The federal budget tabled on November 5 puts the brakes on Canada’s rearmament. A month earlier, the Carney government released the country’s first national security framework in more than twenty years, in which it commits to “prepare for all contingencies up to and including war and other worst-case scenarios.” The budget was supposed to provide the means to do so. Yet military spending will plateau at 2.6% of GDP as of next year and remain there until 2031.
Granted, considerable ground has been covered. Budget 2025 committed $81.8 billion over five years to rebuild and rearm the Canadian Armed Forces, which allowed Canada to reach the 2% of GDP threshold for the first time since the end of the Cold War. Budget 2026 projects that core defence spending will rise from $75 billion this year to $99 billion in 2030-31. This is the largest annual increase since the Korean War rearmament of the early 1950s.
But this increase quickly runs out of steam. Military spending will reach 2.2% of GDP this year and 2.6% next year, then stay at that level for the following three years. What is more, the budget contains practically no new money. The reinforcement of Canada’s presence in Latvia, at a cost of $7.6 billion, will be funded from the existing resources of National Defence. The $2.7 billion earmarked for the defence industry comes from previously announced funding. In other words, after the initial jump, the defence effort will grow no faster than the economy.
The government, for its part, maintains that it is on track to devote 4% of GDP to defence by the end of the decade. This figure, however, adds together military spending and broader security-related spending (critical infrastructure, police officers, border agents, civil preparedness), for which NATO sets a separate 1.5% target that Canada already meets. Yet it is the 3.5% target that measures military effort. At the Hague summit in June 2025, allies agreed to submit annual plans showing a credible, incremental path to reach it by 2035. A four-year plateau is no such path.
The gap is considerable. In 2030-31, 3.5% of GDP would represent roughly $136 billion, or $37 billion more than what the budget provides. The Parliamentary Budget Officer estimates that military spending will need to reach $159 billion in 2035-36. Canada would therefore have to add $60 billion in five years, or $12 billion per year, whereas planned growth until then barely exceeds $3 billion per year. In other words, most of the effort is deferred to a future government, with no guarantee that it will be made.
This ceiling risks displeasing allies. NATO is due to review its targets in 2029 and Canada will show up with a flat line, while several European countries already devote more than 3% of their GDP to defence. Washington, for its part, now reserves its esteem for “model allies,” namely those that visibly take primary responsibility for their own defence. It is particularly ill-advised to invite such criticism at a time when Ottawa is seeking to plug into European armament programs and to host the headquarters of a new multilateral defence bank.
But the greatest risk is that this ceiling prevents the government from achieving its own ambition – strategic autonomy – meaning the capacity to conduct military operations with the United States if possible, but without its support if necessary. The needs are considerable. A roadmap on strategic autonomy co-authored with Philippe Lagassé assesses them as a mixed fleet of more than 130 fighter aircraft (not 88), twelve (not eight) submarines, multi-layered air defence systems, deep strike capabilities, a sovereign capacity to mass-produce missiles and interceptors, more tanker and surveillance aircraft, as well as a sizable and sustainable land contribution to European security. At 2.6% of GDP, catching up on decades of neglect is likely to absorb most of the funds, and choices may have to be made between submarines, surface combatants, and fighter jets. The lack of transparency makes it impossible to know for certain. The government has provided neither the detailed costs of these projects nor a long-term investment plan, even as its budget touts a commitment to greater transparency.
Two arguments justify this ceiling in the government’s eyes: the effort already made is historic, and it must remain fiscally responsible. Neither withstands scrutiny. The scale of the increase reflects first and foremost the scale of the accumulated shortfall, not that of the needs. As for the cost of rearmament, it must be compared with the cost of failing to prepare. Deterrence rests on credible capabilities, not on future promises. If Russia tests NATO’s Article 5 in the coming years, as its escalating hybrid attacks suggest it might, the most dangerous period will coincide precisely with Canada’s budgetary plateau. Preparing for war is expensive, but far less so than having to fight one for want of having prevented it.
The new defence policy the government is preparing offers an opportunity to correct course. It should be accompanied by a ten-year investment plan, costed year by year up to 3.5% of GDP and validated by the Parliamentary Budget Officer. Giving Canada such a plan is not only an obligation to its allies; it is also the condition for the country to become truly master of its destiny.
Justin Massie is a professor of political science at the Université du Québec à Montréal (UQAM) and director of the Strategic Analysis Network. He is also codirector of Le Rubicon.
The views expressed in this op-ed are the author’s own and do not necessarily represent those of the Institute or its staff.
Photo: Lars Hagberg / Office of the Prime Minister of Canada
