Budget 2026 adds $11.2 billion for defence over five years

Ottawa's 2026 federal budget announces $11.2 billion in new defence spending over five years, according to the Globe and Mail.

The budget is prepared by the Department of Finance Canada. Starting with Budget 2025, the federal budget is delivered in the fall, followed by an economic and fiscal update in the spring. Before that change, the budget was presented early in the year.

The budget projects defence spending at 2.2% of gross domestic product (GDP, the total value of goods and services the country produces) in the current fiscal year. It then projects 2.6% of GDP for each year from 2027-28 through 2030-31.

Prime Minister Mark Carney has committed Canada to raise core military spending to 3.5% of GDP by 2035. Ottawa estimates the country will still be roughly $37 billion short in 2030 of the annual military spending that goal requires.

Canadian Global Affairs Institute president David Perry said progress toward Canada's NATO target would "flatline" after 2027-28. NATO is the North Atlantic Treaty Organization, the Western military alliance.

Canada reached the alliance's benchmark of 2% of GDP in military spending, and NATO reported that in March. The federal government's Spring Economic Update 2026 says Canada spent more than $63 billion on defence in 2025-26.

The budget also sets aside $6 billion over 10 years for the Canadian Security Intelligence Service, the country's domestic spy agency. Separately, Budget 2026 reduces projected direct program expenses by about 4.5%, or roughly $12.4 billion a year on average over the forecast period.

Budget 2025 had included an $81.1 billion multi-year investment to rebuild, rearm and reinvest in national defence and security.