Question Period Note: Budget 2025

Why is this Government spending so much on Defence when there are other issues affecting Canadians?

• Canada faces a rapidly changing and increasingly uncertain world and must be ready and able to defend our territory, our people, and our values.
• Budget 2025 proposes $81.8 billion in cash over five years to rebuild, rearm, and reinvest in the Canadian Armed Forces.
• These investments will help recruit and retain a strong fighting force, while ensuring that our military has the equipment and infrastructure they need.
• This also includes an initial investment of $6.6 billion to launch our Defence Industrial Strategy, to be released shortly.
• Further, Canada is committed to strengthening transatlantic security and reaffirming our commitment to defend NATO territory in the face of ongoing Russian aggression.
• In fact, Canada is set to meet NATO’s 2% defence-spending-to-GDP target this fiscal year—five years ahead of schedule.
• We are also on a pathway to meet NATO’s 5% Defence Investment Pledge by 2035, further demonstrating our unwavering commitment to collective defence and transatlantic security.
• Taken together, these generational investments will provide our military with the necessary tools and equipment to protect our sovereignty and bolster our security.

• The 2025 Federal Budget, Canada Strong, was introduced on November 4, 2025.
• Budget 2025 states that Canada will make generational investments totaling over $280 billion across four key pillars: housing ($25 billion on an accrual basis over 5 years), infrastructure ($115 billion on an accrual basis over 5 years), defence and security ($30 billion on an accrual basis over 5 years), and productivity and competitiveness ($110 billion on an accrual basis over 5 years).
• Under the theme of “Defending Our Sovereignty,” Budget 2025 lays out the Government’s plan to “secure Canada, fulfill our responsibility to shared security with our Allies, build a world class defence industrial base, and establish a new Defence Investment Agency that will accelerate the procurement process.”

Rebuild, Rearm, Reinvest

• Budget 2025 proposes to provide $81.8 billion over five years on a cash basis, starting in 2025-26, to rebuild, rearm, and reinvest in the Canadian Armed Forces (CAF). This includes over $9 billion in 2025-26 that was announced by the Prime Minister in June 2025.
  • $20.4 billion over five years to recruit and retain a strong fighting force, including generational pay raises for the CAF and support to CAF healthcare.
  • $19.0 billion over five years to repair and sustain CAF capabilities and invest in defence infrastructure, including expanding ammunition and training infrastructure.
  • $10.9 billion over five years for upgrades to digital infrastructure at National Defence and the Communications Security Establishment, including those needed for modern warfare such as cyber defence.
  • $17.9 billion over five years to expand Canada’s military capabilities, including investments in additional logistics utility, light utility, and armoured vehicles, counter-drone and long-range precision strike capabilities, and domestic ammunition production, among other investments.
  • $6.6 billion over five years, starting in 2025-26, to strengthen Canada’s defence industry through a Defence Industrial Strategy.
  • $6.2 billion over five years to expand Canada’s defence partnerships, including expanded military assistance to Ukraine and increased military training and international policy programming.
  • $805 million over five years to the Canadian Coast Guard, the Canadian Security Intelligence Service, and Public Services and Procurement Canada (PSPC) for complementary initiatives to support Canada’s defence capabilities.

Defence Industrial Strategy

• Budget 2025 announces $6.6 billion over five years for the forthcoming Defence Industrial Strategy, including $4.6 billion for the Strategy’s Early Moves.
• National Defence initiatives outlined in the Budget include the establishment of the Bureau of Research, Engineering and Advanced Leadership in innovation and Science (BOREALIS), and funding to establish a sovereign space launch capability.
• The Budget commits to publish a fulsome Defence Industrial Strategy in the coming months.
  Defence Investment Agency (DIA)
• The DIA will focus on defence procurements valued at $100 million and above, including submarines and other critical capabilities that the CAF requires.
• Budget 2025 proposes to provide $30.8 million over four years, starting in 2026-27, with $7.7 million ongoing to PSPC to establish the DIA.
• Budget 2025 proposes to provide $52.5 million over five years, starting in 2026-27, with $12.2 million ongoing to PSPC to modernise and increase capacity for the Industrial Security Program to meet the needs of the DIA and support Canada’s defence industry.

Operations

• Operations REASSURANCE and AMARNA are included in Budget 2025.
• Specifically, the Budget reaffirms the Prime Minister’s announcement in August 2025 regarding the renewal of Operation REASSURANCE ($2.7B over three years).
• The Budget further proposes $300.1M over three years for Operation AMARNA ($155.8M of which is to be funded through existing National Defence reference levels).

Responsible Principals: Assistant Deputy Minister (Finance), Assistant Deputy Minister (Policy)

Quick facts

• Budget 2025 proposes to provide $81.8 billion over five years on a cash basis, starting in 2025-26, to rebuild, rearm, and reinvest in the Canadian Armed Forces. This includes over $9 billion in 2025-26 that was announced by the Prime Minister in June 2025.
• The Budget highlights investments to meet the North Atlantic Treaty Organization’s (NATO) 2% of gross domestic product (GDP) target this year and put Canada on a pathway to meet the NATO Defence Investment Pledge of investing 5% of GDP in defence by 2035.