in funding from the new Liberal government. (Canadian Forces photo)
By David Pugliese
The Department of National Defence and the Canadian Forces are starting to emerge as the big winners of the election of Prime Minister Mark Carney.
Carney announced June 9 a major boost in funding for the Canadian military and DND, setting the stage for what could be major changes for the future. Here is what we know so far and some questions about what still is yet to come.
THE ANNOUNCEMENT
Carney committed his government to providing more than $9 billion in new funding for the Department of National Defence over the next ten months. That money will allow Canada to reach by April 2026 the NATO goal of spending two percent of GDP on defence.
By then Canada will be spending $62.7 billion on defence and security. That figure includes spending by both DND and other federal departments.
Carney’s announcement marked a radical change in that during the federal election campaign he had pledged to reach the two per cent GDP mark by 2030. “When it’s something as fundamental as defence, defence of Canadians, defence of Canadian interests, you need to act and that’s why we’re pulling things forward,” he explained.
HOW WILL THE MONEY BE SPENT
As noted, the plan includes a cash increase of over $9 billion in defence investment this fiscal year (2025-26).
Of that, both the DND and the Communications Security Establishment will share in $560 million in funding to shore up defences against cyber threats and to use AI in helping in decision making.
Another $1 billion will be used to expand and enhance existing and emerging military capabilities. No specifics were provided but this will help efforts to allow Canada to become increasingly self-sufficient in defending its territory, especially in the Arctic, according to the DND.
Another $844 million will go to the repair and sustainment of equipment and infrastructure.
PAY INCREASES FOR CANADIAN FORCES PERSONNEL
The new funding will also finance pay increases for Canadian Forces personnel. “Members of our armed forces will get a well deserved salary increase, which will contribute to better recruitment and retention of personnel,” Carney said.
As I wrote in the Ottawa Citizen, Defence Minister David McGuinty revealed that military personnel will get a 20 per cent wage boost. McGuinty told journalists on June 10 that improvements were also coming in military benefits, housing and health care. “That’s where a lot of the initial investment will be, of course, including a 20-per-cent pay increase,” he explained.
But when that pay hike will come is still unclear. The Ottawa Citizen asked the Department of National Defence on June 10 for details about the raises and for information on when military personnel would see the extra money on their paycheques. DND did not respond.
In addition, there will be increases in training allowances and the introduction of retention bonuses for key military personnel. No further details were provided.
The spending includes $2.6 billion to improve recruiting and retain personnel. This will accelerate recruitment and reinforce retention to bring the CAF to 71,500 Regular and 30,000 Primary Reserve members by 2030.
In addition, 1,400 civilian public servants will be hired. Those new employees will be able to support operational readiness, fleet maintenance, internal service functions, finance, policy procurement, public affairs, security, accountability, digital, and infrastructure requirements, according to the DND. That, in turn, will allow military personnel to focus directly on operational requirements.
June Winger, national president of the Union of National Defence Employees, said that she had received initial information from DND that more civilian staff would be hired, but no specific details. But Winger noted that the department had faced significant barriers in getting new staff in place because of delays in completing security clearances. Such clearances are taking months and perspective staff, instead of waiting, are instead accepting jobs other than at DND, she said.
NEW EQUIPMENT
The announcement did not include specifics on new equipment. But Carney has already promised his government will purchase self-propelled howitzers, a fleet of conventionally-powered submarines, and a fleet of Canadian-made early warning and control aircraft. A new ground-based air defence system will also be purchased for the Canadian Army.
Carney has also promised purchasing additional heavy icebreakers, although he has not provided details on numbers of such ships.
Carney is obviously aware of the need for re-equipping the Canadian military, speaking in blunt terms about the current state of affairs. “Only one of our four submarines is seaworthy,” he said in a speech to the University of Toronto’s Munk School on June 9. “Less than half of our maritime fleet and land vehicles are operational.”
Canadian defence officials, speaking on background at a technical briefing for journalists, noted that the extra spending Carney announced will set the stage for future defence procurements.
FUTURE RELATIONS WITH THE U.S.
Carney was blunt in how he viewed future relations with the U.S.
"We stood shoulder to shoulder with the Americans throughout the Cold War and in the decades that followed, as the United States played a dominant role on the world stage. Today, that dominance is a thing of the past," Carney said in his June 9 speech. “Now the United States is beginning to monetize its hegemony: Charging for access to its markets and reducing its relative contributions to our collective security.”
In some comments he claimed Canada’s past relationship with the U.S. was a thing of the past. But in other statements, he noted that co-operation would continue and a new security and economic relationship between the two nations would emerge.
A MOVE TOWARDS DIVERSIFYING DEFENCE RELATIONS
Of the new funding, $2.1 billion will be used to strengthen the federal government’s relationship with Canada’s defence industry and lay the groundwork for what is being called a comprehensive Defence Industrial Strategy or DIS. “These actions focus on immediate needs like reducing obstacles that currently limit industry’s ability to provide critical equipment and support to the CAF,” according to briefing materials provided by the DND. “As Canada cannot produce all needed military capabilities independently, the DIS will also strengthen Allied industrial partnerships and leverage joint NATO procurement mechanisms.”
Carney has claimed he wants to move Canada away from its reliance on the U.S. and American military equipment. “We should no longer send three quarters of our defence capital spending to America,” Carney said.
The prime minister has stated he wants to diversify Canada’s defence equipment suppliers to include what he says would be reliable European partners. He wants Canada to participate in the $234 billion ReArm Europe program. Carney told the Canadian Broadcasting Corporation that he hopes to be able to sign on to the ReArm Europe initiative by July 1.
“Our plan will help ensure that Canada is strong at home and reliable abroad,” he has said. “We will ensure that every dollar is invested wisely, including by prioritizing made-in-Canada manufacturing and supply chains.”
COAST GUARD MOVES TO DND
One area of confusion from the Carney announcement was in regard to the future of the Canadian Coast Guard. During technical briefings for journalists, senior defence officials noted that the money set aside for the construction of new ships for the coast guard was included in the overall defence and security cost figures that allowed Canada to reach the NATO two per cent of GDP spending figure.
But they were adamant that the control of the coast guard would not move over to DND and would instead reside where it was already under the Department of Fisheries and Oceans. Public service union leaders were told the same thing.
Senior officials stated that the coast guard ships and crews would feed surveillance information to the CAF/DND about the situation in the far north/Arctic and other areas but that was as far as the cooperation went.
But a couple of hours after the prime minister’s speech, the Prime Minister’s Office claimed otherwise. PMO spokesperson Emily Williams told the Globe and Mail and other news outlets that “the Prime Minister will soon initiate the process of moving the Canadian Coast Guard to the leadership of the Minister of National Defence.” She noted that the change she would better permit the coast guard to “better fulfill both its civilian and security responsibilities.”
WHAT HAPPENS NEXT WITH MISSILE DEFENCE?
What is unclear is the future of Canada’s integration with the U.S. for the defence of North America. Carney has repeatedly talked about NORAD renewal and ongoing initiatives in Canada to make that happen.
But U.S. President Donald Trump revealed on social media that his administration is in discussions with Canada in regard to joining his "Golden Dome" missile defence system. Trump stated that Canada will have to pay $61 billion U.S. ($83 billion Canadian dollars) to join but added it would “cost ZERO DOLLARS if they become our cherished 51st State. They are considering the offer!”
Trump said he was inclined to let Canada take part in the project, but added “they’ll pay their fair share.”
Golden Dome is expected to be one of the most expensive defence programs ever launched by the U.S. It was named after the president’s favourite colour.
Trump said the project would cost $175 billion U.S. ($242 billion Cdn) and be ready within three years.
But Republican Senator Tim Sheehy said Golden Dome was similar in scope to the creation of the atomic bomb or the Apollo moon program. “It will likely cost in the trillions if and when Golden Dome is completed,” Sheehy, who serves on a subcommittee of the Senate’s armed services committee, said on May 13.
Trump noted Golden Dome was a continuation of the space-based Strategic Defence Initiative proposed by Ronald Reagan in 1983. That initiative, nicknamed Star Wars, never got off the ground because of the massive cost and technological hurdles.
It was only after Trump revealed the ongoing discussions about Canada joining Golden Dome, that Carney’s office confirmed such talks were indeed happening.
Because of the ongoing discussions, Carney was labelled a hypocrite by some critics. “Carney promised to move us away from the U.S. because the Americans are now a threat to our country,” said Steve Staples, author of Missile Defence: Round One. “But participating in this (shield) will only bring Canada closer to and more reliant on the U.S. military.”
Former foreign affairs minister Lloyd Axworthy responded to the news that Golden Dome discussions were underway by writing in the Globe and Mail: “Is this for real? Is Canada seriously contemplating joining Mr. Trump’s latest cockamamie idea?”
Ambassador Bob Rae responded to Trump’s social media post about Canada joining the Golden Dome - “In another context, this would (be) called a ‘protection racket.”
EVEN MORE MONEY COMING IN THE FUTURE
Carney has stated that he expects defence funding to further increase.
"Our goal is tangible commitments from our allies to provide NATO with the necessary resolve to deter aggression and protect against all adversaries in all domains," Carney explained. “We will further accelerate our investments in the years to come, consistent with meeting our new security imperatives.”
“Our ability to defend Canada is not at a point in time, it’s going to require sustained investment,” Carney pointed out. “We expect a further acceleration.”
WHERE IS THE MONEY COMING FROM?
That is the key question. Carney says he is not raising taxes. He has suggested that cuts to government services or savings from various program reviews would contribute the new dollars to defence spending.
Recent opinion polls show that Canadians are supportive of more defence spending. Will they continue their support if that results in cuts to the government services they need?
ALL EYES WILL BE ON DND AND THE CAF TO DELIVER
The DND and CAF are now receiving the significant funding they have called for over the years. It will be up to them to spend that money efficiently and without waste. If they can’t do that then Carney’s initiative will be undermined and future claims about the need for more defence spending could be put in jeopardy.
