Budget 2026: Defence
Budget 2026 says Canada is on track to reach 4% of GDP on defence this decade and 5% by 2035, with more than $700 billion over five years from 2026-27. It proposes $2.3 billion for the Defence Drone Initiative and directs up to $2.7 billion of previously announced funding to Defence Industrial Strategy priorities, including domestic inputs for munitions and armoured vehicles. It also covers the Defence Investment Agency, small-firm financing and a proposed Defence, Security and Resilience Bank.
Fiscal commitments
Projected path toward 4% and 5% of GDP defence spending.
Sources
Canada is making significant progress toward NATO’s Defence Investment Pledge: we are on track to spend 4% of GDP on defence this decade and reach 5% of GDP by 2035. Over five years, starting in 2026-27, generational investments in defence will total more than $700 billion on a cash basis.
Budget 2026 - Masters of our Destiny · PDF p. 283Full cited page
Canada is making significant progress toward NATO’s Defence Investment Pledge: we are on track to spend 4% of GDP on defence this decade and reach 5% of GDP by 2035. Over five years, starting in 2026-27, generational investments in defence will total more than $700 billion on a cash basis.
Budget 2025 committed $81.8 billion on a cash basis to rebuild, rearm, and reinvest in the Canadian Armed Forces (CAF).
Budget 2026 - Masters of our Destiny · PDF p. 273Full cited page
Budget 2025 committed $81.8 billion on a cash basis to rebuild, rearm, and reinvest in the Canadian Armed Forces (CAF).
Procurement and domestic suppliers
Drone Initiative, Defence Industrial Strategy funding, the Defence Investment Agency and domestic-content procurements.
Sources
Budget 2026 proposes to provide $2.3 billion over five years, starting in 2027-28, on a cash basis to the Department of National Defence for the Defence Drone Initiative to accelerate the discovery, acquisition, and deployment of uncrewed and counter-uncrewed capabilities. A portion of funding for this initiative would be sourced from funding already provisioned in the fiscal framework.
Budget 2026 - Masters of our Destiny · PDF p. 274Full cited page
Budget 2026 proposes to provide $2.3 billion over five years, starting in 2027-28, on a cash basis to the Department of National Defence for the Defence Drone Initiative to accelerate the discovery, acquisition, and deployment of uncrewed and counter-uncrewed capabilities. A portion of funding for this initiative would be sourced from funding already provisioned in the fiscal framework.
Direct up to $2.7 billion over five years, starting in 2026-27, on a cash basis, from previously announced funding, including toward the following priority measures:
Budget 2026 - Masters of our Destiny · PDF p. 277Full cited page
Direct up to $2.7 billion over five years, starting in 2026-27, on a cash basis, from previously announced funding, including toward the following priority measures:
Strengthen cross-cutting funding tools and enablers of the defence industry. This includes extending initiatives such as BOREALIS, Defence Industry Assist, export promotion, and the Regional Defence Investment Initiative
Budget 2026 - Masters of our Destiny · PDF p. 278Full cited page
Strengthen cross-cutting funding tools and enablers of the defence industry. This includes extending initiatives such as BOREALIS, Defence Industry Assist, export promotion, and the Regional Defence Investment Initiative
Secure critical inputs for Canadian defence production.
Budget 2026 - Masters of our Destiny · PDF p. 278Full cited page
Secure critical inputs for Canadian defence production.
In October, we introduced legislation to establish the Defence Investment Agency as a Crown corporation. This will give it a clear mandate, a permanent and centralised structure, and dedicated ministerial leadership.
Budget 2026 - Masters of our Destiny · PDF p. 278Full cited page
In October, we introduced legislation to establish the Defence Investment Agency as a Crown corporation. This will give it a clear mandate, a permanent and centralised structure, and dedicated ministerial leadership.
Through the government’s Buy Canadian Policy, we are ensuring that Canadian firms are the key partners in meeting Canada’s new defence and security needs. This gives Canadian defence companies the demand to scale up and invest with confidence.
Budget 2026 - Masters of our Destiny · PDF p. 277Full cited page
Through the government’s Buy Canadian Policy, we are ensuring that Canadian firms are the key partners in meeting Canada’s new defence and security needs. This gives Canadian defence companies the demand to scale up and invest with confidence.
Announced an investment of nearly $2 billion for 190 additional Armoured Combat Support Vehicles alongside a strategic partnership with General Dynamics Land Systems–Canada (GDLS-Canada).
Budget 2026 - Masters of our Destiny · PDF p. 273Full cited page
Announced an investment of nearly $2 billion for 190 additional Armoured Combat Support Vehicles alongside a strategic partnership with General Dynamics Land Systems–Canada (GDLS-Canada).
every vehicle will be designed by Canadian engineers, built with Canadian materials, and assembled by Canadian workers at the GDLS-Canada factory in London, Ontario.
Budget 2026 - Masters of our Destiny · PDF p. 273Full cited page
every vehicle will be designed by Canadian engineers, built with Canadian materials, and assembled by Canadian workers at the GDLS-Canada factory in London, Ontario.
The Project will prioritise investments across the Canadian supply chain to create high-paying jobs and strengthen Canada’s defence industries.
Budget 2026 - Masters of our Destiny · PDF p. 273Full cited page
The Project will prioritise investments across the Canadian supply chain to create high-paying jobs and strengthen Canada’s defence industries.
Financing and allied markets
BDC and CIBC financing, EU Ukraine Support Loan participation and the proposed Defence, Security and Resilience Bank.
Sources
The Business Development Bank of Canada’s $6 billion Defence Platform is implementing a key action of the government’s Defence Industrial Strategy by helping Canadian companies scale, innovate, and compete globally through financing, investment, and advisory support.
Budget 2026 - Masters of our Destiny · PDF p. 279Full cited page
The Business Development Bank of Canada’s $6 billion Defence Platform is implementing a key action of the government’s Defence Industrial Strategy by helping Canadian companies scale, innovate, and compete globally through financing, investment, and advisory support.
In September 2026, the Canadian Imperial Bank of Commerce (CIBC) committed $2 billion to support the growth of small- and medium-sized defence-related and dual-use businesses.
Budget 2026 - Masters of our Destiny · PDF p. 279Full cited page
In September 2026, the Canadian Imperial Bank of Commerce (CIBC) committed $2 billion to support the growth of small- and medium-sized defence-related and dual-use businesses.
Canada also intends to join the European Union’s €90 billion Ukraine Support Loan, which can open new opportunities for Canadian defence companies. Participation would allow Canadian companies to compete for approximately €60 billion in Ukrainian defence procurement
Budget 2026 - Masters of our Destiny · PDF p. 279Full cited page
Canada also intends to join the European Union’s €90 billion Ukraine Support Loan, which can open new opportunities for Canadian defence companies. Participation would allow Canadian companies to compete for approximately €60 billion in Ukrainian defence procurement
Budget 2026 proposes to provide up to $61.9 million over four years, starting in 2027-28, and $109.2 million in future years to Global Affairs Canada to support Canada’s anticipated participation in the EU’s Ukraine Support Loan procurement opportunities.
Budget 2026 - Masters of our Destiny · PDF p. 279Full cited page
Budget 2026 proposes to provide up to $61.9 million over four years, starting in 2027-28, and $109.2 million in future years to Global Affairs Canada to support Canada’s anticipated participation in the EU’s Ukraine Support Loan procurement opportunities.
Canada and international partners will gather in Luxembourg on November 30, 2026, to sign the Articles of Agreement establishing the DSRB. With its headquarters in Canada and a European hub in Luxembourg, the DSRB will reflect the collaborative, international partnership at the heart of this initiative.
Budget 2026 - Masters of our Destiny · PDF p. 280Full cited page
Canada and international partners will gather in Luxembourg on November 30, 2026, to sign the Articles of Agreement establishing the DSRB. With its headquarters in Canada and a European hub in Luxembourg, the DSRB will reflect the collaborative, international partnership at the heart of this initiative.
For Canadian businesses, including small- and medium-sized enterprises, the DSRB will help address financing gaps and support their participation in allied defence supply chains
Budget 2026 - Masters of our Destiny · PDF p. 280Full cited page
For Canadian businesses, including small- and medium-sized enterprises, the DSRB will help address financing gaps and support their participation in allied defence supply chains
Analysis of cited budget provisions. Proposals and forecasts are distinguished from implemented measures.
