Budget raises questions about defence spending targets after 2030

Reaching the goal of spending five per cent of national GDP on defence by 2035 would heap mounds of new spending pressure on future budgets.

Former parliamentary budget officer Kevin Page has warned Ottawa is not being transparent by ending its projections at 2030.

Finance Minister François-Philippe Champagne argued that Ottawa is offering more transparency on its defence spending plans than other alliance members facing the same difficult task.

“In terms of spending on defence … you’ll see more transparency than most G7 countries,” he said at a Thursday news conference.

“You’ll see the spending on a cash basis for every year until 2030.”

Prime Minister Mark Carney has said that if Ottawa put out a full plan, it would be outdated quickly because of how rapidly modern warfare is changing.

When NATO nations met in The Hague last year, they agreed to massively increase alliance members’ defence spending targets to the equivalent of 5 per cent of annual GDP by 2035.

The federal budget says Canada will reach 4 per cent by 2030.

But core defence spending — a key figure that includes things like bullets, bombs and soldiers’ salaries — is expected to reach 3.5 per cent by 2035.

The budget says core defence spending will reach 2.6 per cent of GDP by 2030, about $99 billion.

That’s already a big leap. In 2024, core defence spending was just $43.9 billion.

But parliamentary budget officer Annette Ryan estimates that to reach the 3.5 per cent target, core defence spending would have to hit $163.6 billion in 2035.

The difference between two per cent and 3.5 per cent amounts to an extra $70 billion per year, according to her office’s calculations.

The alliance has come under sustained pressure from U.S. President Donald Trump to hike spending to the new targets. NATO plans to review its 2035 targets by 2030 — after Trump leaves office.

The federal government is currently in negotiations to purchase a fleet of up to 12 submarines from German defence firm TKMS, a massive purchase expected to cost tens of billions of dollars.

It’s also in talks for advanced radar planes for the air force from the Swedish firm Saab — a procurement worth billions of dollars — and is looking at whether to pursue a mixed fighter jet fleet.

No funding has been set out for any of these purchases.

The budget also commits new funding for the families of victims of the tragedy at CFB Wainwright. A sudden fire at the base last month overtook a training exercise, claiming the lives of four soldiers and injuring dozens more.

The fiscal plan sets aside $25 million for support for Canadian Armed Forces members, their families and local communities affected by the fire.

The government has not provided a further breakdown of the funding envelope. Another $3 million will be put toward the Wainwright Military Family Resource Centre.

While Ottawa has rolled out major defence spending initiatives since Carney took office, the 2026 budget only pencils in $755 million in new defence funding over the next five years.

It touts plans to spend billions more — but much of that money was either already on the books under pre-existing programming or, according to the budget document, will be “sourced from existing departmental resources.”

The budget sets out $7.6 billion to support Canada’s overseas military deployment in Latvia.

Canada has some 2,000 troops stationed there and announced plans at this year’s NATO summit in Turkey to increase that figure to 2,600 and extend the mission to 2031.

The document earmarks $2.3 billion for the Defence Drone Initiative, a program meant to help develop drones domestically and allow the military to acquire them faster.

The budget suggests Canada could spend $61.9 million over the next four years to participate in the European Union’s Ukraine Support Loan program.

Participation would allow Canadian firms to compete for about 60 billion euros in Ukraine defence contracts, the budget document said.

This report by The Canadian Press was first published Nov. 5, 2026.

Read more on the federal budget at thestar.com