House Standing Committee on National Defence (NDDN) - 25 March 2026

• Charles Sousa
• James Bezan
• Simon-Pierre Savard-Tremblay
• Sherry Romanado
• Cheryl Gallant
• Jeff Kibble
• Scott Anderson
• Viviane Lapointe
• Chris Malette
• Tim Watchorn

• Supplementary Estimates (C) would increase National Defence’s authorities for the current fiscal year to $47.8 billion ($49.53 billion including the Communications Security Establishment and agencies).
• The following funding items are included in Supplementary Estimates (C) (including statutory amounts):
  • Previously approved defence investments funded through the Capital Investment Fund ($563,748,936) - Capital Investment Fund Projects
  • Strategic Tanker Transport Capability Aircraft Project ($314,014,283) – Supps (C) Funding: North American Aerospace Defense Command (NORAD) Modernization, including Strategic Tanker Transport Capability Aircraft
  • Expansion of the Canadian Coast Guard’s security role (Budget 2025) ($129,496,997) – Supps (C) Funding: Canadian Coast Guard
  • Canadian Armed Forces Northern Operations ($66,800,000) – Supps (C) Funding: Funding for Operations
  • Recruitment, retention and support programs for the Canadian Armed Forces ($49,164,720) – Supps (C) Funding: Recruitment and Retention
  • Canadian Armed Forces operations in the Middle East (Budget 2025) ($36,893,371) – Supps (C) Funding: Funding for Operations
  • The 30 Strategic Days of Supply initiative ($26,088,239) – Supps (C) Funding: Sovereign Ammunition Capability Supps (C) Funding: Sovereign Ammunition Capability
  • Reinvestment of revenues from sale or transfer of real property ($16,132,065)
  • Enhance early learning childcare access for the Canadian Armed Forces (Budget 2024) ($12,092,249) – Supps (C) Funding: Recruitment and Retention
  • In-Service Support for the Future Fighter Capability Project ($8,453,293) – Supps (C) Funding: In-Service Support for Future Fighter Capability Project and Counter Uncrewed Aircraft System Project
  • Defence Enhanced Surveillance from Space Project ($5,431,729) – Supps (C) Funding: Defence Enhanced Surveillance from Space Project
  • In-Service Support for the Counter Uncrewed Aircraft System Project ($2,019,868) – Supps (C) Funding: In-Service Support for Future Fighter Capability Project and Counter Uncrewed Aircraft System Project
  • Reinvestment of royalties from intellectual property ($248,765)

Note: Some numbers may include Employee Benefit Plan (EBP) costs and therefore do not equal the numbers in the Page Proofs, where EBP, both civilian and military are included separately as a total line item under Listing of Statutory Authorities (Supplementary Estimates (C),2025-26)

• On September 2, 2025, Order in Council P.C. 2025-0639 transferred the control and supervision of the Canadian Coast Guard from the Department of Fisheries and Oceans to the Department of National Defence. This includes transferring unexpended appropriations for the Canadian Coast Guard to the Department of National Defence.

Transfers

• In addition to receiving new funding, these Supplementary Estimates include 14 transfers to other Government departments from National Defence (- $178,535,322).
• There are also four internal transfers that net from Vote 5 to Vote 1 ($8,126,401) with a $0 net effect.

• Transfer of ($23.5K) to the Global Affairs Canada (GAC) for Foreign Service Directives (FSDs); and
• Transfer of ($425K) to the Treasury Board Secretariat (TBS) to support the Comptrollership Program.
• A listing of 'Frozen Allotments in Voted Authorities’ is also included in the final SEC page proofs and identifies a CSE transfer totaling ($22.5K) for the Communications Community Office.

• $563.7 million is requested in Supplementary Estimates (C), 2025–26 for the following previously approved defence investments under the Capital Investment Fund (CIF):
  • CIF reprofile of various projects totalling - $533.8 million;
  • Identification and Options Analysis Activities - $18.5 million;
  • Long-Range Precision Strike (Land) project - $9.8 million;
  • Domestic Arctic Mobility Enhancement project - $0.9 million; and
  • Naval Large Tug project - $0.9 million.

Note: Some numbers may include Employee Benefit Plan (EBP) costs and therefore do not equal the numbers in the Page Proofs, where EBP, both civilian and military are included separately as a total line item under Listing of Statutory Authorities (Supplementary Estimates (C), 2025-26)

• The Capital Investment Fund (CIF) is a dedicated source of funds that matches the accrual profile of National Defence’s existing and planned capital assets.
• Within its 20-year envelope, this funding can be used to mitigate risks within other projects, provide funding for new projects, or adjust for changes in scope to existing projects.
• As part of its prudent management of public funds, National Defence would only make funding requests that can be reasonably spent in a given fiscal year; additional funding, when needed, is requested through Supplementary Estimates.
• The CIF was introduced as part of Strong, Secure, Engaged, to enable a full 20-year view of capital investments under a consolidated defence budget.
• Prior to 2019, the planning of National Defence’s capital program was managed on both a cash and accrual basis.
  • Accrual Basis: the cost of acquiring an asset is spread over its useful life. Operating funding for the asset is recorded in the year that the expenditure is made.
  • Cash Basis: funding for cash payments related to the acquisition of capital assets and operating funding is allocated in the year in which the expenditure is made (immediately).
• Some operating costs were covered on a cash basis, while others were managed on an accrual basis. This introduced significant complexity in planning for major equipment projects, which was a fundamental challenge of large procurements of the past.
• The CIF introduced important changes to how the defence budget is managed to ensure that the Defence Team has the flexibility to effectively manage key investments in defence capabilities.
• Cash can be accessed on demand, if there is a source of funds in the CIF that is affordable on an accrual basis.
• Annual CIF accrual forecasts may exceed the supplied accrual funding by up to 5% in a given year, provided the overall 20-year accrual envelope is not exceeded.
• National Defence provides an annual CIF report to the Department of Finance and Treasury Board Secretariat to determine the affordability of the CIF when compared to the supplied funding.

• Of the $6.7 million requested in Supplementary Estimates (C):
  • Contributions in support of the Capital Assistance Program will support the Strategic Tanker Transport Capability (STTC) Aircraft project and the Defence of Canada Fighter Infrastructure Project.
  • Contributions in support of the Military Training and Cooperation Program and the grants for the Innovation for Defence Excellence and Security Program will secure and demonstrate sovereignty of Canada’s Arctic regions and support three CAF operations in the north: Operations NANOOK, LIMPID, and LATITUDE.
  • Contributions in support of the Canadian Coast Guard Integrated Program will expand the Canadian Coast Guard’s security role and strengthen Canadian sovereignty and national security, especially in the Arctic.
• $17 million of existing Vote 10 was transferred from National Defence to various government departments in Supplementary Estimates (C).
  • $16.6 million in contributions to Global Affairs Canada in support of activities related to Ukraine.
  • $350,000 to Natural Resources for contributions in support of the Canadian Coast Guard Integrated Program.

Grants and Contributions

• Both grants and contributions are types of “voted transfer payments,” which means that funding for these payments must be approved by a Vote in Parliament. These payments do not include investments, loans, and loan guarantees, nor do they result in the acquisition of any goods, services, or assets by the Government. 
  • Grants: A grant is an unconditional transfer payment. This means that recipients must meet certain eligibility requirements before they receive a payment; however, they usually do not need to meet any further conditions after they receive the payment.
  • Contributions: A contribution is a conditional transfer payment. This means that recipients must first meet certain eligibility requirements before they receive payment and are also subject to post-payment performance conditions that are specified in a contribution agreement. These conditions are based on a performance measurement strategy that is developed before the contribution is disbursed. The strategy must include an explanation of the program goals, as well as the expected results, performance targets, and internal audit and evaluation strategies.
 

• Budget 2025 announced the Comprehensive Expenditure Review (CER), an initiative to save $60 billion over five years through rationalization of the public service and reductions in discretionary spending on consulting, professional services, and travel.
• The CER will have minimal impact on National Defence, expenditure reductions will be largely centred on a fleet divestment strategy, representing $1.1 billion of the total $1.8 billion spending reduction over four years.
• Of the $772.1 million in unspent funding in 2024-2025, $708.1 million (excludes spending of proceeds from the disposal of surplus Crown assets available for use in subsequent years) or 91.7% of the amount is available for defence spending in future years. This includes:
  • $364 million in Carry Forward (operating expenditures) including $97.1 million for Class Action Settlements;
  • $210.6 million for adjustments to spending on capital equipment and infrastructure;
  • $109.3 million for the Medium Range Air-to-Air Missile acquisition;
  • $24.3 million for various contribution programs;

• National Defence introduced a flexible funding model in 2017 to re-allocate unspent funds to support emerging priorities or future needs.
• This funding model provides National Defence with significant flexibility to manage changes in project scope and schedules, and to reallocate funding as necessary toward projects that are ready to advance to the next phase.
• Capital funding that National Defence could have accessed during a fiscal year, but did not request through the Estimates process, is not lost to the department — the funding remains in the Capital Investment Fund, available for future use when needed to advance capital projects.

Lapsed Funding

• To mitigate lapses in funding authorized by Parliament, National Defence is taking the following actions:
  • Improving its capital funding forecast to ensure that the Department does not request more funding authorities from Parliament than required;
  • Funding new projects from surplus in-year funding rather than requesting additional funding from Parliament;
  • Requesting funding for additional military deployments later in the process to ensure only the required funding authorities are requested (to prevent operating lapse); and
  • Monitoring forecasted exchange rates to better anticipate their impact on funding estimates (to mitigate grants and contributions lapse).

Parliamentary Budget Officer (PBO) Report

• In February, the PBO published a report titled Planned Capital Spending under Canada’s Defence Policy: 2025 Update
• PBO noted that over the period 2017-18 to 2023-24, actual capital spending for National Defence fell short of planned amounts by a total of $18.5 billion.

• Starting in 2025-26, Budget 2025 proposes the provision of $81.8 billion over five years on a cash basis to rebuild, rearm, and reinvest in the Canadian Armed Forces (CAF). This includes over $9 billion in 2025-26 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 fiscal year and to put Canada on a pathway to meet our NATO Defence Investment Pledge of investing 5% of GDP by 2035.

• Starting in 2025-26, Budget 2025 proposes the provision of $81.8 billion over five years (on a cash basis) for:
  • $20.4 billion over five years to recruit and retain a strong fighting force, including generational pay raises for the Canadian Armed Forces (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.
  • $6.2 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 for complementary initiatives to support Canada’s defence capabilities.

CAF Operations

• Budget 2025 proposes to provide $2.7 billion over three years on a cash basis, starting in 2026-27, to support the renewal of Operation REASSURANCE – the CAF’s largest overseas mission, through which the CAF contributes to NATO deterrence and defence measures in Central and Eastern Europe.
• It also proposes to provide $300.1 million over three years on a cash basis starting in 2025-26 to National Defence and CSE to support Operation ARMANA – the CAF’s contribution to strengthening peace and security in the Middle East. This $300.1 million is partially offset by $155.8 million over three years of existing resources.

Budget 2025

• 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 fiscal year and puts Canada on a pathway to meet our NATO Defence Investment Pledge of investing 5% of GDP in defence by 2035.
• Fiscal Year (FY) 2025-26: As per NATO’s latest press release of Defence Expenditures of NATO Countries in June 2025, Canada’s defence spending is projected to reach 2.01% of its GDP, with 22.6% devoted to major equipment, up from 1.47% of GDP and 18.3% on major equipment in comparison to FY 2024-25.
• As of Supplementary Estimates (B), National Defence’s authorities have increased to $46.7 billion ($48.4 billion including agencies) for the current fiscal year.
• The Department is requesting an additional $1.05 billion in Supplementary Estimates (C) for 2025-2026. This would increase the Department’s total authorities to just over $47.8 billion for the year ($49.53 billion including agencies).

NATO Common Funded Budget

• In addition to investing in their own armed forces, all NATO Allies contribute directly to NATO’s budget based on an agreed cost-share formula derived from Gross National Income. Canada is the 6^th largest contributor to NATO’s common funded budget.

Defence Spending – 2% of Gross Domestic Product (GDP) Target

• Canada is on track to spend 2% of GDP on defence by March 31, 2026.
• The additional $9.2 billion investment in defence announced in June 2025 has positioned Canada to meet this target.
• In November, the Budget also reaffirmed our commitment to meet the 2% target and to accelerate investments to put Canada on a path to meet the North Atlantic Treaty Organization’s (NATO) 5% Defence Investment Pledge by 2035.
• Budget 2025 includes $81.8 billion over five years on defence, including $17.9 billion to expand military capabilities and $19 billion to repair and sustain capabilities and invest in defence infrastructure.

NATO Investment Pledge

• On June 25, 2025, Canada and its NATO Allies agreed to a new Defence Investment Pledge of investing 5% of GDP annually by 2035.
• As part of this 5% pledge, Canada will invest 3.5% of GDP for core defence expenditures, expanding on the June 9, 2025, announcement, which will bring Canada to 2% of GDP by the end of this fiscal year.
• This includes strengthening the foundation of National Defence through investments in our people, capabilities, infrastructure, and digital capabilities.
• An additional 1.5% of GDP will be dedicated to investments in critical defence and security-related expenditures, that will – among other things – protect our critical infrastructure, defend our networks, unleash innovation, and strengthen our defence industrial base.

Other Government Department and Agencies’ Contributions to NATO Investment Pledge

• On September 2, 2025, the Canadian Coast Guard joined the National Defence portfolio and as such its entire budget is now included in Canada’s defence expenditures going forward, reflecting its integration and expanded security mandate. Historically, only a portion of the budget counted towards Canadian defence expenditures.
• Eligible funding from other government departments also contributes towards Canada’s defence expenditures. This includes Veterans Affairs Canada, Treasury Board of Canada Secretariat, Global Affairs Canada, Shared Services Canada, and others that cannot be disclosed publicly.

Parliamentary Budget Officer (PBO) Report (2026)

• On February 5, 2026, the PBO released a report on “Fiscal Implications of Meeting NATO’s 5% Commitment”.
• The report examined the fiscal implications of Canada’s commitment to reach the NATO military spending target of 5% of GDP by 2035.
• PBO estimates that meeting the NATO 5% commitment by gradually increasing core defence spending from 2.0% in 2026 to 3.5% by 2035 will require additional defence spending averaging approximately $33.5 billion per year in cash expenditures over the next 10 years.
• PBO estimates that the additional core defence spending required to meet the NATO 5% commitment will increase the budgetary deficit by $63.0 billion (1.4% of GDP) in 2035-36 and the federal debt-to-GDP ratio by 6.3% of GDP by 2035-36.

The Five Pillars of the Defence Industrial Strategy (DIS)

• Renewing our relationship with industry;
• Procuring strategically through the new Defence Investment Agency and a new “Build-Partner-Buy” framework;
• Investing purposefully to strengthen an innovative Canadian defence sector;
• Securing supply chains for key inputs and goods; and
• Working with domestic partners, including in Canada’s North and Arctic.

Anticipated Benefits of Implementing the DIS

• $125 billion downstream economic benefit by 2035;
• Increase of Canada’s defence exports by 50%;
• Raise share of defence acquisitions awarded to Canadian firms to 70%; and
• Rise of maritime fleet serviceability to 75%, land fleets to 80% and aerospace fleets to 85% to bolster Canadian defence.

Key Sovereign Capabilities

• The DIS identifies 10 priority areas for investment to maximize strategic autonomy for capabilities critical to the defence of Canada and where Canada has an existing or potential advantage, these include:
  • Aerospace - Aerospace Platforms; Avionics; and Aircraft Communications;
  • Ammunition - Common Ammunition; Battle-Decisive Munitions; Small Arms; Missiles and Bombs;
  • Digital Systems - Secure Cloud; Artificial Intelligence; Quantum Computing and Communications; Integrated Command, Control and Communications; High- Assurance Communications Equipment;
  • In-Service Support - Naval; Land; Air;
  • Personnel Protection - Medical Counter Measures;
  • Sensors - Marine Sensors; Quantum Sensors; Electronic Warfare;
  • Space - Space-Based Intelligence; Surveillance and Reconnaissance; Space Domain Awareness; Satellite Communications; Space Launch;
  • Specialized Manufacturing - Land Vehicles / Surface Ships, including Icebreakers and Marine Systems;
  • Training and Simulation - Naval; Land; Air; and
  • Uncrewed and Autonomous Systems - Uncrewed and Autonomous Land, Aerial, Underwater and Surface Systems (including Uncrewed Collaborative Platforms).

• Announced on February 17, 2026, the Defence Industrial Strategy (DIS) is intended to transform Canada’s defence industry by prioritizing Canadian suppliers and materials, investing in Canadian innovation and commercialization, and streamlining procurement to give businesses consistent and predictable demand.
• To procure the equipment and services the Canadian Armed Forces (CAF) needs, National Defence works closely with partners in other departments such as Public Services and Procurement Canada, the Defence Investment Agency, and Innovation, Science and Economic Development (ISED).
• Canada has an Industrial and Technological Benefits (ITB) policy, managed by ISED, which leverages National Defence and Canadian Coast Guard procurements to contribute to jobs, innovation and economic growth across the country. This policy will be updated in 2026 to align with DIS aims.

The Defence Industrial Role of the Provinces, Territories, and Indigenous (PTI) Rightsholders

• PTI governments control many of the levers that shape the operating environment for the CAF and the defence industrial base. The DIS underscores the importance of PTI collaboration, notably to advance infrastructure and workforce development.
• Ontario is home to over 35% of Canada’s defence industry employment, with a leading role in combat vehicles, airborne sensors and warning systems, munitions, and aircraft manufacturing. In its 2025 budget, Ontario made strategic investments in its defence sector, including through a $215 million shipbuilding commitment.
• Quebec is home to almost 25% of Canada’s defence industry employment, with strengths in aerospace, munitions, ground transportation, marine innovation, advanced materials and manufacturing, and digital technologies, including quantum. The province is home to six prime contractors, including Bombardier and CAE. Quebec has taken significant steps to bolster its defence industry, naming it as a priority sector, allowing Investissement Québec (a provincially owned holding company) to invest in certain defence-related enterprises.
• Atlantic Canada is home to 20% of Canada’s defence industry employment, with top activities including shipbuilding, aircraft maintenance, repair, and operations (MRO), robotics, space launch, and marine technology. Irving Shipbuilding Inc., in Halifax, Nova Scotia is a major partner in the National Shipbuilding Strategy. The city also hosts NATO’s Defence Innovation Accelerator for the North Atlantic (DIANA), and DIANA’s Centre for Ocean Ventures and Entrepreneurship site is the first Maritime-focused Defence Innovation Secure Hub under the Bureau of Research, Engineering and Advanced Leadership in Innovation and Science.
• Western and Northern Canada are home to 20% of jobs in Canada’s defence industry. Top activities in these regions include aircraft MRO, naval shipbuilding, design, and MRO, life sciences, and digital technologies, including quantum. SkyAlyne, a partnership between CAE and KF Aerospace, provides training and operational support in Manitoba and Saskatchewan; and Cascade Aerospace in Abbotsford, British Columbia, provides maintenance services for CC-130 Hercules aircraft. Vancouver Shipyards in British Columbia, is a major partner in the National Shipbuilding Strategy. British Columbia and Alberta have developed provincial industrial strategies that prioritize defence-related sectors.
• Indigenous governments and rightsholders are key partners for building the defence industrial base, notably in the North. Alongside the provinces and territories, they play a vital and constitutional role, particularly in natural resource and infrastructure development. The DIS includes initiatives to enhance their participation in the defence supply chain, already supported through the mandatory minimum 5% Indigenous federal procurement target.

Space Launch

• The Government of Canada has committed $182.6 million over three years (starting 2025–26) to establish a sovereign Canadian space-launch capability, reducing dependence on foreign launch providers for critical space access.
• As part of this commitment, the National Defence program for Innovation for Defence Excellence and Security is investing $105 million over three years in the development of responsive light-lift launch systems for small payloads by 2028-29 to accelerate Canadian space-launch-related innovation and to strengthen the foundations needed for future sovereign launch capability. Through the first round of this funding, three Canadian companies were awarded $8.3M each to advance their space rocketry projects. This funding will foster Canadian industrial and academic collaboration to develop the launch systems that will support future National Defence space missions.
• Investing in sovereign launch capability now means that Canadians and their businesses can participate in the space economy and reap benefits for decades to come. A domestic launch capability also supports national security and strategic autonomy by enabling rapid, reliable access to space for defence, communications, and surveillance without reliance on foreign launch providers.

Bureau of Research, Engineering and Advanced Leadership in Innovation and Science (BOREALIS)

• BOREALIS will accelerate the delivery of Canadian cutting-edge technologies and capabilities to the CAF and the Communications Security Establishment (CSE), while serving as the interface for industry and academia to engage and access defence innovation programs.
• Key Features of BOREALIS:
  • Joint Program Office: A cross-departmental implementation team housed within Defence Research and Development Canada at National Defence to lead early delivery;
  • Program Consolidation and Streamlining: Providing coherence and access to federal innovation programs to accelerate delivery and align investments;
  • Team Canada Model: Leveraging expertise from across National Defence, CSE, the National Research Council (NRC), ISED, and other departments; and
  • Defence Innovation Secure Hubs (DISH): Co-located classified environments for prototyping, validation, and research and development (R&D).
• On 21 November 2025, the Minister of National Defence announced the establishment of Canada’s first DISH, the Maritime DISH pilot in Halifax.
• The Maritime DISH will unite various defence and security partners, including industry, academia, naval and joint operators, and federal departments and agencies, to collaboratively develop, test, and transition new maritime technologies. Key areas of focus will include:
  • Undersea domain awareness;
  • Uncrewed and autonomous systems;
  • Advanced sensing and surveillance technologies; and
  • AI-enabled maritime analytics.
• BOREALIS has recently announced a call for proposals to establish two additional DISHs - one focused on uncrewed systems, and one on quantum technology. Successful proponents will be announced in spring 2026, with their new hubs expected to be operational within two years and undertaking key R&D activities. The BOREALIS team continues to assess other potential DISHs needed to advance defence and security R&D in Canada.

Budget 2025

• Budget 2025 committed $6.6 billion over five years to the initial investments of the DIS. This includes a series of initial investments starting this year to improve access to capital, drive research and innovation, bolster domestic supply chains, and grow critical resource stockpiles.
• Specific initiatives include:
  • $182.6 million over three years for National Defence to establish a sovereign space launch capability.
  • $68.2 million over three years for National Defence, ISED, NRC, and the CSE to establish BOREALIS.
  • $1 billion in 2025-26 to create a new Defence and Security Business Mobilization Program at the Business Development Bank of Canada.
  • $656.9 million over five years, to ISED to develop and commercialize dual civilian-military technologies.
  • $334.3 million over five years, to ISED, NRC, and the Natural Sciences and Engineering Research Council of Canada for a suite of measures to help anchor quantum technology companies in Canada and provide pathways to technology adoption in defence-related applications and industries.
  • $443 million over five years, to NRC and ISED to support the development of innovative critical minerals processing technologies, support joint investments with allies in Canadian critical minerals projects, and develop a critical mineral stockpiling mechanism to strengthen Canadian and allied national security.

Post-Budget Announcements

• Since the release of Budget 2025, notable investments announced by the Government include:
  • $528.5 million for the European Space Agency to promote Canadian space technology innovation and access to the European market.
  • $244.2 million over three years for NRC to stand up a Defence Industry Assist Program that will provide funding and advice to high-potential, innovative Canadian small and medium-sized enterprises.
  • $357 million over three years to the federal regional development agencies for a new Regional Defence Investment Initiative to help integrate small and medium-sized enterprises into domestic and international defence supply chains, enhance industrial and innovation capacity, and foster regional economic development.

2022 Canadian Defence Industry Key Figures^{Footnote *}

• Generated $14.3 billion in revenues from its more than 585 firms.
• Contributed $9.6 billion in Gross Domestic Product.
• Exported over $7 billion in goods in services, of which close to 70% was to Canada’s Five Eyes partners.
• Firms with fewer than 250 employees represented over 85% of firms in the Canadian defence industry.
• The Canadian defence industry was over three times more R&D intensive than the broader manufacturing sector.

• Since February 2022, Canada has committed $8.5 billion in military assistance to Ukraine.
• On February 24, 2026, marking the fourth anniversary of Russia’s invasion of Ukraine, the Minister of National Defence announced military assistance that responds directly to operational requirements on the battlefield. This includes:
  • An additional $300 million in military assistance, taking Canada’s total contribution to approximately $2 billion for Fiscal Year (FY) 2026-27. This builds on Canada’s sustained provision of critical military support, and will help ensure the Armed Forces of Ukraine have the equipment and capabilities needed to defend their territory; and
  • Donation of over 400 armoured vehicles, including 66 Light Armoured Vehicle 6s (LAV6 from General Dynamics Land Systems Canada) and 383 Senator Armoured Vehicles (Roshel).
• Canada has committed over $2 billion in military assistance to Ukraine in FY 2025-26, including December 2025 announcements of $200 million towards a package of critical military capabilities and $50 million to the Drone Capability Coalition.
• On August 24, 2025 – the 34^th anniversary of Ukraine’s independence – Prime Minister Carney announced the following allocations of military assistance for FY 2025-26:
  • Approximately $835 million to procure critical capabilities, including armoured vehicles, medical equipment, spare parts, small arms, ammunition, explosives, and drone capabilities;
  • Approximately USD $500 million to purchase a package of U.S. capabilities under the Prioritised Ukraine Requirements List (PURL) Initiative, including ammunition and air defence capabilities;
  • $220 million to purchase drone, counter-drone and electronic warfare capabilities;
  • $165 million to support Canada’s work in Ukraine Defense Contact Group Capability Coalitions; and
  • $100 million to source ammunition through the Czech Ammunition Initiative.

Latest Projects/Announcements

• On February 24, 2026, marking the fourth anniversary of Russia’s invasion of Ukraine, the Minister of National Defence announced approximately $2 billion in military assistance for fiscal year 2026–27, which is drawn from previously approved funding of $1.75 billion from Budget 2025 and an additional $300 million announced on February 24, 2026.
• Also announced on February 24, 2026, was the donation of over 400 armoured vehicles, including 66 Light Armoured Vehicles 6s (LAV6 from General Dynamics) and 383 Senator Armoured Vehicles (Roshel).
• On February 12, 2026, at the 33^rd Ukraine Defense Contact Group meeting, the Minister of National Defence provided updates on recent military assistance, including that Canada is providing $45 million worth of critical medical supplies—including Resuscitative Endovascular Balloon Occlusion of the Aorta catheters and ancillaries, combat medical kits, and consumables. These donations are built on previous donations of medical equipment and will also support Canadian Armed Forces (CAF) medical training under Operation UNIFIER.
• On December 3, 2025, the Minister of National Defence announced that Canada will purchase a package of critical military capabilities sourced from the United States under the North Atlantic Treaty Organization’s (NATO) Prioritised Ukraine Requirements List (PURL), in partnership with NATO Allies. Canada’s contribution to this PURL package was $200 million USD of the $500 million USD total. The December 2025 announcement brings Canada’s total PURL contribution to approximately $892 million CAD.
• On August 24, 2025, Prime Minister Carney announced Canada has invested $100 million over two years to deliver small arms and ammunition — including 5.56mm and 7.62mm rounds, blank training rounds, and M4 Carbines (CAF C7/C8 equivalent) from Colt Canada. This initiative addresses Ukraine’s urgent need for ammunition and supports its transition to NATO-standard weapons. These efforts build on Canada’s previous contribution of $172 million in small arms and ammunition since 2022.

Ukraine Defense Contact Group (UDCG)

• Co-chaired by the United Kingdom and Germany, the UDGC brings together over 50 countries, providing a mechanism for identifying Ukraine’s critical equipment needs, enabling Allies and partners to facilitate donation assistance to Ukraine, and building the long-term capabilities of the Armed Forces of Ukraine (AFU).
• Canada is an active member in the Air Force, Armour, Drone and Information Technology UDCG Capability Coalitions.

Air Force Capability Coalition

• Canada joined the Air Force Coalition due to its niche capabilities in pilot training English language training. Canada announced an investment of $389 million over five years to support F-16 pilot training for Ukrainian personnel from 2024 to 2029. This commitment has and will continue to support training for Ukrainian pilots and provide equipment to support Ukraine’s safe operation of F-16s and other aircraft.

Armour Capability Coalition

• Canada joined the Armour Capability Coalition due to its industry expertise and previous donations to Ukraine, including 39 armoured combat support vehicles (ACSVs). Canada has donated hundreds of armoured vehicles to date and committed a total of $50 million to support Poland’s Leopard Maintenance and Repair Centre, which is instrumental in maintaining Ukraine’s fleet of Leopard 2A4 main battle tanks.

Drone Capability Coalition

• Canada joined the Drone Capability Coalition to coordinate and deliver drone capabilities to Ukraine, leverage opportunities for knowledge exchange with the AFU, and explore potential partnerships with Ukrainian industry. Canada has committed $87 million to Drone Capability Coalition projects aimed at bolstering Ukraine’s drone capabilities. The Drone Coalition is comprised of four working groups. Canada co-leads the Joint Venture Working Group with Latvia, where we are working to coordinate opportunities for partnership between Canadian and other Drone Coalition nations’ companies with Ukrainian industry.

Information Technology Capability Coalition

• Canada joined the Information Technology (IT) Capability Coalition to further advance our support to Ukrainian resilience in areas such as digital modernization, IT infrastructure, communications, and cyber security. Canada leads the Cyber Security Working Group and has contributed $2 million to the Information Technology Capability Coalition’s Common Fund to advance Ukraine’s cyber capabilities. Canada committed an additional $6 million to advance efforts under the Information Technology Capability Coalition in 2025-26.

Canada – European Union (EU) Security and Defence Partnership

• Signed June 23, 2025.
• Established a political framework to boost cooperation in security, defence, maritime efforts, and emerging threats like cyber warfare.

Security Action for Europe (SAFE)

• The final Canada – European Union (EU) agreement was signed on February 14, 2026.
• By joining SAFE, Canadian industry is now able to participate in procurements funded by SAFE loans with up to 80% contract value provided by Canadian industry - a significant increase from the previous 35% threshold for other third countries.
• Currently, Canada is the only non-European country to receive preferential access to this extraordinary EU defence procurement initiative.

Canada-Denmark-Faroe Islands-Greenland Defence Cooperation Memorandum of Understanding (MOU)

• This MOU strengthens defence cooperation across several key areas: defence innovation, materiel and industrial cooperation, mutual logistics support, and personnel, training and exercises, and education.

Canada’s Indo-Pacific Strategy

• Canada’s Indo-Pacific Strategy outlines a whole-of-government approach to supporting a stable, secure, and prosperous Indo-Pacific region.

Operation HORIZON

• Operation HORIZON is Canada’s forward-presence mission in the Indo-Pacific region, promoting peace, stability, and an international order based on the rule of law.

Operation NEON

• Operation NEON is Canada’s contribution to a coordinated multinational effort supporting the implementation of United Nations Security Council sanctions against North Korea.
• Military ships, aircraft, and personnel are deployed to conduct surveillance operations, identifying maritime sanctions evasion activities, particularly ship-to-ship transfers of banned commodities.
• Canadian warships and aircraft will continue conducting episodic monitoring activities in 2026.

Funding for Bilateral and Multilateral Exercises

• As part of the Indo-Pacific Strategy’s five interconnected priorities promoting peace, resilience, and security, $48.7 million is allocated to increase Canadian Armed Forces participation in bilateral and multilateral exercises with regional allies and partners.

Status of Visiting Forces Agreement (SOVFA)

• In November 2025, Canada and the Philippines signed a SOVFA, strengthening the bilateral defence relationship and once ratified, will open the door to further activities and exercises.

Security and Defence Cooperation Partnership (SDCP)

• In October 2025, Canada and the Republic of Korea agreed to a SDCP, a first of its kind in the region, committing to expanding and strengthening cooperation to address evolving traditional and emerging threats.
• An SCDP Action Plan was agreed upon in February 2025 to ensure operationalization of this commitment.

Enhancing Defence Industrial Relations with the European Union (EU)

• In March 025, the White Paper for European Defence and the ReArm European Plan/Readiness 2030 was released to frame a new approach to defence, strengthen pan-European defence capabilities, and identify investment needs.
• On June 23, 2025, Canada signed the Security and Defence Partnership (SDP) with the EU to strengthen defence cooperation with Europe. This new partnership was the intentional first step toward Canada’s participation in Security Action for Europe (SAFE), an instrument of the EU’s Readiness 2030 plan, formerly known as ReArm Europe.
• On December 1, 2025, Prime Minister Carney announced the conclusion of negotiations for Canada’s participation in SAFE, which aims to result in greater access for Canadian companies into the European market.
• On February 14, 2026, the final Canada-EU SAFE Agreement was signed at the Munich Security Conference, making Canada the first non-EU member state to conclude a bilateral agreement to join the SAFE Regulation.
• SAFE is a financial instrument that will provide €150 billion in loans to eligible Member States to acquire military capabilities and increase interoperability in Europe by 2030. SAFE also promotes joint procurement and increased defence industrial collaboration between EU Member States and countries with an SDP with the EU. Canadian firms are now eligible to participate in SAFE procurements up to 80% of the total cost of the contract.
• Of note, through the loosening of fiscal constraints, the EU intends to encourage increased defence investment by Member States of up to €600 billion. These contracts will not be restricted by the same content requirements as the SAFE Instrument and provide Canadian industry with additional opportunities to deepen defence industrial ties with European allies and partners.
• Canada aims to participate in the Readiness 2030 through its SDP with the EU and to expand joint defence procurement in capability areas like artillery systems, air and missile defence, ammunition, drones and counter-drone systems, mobility assets, emerging technologies, and critical infrastructure protection.

Participation in Indo-Pacific Exercises and Activities

• Through 2025 to date, the Canadian Armed Forces (CAF) has participated in numerous exercises, such as:
  • KHAAN QUEST and PACIFIC AIRLIFT RALLY (Mongolia)
  • MOBILITY GUARDIAN (Guam)
  • ANNUALEX and Surface Warfare Advanced Tactical Training (Japan)
  • FREEDOM SHIELD, ULCHI FREEDOM SHIELD, LOCKED SHIELDS, and Allied Power Exercise (APEX) (Republic of Korea)
  • SAMA SAMA and ALON (Philippines, Australia, and partner nations)
  • TALISMAN SABRE (Australia and partner nations)
  • PACIFIC PARTNERSHIP (US and partner nations)
  • SUPER GARUDA SHIELD (Indonesia)
• On November 10, 2025, His Majesty’s Canadian Ship (HMCS) Ville de Québec returned to its home port of Halifax, Nova Scotia, after completing a seven-month deployment, which included travel across the Indo-Pacific and work with regional partners under Operation HORIZON.
• HMCS Max Bernays deployed on Operation HORIZON in 2025, returning to Esquimalt, British Columbia, on December 19, 2025. In addition to taking part in multinational exercises, including SAMA SAMA in the Philippines and ANNUALEX in Japan.
• HMCS Max Bernays participated in Operation NEON along with a CP-140 detachment and conducted port calls and defence diplomacy engagements in the Philippines, Japan, and South Korea, all in support of Canada’s Indo-Pacific Strategy.
• From July 13 to August 4, 2025, the CAF deployed a joint force of approximately 600 personnel to participate in Exercise TALISMAN SABRE in Australia. This included HMCS Ville de Québec and was the largest single deployment of CAF personnel to the region since the launch of Op HORIZON, making it a significant opportunity to improve interoperability with important regional partners.
• In support of Operation HORIZON, the CAF conducts routine transits through the Taiwan Strait to reaffirm Canada’s commitment to peace and stability in the Strait and to uphold international law, including navigation and overflight. These transits contribute to a free, open, and secure Indo-Pacific.
• Further, under the same principles, the CAF also conducts regular Multilateral Maritime Cooperative Activities (MCA) in the South China Sea with the Philippines and other key partners such as Australia, Japan, and the United States.
• An MCA is a joint effort between multiple nations to collaborate on maritime issues. These activities aim to enhance cooperation, improve interoperability, and address shared maritime security challenges.
• MCAs often involve coordinated patrols, strategic collaborations, and other joint operations, demonstrating a collective commitment to upholding international maritime law and maintaining stability in international waters.

Defence Materiel Cooperation in the Indo-Pacific

• The Australia-Canada Defence Materiel Cooperation Committee serves as the principal forum for discussing materiel issues of mutual interest and identifying potential materiel cooperative activities. The many common platforms used by the Australian Defence Force and the CAF, such as the F-35 fighter, P-8 maritime patrol aircraft, Chinook helicopter, A330 Multi Role Tanker Transport, and Hercules and Globemaster III transport aircraft provide ample opportunities for sustainment cooperation. The adoption of BAE Systems’ Type 26 Global Combat Ship as the basis for Canada’s River Class Destroyer and Australia’s Hunter Class frigate has also resulted in extensive cooperation between the nations’ projects.
• Canada and New Zealand are partners (along with Chile and Germany) in the International Users Group for the Lockheed Martin Canada CMS 330 naval combat management system adopted by the four nations, working together on the sustainment and future development of the system.
• Canada and the Republic of Korea leverage their bilateral Joint Meeting (Materiel), which meets annually, to identify material cooperative activities, exchange information, and advance Korea-Canada defence industrial collaboration.
• Canada and Japan have established a Joint Working Group for cooperation in the field of defence equipment and technology and, on January 27, 2026, the Minister of National Defence and Japan’s Ambassador to Canada signed the Japan-Canada Equipment and Technology Transfer Agreement permitting the export of Japanese-origin defence equipment, technology, and intellectual property to Canada.

Cyber Cooperation in the Indo-Pacific

• Canada’s Indo-Pacific Strategy included $2.6 million to bolster military-to-military cyber cooperation and sharing of information and lessons learned with select partners in the region.
• As part of this commitment, the Canadian Armed Forces Cyber Command (CAFCYBERCOM) is deepening its relationship with key actors in the region through joint exercises, strategic-level engagements on cyber defence issues, and the delivery of capacity-building training.
• For example, in December 2024, CAFCYBERCOM supported its first Military Cyber Operations and Capabilities Course in Malaysia, sponsored by the Military Training and Cooperation Program.

Indo-Pacific Regional Training and Capacity Building

• Through its Military Training and Cooperation Programme, National Defence has programmed over $6 million in support of military capacity building and Women, Peace, and Security (WPS) initiatives in the Indo-Pacific since 2023, training over 500 personnel from Indonesia, the Philippines, Vietnam, and Malaysia.
• WPS initiatives include supporting tailored training and seminars to enhance gender integration and gender perspectives in military operations in the armed forces of Malaysia, Indonesia, the Philippines, and Vietnam, as well as cooperating with Japan to create a maritime intersectionality tool to enhance these countries’ maritime security operations.
• Other capacity building efforts include enhancing the Malaysian Armed Forces’ ability to respond to chemical, biological, radiological, or nuclear threats; collaborating with the United States to deliver two maritime surveillance uncrewed aerial systems to the Philippines; and providing submariner training to the Philippine Navy.

Canada-United States (U.S.) Defence Relationship

• The Canada-U.S. bilateral defence relationship is characterized by extensive military-to-military cooperation, policy dialogue, and high-level strategic engagements. This is accomplished through:
  • Institutions, organizations, and agreements, such as the binational North American Aerospace Defense Command (NORAD), the Permanent Joint Board on Defence, and the Military Cooperation Committee.
  • Personnel exchanges:
    • Approximately 320 Canadian Armed Forces (CAF) members serve under binational NORAD command across the U.S.
    • Another 300 CAF members serve in other areas in the U.S.
    • Approximately 40 American military personnel serve at North Bay, Ontario, and Winnipeg, Manitoba, as part of NORAD.
  • Joint exercises and operations, such as Exercise ARCTIC FORGE, Exercise GLOBAL RESOLVE, Exercise VITAL ARCHER, and Operation NOBLE DEFENDER. The U.S. also participates in Operation NANOOK. Canada participates in U.S.-led counternarcotics operations in the Caribbean through our Operation CARIBBE, which is distinct from the recent U.S. actions in Venezuela.
  • Cooperation on Cyber, Space, and Emerging Technologies, between National Defence, Canada’s Communications Security Establishment, the U.S. Department of War, U.S. Space Force, USSPACECOM, USCYBERCOM, and the U.S. intelligence community.
  • Defence materiel relations are underpinned by the Defence Production Sharing Agreement and Title III of the American Defense Production Act, which recognizes Canadian businesses as domestic sources in the U.S.
  • Multilateral engagements, including through the North Atlantic Treaty Organization, Five-Eyes, Global Coalition to Defeat Daesh, Combined Space Operations Initiative, Operation OLYMPIC DEFENDER, the Ukraine Defense Contact Group, and the Partnership for Indo-Pacific Industrial Resilience.
  • The United States Foreign Military Sales Program is an instrument for Canada and allies to acquire defence equipment, services, and training through government-to-government agreements.
  • Separately, as a qualifying country under the United States Defense Federal Acquisition Regulations Supplement (DFARS), U.S. tariffs do not apply to defence trade with Canada. More specifically, DFARS 252.225-7013 clause waives duties on Canadian products entering the U.S. for defence purposes.

Supplementary Estimates (C): Strategic Tanker Transport Capability (STTC) Project

• Supplementary Estimates (C) provides a total of $314 million for the STTC Aircraft project. Of this $314 million:
  • $29 million is funded through the North American Aerospace Defense Command (NORAD) Modernization Funding Decision (ISS)
  • $285 million is funded through the Capital Investment Fund (acquisition)
• This project will deliver a permanent replacement to the existing CC150 Polaris fleet and serve as the Royal Canadian Air Force’s multi-role airlift platform for air-to-air refueling and transport. Funding will also support the construction of infrastructure in three locations across Canada, and the establishment of the in-service support requirements of the STTC project.
• The STTC acquisition and conversion cost is valued at $3.6 billion. This includes the acquisition and conversion of nine CC330 Husky aircraft, associated equipment, training capability, integrated logistic support, and sustainment.
• Canada’s first new CC330 aircraft, Husky 006, was flown from the Airbus facility in Toulouse, France, to the Airbus Defence and Space facility in Getafe, Spain, in June 2025, where it has begun conversion work to its multi-role tanker transport configuration. The aircraft designated for Government of Canada transport is currently undergoing cabin outfitting in Switzerland with delivery planned in 2027-28.

NORAD Modernization

• In June 2022, National Defence announced $38.6 billion (on an accrual basis over 20 years) to modernize key Canadian capabilities in support of NORAD.
• These investments include:
  • $6.96 billion to modernize surveillance systems, especially in Canada’s northern approaches;
  • $4.13 billion to improve threat identification and response speeds through upgrades to command, control, and communications systems;
  • $6.38 billion to strengthen our ability to deter and defeat aerospace threats by modernizing air weapon systems;
  • $15.68 billion to ensure the Canadian Armed Forces can deploy and sustain a strong military presence across the country, including in Canada’s North, through investments in infrastructure and support capabilities; and
  • $4.23 billion to future-proof our capabilities to defend North America through investments in science and technology.

Arctic Over-the-Horizon (A-OTHR) Timeline

• Initial work is anticipated to begin at the Kawartha Lakes and Clearview Township sites as early as winter 2026, with the initial Stage 1 capability to be installed by the end of 2029.
  • Each radar is comprised of a Transmit site, and a Receive site with a common Operational Control centre serving both systems.
• The full A-OTHR capability is anticipated by 2043.

Budget/Funding

• Stage 1 of the A-OTHR program is funded through the $38.6 billion (accrual over 20 years) NORAD modernization plan investment, with additional funding through Budget 2025.

• Beyond the North American Aerospace Defense Command (NORAD) modernization investments announced in 2022, Canada is also modernizing its air fleets and acquiring new capabilities that will support NORAD’s missions:
  • Strong, Secure, Engaged announced major procurement projects relevant to NORAD that are currently in the implementation stage, including the Future Fighter Capability Project (F35s), Canadian Multi-Mission Aircraft (CP8A maritime patrol aircraft), Strategic Tanker Transport Aircraft (CC330), and Remotely Piloted Aircraft Systems (MQ-9B).
  • Our North, Strong and Free provided $103 billion (cash basis) in new funding and announced new maritime sensors, a new fleet of Airborne Early Warning aircraft, and committed to strengthening Canada’s contribution to the Integrated Air and Missile Defence of North America.
  • As part of the Government of Canada’s $9 billion plan (cash basis) announced in June 2025 to rebuild, re-arm and reinvest in the Canadian Armed Forces (CAF), Canada is also supporting key capabilities such as the Joint Counter-Drone Program.

Defending, Building, and Transforming the North

• On March 12, 2026, Prime Minister Carney announced new measures, including:
  • Investing $32 billion at Forward Operating Locations in Yellowknife, Inuvik, and Iqaluit, and at Deployed Operating Base 5 Wing Goose Bay. This includes infrastructure upgrades such as airfield upgrades; new or repurposed hangars; ammunition and fuel facilities; and buildings and equipment for accommodations, warehousing, IT, and general support.
  • Two new Northern Operational Support Hubs (NOSHs) at Whitehorse and Resolute, and two new Northern Operational Support Nodes (NOSNs) at Cambridge Bay and Rankin Inlet, backed by an investment of $2.67 billion to deploy rapidly and support year-round response across the Arctic and North, no matter how remote.
  • Investing $294 million in Arctic airports, including building a runway overlay and modernising Rankin Inlet Airport and upgrading Inuvik Airport to allow larger aircraft to land, connect Northern communities to the rest of the country year-round to enable faster, more convenient, and lower-cost travel for both the military and civilians.

CAF Contribution to NORAD

• Canada contributes fighter aircraft, bases, air-to-air refuelers, Forward/Deployed Operating Locations, and approximately 1,000 personnel in support of the NORAD mission throughout North America.
• Forward Operating Locations in Inuvik, Yellowknife, Iqaluit, and Deployed Operating Base Goose Bay will be upgraded to support NORAD activities. The facilities at these locations can currently accommodate fighter aircraft and other assets when required but require significant upgrades to enable 5th generation networked operations and pan-domain continental defence well into the future.
• Canada manages and operates the Canadian portion of the North Warning System (NWS), a chain of radar stations stretching from Alaska to Labrador. An Inuit majority-owned company, Nasittuq, is under contract to assist with the management of the 47 Canadian NWS radar sites.
• Canadian NORAD Region headquarters in Winnipeg, Manitoba, provides operational control of assets assigned to NORAD in Canadian airspace.
• The Canadian Air Defence Sector in North Bay, Ontario, provides tactical command and control of assets in the Canadian Sector that have direct ties to NORAD Headquarters in Colorado.
• Canada demonstrates its capabilities and commitment to NORAD through binational operations and exercises, such as Operation NOBLE DEFENDER, a recurring, year-round defensive training operation.

Arctic Over-the-Horizon-Radar (A-OTHR)

• On March 18, 2025, Prime Minister Carney announced Canada’s intention to partner with the Government of Australia on advanced Over-the-Horizon Radar (OTHR) technology. Subsequently, in June 2025, Canada and Australia signed a technology partnership to advance collaboration to rapidly develop Canada’s A-OTHR capability.
• This system, based on Australia’s Jindalee Operational Radar Network (JORN) technology and adapted to the challenges of Northern surveillance, will provide advanced early warning and long-range surveillance, enabling faster CAF detection and tracking of a wide range of threats in our Northern air and maritime approaches, while strengthening NORAD domain awareness in the defence of Canada and North America.
• Stage 1 will be completed by the end of 2029, which will provide an initial capability. The full A-OTHR capability with two full-scale radar systems is anticipated by 2043. Work is underway to shorten the date of full operational capability.
• In March 2026, Prime Minister Carney issued a joint statement with Australian Prime Minister Albanese that reaffirmed their commitment for Australia and Canada to collaborate on the development of OTHR technology in support of fielding an A-OTHR system in Canada, bringing together Australia’s world-leading JORN technology with Canada’s expertise in operating high-frequency radar in the Arctic.

Industry Benefits for A-OTHR

• Canada’s Industrial and Technological Benefits Policy will apply to the A-OTHR project. Australian industry partners will work with Canadian companies to build expertise and capacity in Canada, grow our domestic defence industry, support high-paying Canadian jobs, and help Canada scale up its own radar system.
• Canada intends to work with the Government of Australia to further develop OTHR technology to our mutual advantage and will work closely with the United States to ensure the interoperability of domain awareness solutions for the defence of North America.

A-OTHR Siting and Public Reaction

• A-OTHR will be based in Southern Ontario. On July 17, 2025, as part of Stage 1, the selection of the first transmit site, in Kawartha Lakes, and receive site, in Clearview Township, was announced. Initial work is anticipated to begin at the Kawartha Lakes site in winter 2026 while the site study remains ongoing at the Clearview site.
• Since fall 2025, several news articles have reported concerns from farmers and other residents of Clearview Township regarding National Defence’s plan for the new radar site. In media reports from the Ottawa Citizen, CBC, and CTV News, locals have questioned why the capability cannot be located at nearby CAF properties instead, such as the Meaford Training Centre or Canadian Forces Base Borden.
• Siting analysis for A-OTHR is driven by a set of complex and inflexible requirements. These include parcel size, latitude, orientation, distance separation between parcels, environmental conditions and constraints, and adjacent land use.
• Potential sites must:
  • Be located in a remote, flat and dry area;
  • Have limited environmental conditions and constraints;
  • Be a suitable distance from radio noise sources; and
  • Be close to electrical power sources

Strategic Tanker Transport Capability Project

• The Government of Canada is acquiring a new fleet of aircraft to replace the CC150 Polaris. Known as the CC330 Husky, this new fleet will be comprised of nine aircraft (a mix of four new and five used A330-200) and will conduct multiple tasks such as in-flight refuelling of other aircraft, military personnel and cargo airlift, medical evacuations, and strategic transport of Government of Canada officials.
• This new aircraft will improve the flexibility, responsiveness, interoperability with allied nations, communications security, and self-protection of the Royal Canadian Air Force’s current fleet.
• The project will acquire an in-service support solution for the aircraft, as well as infrastructure to house and maintain the fleet at two main operating bases located at 8 Wing, Trenton and the Edmonton International Airport, respectively. Additionally, the project will provide a training and simulation capability to prepare and maintain crew readiness.

Canadian Armed Forces (CAF) Arctic Presence

• The North American Aerospace Defense Command (NORAD) conducts operations to defend the approaches to North America with personnel on watch 24/7. More than 50% of NORAD’s area of operation is in the Arctic.
• The CAF permanent presence in the North is anchored by Joint Task Force North (JTFN); Currently, up to 160 personnel could be stationed with JTFN, which is headquartered in Yellowknife with detachments in Whitehorse and Iqaluit.
• There are approximately 5,000 Canadian Rangers that maintain a meaningful presence in 208 remote and isolated communities, including over 1,500 Rangers in 66 Northern communities.
• On March 18, 2025, Prime Minister Carney announced $420 million in new funding to boost the presence of the CAF in the North and Inuit Nunangat.

Canadian Coast Guard (CCG) Arctic Presence

• Regional headquarters in Yellowknife, Northwest Territories (NT), and CCG Base in Hay River, NT;
• Response depots in Yellowknife, NT, and Iqaluit, Nunavut (NU);
• Marine Communications and Traffic Services Centre in Iqaluit, NU, plus 10 remotely controlled radio sites;
• Environmental response depots (staffed) in Yellowknife and Hay River, NT, and Iqaluit, NU, and (unstaffed) in Churchill, Manitoba, and Tuktoyaktuk, NT;
• Arctic Marine Response Station in Rankin Inlet, NU, operating from June to November;
• 47 CCG Environment Response Equipment Caches;
• 11 Remote Communication Sites;
• 1 Rapid Air Transportable Pack in Hay River, NT;
• Over 2,000 Lit and Un-Lit Fixed and Floating Aids to Navigation; and
• CCG Auxiliary - Arctic Chapter: 41 units; 576 members; 61 vessels.

Investments with an Arctic Nexus in Canada’s Defence Policy (cash basis)

• $2.7 billion over 20 years to establish Northern Operational Support Hubs;
• $29.1 billion over 20 years to acquire a more modern, mobile, and effective tactical helicopter capability;
• $7.6 billion over 20 years for airborne early warning aircraft;
• $2.1 billion over 20 years to acquire specialized maritime sensors to conduct ocean surveillance; and
• $985 million over 20 years to build a new satellite ground station in the Arctic.

Defending, Building, and Transforming the North

• On March 12, 2026, Prime Minister Carney announced new measures, including:
  • Investing $32 billion at Forward Operating Locations in Yellowknife, Inuvik, and Iqaluit, and at Deployed Operating Base 5 Wing Goose Bay. This includes infrastructure upgrades such as airfield upgrades; new or repurposed hangars; ammunition and fuel facilities; and buildings and equipment for accommodations, warehousing, IT, and general support.
  • Two new Northern Operational Support Hubs (NOSHs) at Whitehorse and Resolute, and two new Northern Operational Support Nodes (NOSNs) at Cambridge Bay and Rankin Inlet, backed by an investment of $2.67 billion to deploy rapidly and support year-round response across the Arctic and North, no matter how remote.
  • Investing $294 million in Arctic airports, including building a runway overlay and modernising Rankin Inlet Airport and upgrading Inuvik Airport to allow larger aircraft to land, connect Northern communities to the rest of the country year-round to enable faster, more convenient, and lower-cost travel for both the military and civilians.

CAF Presence in the Arctic

• The CAF’s permanent presence in the North is anchored by Joint Task Force North in Yellowknife, Northwest Territories (NT), with detachments in Iqaluit, Nunavut (NU) and Whitehorse, Yukon Territory (YT), along with 440 Transport Squadron, 1 Canadian Ranger Patrol Group Headquarters, and a Company of Reserve Infantry.
• The Canadian Army’s Arctic Response Company Groups can conduct sovereignty operations, facilitate disaster response support, and provide general assistance to other government departments in the Canadian North.
• The CAF’s footprint in the North and Inuit Nunangat also includes:
  • Canadian Forces Station Alert, the northernmost CAF outpost;
  • CAF Arctic Training Centre in Resolute Bay, NU, which provides a permanent location for training and operations in the Arctic and is staffed approximately 9 months of the year; and
  • Assets that support North American Aerospace Defense Command (NORAD) operations, including the North Warning System, three Forward Operating Locations in, Inuvik, NU, and Iqaluit and Yellowknife, NT, and one Deployed Operating Base in Goose Bay, Newfoundland and Labrador (NL).
• National Defence supplements its capabilities in the North and Inuit Nunangat through collaboration with intergovernmental and Northern First Nations, Inuit and Métis partners, to ensure we are fulfilling obligations under modern treaties, land claims agreements, and self-government agreements.
  • This is in addition to collaboration through the Inuit-Crown Partnership Committee (ICPC), which meets three times annually, and provides briefings to Northern Premiers and Indigenous leaders.
  • The ICPC has co-developed a work plan with Defence focused on multi-purpose infrastructure and procurement in Inuit Nunangat.
• Canada will further bolster its presence in the Arctic with $2.7 billion over 20 years (cash basis) for Northern Operational Support Hubs. These hubs will better ensure Canadian sovereignty by establishing a greater year-round presence across the Arctic and the North, and investing in multi-purpose, dual-use infrastructure that also meets the needs of the territories, Indigenous Peoples, and Northern communities.
• On March 6, 2025, the Minister of National Defence announced Inuvik, NU, and Yellowknife and Iqaluit, NT, as Northern Operational Support Hub locations.
• Further, the North American Aerospace Defense Command (NORAD) Northern Basing Infrastructure project, part of Canada’s NORAD modernization plan, will upgrade legacy and build new infrastructure to support NORAD and CAF operations.
  • As part of this project, National Defence is maintaining and enhancing CAF infrastructure at Inuvik, NU, and Yellowknife and Iqaluit, NT, and 5 Wing Goose Bay, NL. The investment covers recapitalization, modernization, replacement or addition of new critical infrastructure, airfield rehabilitation, as well as upgrades to security, information management/information technology, and electrical systems.
• Separate from Northern Basing Infrastructure, other projects will upgrade infrastructure in Alert and Rankin Inlet, NU, the North Warning System locations, and the Whitehorse Cadet Camp, YT.
• On March 18, 2025, Prime Minister Carney announced $420 million in new funding to boost the presence of the CAF in the North and Inuit Nunangat.
  • This expansion anticipates including more CAF personnel and the potential for increased inclusion of forces from allied nations with an Arctic interest.
  • New activities and increased resources aim to support a near persistent operations through Operation NANOOK and other exercises and training to assert Canada’s presence and sovereignty, as well as refine information-sharing processes.

Exercises and Operations

• CAF presence and responsiveness in the Arctic is maintained through regular national, bilateral, and multilateral exercises and operations. For example:
  • Operation LATITUDE focuses on increasing domain awareness in the Western Arctic and its approaches, in addition to enhancing interoperability with the United States military in the context of continental defence through personnel exchanges, integrated drills, and tactical coordination.
  • Operation NANOOK is a near persistent all-domain CAF operation that aims to detect, deter, and defend against threats in the Arctic, and augment CAF’s permanent Arctic presence.

Arctic Over-the-Horizon Radar (A-OTHR) Project

• On March 18, 2025, the Prime Minister announced Canada’s intention to partner with the Government of Australia on advanced A-OTHR technology. Subsequently, on June 20, 2025, Canada and Australia signed a technology partnership to advance collaboration to rapidly develop Canada’s A-OTHR capability. The first stage of the A-OTHR program will deliver an initial capability by the end of 2029.
• This system will provide advanced early warning and long-range surveillance, enable faster CAF detection and tracking of a wide range of threats in our Northern air and maritime approaches, while strengthening NORAD domain awareness.

Polar Over-the-Horizon Radar (P-OTHR) Project

• National Defence is conducting research and development into the P-OTHR capability, which will further extend surveillance coverage for early threat identification and warning.
• In April 2025, the Government of Canada awarded a two-year contract, valued at $48.4 million, to a joint venture between ATCO Frontec Ltd and Inuvialuit Development Corporation to design, build, install, and operate the P-OTHR research and development data collection system in the Northwest Territories.

The Canadian Coast Guard (CCG) Presence in the Arctic

• The CCG Arctic Region is headquartered in Yellowknife, NT, and includes bases in Hay River, NT, and Iqaluit, NU. The Iqaluit base includes the Marine Communications and Traffic Services Centre, which operates from mid-May to mid-December.
• The CCG Arctic Region has grown to more than 120 full-time employees dedicated to program delivery in the Arctic, with over 50% of its employees based in the North.
• The Canadian Coast Guard Auxiliary (CCGA) in the Arctic has undergone tremendous expansion in recent years. Prior to 2015, the CCGA operated nine community-based units in the Arctic; currently, there are 41 community-based CCGA units with 576  members and 61 vessels. This expansion has strengthened local response capacity and search and rescue.
• The CCG also operates the Arctic Marine Response Station (AMRS) in Rankin Inlet, NU. The AMRS is the CCG’s first search-and-rescue facility in the Arctic, improving maritime safety in the western Hudson and James Bay. The station operates seasonally from June to November.
• The CCG Arctic Region’s Marine Environmental and Hazards Response (MEHR) team has enhanced the Agency’s footprint across the Canadian Arctic with staffed facilities in Iqaluit, Yellowknife and Hay River, NT. It will also place equipment caches in 47 communities by the end of Fiscal Year (FY) 2025-26, augmenting primary response capacity for spills. Community caches save significant time and resources to support effective regional response to marine pollution incidents while larger equipment is mobilized from depots, CCG fleet, or industry.
• On March 8, 2025, the Government of Canada announced contract awards totaling $6.4 billion with Vancouver Shipyards and Chantier Davie for the construction of two Polar Icebreakers expected to be delivered in 2030 and 2031, which will enable a sustained year-round Arctic presence and strengthen the CCG’s capacity to deliver critical services in the North, including icebreaking, search and rescue, environmental response, and support to hydrographic services.
• The two Arctic Offshore Patrol Ships under construction, expected to be delivered in 2026 and 2027, will provide further flexibility for the CCG to operate in Northern and Arctic waters, including enabling opportunities for cooperation and exercises with the Royal Canadian Navy.
• Bill C-12, the Strengthening Canada’s Immigration System and Borders Act, proposes to expand the CCG’s services to include security activities. This change, alongside further investments, will enhance Arctic Maritime Domain Awareness, improve intelligence, surveillance, and reconnaissance capabilities, and enable Arctic security patrols and interoperability with defence and security partners.

International Cooperation

• National Defence maintains strategic-level collaboration with Arctic Allies and partners through regular multilateral policy dialogues such as the Northern Defence Dialogue at the Defence Ministerial level, the Arctic Chiefs of Defence meetings, the Arctic Security Forces Roundtable, the Arctic Security Policy Roundtable, and the Arctic Council.
• National Defence is also committed to increasing information sharing and joint training opportunities with Arctic and non-Arctic partners, including through NATO’s enhanced Vigilance Activity ARCTIC SENTRY.
• National Defence and the Canadian Coast Guard are also collaborating with other government departments in the Icebreaker Collaboration Effort, or ICE Pact, a strategic trilateral partnership between Canada, the United States, and Finland designed to deepen Arctic national and economic security cooperation by strengthening marine industrial capacity and accelerating the development of best-in-class icebreaking and polar capabilities. The partnership was formalized in November 2024 through the signing of a Memorandum of Understanding and reinforced with the signing of a Joint Statement of Intent in November 2025.
• The CCG collaborates with other Arctic states on maritime search and rescue and environmental response training, and Arctic operations. It is an active member in the Arctic Coast Guard Forum and Arctic Council’s Emergency Prevention, Preparedness, and Response Working Group.
• In December 2025, the CCG signed a letter of intent with the Icelandic Coast Guard to formalize a shared commitment to cooperation and collaboration on coast guard operations. In addition, the CCG has existing agreements with other Arctic allies, including a Letter of Intent (2020) with Danish Joint Arctic Command and two Cooperation Agreements (2024, 2017) with the Norwegian Coast Guard and the Norwegian Coastal Administration.
• Defence Research and Development Canada is an active participant in the International Cooperative Engagement Program for Polar Research with several Arctic nations to conduct collaborative research and development activities relevant to defence and security operations in Polar Regions.

Arctic Infrastructure Fund – Defence perspective

• Announced in Budget 2025, the Arctic Infrastructure Fund, led by Transport Canada, will invest $1 billion over four years, starting in fiscal year 2025-26, in major transportation projects in the North with dual-use applications for both military and civilian purposes, including airports, seaports, all-season roads, and highways.
• These investments will advance shared priorities by supporting National Defence operational readiness while meeting the infrastructure needs of Northern and Indigenous communities.
• Projects under this fund will focus on critical enablers such as transportation, energy, and communications, which are essential for sustaining operations and strengthening resilience in the Arctic.
• National Defence is working closely with other government departments to ensure that dual-use infrastructure investments complement mobility, logistics, and situational awareness requirements, reinforcing Canada’s sovereignty and security posture in the North.

Supplementary Estimates (C)

• The Defence Enhanced Surveillance from Space Project (DESSP) will receive a total of $5.4 million in funding through Supplementary Estimates (C), broken down by the following votes:
  • Vote 1: $0.3 million
  • Vote 5: $4.3 million
  • Statutory: $0.9 million
• As part of the DESSP project in Supplementary Estimates (C), existing reference levels of $0.1 million will be transferred from Vote 1 to Vote 5 to cover the costs of Canadian Armed Forces personnel working on the project.
• This funding will support the solicitation, management, and delivery of the design contracts and the development and solicitation of the Implementation Phase Request for Proposal.

Defence Enhanced Surveillance from Space Project (DESSP)

• The DESSP is a North American Aerospace Defence Command (NORAD) modernization project aimed at improving Canada’s ability to detect and track threats using advanced space-based surveillance technologies.
• DESSP will strengthen continental defence by providing actionable intelligence, in near real time, to key decision makers to deter threats to Canada and Canadian interests domestically and globally.
• This project would replace the defence capabilities provided by the current RADARSAT Constellation Mission and Polar Epsilon 2 systems.
• In fall 2025, DESSP was incorporated into the Defence Investment Agency (DIA) portfolio.
• On 4 December 2025, Treasury Board approved Expenditure Authority and Contracting Authority for the Definition phase.
• On 17 February 2026, Canada released its first Defence Industrial Strategy , which identifies space, particularly satellite communications, Intelligence, Surveillance, and Reconnaissance (ISR), space domain awareness, and space launch, as sovereign capabilities critical to the Canadian Armed Forces.
• From May to August 2026, the project plans to conduct a competitive, limited tender Solicitation of Offers to award up to three design contracts.
• Initial Operational Capability is planned for September 2035, with Full Operational Capability scheduled for June 2037.

Defence Enhanced Surveillance from Space Project (DESSP)

• The DESSP was established in response to direction set in Strong, Secure, Engaged: Canada’s Defence Policy. It will continue and enhance the global ISR capabilities provided by RADARSAT Constellation Mission (RCM) and Polar Epsilon 2 (PE2).
• The Canadian Armed Forces (CAF) use synthetic aperture radar and other data to make informed decisions for operations at home and abroad including maritime and terrestrial surveillance globally and in the approaches to Canada and change detection to support intelligence for expeditionary operations.
• DESSP will provide sustainable land surveillance, including in the Arctic, as well as global maritime domain awareness and surveillance to contribute to domestic and international security in near real-time by employing a mix of space-based sensors to provide more advanced intelligence support National Defence and the FVEY Alliance.

Defence Policy and Arctic and Northern Policy Framework

• The Defence policy update, Our North, Strong and Free (ONSAF) noted that the CAF “…needs increased capacity to monitor our vast land mass, airspace and maritime areas, defend against threats to Canada as they arise, and be able to deploy quickly and efficiently across the country, especially in remote environments like our Arctic and North…” It also directs that Canada will "broaden our ability to monitor our approaches and detect and deter threats before they reach Canada and share that information securely with our allies.”
• Canada’s Arctic and Northern Policy Framework (ANPF) highlights the challenges of modern threats to Canada’s Arctic. The ANPF notes that, “as new areas of potential threat are identified — including developing technologies such as remotely-piloted systems and the emergence of new space and cyber capabilities — acquiring assets such as the replacement for the upcoming RADARSAT Constellation Mission system will enhance and improve surveillance and monitoring, including throughout Canada's Arctic region.”

National Security Exception

• A National Security Exception (NSE) was invoked on April 14, 2022, which removes application of Canada’s trade agreements.
• This allows for the Industrial and Technological Benefits (ITB) policy, including Value Proposition, to apply to this procurement.

RADARSAT Constellation Mission (RCM)

• The RCM, a Canadian Space Agency (CSA) managed project, builds on Canada’s expertise and leadership in Earth observation from space and is critical to Canada.
• The RCM, launched in 2019 as a constellation of three SAR (Synthetic Aperture Radar) satellites, provided Canada essential ISR data for environmental monitoring, maritime surveillance, and Arctic domain awareness.
• Its primary objective is to respond to the SAR data needs of the federal government.
• For example, this is used to improve the identification and tracking of threats and improve situational awareness of routine traffic in and through Canadian territory.
• RCM, which is a Canadian Government-owned three-satellite constellation, will reach end of design life in 2026, after which it is expected to degrade. Of the three satellites in the RCM constellation, analysis by the CSA determined there is a 50% chance that at least one of the satellites will fail by 2026. Additionally, the manufacturer of the RCM batteries has suggested that the battery capacity will significantly diminish around 2028, further degrading RCM’s capacity.
• As a result, DESSP must advance into the Definition phase on an accelerated timeline. Any delay will widen an already significant and forecasted capability gap for the Canadian Armed Forces.
• The data produced by DESSP will support a wide range of critical missions, including search and rescue, monitoring of Canada’s landmass, particularly the Arctic, and surveillance of maritime approaches to Canada and North America to assert and exercise Canadian sovereignty.
• DESSP will also enhance Canada’s ability to detect and characterize adversary activities that may threaten national security, Canadians, or deployed CAF personnel.
• Through DESSP, National Defence will strengthen Canada’s sovereign, space based ISR capabilities in support of the defence of Canada.

Polar Epsilon and Polar Epsilon 2

• Polar Epsilon (PE) was National Defence’s initial project to build two ground stations that would download imagery from RADARSAT-2 and provide enhanced products for use in CAF and maritime operations for other government departments. PE stations are still fully operational and in use today.
• Polar Epsilon 2 was established to implement two additional ground stations, to order, process and receive RCM data for the Canadian Armed Forces, as well as continued support to the Maritime Security Operation Centres.

In-service support (ISS) involves comprehensive, long-term contracts to maintain, repair, and upgrade military equipment, platforms, and systems, ensuring operational readiness for the Canadian Armed Forces (CAF).

Supplementary Estimate (C) Funding:

• ISS for the Future Fighter Capability Project (FFCP):
  • Vote 5: $8.5 million
  • Supports Canada’s mandatory financial commitments under the F-35 Joint Strike Fighter Program (JSF) Production, Sustainment and Follow-on Development (PSFD) Memorandum of Understanding, including payments to the United States (U.S.) Government.
• ISS for Counter Uncrewed Aircraft System Project (CUAS):
  • Vote 1: $2.0 million
  • Enables increased training for operators and maintainers, establishment of baseline maintenance arrangements, and sustainment of early equipment deliveries.

Future-Fighter Capability Project (FFCP)

• Supplementary Estimates (C) funding supports the initial sustainment of the F-35 fleet through the Global Support Solution, including non-recurring engineering work for aircraft and propulsion system modifications, software updates, and technical data management.
• This funding will establish the foundational support systems, such as technical data, training support, and maintenance frameworks, prior to aircraft arrival.
• These activities ensure that the fleet can enter service smoothly and safely, and that the Royal Canadian Air Force is ready to operate and maintain this advanced capability from day one.
• The F-35 sustainment strategy utilizes a "global spares pool" managed by the United States (U.S.) government and Lockheed Martin, allowing partners to share resources and reduce logistics footprints.

Counter Uncrewed Aircraft System Project (CUAS)

• Supplementary Estimates (C) funding is requested to support the initial sustainment, maintenance, training, and effective management of the CUAS as it enters service.
• These initial sustainment activities are essential to ensuring that the Canadian Armed Forces (CAF) remain operational and responsive to the rapidly evolving threat posed by uncrewed aircraft systems, which are increasingly prevalent in modern conflict and security environments.
• CUAS protects Canadian soldiers by detecting, identifying, and tracking hostile threats through integral or allied sensors and contributes to a much-needed integrated capability within North Atlantic Treaty Organization.

River-class Destroyer (RCD)

Total Estimated Cost Batch 1 Ships: $22.2 billion (three ships).

Project Status:

• In February 2019, Canada selected the RCD design, based on the BAE Systems’ Type 26 Global Combat Ship. Irving Shipbuilding (ISI) (prime contractor) contracted Lockheed Martin Canada for the design team.
• Canada worked with ISI, Lockheed Martin Canada, and their subcontractors to evolve the selected ship design and systems integration.
• On March 3, 2025, the Government of Canada awarded a build contract to ISI for the construction of Batch 1 ships (three ships). Full-rate production started in April 2025.
• The initial contract includes the construction, testing and trialling, as well as delivery of the ships and necessary supports such as training, maintenance and logistics support data.
• Delivery of the first River-class destroyer, the future His Majesty’s Canadian Ship Fraser, is expected in the early 2030s, with the final ship (ship 15) expected by 2050.

Economic Benefits:

• The project will promote growth of key industrial capabilities in Canada by creating investments in innovation, supplier development, and export opportunities with a focus on cyber security and the marine sector.

Joint Support Ships

Budget: Up to $6.09 billion

• The contract awarded to Vancouver Shipyards for full-rate construction is valued at $3.4 billion.
• The Motor Vessel (MV) Asterix remains an interim solution until the Joint Support Ships are operational in 2028.
• The MV Asterix is a civilian vessel, owned, operated, and maintained by Federal Fleet Services (the parent company is Chantier Davie Canada Inc.).

Arctic Offshore Patrol Ships (AOPS)

Budget: Up to $4.98 billion (excluding taxes)

• All six AOPS have been delivered to the Navy, and the ships have been deployed on Operations CARIBBE, HORIZON and NANOOK. The AOPS have also circumnavigated North America, deployed to Antarctica, and have provided support to Canadians at home under Operation LENTUS.
  • AOPS can operate unescorted in up to one meter of first-year ice, which is the ice condition experienced annually in the waterways of the Canadian Arctic between June and October.
• AOPS will extend and enhance the Canadian Armed Forces presence in the North, by operating in Canada’s exclusive economic zone along the Northwest Passage.
• AOPS will also augment Canada’s presence on the Atlantic and Pacific oceans and conduct a wide variety of operations abroad.

Note: Some numbers may include Employee Benefit Plan (EBP) costs and therefore do not equal the numbers in the Page Proofs, where EBP, both civilian and military are included separately as a total line item under Listing of Statutory Authorities (Supplementary Estimates (C), 2025-26)

River-class Destroyer (RCD)

• The RCD are fast, manoeuvrable, long endurance warships which will replace the retired Iroquois-class destroyers (four ships) and the Halifax-class frigates (12 ships). This single combat-capable class of ship will be capable of meeting multiple threats on the open ocean and the coastal environment.
• As Canada’s future warship, the RCD must be capable of conducting a full range of military operations in high-threat environments, including counter-terrorism as well as humanitarian and sovereignty enforcement operations.
• The $215 million obtained through Supplementary Estimates (B) is being used to acquire spare parts, ammunition, and other key supplies for the initial three RCDs. It will also be used to develop and deliver training, so that our members are ready to operate our new ships as they come online.

Joint Support Ships

• The Protecteur-class Joint Support Ships will provide Canada with a modern, task tailored, and globally deployable naval support capability.
• The new Protecteur-class ships will have key capabilities to support naval task groups, including to:
  • Re-supply fuel, ammunition, spare parts, and other supplies;
  • Facilitate the operation and maintenance of helicopters; and,
  • Provide Task group medical and dental facilities.
• In addition, the ships will have the following roles:
  • Sealift: capable of transporting and delivering cargo both in support of task group operations and in support to operations ashore.
  • Support to operations ashore: will support operations ashore, ranging from combat to humanitarian and disaster relief.
  • Sensor Capabilities: will be equipped with systems to detect and protect against chemical, biological, radiological, and nuclear threats.
  • Task Force Capabilities: will be equipped with a combat management system, multiple defensive weapons systems, an electronic support measures suite, air search radar and dual shafts for enhanced redundancy.
• Supply-chain impacts resulting from COVID, as well as the volume of work associated with constructing a large “first of class” warship, impacted the production schedule. The first ship, the future HMCS Protecteur – originally slated to be delivered in 2023 - is now expected to commence sea trials in late 2026 and to be delivered to the RCN in mid-2027, followed by the delivery of the future HMCS Preserver in late 2027 or early 2028.

Small Vessel Fleet

• In these Supplementary Estimates (C), $868,500 is being requested for the Naval Large Tug project as part of the Capital Investment Fund Request. See Tab C for further details.
• To support the Navy’s expanding operational requirements, the contract for the procurement of Naval Large Tugs was amended in December 2025 to add $81 million (including tax), bringing the total contract value to $213.45 million and enabling the acquisition of two additional tugs—for a total of six vessels.
• The Department of National Defence accepted a third Naval Large Tug in January 2026.
• In addition, over the past year, Canada has acquired over 30 multi-role, waterborne security, and dive support crafts of various classes, representing about $30 million of work for Canadian boat builders, with more vessels slated for delivery in 2026.

Supplementary Estimates (C)

• $26.1 million is requested to fund the 30 Strategic Days of Supply initiative.

Domestic Production and the Munitions Supply Program (MSP)

• The MSP was established by the Government of Canada in the 1970s to maintain domestic capability to produce select high-volume operational and training military munitions in Canada.
• The five companies comprising the MSP are:
  • General Dynamics – Ordnance and Tactical Systems (GD-OTS), with three locations in Quebec, is the designated Centre of Excellence for ammunition, propellant, and explosives;
  • Colt Canada, based in Ontario, is the Centre of Excellence for small arms;
  • IMT Precision (previously IMT Defence), with three locations in Ontario, is the Centre of Excellence for the manufacturing of projectile bodies;
  • Magellan Aerospace, located in Winnipeg, Manitoba, is the Centre of Excellence for rockets, illumination flares, and rocket propellants; and
  • HFI Pyrotechnics Inc., based in Prescott, Ontario, is the Centre of Excellence for pyrotechnic technology.
• Approximately 30% of the Canadian Armed Forces in-service ammunition is sourced domestically through the MSP, helping ensure a reliable Canadian supply for specific munitions.
• National Defence has secured $34 million in domestic ammunition contracts over and above the standing MSP contracts, with $22.7 million expended to date.
• Expanding sovereign ammunition production will help secure critical materials, reduce reliance on foreign suppliers, and strengthen Canada’s overall defence readiness.

Supplementary Estimates (C)

• $26.1 million has been allocated in Supplementary Estimates (C) to ensure that the Canadian Armed Forces (CAF) has a sufficient stockpile of ammunition in the event of a major conflict.
• This initiative supports access to a resilient ammunition supply chain to ensure Canada can rapidly resupply inventory.

Munitions Supply Program (MSP)

• Prior to 1946, the Government of Canada owned and operated several munition plants; these facilities were privatized in the 1960s and 1970s.
• The MSP was created in 1974 to sustain a long-term, viable domestic munitions production capability in Canada.
• The MSP operates through Strategic Source Agreements under which selected companies are designated Strategic Sources of Supply and Centres of Excellence in their areas of specialization. They include:
  • General Dynamics – Ordnance and Tactical Systems (GD-OTS) — Quebec’s Centre of Excellence for ammunition, propellant, and explosives
  • Colt Canada — Ontario, Centre of Excellence for small arms
  • IMT Precision — Ontario, Centre of Excellence for projectile bodies
  • Magellan Aerospace — Manitoba, Centre of Excellence for rockets, illumination flares, and rocket propellants
  • HFI Pyrotechnics Inc. — Ontario, Centre of Excellence for pyrotechnic technology.
• These MSP partners must maintain domestic manufacturing capability and provide Canada with “first-in-line” status production.
• National Defence is currently working on several initiatives to leverage the MSP to accelerate the processes behind procurement and delivery of munitions.
• This includes improved forecasting of demand, with better analytics for improved coordination across the CAF, as well as supply chain illumination to better understand how to onshore the various component parts of ammunition.
• Additionally, Canada is investing MSP partners to develop sovereign capability to:
  • Manufacture extended range large calibre (M795) projectile bodies;
  • Manufacture extended range large calibre load-assemble-packs; and
  • Manufacture propelling charge (Modular Artillery Charge System, or MACS) load-assemble-packs.

Recent Investments and Production Initiatives

• In February 2023, Canada awarded $4.8 million to IMT Precision to increase production of 155mm M107 projectile bodies, raising output from 3,000 to 5,000 rounds per month.
• In March 2024, National Defence awarded $4.4 million through the IDEaS program to GD-OTS Canada and IMT Precision to support modernization of 155mm ammunition production through automation and new materials.
  • IMT was awarded a contribution agreement ($455,872) to develop a production line concept for 155mm projectile bodies, using advanced manufacturing and inspection techniques. IMT concluded this project in 2024, providing CAF with increased understanding of potential capability to produce modern, advanced projectile production. Through this effort IMT demonstrated methods to optimize their production processes while increasing flexibility to meet changing requirements.
  • GD-OTS Canada (Repentigny) was awarded a contribution agreement ($1,968,825) to investigate automating key areas of production of 155mm projectiles, such as casting and solidification processes, inspecting for defects using an X-ray, and transporting materials using automated guided vehicles. This work is expected to be completed by March 2026; and
  • GD-OTS Canada (Valleyfield) was awarded a contribution agreement ($2,019,959) to demonstrate the capability to manufacture a combustible cartridge case for the 155mm Howitzer, including developing the expertise and pre-engineering study to manufacture combustible cartridge cases for Canada’s needs. It is anticipated this work will be completed in spring 2026.
• Engineering work continues with domestic companies to accelerate establishment of new artillery ammunition production capacity for North Atlantic Treaty Organization (NATO) standard munitions.
• On June 9, 2025, the Government of Canada announced an additional $9 billion in defence funding for FY 2025–26, including support for domestic ammunition production and industrial capacity.

Current Domestic Capacity and Limitations

• Approximately 30% of CAF in-service ammunition is sourced domestically through the MSP.
• For certain ammunition types where licensing or domestic production is not feasible, Canada relies on foreign suppliers.
• Canada and Canadian industry do not possess modern ammunition intellectual property (IP), limiting independent production and export options.
• Bringing ammunition supply chains to Canada is challenged by IP restrictions, limited domestic production volumes, human resource constraints, and capital-intensive processes.
• Canada also faces challenges securing critical raw materials and sustaining long term production without significant additional investment.

NATO Air Battle Decisive Munitions (ABDM) Framework

• Canada joined NATO’s Air Battle Decisive Munitions (ABDM) framework in April 2024.
• The ABDM framework aggregates allied munitions requirements into multinational procurements, improving cost efficiency, accelerating delivery timelines, and enhancing stockpile interoperability.
• Participation supports NATO deterrence and expands options to support Ukraine’s defence needs.

Role of Research and Development

• Defence Research and Development Canada continues to foster innovation by conducting research and development into improving munitions and related materials with the objective of providing the CAF with scientific advice and future capability options.

Domestic Arctic Mobility Enhancement (DAME)

• In Supplementary Estimates (C), $900,000 is allocated to the Domestic Arctic Mobility Enhancement project through the Capital Investment Fund. See Tab C.
• Procurement will be managed by the Defence Investment Agency to support faster and more streamlined defence acquisitions.
• Initial Operating Capability is planned for 2030–2031, with Full Operating Capability planned for 2031–2032.

Long Range Precision Strike (Land) (LRPS(L) - Foreign Military Sales (FMS) Program - High Mobility Artillery Rocket System (HIMARS)

• In Supplementary Estimates (C), $9.8 million is allocated to support the Long‑Range Precision Strike (Land) project, including HIMARS through the Capital Investment Fund. See Tab 002.
• HIMARS is produced by Lockheed Martin Missiles and Fire Control. It is not commercially available and can only be acquired through the United States’ (U.S.) FMS program.
• The sale includes 26 HIMARS launchers, various long-range missiles and training rockets, initial spares, training, and support services.
• Cost: Up to USD $2.62 billion.

Timeline for HIMARS

• Canada submitted a Letter of Request to the U.S. government in December 2024 requesting acquisition under the FMS program.
• On October 1, 2025, the U.S. Department of State approved the sale to Canada. The U.S. Letter of Offer and Acceptance was received at the end of December, then reviewed and signed by Canadian authorities on January 6, 2026.
• The first payment of USD $250 million towards the sale was confirmed by the U.S. government on January 12, 2026.
• Initial operating capability is scheduled for 2030 with full operating capability by 2034.

Note: Some numbers may include Employee Benefit Plan (EBP) costs and therefore do not equal the numbers in the Page Proofs, where EBP, both civilian and military are included separately as a total line item under Listing of Statutory Authorities (Supplementary Estimates (C), 2025-26

Domestic Arctic Mobility Enhancement (DAME)

• The DAME project will provide the Canadian Armed Forces with a modern, Arctic‑capable platform able to operate year‑round, independently, and for extended periods across snow, ice, and complex terrain.
• It will replace the current BV206 fleet with a new arctic mobility capability consisting of a fleet of medium-sized, amphibious, high mobility carriers.
• The project intends to deliver up to 170 vehicles in four variants: Command Post, Troop Carrying, Cargo and Equipment Carrying, and Ambulance. It includes a quantity of trailers proportional to the support needs of the fleet.
• A Request for Information closed in September 25, 2025.
• In February 2026, the Ottawa Citizen reported that the publicly posted budget estimate for the DAME project had increased from up to $249 million to up to $1 billion, compared to earlier preliminary figures shared with industry less than a year earlier.

Long Range Precision Strike (Land) Overview

• A long-range missile capability was identified as a priority in Canada’s 2024 Defence Policy, Our North, Strong and Free and in the Canadian Army’s modernization strategy, Inflection Point 2025.
• HIMARS will equip the Canadian Army with an enhanced long-range strike capability that can shoot at threats at distances up to 300 kilometers and beyond. This represents an increase from the current 30 kilometers range, revolutionizing the way the Canadian Army conducts strike operations.

Supplementary Estimates (C)

• Supplementary Estimates (C) includes $8.5 million to fund in-service support for the Future Fighter Capability.
• This funding is essential as it enables Canada to meet its mandatory in-Service Support financial commitments, including payments required under the F35 Memorandum of Understanding (MOU) with the United States (U.S.) Government.

Budget: $27.7 billion

• The acquisition budget includes 88 F-35 jets, associated training, support equipment, sustainment set-up and services, and the construction of Fighter Squadron Facilities in Cold Lake, Alberta, and Bagotville, Quebec.

Timeline

• Delivery of initial eight aircraft: 2026-2027 to Luke Air Force Base, Arizona, for the training of Canadian pilots.
• First Aircraft Arrival in Canada: 2028 to Canadian Forces Base Cold Lake
• Initial Operational Capability: 2029
• Full Operational Capability: 2033

CF-18 Hornets

• The CF-18 Hornet fighter fleet will continue to be assigned missions under Government of Canada commitments to the North American Aerospace Defense Command (NORAD) and the North Atlantic Treaty Organization (NATO) until the retirement of the fleet in 2032.

Supplementary Estimates (C)

• Supplementary Estimates (C) includes $8.5 million to enable Canada to meet its mandatory in-Service Support financial commitments, including payments required under the F35 Memorandum of Understanding (MOU) with the United Sates (U.S.) Government.
• These commitments cover sustainment services such as non-recurring engineering work for aircraft and propulsion system modifications, software updates, and technical data management.

Supplementary Estimates (B)

• Supplementary Estimates (B) included $476 million for the Future Fighter Capability Program to fulfill financial commitments, including payments under the F-35 MOU with the U.S. Government, which was reprofiled from future years.

F-35 Procurement Review

• On March 14, 2025, Prime Minister Carney announced a review of the F-35 acquisition, to determine whether it remains the best choice for Canada.
• The review considers operational needs, North American Aerospace Defense Command (NORAD) and North Atlantic Treaty Organization (NATO) commitments, industrial benefits, strategic partnerships, and potential alternatives considering current domestic and global realities.

Fleet Replacement

• Canada’s current fighter fleet, the CF-18 Hornet, has already begun its retirement and will be entirely removed from service by 2032.
• This means that the replacement capability must be delivered and fully operational by 2032 to avoid a critical capability gap.
• The planned F-35 acquisition delivery schedule has been coordinated with the phased retirement of the CF-18 to minimize operational impacts during the transition.

Joint Strike Fighter Program (JSF) Production, Sustainment and Follow-on Development (PSFD) MOU

• The JSF Program is a multinational cooperative effort to build an advanced combat aircraft equipped to fulfill multiple roles.
• The F-35 was developed and continues to be operated and sustained as a joint/coalition platform, built on strong partnerships with the United States, NATO Allies and partner nations across the globe.
• The program operates under well-established agreements that include maximizing commonality to achieve affordability and coalition interoperability; implementing a global sustainment system to deliver continuous cost and performance improvements; and promoting industrial involvement for participants.
• Canada has been an active participant in the JSF Program since it began in 1997, and in 2006 became a partner in the PSFD MOU, which expires in December 2051.
• Eight partner countries cooperate under the PSFD MOU: Australia, Canada, Denmark, Italy, Netherlands, Norway, United Kingdom, and the United States.
• In addition to the eight partner countries, there are 12 countries purchasing the F-35 through the United States Foreign Military Sales Program: Belgium, Finland, Germany, Israel, Japan, South Korea, Poland, Singapore, Switzerland, Czechia, Greece, and Romania.
• The total F-35 orders of these 20 nations are anticipated to exceed 3,600 jets.

Economic Benefits

• As a partner in the F-35 program, Canada has access to industrial participation in production of the aircraft.
• To date, over $3.6 billion USD (~$5.2 billion CDN) in contracts has been awarded to over 110 Canadian companies involved in the production and supply chain of the F-35.
• Currently, 37 Canadian companies have F-35 contracts, including Magellan Aerospace in Manitoba (horizontal tail assembly), GasTops in Ontario (engine sensors), and Heroux-Devtek in Quebec (landing gear components).
• Each F-35 aircraft coming out of the production line contains approximately $2.2 million USD (~$3.3 million CAD) of Canadian-made components.
• The acquisition and initial sustainment of the F-35 project have the potential to contribute over $425 million annually to Canada’s gross domestic product and maintain 3,300 jobs annually for Canadian industry and value chain partners (direct and indirect).
• In addition, over 1,000 jobs will be generated by the significant construction initiatives in Cold Lake and Bagotville.
• Total construction investment for the two Fighter Squadron Facilities in Bagotville and Cold Lake is valued at approximately $2.5 billion.
• More jobs are anticipated as repair overhaul facilities are stood up and infrastructure upgrades progress on other operating locations across Canada to support extended F-35 operations.
• Further work to upgrade infrastructure, hangars, runways and services at these two bases and other operating locations is valued at approximately $10.2 billion.
• The procurement is expected to generate additional opportunities and jobs for Canadian industry to integrate into the global supply chain, which will support a fleet of over 3,600 aircrafts worldwide.
• In November 2024, the Government of Canada announced that L3Harris MAS of Mirabel, Quebec, was identified as its strategic partner to work with Canada and the F-35 Joint Program Office to investigate requirements for an F-35 air vehicle maintenance, repair, overhaul, and upgrade facility, also known as an air vehicle depot.

• Project Name: Airlift Capability Project – Multi-Role Flight Service (ACP-MFS)
• Project Value: $2.05 billion
  • The 2026-27 Main Estimates includes $757 million in new funding for the project.
• Contract Value: $753 million with Bombardier Inc. for six new Global 6500 aircraft
• Contract Type: Non-competitive
• Timelines:
  • Contract Award: December 12, 2025
  • Delivery of first aircraft: Summer 2027
  • Initial Operational Capability: end of 2027
  • Full Operational Capability: 2032
• Current CC-144 Challenger fleet
  • As the entire CC-144 Challenger fleet is becoming increasingly obsolete, upgrades are required in order to modernize its capabilities, maintain technological relevance, and comply with new airworthiness and regulatory requirements.
  • The existing CC-144 Challenger fleet will continue to support operations as we transition to the new Global 6500 fleet.

2026-27 Main Estimates

• The Main Estimates include $757 million in new funding for the Airlift Capability Project – Multi-Role Flight Service.

Airlift Capability Project

• Through the Airlift Capability Project – Multi-Role Flight Service, the Royal Canadian Air Force (RCAF) is acquiring a new fleet of six new Global 6500 aircraft to replace and modernize the capabilities currently provided by its CC-144 Challenger fleet.
• These new aircraft will increase the capacity of the RCAF to support administrative flight services for senior Government of Canada leaders and provide utility flight services in support of CAF operations and missions.
• This project has replaced the previous Challenger Consolidation Project, which was linked to Strong, Secure, Engaged initiative #54: “recapitalize or life-extend existing capabilities in advance of the arrival of next generation platforms”.
• Through the Industrial and Technological Benefits Policy, including Value Proposition, this contract will reinforce Canada’s expertise in the strategic areas of aerospace and defence, strengthen our defence industrial base, and create economic opportunities across the country.
• A non-competitive contract was determined to be the most practical course of action, ensuring the new fleet gets delivered in a timely manner while also providing the best value to Canadians.
• As the aircraft delivered through this project will be used to transport senior Government of Canada leadership who are essential to national defence and security, it was determined that the National Security Exception will be invoked for this procurement.
• Like the CC-144 Challenger fleet, the Global 6500 fleet will be operated by 412 Squadron based out of the Ottawa International Airport.
• This project will provide the necessary infrastructure required to maintain and store the new aircraft.

Global 6500 aircraft

• The Global 6500 aircraft is a Canadian manufactured platform that meets all of the operational requirements of the Royal Canadian Air Force.
• The fleet will be equipped with modern technology to address obsolescence issues, and will provide increased range and passenger capacity, helping to reduce operating costs and greenhouse gas emissions.
• As a proven commercial off-the-shelf design, the new Global 6500 fleet will not be delayed by developmental work, ensuring the aircraft are delivered and ready to support operations in a timely manner.
• The new aircraft will potentially be equipped with a self-protection system, secure communications, Mode 5 military friend-or-foe identification system (IFF), and military global positioning system (GPS).

Current CC-144 Challenger fleet

• As the CC-144 Challenger fleet is becoming increasingly obsolete, upgrades are required in order to modernize its capabilities, maintain technological relevance, and comply with new airworthiness and regulatory requirements.
• Following the gradual retirement of the airframes, they will be declared surplus.
• Once declared surplus, various options – including, donation, sale, possible alternate use within the Canadian Armed Forces (e.g. for training or display purposes) or destruction – will be considered.

Canadian Patrol Submarine Project (CPSP)

• On July 10, 2024, Canada announced it was launching a process to acquire up to 12 conventionally powered, under ice-capable submarines.
• A Request for Information was released on September 16, 2024, enabling industry engagement in the acquisition process.
• On August 26, 2025, the Government of Canada announced that it had identified German company TKMS (previously known as Thyssenkrupp Marine Systems) and Republic of Korea company Hanwha Ocean Co., Ltd. as the two Qualified Suppliers for the CPSP. This decision was informed by a thorough assessment of Canada’s requirements for the CPSP, including construction and delivery timelines for the new submarine fleet.
• In November 2025, Qualified Suppliers received guidelines and instructions to enable the submission of formal proposals.
• A contract for the new fleet of submarines is anticipated to be awarded no later than 2028, following the evaluation of formal proposals submitted by March 2, 2026.
• Delivery of the first Canadian Patrol Submarine is required no later than 2035.

Victoria-class Modernization (VCM)

• Improvements to His Majesty’s Canadian Ship (HMCS) Victoria, HMCS Windsor and HMCS Corner Brook are ongoing and are expected to be completed in the early 2030s.
• The VCM projects continue to be evaluated to ensure value for money.

• The Canadian Patrol Submarine Project (CPSP) was established in 2021 to inform timely governmental decision-making about a potential replacement class of submarines and avoid any gap in capabilities.
• The key submarine capability requirements are delivery timelines, range-endurance-persistence, Arctic capability, and lethality.
• Canada has engaged with other governments and militaries to exchange lessons learned and to gain insights into their respective submarine acquisitions, infrastructure and sustainment programs.
• These engagements have been instrumental in shaping the CPSP acquisition process, including the accelerated supplier qualification completed in August 2025 and the proposal process launched in November 2025. Lessons from allies and other Canadian defence procurements also informed the CPSP evaluation criteria, which prioritize a sustainable fleet, ensure the Royal Canadian Navy receives the submarine capability it requires, and encourage suppliers to deliver meaningful economic benefits for Canada
• National Defence is working with federal partners to determine the most suitable contracting option. A preferred supplier will be identified following the evaluation of proposals.

Victoria-class Modernization (VCM)

• The VCM project is focused primarily on enhancing three distinct capabilities:
  • Habitability – to improve habitability and functionality of living conditions onboard Victoria-class submarines, including improvements to increase the functionality of living spaces and washrooms;
    • Habitability improvements are being implemented on His Majesty’s Canadian Ship (HMCS) Victoria and HMCS Windsor during their ongoing Work Periods.
    • HMCS Corner Brook will have these changes implemented at its mid-cycle Docking Work Period scheduled for 2030.
    • These updates are expected to be completed on all three platforms in the early 2030s.
  • Joint Force Capability – to position the Victoria-class submarines to contribute meaningfully to joint operations ashore, including by making them less likely to be detected and by increasing their ability to conduct intelligence, surveillance and reconnaissance missions; and
  • Survivability – to ensure the survivability of the Victoria-class submarines against an evolving complex threat in an ever-changing battle space.
    • Joint Force Capability and Survivability improvements are also expected to be completed on HMCS Windsor during its ongoing Extended Docking Work Period.
    • HMCS Corner Brook and HMCS Victoria will have these changes implemented during their mid-cycle Docking Work Periods, which are both scheduled to start in the early-2030s.

Victoria In Service Support Contract

• The current annual maintenance cost for the four Victoria-class submarines is approximately $300-350 million.

Revitalized Shipbuilding Sector

• In November 2025, the Canadian Coast Guard (CCG) took delivery of an Offshore Oceanographic Science Vessel (OOSV), built by Vancouver Shipyards (VSY). The vessel will replace the critical oceanographic and climate change research that was performed by the decommissioned Canadian Coast Guard Ship Hudson.
• Construction efforts are currently underway on four large vessels for the CCG, including Two Polar Icebreakers and Two Arctic and Offshore Patrol Ship (AOPS) variants.
• On March 7, 2025, Canada awarded a $3.15 billion contract to Vancouver Shipyards and a $3.25 billion contract to Chantier Davie, each for the construction of a Polar Icebreaker.
• Since 2005, Canada has invested close to $40 billion in fleet recapitalization to sustain Coast Guard operations until new vessels are delivered under the National Shipbuilding Strategy (NSS).

Upcoming Milestones

• The contract design award for the Mid-Shore Multi-Mission vessels is expected to be announced in March 2026.
• The start of Canadian production efforts for the Polar Icebreaker at Chantier Davie will begin on March 31, 2026.
• CCGS Donjek, Coast Guard's first AOPS variant, is targeting launch in late April 2026.

• The Canadian Coast Guard (CCG) fleet renewal consists of the following large vessels:
  • Three Offshore Fisheries Science Vessels (delivered in 2019 and 2020);
  • One Offshore Oceanographic Science Vessel (OOSV) (delivered November 2025);
  • Two Polar Icebreakers;
  • Up to 16 Multi-Purpose Icebreakers (MPI);
  • Two Arctic and Offshore Patrol Ships (AOPS) (Coast Guard variants); and
  • Up to six Program Icebreakers (PIB).

Vancouver Shipyards (VSY)

• The OOSV, Canadian Coast Guard Ship (CCGS) Naalak Nappaaluk, was delivered on November 13, 2025. The OOSV began its transit from Canada’s West Coast to its homeport in Dartmouth, Nova Scotia late February 2026, and is expected to arrive by early April 2026. The Dedication to Service ceremony is currently planned for May 2026.
• Construction engineering and long-lead items contracts for the Multi-Purpose Icebreakers were announced in March 2024. Work is underway to prepare for the start of the construction, currently planned for 2027.
• On March 7, 2025, Canada awarded a $3.15 billion build contract to Vancouver Shipyards to build a Polar Icebreaker. Steel was cut n April 2025, and full rate construction began in July 2025. The vessel is expected to be delivered to Canada in 2031.

Chantier Davie Canada Inc. (CDCI)

• In 2023, CDCI was formally announced as the third NSS Shipyard.
• Initial work on the Polar Icebreakers is underway through an ancillary contract that was announced in March 2024.
• On March 7, 2025 Canada awarded a $3.25 billion contract to CDCI, for the construction of a Polar Icebreaker, the Polar Max. Steel was cut in August 20, 2025, following a ceremony held in Helsinki, Finland, and the Canadian portion of production work is expected to commence at CDCI on March 2026. The vessel is expected to be delivered to Canada in 2030.

Irving Shipbuilding Inc. (ISI)

• Work is progressing well on both Arctic and Offshore Patrol Ships (CCG variants). ISI is targeting delivery of CCGS Donjek in fall 2026 and expects to deliver CCGS Sermilik in fall 2027.

Small Vessel Fleet

• On May 25, 2023, Canada announced an investment valued at $2.5 billion for up to 61 small vessels. To date, 34 small vessels have been delivered to the CCG, including 22 vessels acquired under the NSS.

Additional Initiatives

• The CCG completed the renewal of its light and medium helicopter fleet with delivery of 16 new light-lift helicopters and seven new medium-lift helicopters.
• The CCG is also implementing interim measures to ensure continued delivery of critical services until new ships are delivered. This includes a comprehensive $2 billion Vessel Life Extension program for existing vessels, as well as the acquisition of three interim Medium Icebreakers and one interim Light Icebreaker.

Current Housing Portfolio

• National Defence’s residential housing portfolio includes 11,737 residential housing units at 27 locations across Canada.
• Approximately 16% of Canadian Armed Forces (CAF) members currently live in National Defence housing.

Shelter Charges

• For Fiscal Year 2025-26, the national average shelter charge is $1,066 per month. For current occupants, this represents an average increase of 8.6%, or approximately $91 per month.
• Annual adjustments are made based on the Statistics Canada Consumer Price Index.
• When annual adjustments result in an increase, shelter chargers are limited to a maximum of $100 per month to protect members from sudden and substantial changes. These adjustments took effect on May 1, 2025.

Military Housing Investments

• Investments under Our North, Strong and Free are enabling National Defence to construct 800 residential housing units by FY 2029-30 in Gagetown, Halifax, Valcartier, Trenton, Kingston, Petawawa, Borden, Edmonton, and Esquimalt.
  • Spring 2024: Construction began on six net-zero ready buildings in Edmonton (36 units total), the first residential net-zero-emission-ready buildings in the federal government. A $19 million contract was awarded to Bird Construction Group Ltd. Construction is planned to be completed by March 31, 2026.
  • February 2025: A $4.8 million Modified Design Build contract was awarded to Bird Construction Group Ltd. for the design of 12 unit apartment buildings (totaling 200 residential units) in Borden, Kingston, and Petawawa. Construction is expected to begin in early fiscal year 2026–27.
  • March 2025: A $2.2 million Modified Design Build contract in Esquimalt was awarded to Pomerleau Inc. to design several apartment buildings totaling 244 new units. Construction is anticipated to start in early fiscal year 2026–27.
  • March 2025: A Modified Design Build contract valued at $855,000 was awarded to Pomerleau Inc. for the design of 12 unit apartment buildings (40 units total) in Gagetown. Construction is planned to begin in early fiscal year 2026–27.
  • April 2025: A construction contract for two six-unit apartment buildings in Kingston was awarded to DC&F Corp. of Toronto. Construction is expected to be completed in fall 2026.
  • June and September 2025: Republic Architecture Inc. was awarded design contracts for two six-unit apartment buildings ($200,000) and five four-unit row houses ($100,000) in Edmonton.
  • October 2025: A $5.1 million construction contract for two six-unit apartment buildings in Valcartier was awarded to Nova Construction.
  • December 2025: Quad Pro Construction Inc. was awarded a $25.6 million contract to construct eight six-unit apartment buildings in Borden.
  • Additional upcoming work: Further design and construction contracts are expected to be tendered and awarded in Edmonton, Petawawa, Kingston, Trenton, Valcartier, and Halifax by early fiscal year 2026–27.

Accommodations

• Summer 2024: A contract was awarded to Ellis Don Corporation to begin design work on a new state-of-the-art facility at Canadian Forces Base Esquimalt which will provide modern accommodations for 480 members while on training.

Budget 2024

• Budget 2024 includes a $1.4 billion investment to build 1,400 homes and renovate 2,500 existing units.

Dual-Use Pathfinder Initiative

• As part of broader efforts to build homes on public lands, Budget 2024 announced that the Government is exploring the redevelopment of select National Defence properties in Halifax, Toronto, and the Victoria area (i.e. Esquimalt).These locations, referred to as “Pathfinder Sites” may support a mix of military and civilian housing.

Prefabricated Construction

• National Defence is examining the advantages of modular and prefabricated construction, which can offer higher-quality builds and faster on site assembly potentially helping to accelerate the availability of new housing units.

2025 Office of the Auditor General (OAG) Report on Canadian Armed Forces (CAF) Housing

• This audit focused on whether National Defence managed living accommodations to meet operational requirements and respond to the needs of CAF members.
• Key findings:
  • National Defence did not manage the housing needs of the CAF to meet operational requirements. Quarters are in poor physical condition, and many do not offer enough space and modern amenities.
  • The Canadian Forces Housing Agency (CFHA) provides insufficient residential housing units to meet operational and members’ needs and does not have up-to-date inspections on 25% of the units.
  • National Defence has set strategic goals and actions to increase housing supply but has not considered future demand growth for housing to bring CAF beyond the authorized strength of 71,500.

2024 Report of the Standing Committee on National Defence (NDDN) regarding CAF Housing: Gaps to Fill: Housing and Other Needed Supports for Canadian Armed Forces Members and their Families

• The report was presented to the House on September 23, 2025.
• NDDN issued 25 recommendations urging the government to reverse rent increases, expand and renovate housing, improve contractor oversight, enhance relocation services, and increase collaboration with provinces and municipalities.
• A Government Response, addressing these recommendations was tabled in the House on January 26, 2026.

National Defence Real Property Portfolio Overview

• 2.2 million hectares of land.
• 19,000 buildings, 20,000 works (electrical water), 5,500 kilometres of roads.
• Average age of assets is 39 years old.

Canadian Coast Guard Real Property Portfolio Overview

• More than 17,000 hectares of land and a broad, highly specialized, and complex real property portfolio is being transferred to National Defence with the integration of the Canadian Coast Guard.

Budget 2025

• Budget 2025 provides for $19 billion over five years to repair and sustain Canadian Armed Forces (CAF) capabilities and invest in defence infrastructure, including expanding ammunition and training infrastructure.

Our North, Strong and Free (ONSAF)

• ONSAF committed to investing $10.2 billion (on an accrual basis) over 20 years in current and new infrastructure to support the required tempo of training, operations and day-to-day military activities.
• These investments will range from asset maintenance and repair to minor and major recapitalization and renewal of military facilities, including but not limited to retrofit and replacement of firehalls, living accommodations, and health services centres.

Examples of Major Recent Defence Infrastructure Projects

• Canadian Forces Base (CFB) Halifax: design phase of the $188 million Combatant Training and Integration Centre at CFB Halifax. Once complete, this facility will house cutting-edge training systems for River-class destroyer operations.
• Defence Research and Development Canada Suffield: design phase of the combined Modernize Chemical and Biological Facilities and Neurobehavioral Blast Research Facility projects for a value of $761 million. This project will support ongoing and future research activities on chemical and biological threats, including improving blast protection and blast treatment for personnel.
• CFB Esquimalt: construction phase of the ongoing $1.1 billion A/B Jetty Recapitalization Project to support new fleets built through the National Shipbuilding Strategy. Work this year includes the completion of “B” Jetty and the start of construction of “A” Jetty.
• CFB Gagetown: completion of the new $90 million facility for the 4 Engineering Support Regiment, the Canadian Army’s High Readiness Engineer Unit. This facility enables the unit to continue to meet the demands of domestic and expeditionary crisis response.
• CFB Bagotville and Cold Lake: infrastructure modernization related to the F-35 fleet, including new hangarettes, warehousing, firehalls and Quick Reaction Alert hangars, with associated airfield support upgrades required for next generation fighter operations.
  • Bagotville will soon be constructing a Mess/Dining/Accommodation facility valued at over $180 million and a new $131 million 2 Wing Air Force Expeditionary Capability Headquarters.
  • Cold Lake is constructing a new Fighter Squadron Facility that will support daily operations, maintenance, and simulator training for two tactical fighter squadrons.
• CFB Trenton: construction to support the Strategic Tanker Transport Capability program, including a new hangar, fuel depot, training facility, ramp expansion, and runway/apron resurfacing.
• CFB Moose Jaw: infrastructure modernization to support the $11.2 billion Future Aircrew Training Program, which will deliver new training, simulation, and aircraft maintenance facilities, including a multi building campus with classrooms, simulators, hangars, workshops, and support spaces.
• CFB Greenwood and Comox: infrastructure projects to support the Canadian Multi-Mission Aircraft program, including work on hangars and runways.
• Yellowknife: construction of the $136 million Yellowknife Multipurpose Facility, expected to be completed in the winter of 2026-27, will create a new headquarters for the 1st Canadian Rangers Patrol Group, along with elements of Joint Task Force (North).

Infrastructure Modernization and Maintenance

• A large share of the real property portfolio is outdated and no longer aligned with modern operational demands. Many of these assets are approaching end of life and are projected to reach “critical” condition by 2030.
• The condition of the portfolio is aligned with the overall Government of Canada real property portfolio - the average age of assets is increasing, overall portfolio condition is deteriorating, deferred maintenance costs are growing, and the functionality and suitability of the portfolio are declining.
• Additionally, due to climate change, 64% of National Defence assets are at a high or greater risk of failure by the 2050s.
• To address these issues, National Defence is investing $8.8 billion over 5 years (starting in 2025-26) to address the backlog of deferred maintenance, including recapitalization of linear assets and municipal works to improve the resiliency and sustainability of the real property portfolio across bases and wings.
• Through portfolio modernization, National Defence is increasing the energy efficiency of defence infrastructure, reducing greenhouse gas (GHG) emissions, and providing modern net-zero or net-zero ready facilities to support personnel.
  • As of 2023–24, National Defence achieved a 38% reduction in GHG emissions from its real property and conventional fleet compared to 2005 levels, placing the department within reach of its 40% reduction target for 2024–25.
  • By 2030, National Defence’s goal is to eliminate fossil fuel use in government-owned buildings, cut emissions, and lower energy costs. We are investing in diverse low-carbon projects and expanding the use of Energy Performance products to deliver cost- effective upgrades with guaranteed energy savings.
  • To strengthen accountability, all new infrastructure projects will include energy performance targets in their design, and procurement will prioritize low carbon materials and sustainable products, from building materials to vehicle fleets.
  • Throughout this process, National Defence remains committed to implementing Government of Canada environmental obligations and regularly engaging Northern and Indigenous partners, as we work to address the security impacts of climate change.
• For 2025-26, National Defence allocated over $370 million to minor capital projects for existing infrastructure. In addition to buildings and facilities, this included $31 million for municipal works projects, such as roads and utilities.
• The Digital Services Group is collaborating closely with Shared Services Canada to ensure National Defence’s infrastructure is supported through the Network Modernization Project. Additionally, work is ongoing to enhance wireless solutions on bases and wings.

Supplementary Estimates (C) Funding

• Supplementary Estimates (C) includes funding of $49.2 million to support a variety of activities related to the recruitment and retention of Canadian Armed Forces (CAF) personnel.
• Supplementary Estimates (C) includes funding of $12.1 million to enhance early learning childcare access for the CAF as announced in Budget 2024.

Canadian Armed Forces Strength

• The authorized Target Strength of the CAF Regular Force is 71,500, and that of the Primary Reserve Force is 30,000.
  • As of February 28, 2026, the current Force Strength is approximately 66,700 Regular Force and 24,900 (Average Paid Strength) Primary Reserve Force members. This is approximately 9,900 short of the authorized strength.
• In 2025-26 (as of February 28, 2026), approximately 9,700 individuals joined the Regular Force and Primary Reserve, 17.9% of whom were women and 22.3% of whom identified as francophone.
  • 2024-25 intake: approximately 11,500 individuals.
  • 2023-24 intake: approximately 8,100 individuals.

Cost-of-Living Supports – Salary Increases

• On August 8, 2025, the Prime Minister and the Minister of National Defence announced the following updates to CAF compensation measures:
  • Pay adjustment (retroactive to April 1, 2025)
    • This significant, pensionable adjustment is a result of the modernization of the Military Factor, a percentage added to the base salaries of CAF members.
    • The back pay was paid out on November 14, 2025.
  • Military Service Pay (retroactive to April 1, 2025)
    • A new annual, pensionable compensation measure will be implemented, paid as a lump sum, based on years of service, for both Regular Force and Reserve Force members.
    • Details (Years of Service: Compensation based on Regular Force/Reserve Force):
      • 5-10 years: $2,000/$400
      • 11-15 years: $3,500/$700
      • 16-20 years: $5,000/$1,000
      • 21+ years: $6,000/$1,200

Additional Compensation Measures

• Recruitment Allowance for Critical Occupations - Effective November 1, 2025
  • Members will receive $10,000 upon completion of basic training, $20,000 once qualified in trade, and $20,000 upon completion of six years of service and a commitment to serve an additional three years.
• Instructors’ Allowance - Effective January 1, 2026
  • All members posted, attach-posted, or on temporary duty to a designated unit (not as a student or a candidate) will receive $300/month. Instructors at Canadian Forces Leadership and Recruit School will receive an additional $35/day they instruct, while instructors at other establishments will receive an additional $20/day they instruct.
• Changes to Environmental Allowances - Effective April 1, 2026
  • The current monthly allowance, prorated for the number of years in the environment, will transition back to a daily flat rate of $100/day, and will be received when the member is actually at sea or in the field.
• Domestic Operations and Arctic Allowance - Effective April 1, 2026
  • In addition to any environmental allowances being received, members will receive $45/day when deployed on a named domestic operation (for example, Operation LENTUS), and an additional percentage of their land duty (50%) or sea duty (25%) allowance when deployed in the Arctic.
• Posting Frequency Mitigation Measures - Effective April 1, 2026
  • For Regular Force, $13,500 for each of the first three moves, $20,250 for moves four to six, and $27,000 after that. This applies to single members as well, although those on Imposed Restriction will receive half of the new allowance, given the other benefits being provided.
• Imposed Restriction Improvements - Effective first day of third month following approval for members on Imposed Restriction
  • A member will now receive a food allowance of $19.51/day, a transportation allowance of $350/month and an incidentals allowance of $200/month.

“This is For You” Augmented Reality (AR) Experience

• In June 2025, National Defence launched the “This is For You” Augmented Reality Experience which allows participants to:
  • take flight as part of an air crew delivering supplies to Canadian Forces Station Alert;
  • participate as a soldier providing assistance to Canadian citizens during a natural disaster; or
  • take action as a sailor on His Majesty’s Canadian Ship (HMCS) Harry DeWolf, whose crew finds a distressed research vessel.
• The goal of this ambitious project is to capture the imagination of Canadians, especially those who are between 18-34 years old and are potential recruits for the Canadian Armed Forces (CAF).
• The development and launch of this AR experience is part of the ongoing “This is For You” recruitment campaign that also includes a national advertising campaign, including a series of video ads and new eye-catching decals on the windows of 23 Canadian Forces Recruiting Centres across the country.

Cost-of-Living Supports – Childcare

• Budget 2024 announced a total investment of $100 million over five years to enhance access to childcare services for CAF families.
• This is in recognition of military service which requires frequent moves and deployments making it more difficult for military members and their families to find and maintain childcare. While a small number of childcare spots are available through Military Family Resource Centres at bases and wings, the vast number of CAF families must compete for childcare spots in the local civilian community where they live, often perpetually registered at the bottom of wait lists because they move often and need to continually start over.
• This funding will help improve childcare access for military families by partnering with not-for-profit childcare providers to expand services near bases, reimbursing CAF family members who train and certify as childcare workers and creating a network of childcare coordinators to quickly connect families with local childcare resources.
• Supplementary Estimates (C) includes funding of $12.1 million to enhance early learning childcare access for the Canadian Armed Forces as announced in Budget 2024.

Cost-of-Living Supports – Housing

• Budget 2024 announced a total investment of $1.4 billion to build 1,400 homes and renovate 2,500 existing units.
• Over the next 20 years, this investment will build and renovate housing on bases and wings nationwide. Projects will span key locations such as Esquimalt, Edmonton, Borden, Trenton, Kingston, Petawawa, Ottawa, Valcartier, Halifax, and Gagetown.This includes a new accommodations facility at Canadian Forces Base Borden which provides to up 350 modern sleeping quarters, common lounge areas, study areas, laundry rooms, storage, and office spaces to the recruits who train on base.

Auditor General Report on CAF Recruitment

• In their fall 2025 report on CAF recruitment, the Auditor General noted:
  • Overall, the CAF did not meet its recruitment and training goals and failed to understand the causes of applicant drop-off during recruitment;
  • The CAF did not have sufficient basic training capacity to meet demand if recruitment targets were met;
  • Planning for new recruits fell short of meeting demand and did not fully account for trained and effective members leaving;
  • Recruitment and training processes are inefficient and fail to leverage modern tools such as electronic forms or automation; and
  • Security screening processes involve significant backlog.
• Over the last year, National Defence has redesigned key elements of the recruiting process to make it faster, more efficient, and easier for applicants to navigate.
• Digital tools have been improved, administrative steps streamlined, and training capacity expanded.
• These changes reduce bottlenecks, improve communication with applicants, and make it easier for Canadians to pursue a career in uniform.

Supplementary Estimates (C)

• The Canadian Coast Guard (CCG) will receive a total of $131.5 million in funding through Supplementary Estimates (C), broken down by the following votes:

• $129.5M of this funding will support the expansion of the CCG’s security role, including investments in personnel, assets and resources to deliver its enhanced maritime security mandate.
• $2M of this funding will provide support for increased use of renewable fuels, and projects that reduce greenhouse gas emissions in federal government operations (like the CCG fleet).
• The CCG will transfer a total of $350,000 in funding to the Multi-Partner Research Initiative led by National Resources Canada to support research that will increase capacity, capabilities and decision making when responding to Hazardous and Noxious Substance pollution incidents in Canadian Waters.

Note: Some numbers may include Employee Benefit Plan (EBP) costs and therefore do not equal the numbers in the Page Proofs, where EBP, both civilian and military are included separately as a total line item under Listing of Statutory Authorities (Supplementary Estimates (C), 2025-26)

• Funding sought in these Supplementary Estimates (C) will support:
  • asset and capability procurement (e.g., drones, sensors and satellite technology) to strengthen maritime domain awareness;
  • enhanced operational and security posture, including moving to 24/7 Marine Security Operations Centres, as of February 16, 2026; and
  • Indigenous consultation, engagement and maritime security capacity development.

Integration into National Defence

• On June 9, 2025, it was announced that the Canadian Coast Guard (CCG) would be integrated into the Defence portfolio. The transfer became effective on September 2, 2025, through an Order in Council.
• On October 10, 2025, the Minister of National Defence formally welcomed the CCG to the Defence Team at a ceremony in Dartmouth, Nova Scotia.
• The full transition of asset ownership is taking place. The Department of National Defence (DND) and the Department of Fisheries and Oceans (DFO) have established a memorandum of understanding that ensures continuity of operations in the interim.
• As part of CCG’s transition, the CCG is finalizing the Special Operating Agency (SOA) Framework Agreement, which is the overarching policy document outlining how CCG will operate as an autonomous SOA within DND. The Framework Agreement includes CCG’s mission, mandate, values, operational principles and objectives, financial management, and governance and accountability structures.
• An Order in Council is expected as of April 1, 2026, to transfer the Aircraft Services Directorate from Transport Canada to CCG, within DND, enabling operational command of helicopter and other aerial capabilities, access to surveillance assets and a fully functioning Intelligence, Surveillance, and Reconnaissance capability.

Expansion of the Canadian Coast Guard’s Security Role

• The Strengthening Canada’s Immigration System and Borders Act (Bill C-12) amends the Oceans Act to expand the mandate of the CCG to include activities related to security and intelligence to protect Canada’s sovereignty and maritime interests.
• Bill C-12 formally integrates the CCG into Canada’s national security architecture and authorizes the responsible Minister to collect, analyze and disclose information and intelligence.
• These amendments enable the CCG to contribute more effectively to Canada’s security objectives by strengthening maritime domain awareness, supporting federal security partners, and contributing security-relevant information and intelligence.
• The CCG remains a civilian federal fleet. These amendments do not confer law enforcement powers on CCG personnel.
• The CCG will continue to support enforcement partners such as the Royal Canadian Mounted Police, Canada Border Services Agency, Fisheries and Oceans Canada Conservation and Protection, and the Canadian Armed Forces by providing maritime platforms, operational presence, and marine expertise.
• Maritime security activities will be integrated into existing Coast Guard operations, including icebreaking, search and rescue, marine environmental and hazards response, and aids to navigation.

Project Support to Reduce Greenhouse Gas Emissions in Federal Departments

• The CCG is a maritime leader in climate resilience and greenhouse gas (GHG) emissions reductions.
• The CCG is on track to reach its 40% fleet emission reduction target by 2030, as per the Operational Fleet Decarbonization Plan.
• Fleet decarbonization is anchored in the accelerated adoption of sustainable, low carbon, biodiesel and renewable diesel.
• In 2025, the CCGS Sir Wilfrid Laurier bunkered over 670,000L of low-carbon biofuel blends.
• The vessel continues to attract international attention as it sailed to Japan in 2024 and 2025 and will do so again in 2026 using even higher concentration domestically sourced biofuel blends.
• Deeper emission reductions require optimal energy management, efficiency improvements, and ultimately zero-emitting fuels such as hydrogen or battery-electric hybrid technologies.
• Through collaborations with industry, academia, and international partners, CCG continues to advance research and pilot projects on alternative fuels and marine decarbonization technologies, helping accelerate sector-wide emission reductions.

Research Support on Hazardous and Noxious Substances

• The purpose of the CCG Hazardous and Noxious Substance initiative is to review and expand preparedness and response for incidents involving hazardous and noxious substances in Canadian waters, to ensure employee health and safety and the effective facilitation of on-site incident management, coordination and decision-making. This includes planning, training, exercising, and equipment procurement.
• Funding is being transferred through the Multi-Partner Research Initiative (MPRI) to Natural Resources Canada to support research that will enable the CCG to advance its goals related to Hazardous and Noxious Substances.
• The funds will help support the following three research initiatives:
  • Freshwater Risk Evaluation and Spill Hazard of Ammonia Project ($200,000),
  • International Oil Spill Science Conference 2026 ($100,000), and
  • Generating Inputs for the Calibration of Oil Spill Effects Models: Filling Data Gaps for Marine and Freshwater Species of Importance and Application of Oil Spill Biomonitoring System ($50,000).

Bill C-11

• On September 26, 2025, Bill C-11, formerly Bill C-66, was reintroduced to amend the National Defence Act (NDA).
• Key areas of the proposed legislation included:
  • Removing the Canadian Armed Forces’ (CAF) investigative and prosecutorial jurisdiction over Criminal Code sexual offences committed in Canada (Recommendation 5 of Arbour Report);
  • Making amendments to the NDA modifying the appointment process for the Director of Military Prosecutions, the Director of Defence Counsel Services, and the Canadian Forces Provost Marshal (recommendations from Justice Fish);
  • Excluding military judges from the summary hearing system and expanding access to Victim’s Liaison Officers; and
  • Amending the NDA to align sex offender information and publication ban provisions with the amendments made in An Act to amend the Criminal Code, the Sex Offender Information Registration Act and the International Transfer of Offenders Act.
• The Standing Committee on National Defence (NDDN) undertook six meetings with witnesses and three meetings to complete its clause-by-clause review of Bill C-11.
• Key amendments passed by NDDN seek to retain concurrent military and civilian jurisdiction over investigation and prosecution of Criminal Code Sexual Offences, give victims a choice over the system in which their cases are prosecuted, and change the appointment process and tenure in position of key actors in the military justice system.
• NDDN reported an amended Bill C-11 to the House of Commons on February 9, 2026.

Reintroduction of Former Bill C-66

• On September 26, 2025, the Minister of National Defence reintroduced legislation to amend the National Defence Act (NDA). The series of targeted measures are designed to enhance and modernize the military justice system.
• These amendments address eight recommendations from the Third Independent Review of the National Defence Act (IR3), conducted by former Supreme Court Justice Morris J. Fish, and address one recommendation from the Independent External Comprehensive Review (IECR), conducted by former Supreme Court Justice Louise Arbour.
• This legislation was first introduced in March 2024 as Bill C-66 but ceased to exist once Parliament was prorogued in January 2025.

Details of Bill C-11 at Introduction

• The original Bill C-11 introduced in the House was grouped into four key areas:
  • Removing the CAF’s investigative and prosecutorial jurisdiction over Criminal Code sexual offences committed in Canada, thereby addressing Recommendation 5 of former Supreme Court Justice Louise Arbour’s IECR, which states that, “Criminal Code sexual offences should be removed from the jurisdiction of the CAF. They should be prosecuted exclusively in civilian criminal courts in all cases. Where the offence takes place in Canada, it should be investigated by civilian police forces at the earliest opportunity.” The proposed legislation will provide exclusive jurisdiction to civilian authorities to investigate and prosecute these offences in Canada.
    • Recommendation #5 is the only recommendation from Madame Arbour that can exclusively be implemented through legislation. Work is either complete or underway to implement all 48 recommendations, an External Monitor, Madame Jocelyne Therrien, provided external oversight of this progress from 2022-25.
  • Addressing eight recommendations (2, 7, 8, 10, 13, 14, 15, 16) from the Third Independent Review of the National Defence Act report by former Supreme Court Justice Morris J. Fish. These amendments sought to, among other things:
    • Modify the process for the appointment of the Canadian Forces Provost Marshal, the Director of Military Prosecutions and the Director of Defence Counsel Services;
    • Expand the class of persons who are eligible to be appointed as a military judge to include non-commissioned members;
    • Affirm the Judge Advocate General’s respect for the independence of authorities in the military justice system in the exercise of its superintendence of the administration of military justice;
    • Expand the class of persons who may make an interference complaint and provide that a member of the military police or person performing policing duties or functions under the Canadian Forces Provost Marshal’s supervision must make such a complaint in certain circumstances; and
    • Change the title of the Canadian Forces Provost Marshal to the Provost Marshal General to align with the titles of other senior designations in the CAF, such as the Surgeon General, the Chaplain General, and the Judge Advocate General.
  • Excluding military judges from the summary hearing system, and expanding access to Victim’s Liaison Officers, under the Declaration of Victims Rights, to individuals acting on behalf of a victim.
  • Amending the National Defence Act to align sex offender information and publication ban provisions with the amendments made to the Criminal Code in An Act to amend the Criminal Code, the Sex Offender Information Registration Act and the International Transfer of Offenders Act. These proposed amendments are necessary to ensure the parallel military justice system remains constitutional and aligned with the Criminal Code and the civilian criminal justice system.

Amendments Made During Committee Study

• The amendments to Bill C-11 passed at NDDN fall into two broad categories.
  1. First, the provisions of Bill C-11 intending to remove military jurisdiction over Criminal Code Sexual Offences have been amended to retain concurrent military and civilian jurisdiction over investigation and prosecution, and to give victims the exclusive choice regarding the forum of the criminal proceedings (clauses 7 and 8 of the amended Bill).
  2. Second, a series of additional amendments related to the military justice system and key actors within it. Among others, these include:
     • Constitutional challenges surrounding tenure and training of military judges (clauses 9 and 18);
     • Extending the provision of defence counsel services to members charged with Criminal Code sexual offences in the civilian justice system and, possibly, at summary hearings (clause 40.1); and
     • Removing Judge Advocate General supervision of the Director of Defence Counsel Services (clause 40.1).
• Although questions were raised during NDDN clause-by-clause review about the constitutionality of certain amendments, their potential negative impact on the functioning of the military justice system, and whether the retention of concurrent military and civilian jurisdiction actually risked additional harm to victims whose cases might be jeopardized by delays or a lack of legal clarity, NDDN adopted the amendments put forward.

Support to Affected Persons

• Since 2015, the Sexual Misconduct Support and Resource Centre (SMSRC) has worked to ensure that people affected by sexual misconduct have access to a continuum of trauma-informed and confidential support services and trusted resources they need.
• Over the past decade, their services, programs and initiatives have evolved to meet the needs of the wider Defence community. The SMSRC provides immediate assistance through the 24-7 Support Line, as well as ongoing case management and advocacy through the Response and Support Coordination Program. Survivors can also access peer connection, independent legal assistance, and community-based services funded through the Community Support for Sexual Misconduct Survivors Grant Program.
• In September 2025, the SMSRC expanded services to the Canadian Coast Guard.

Recommendations Addressed

• To date the following recommendations have been addressed:
  • 47 of 48 recommendations of the Independent External Comprehensive Review (IECR);
  • 126 of 194 recommendations in the Comprehensive Implementation Plan (CIP);
  • all 8 recommendations from the National Apology Advisory Committee Report; and
  • all 39 of 39 of the actionable recommendations of the Advisory Panel on Systemic Racism.
• 47 of 48 recommendations from Justice Arbour have been addressed; recommendation 5 is dependent on the passage of Bill C-11, the Military Justice System Modernization Act.

Independent External Comprehensive Review (IECR)

• The IECR was presented to the Minister of National Defence by former Supreme Court Justice Louise Arbour in May 2022. It contains 48 recommendations for Department of National Defence (DND) and the Canadian Armed Forces (CAF) to address culture-related issues within the organization.
• To date, 47 of 48 recommendations have been addressed.

Comprehensive Implementation Plan (CIP)

• The CIP establishes a phased approach over five years (2023-28) for prioritizing and addressing 194 external recommendations from the IECR, Third Independent Review of the National Defence Act (IR3), Advisory Panel on Systemic Racism (APR) and Discrimination, and No. 2 Construction Battalion National Apology Advisory Committee Report.
• 126 of 194 of the recommendations have been addressed.
• 12 recommendations were closed following careful analysis and cross-comparison of overlap between the recommendations from all four reports tracked in the CIP as they will be addressed by other external recommendations or broader initiatives or by leveraging existing processes and structures or legislative changes.

Canadian Military College (CMC) Review Board Report

• On March 7, 2025, the former Minister of National Defence released the first report of the CMC Review Board. The report highlighted the enduring value of the colleges and provided 49 recommendations for systemic reform to address issues of negative culture and misconduct previously identified in the IECR.
• Work is underway to address the recommendations.

Sixth External Monitor Report (November 2025)

• Issued November 5, 2025 (published November 20, 2025), the report provides an external, independent assessment of the progress made by DND and the CAF in implementing the recommendations made by former Supreme Court Justice Louise Arbour in the IECR.
• In this sixth and final report, External Monitor Madame Jocelyne Therrien highlighted the genuine effort made by CAF leadership and achievements expected to have an enduring impact, including the repeal of Duty to Report regulations, the introduction of a probationary period for recruits, consideration of unprofessional conduct in promotion and selection processes, and increased supports for affected individuals.
• Madame Therrien also identified structural matters that could impede progress moving forward, such as the need for greater expertise to develop and integrate revisions throughout CAF policy documents, a lack of or dispersal of data across numerous databases, and the complexity of addressing misconduct through overlapping systems of summary hearings and administrative reviews.

Grievance and Complaints System

• The CAF has initiated a review of its grievance and complaints systems with the goal of implementing a complete end-to-end transformation focused on the member’s experience and aiming at reducing the time to decision.
• A new digital grievance submission form was introduced on February 5, 2024, for all CAF members, marking a key step in the modernization of complaints and grievance processes.
• In early September 2025, the CAF published a digital version of the Notice of Intent to Grieve form, a form which makes it easier and faster for CAF members to raise concerns to the Chain of Command and seek resolutions at the earliest opportunity. This introduced another step in the modernization of the grievance process and allows members to digitally submit the form from anywhere, streamlining the process, reduce processing times and providing better access for members.

Extremism and hateful conduct

• Bill C-9, the Combatting Hate Act, was introduced in the House of Commons on September 19, 2025, and seeks to better protect access to places of worship, as well as schools, community centres and other specified places, and to more clearly address and denounce hate-motivated crime.
• The CAF defines hateful conduct in Defence Administrative Orders and Objectives, Conduct and Performance Deficiencies (DAOD 5019-0) as an act or conduct, including the display or communication of words, symbols, or images, by a CAF member that they knew or ought reasonably to have known would constitute, encourage, justify, or promote violence or hatred against a person or persons of an identifiable group, based on prohibited grounds of discrimination drawn from the Canadian Human Rights Act.
• If a military member is found to have engaged in hateful conduct, consequences may include training, monitoring, removed access to materials, investigation and administrative or disciplinary actions.
• The Hateful Conduct Spectrum, which is available to all Defence Team members, identifies improper behaviours like harassment, inappropriate social media use, and affiliations with hate groups, as well as criminal acts like hate crimes, violent extremism, and terrorism.
• It also offers Defence Team members guidance and examples of behaviours on the opposite end of the spectrum, like allyship, anti-racism, and inclusive language, that can help to build a safer and more inclusive workplace.
• The CAF’s recruitment and screening processes have been modernized and expanded to assess both eligibility and suitability for service, with specialized recruitment staff trained to recognize extremist symbols, affiliations, and indicators of radicalization.

Victim Rights – Legislative Context

• Bill C-16, the Protecting Victims Act, was introduced in the House of Commons on December 9, 2025. The Bill proposes amendments to several federal statutes, including the National Defence Act, to strengthen victim rights within the military justice system.
• Proposed amendments include expanded identity-protection measures, requirements for military justice authorities to proactively provide certain information to victims, and updates intended to further align military justice procedures with Criminal Code standards.

Sexual Misconduct Support and Resource Centre (SMSRC)

• The SMSRC provides support services to adults (aged 16 years and older) in the following groups:
  • currently serving members of the CAF;
  • former members of the CAF;
  • DND public service employees;
  • former DND public service employees;
  • Members of the Canadian Coast Guard;
  • Cadets;
  • Junior Canadian Rangers;
  • families of the above; and
  • Defence community members and caregivers who support those affected.

The SMSRC provides expert advice, guidance and recommendations to DND/CAF on all matters related to sexual misconduct. It may engage with DND executives and management and the Chief of the Defence Staff and other CAF commanders to ensure that its advice and recommendations are understood.

Independent Legal Assistance (ILA) Program

• The ILA Program provides no-cost, independent legal assistance to those impacted by sexual misconduct in the DND/CAF context.
• Services expanded in May 2025 to include direct legal services which include the provision of legal information, advice and representation by in-house independent legal counsel in certain areas, while reimbursements remain available.
• Program design is survivor-centred, trauma-informed, and informed by key external reviews and survivor consultation.
• SMSRC independent legal assistance remains available regardless of whether a matter proceeds through the civilian or military justice system.

Peer Support Program

• The Peer Support Program is a joint initiative between the SMSRC and Veterans Affairs Canada (VAC) offering free, bilingual, trauma-informed peer support to those affected by sexual misconduct and military sexual trauma (MST) during their service and/or in their workplace who are 18 years and older.
• The program is now permanently funded following a successful pilot phase and continues to expand access for diverse populations, including 2SLGBTQI+ and men’s groups.

Community Support for Sexual Misconduct Survivors Grant Program

• The Community Support for Sexual Misconduct Survivors Grant Program funds community-based organizations across Canada that provide trauma-informed supports to individuals, families, and supporters within the wider Defence community affected by sexual misconduct.
• Since its creation in 2022, the program has expanded access to services, filled critical gaps and strengthened collaboration with civilian support networks with its funded 64 projects reaching more than 4,000 Defence community members across Canada.
• Funding supports projects designed to remove barriers and meet the needs of women, men, gender-diverse people, 2SLGBTQI+ communities, Indigenous Peoples, racialized groups, persons with disabilities, and those in remote or official-language-minority communities.

Military Liaison Team to the SMSRC

• The Military Liaison Team (MLT) is a resource provided through the SMSRC to strengthen the connection between the SMSRC and the military system.
• The team helps facilitate communication between affected members and chains of command, and they support chains of command to help navigate challenging and sensitive situations they are dealing with at the unit level. They also provide training to SMSRC staff to ensure they understand CAF culture and the lived realities of CAF members.

Other SMSRC Programs and Services

• The SMSRC offers a 24/7 Support Line. The toll-free support line is 1-844-750-1648.
• The Response and Support Coordination Program, launched in 2019, offers ongoing support, advocacy, and personalized case management.
• The Restorative Engagement Program on Sexual Misconduct provides supportive and facilitated restorative opportunities for Sexual Misconduct Class Action Members to be heard and acknowledged, and for Defence Representatives to learn, understand, plan, act and lead as catalysts for change supporting the Institution to end sexual misconduct. The Restorative Engagement Program is successfully supporting all interested class members through trauma-informed, voluntary, and confidential participation and is preparing for its close-out phase by March 31, 2026.
• The SMSRC is leading the design and delivery of Restorative Engagement on Systemic Racism as part of the CAF Systemic Racism Class Action Settlement. The SMSRC is expanding its support services to persons affected by racism and is committed to consulting with clients to ensure services meet their needs.

Supplementary Estimates (C)

• Operations in the Middle East (Budget 2025): Total of $36.9 million to support the continuation of Operations ARTEMIS and IMPACT until the new Operation AMARNA can be fully implemented to strengthen peace and security in the Middle East. Canada maintaining its presence in the Middle East will be strategically important going forward as events continually evolve in the region.
• Northern Operations: Total of $66.8 million to enable the continuation and expansion of activities and exercises in Canada’s Arctic region. Funding will secure and demonstrate sovereignty of Canada’s Arctic regions and support three CAF operations in the north: Operations NANOOK, LIMPID, and LATITUDE.

Note: Some numbers may include Employee Benefit Plan (EBP) costs and therefore do not equal the numbers in the Page Proofs, where EBP, both civilian and military are included separately as a total line item under Listing of Statutory Authorities (Supplementary Estimates (C), 2025-26)

Budget 2025

• Budget 2025 proposes to provide $300.1 million over three years on a cash basis, starting in 2025-26, to the Department of National Defence and the Communications Security Establishment to support Operation AMARNA.
• This will be partly offset by $155.8 million over three years of existing resources.
• Budget 2025 proposes to provide $2.7 billion over three years on a cash basis, starting in 2026-27, to the Department of National Defence in support of the renewal of Operation REASSURANCE.

Operation REASSURANCE

• Under Operation REASSURANCE, the Canadian Armed Forces (CAF) has deployed:
  • A Land Task Force, including contributions to and leadership for the North Atlantic Treaty Organization (NATO) Multinational Brigade Latvia;
  • A Maritime Task Force, which contributes ships to the Standing NATO Maritime Groups;
  • An Air Task Force, providing logistical support out of Prestwick, United Kingdom;
  • A Tactical Aviation Detachment in Latvia composed of episodically deployed Chinook and persistently deployed Griffon helicopters, providing aviation support to NATO forces in the Baltics; and
  • A Cyber Task Force, conducting Joint Threat Hunt operations alongside the Cyber Incident Response Institution of the Republic of Latvia (CERT.LV). This initiative aims to bolster the defence of Latvian critical infrastructure against cyber threats.
• Canada has completed the full implementation of persistently deployed Brigade capabilities to Latvia. The Brigade now includes up to 2,200 Canadian Armed Forces members as part of NATO’s Forward Land Forces and supporting elements in Latvia.
• In August 2025, Canada extended Operation REASSURANCE for another three years until March 2029.

Middle East

• The Canadian Armed Forces (CAF) remains involved in legacy United Nations, NATO, and Multinational Forces and Observers (MFO) contributions in the area (Operations JADE, AMARNA, PROTEUS, FOUNDATION, and CALUMET) and other operations depending on necessity (Operations GLOBE and PRESENCE).
• The approximate number of CAF personnel posted to Middle East operations as of January 6, 2026, can be found in the table below.

Northern Operations

• CAF presence and responsiveness in the Arctic is maintained through regular national, bilateral, and multilateral exercises and operations. For example:
  • Operation LATITUDE focuses on increasing domain awareness in the Western Arctic and its approaches, in addition to enhancing interoperability with the United States military in the context of continental defence, personnel exchanges, integrated drills, and tactical coordination.
  • Operation NANOOK is a near persistent all-domain CAF operation that aims to detect, deter, and defend against threats in the Arctic, and augment CAF’s permanent Arctic presence.
  • Operation LIMPID is a persistent surveillance and presence operation within the Canadian area of responsibility that enhances CAF domain awareness.
• On March 18, 2025, Prime Minister Carney announced $420 million in new funding to boost the presence of the CAF in the North and Inuit Nunangat.
  • This expansion anticipates including more CAF personnel and the potential for increased inclusion of forces from Allied nations with an Arctic interest.
  • New activities and increased resources aim to support a near year-round military operation through Operation NANOOK and other exercises and training to assert Canada’s presence and sovereignty, as well as refine information-sharing processes.

Multinational Brigade Latvia

• Established NATO in July 2024, Multinational Brigade Latvia brings together 12 contributing nations under a unified command structure.
• Today, the Brigade, which works in close cooperation with the Latvian National Armed Forces, includes personnel from: Albania, Canada, Czechia, Denmark, Italy, Montenegro, North Macedonia, Poland, Slovakia, Slovenia, Spain, and Sweden.
• As the Framework Nation, Canada is responsible for coordinating with Latvia and the contributing nations to help set the structure, pace, training and combat effectiveness of the Brigade.
• Canada is one of eight Framework Nations leading NATO’s Forward Land Forces to protect NATO’s eastern flank.

Exercise RESOLUTE WARRIOR

• The second annual exercise was conducted across Central and Northern Latvia from November 1 to 10, 2025, and reinforced the Alliance’s ability to defend its territory and deter aggression through its enhanced presence and coordinated training.
• This large-scale field exercise continues to provide an opportunity for the Brigade to train its operational capabilities and validate force readiness.

Air Task Force – Prestwick, United Kingdom

• Since March 2022, the CAF has provided tactical airlift aircraft and support personnel out of Prestwick, United Kingdom to move vital, time-sensitive military aid donations from Allies and partners in Europe.
• As of December 2025, the Air Task Force delivered approximately 30 million pounds of military aid from Canada, NATO Allies, and partners in support of Ukraine.

Tactical Aviation Detachment in Latvia

• Since August 2024, the CAF has provided aviation support to NATO Multinational Brigade Latvia with an Air Detachment of four CH-146 Griffon helicopters.
• In July 2025, the CAF stood up a Tactical Aviation Battalion in Latvia, which consisted of two CH-147 Chinook heavy-lift, multi-mission helicopters, in addition to the four CH-146 Griffons. The Chinooks provided increased troop transport and cargo delivery capabilities. The Battalion headquarters and the Chinooks returned to Canada in mid-September but remain at elevated readiness, earmarked for deployment to Latvia should the situation require it.

Maritime Task Force

• Since 2014, the CAF has deployed a warship on a persistent, rotational basis for exercises and operational tasks in the NATO Maritime Command’s areas of responsibility.
• His Majesty’s Canadian Ships (HMCS) Edmonton and Yellowknife deployed from July until early October 2025 to Standing NATO Mine Countermeasures Group 1, identifying and disposing of sea mines in European waters while also providing NATO with a maritime patrol capability.
• HMCS St. John’s was deployed with Standing NATO Maritime Group Two (SNMG2) until November 2025 in the Mediterranean Joint Operations Area, then transferred to Standing NATO Maritime Group One (SNMG1) until the end of its deployment in mid-December. From July to December 2024, HMCS Charlottetown commanded SNMG2.
• Periodically through 2025, from April through October, the CAF sent personnel to assist in the Black Sea Mine Countermeasure activity based out of Romania, identifying and disposing of sea mines that have drifted westward from Ukraine to the shores of NATO nations.

Exercise FORMIDABLE SHIELD 25

• HMCS Montréal participated in Exercise FORMIDABLE SHIELD 25 from May 5-23, 2025, which focused on improving NATO’s collective ability to defend the Alliance’s warships in the face of any future missile and air defence scenarios.

Balancing Readiness in Latvia and Pre-Deployment Training in Canada

• The CAF has revamped its approach for the generation and management of readiness, reinforcing it as a central business process in Defence.
• Training and exercises are key to building our readiness for specific missions and to operate as a joint force alongside our Allies and partners. International exercises act as important deterrence instruments, demonstrating capabilities, cooperation, and resolve.
• Given the strategic priority of the Latvia deployment, the Canadian Army concentrates most of its available vehicle replacement parts and consumables on Multinational Brigade Latvia. Deployed needs must be balanced against training and force generation needs in Canada, which periodically leads to shortages in theatre.

Spike Long Range 2 Missile Malfunction

• In December 2023, National Defence finalized the procurement of Portable Anti-Armour Missile Systems from Rafael Advanced Defence Systems.
• In the interest of obtaining the shortest timeline from Request for Proposal to delivery to Latvia, no live-fire tests or demonstrations were planned or performed during the selection process for the Portable Anti-X Missile System’s Urgent Operational Requirement.
• During Initial Cadre Training in mid-July 2024, issues with the functionality of the missiles and launchers were identified by project staff.
• Following consultation with Rafael Advanced Defence Systems, additional trials were conducted in March 2025. The rescheduled demonstration range proved successful, the functionality issue was resolved, and the acquisition is moving forward.
• Training for operators and technicians took place in early September 2025, following the delivery of the missiles to Latvia.

New Capabilities

• Switchblade Loitering Munitions System
  • In February 2025, Canada announced that it was acquiring the Switchblade Loitering Munitions System as part of Operation REASSURANCE.
  • It will reliably locate, track, and neutralize adversary targets beyond visual line of sight to a range of 40km.
• Counter Uncrewed Aircraft System (CUAS)
  • The CUAS Project will acquire a new system to detect, track, identify, and defeat NATO Class 1 Unmanned Aerial Systems as well as Loitering Munitions for forces deployed on Operation REASSURANCE.
  • CUAS will include a dismounted and Fixed Site Systems (Phase 1) as well as an integrated CUAS vehicle (Phase 2).
    • Phase 1 delivery began and was completed in April 2025, and training was completed by the end of May 2025.
    • The Government of Canada has awarded the contract to CACI International, Inc. for the Integrated CUAS Vehicle (ICV) as part of Phase 2 of the project.
• Air Defence Capabilities
  • This project will provide the CAF with the capability to defeat rotary and fixed wing aircraft as well as some Unmanned Aerial Systems in support of Operation REASSURANCE.
  • This project will procure 16 launchers, 286 missiles, and 16 vehicles along with the associated logistics support.
  • Most of the training is complete and deployment to Latvia has already begun.
• Light Tactical Vehicles (LTVs)
  • In July 2024, the Minister of National Defence announced an investment by Canada of $35.8 million to deliver 90 LTVs to Canadian Army personnel deployed in Latvia, supporting Operation REASSURANCE.
  • Delivery of 28 LTVs to Latvia was completed in fall 2024 as part of the first phase of the Light Forces Enhancement (LFE) Project. An additional 72 vehicles are expected to be delivered winter 2026 and will be shipped to Latvia in spring 2026.

Operation UNIFIER

• Operation UNIFIER is the military training, and capacity building mission of the Canadian Armed Forces (CAF) in Ukraine. Launched in 2015, at the request of the Ukrainian government following the illegal annexation of Crimea and has evolved over time to meet Ukraine’s evolving needs, particularly following Russia’ illegal and unprovoked full-scale invasion in 2022.

Capacity Building

• Operation UNIFIER also encompasses support for Ukraine’s various reform objectives – including capacity building and strategic advice to strengthen defence institutions – to improve the governance and accountability of the Ministry of Defence of Ukraine (MoD), the Armed Forces of Ukraine (AFU), and constituent defence forces.
• Since 2025, the Military Training Cooperation Program (MTCP) has managed an annual funding envelope of $18 million in contributions for Defence Institution Building and Defence Capacity Building initiatives in Ukraine.

Cyber Defence Support

• Since the beginning of the conflict, at the request of the Ukrainian MoD, the CAF and the Communications Security Establishment have been bolstering Ukraine’s cyber defence capabilities.
• This support includes the provision of cyber defence expertise, cyber threat intelligence, training, software tools, IT hardware, and engineering solutions.

Bilateral Agreement on Security Cooperation with Ukraine

• On February 24, 2024, Canada and Ukraine signed a 10-year Agreement on Security Cooperation.
• This strategic security partnership formalizes Canada’s long-term support to Ukraine and sets out key areas of current and future cooperation and support. The Agreement serves to match Canadian capabilities with Ukrainian needs and focuses on Canada’s own strengths and areas of interest, including in demining; countering disinformation; and Women, Peace and Security, in addition to military assistance.
• During his August 2025 visit to Ukraine, Prime Minister Carney signed the Action Plan to implement the Agreement and welcomed the signing of a Letter of Intent between the Department of National Defence and Ukrainian MoD to co-produce defence materials in both countries.

Northern Engagement and Operational Support Hubs (NOSH)

• On March 6, 2025, the Minister of National Defence, jointly with the Premier of Nunavut, the Mayor of Iqaluit and Nunavut Inuit leaders, announced that Inuvik, Iqaluit, and Yellowknife have been selected as locations for the Northern Operational Support Hubs (NOSH) program.
• The NOSH program will form a dispersed network of logistical stations comprised of several principal Hubs and secondary Northern Operational Support Nodes connected through multiple transportation spokes.
• These hubs and nodes will extend the operational reach of the Canadian Armed Forces (CAF), reduce logistical constraints, and enhance support for operations in the North and Inuit Nunangat.
• National Defence is working with territorial governments and Northern Indigenous partners to identify additional hub locations, including opportunities for multi-use investments that benefit both the CAF and surrounding communities.

National Defence’s Indigenous Reconciliation Program (IRP)

• Through Budget 2022, National Defence received $6 million over four years, beginning in 2023-24, to establish the IRP as a formal grants and contribution program.
• The program is aligned with the United Nations Declaration on the Rights of Indigenous Peoples and supports early, respectful collaboration with Indigenous communities. 
• In fiscal year 2024-25, the IRP funded 25 First Nations, Inuit, and Métis initiatives.
• The next call for applications will open on April 1, 2026.

Canadian Coast Guard (CCG) – Indigenous Relations Program

• Within the CCG’s operational environment, the Indigenous Relations Program provides strategic, operations-informed advice on First Nations, Métis, and Inuit rights and interests.
• The program ensures CCG adherence to historic and modern treaties, and supports the upholding of Crown obligations, including the Duty to Consult.

Defence Industrial Strategy (DIS)

• Indigenous engagement will be central to the Government’s approach of building necessary northern defence-related infrastructure, ensuring that investments respect rights, advance reconciliation, and deliver tangible, lasting benefits to communities, including through enhanced transportation, communications, energy, and business opportunities.
• The Government will promote Indigenous participation in supply chains, infrastructure development, and procurement, supporting Indigenous-owned firms through direct contracting, public-private partnerships, and regional investment initiatives.
• The DIS will also prioritize the well-being and economic development of Indigenous Peoples, aiming to strengthen communities and ensure that they play a central role in rebuilding Canada’s defence industrial base.

Indigenous Representation in the Canadian Armed Forces (CAF)

• As of December 3, 2025, 2.8% of the Regular Force and Primary Reserve self-identified as Indigenous persons; with a target of reaching 3.5% by 2026.
• As of December 31, 2025, 26.9% of Canadian Rangers self-identify as First Nations, Inuit and Métis peoples.
• National Defence implements a broad range of proactive and targeted recruitment programs aimed at increasing the representation of Indigenous Peoples in the CAF. These programs and initiatives include:
  • The CAF Indigenous Experience Program;
  • The Indigenous Leadership Opportunity Year at the Royal Military College; and
  • Primary Reserve Indigenous Summer Programs.
• These CAF Indigenous Summer Programs have delivered strong results and provide valuable pathways for Indigenous individuals to explore or begin military careers. The Indigenous Summer Programs recorded an approximate 81% graduation rate from 2022 to 2025.

Engagements

• The Inuit-Crown Partnership Committee Working Group on Sovereignty, Defence, and Security continues to advance joint defence priorities, including the co-developed workplan focusing on multi-purpose infrastructure and procurement in Inuit Nunangat.
• The Arctic Foreign Policy supports regular information sharing with Indigenous partners on international security developments and evolving threat environments.
• In 2024, the Assembly of Defence Team Indigenous Advisors was created to support reconciliation efforts within Defence and meets annually.
• Regional committees are underway within National Defence to support Indigenous engagement efforts and ensure region-specific concerns are incorporated into planning.
• The Royal Canadian Navy (RCN) is developing an Indigenous Relations Strategic Framework for policy guidance to advance reconciliation with Indigenous Peoples during its operations and activities.
• In the Arctic, the Canadian Coast Guard (CCG) is supporting capacity building across Inuit Nunangat through $10 million in Inuit Marine Engagement Capacity funding, co‑developing governance with ITK and Inuit Treaty Organizations and participating in key Inuit–Crown Partnership Committee working groups.
• In the central region, the CCG is implementing 24 Contribution Agreements with Indigenous partners to support training and capacity building for search and rescue (SAR) and environmental response capacity and enabling marine safety and security along the Canada-United States border through relationships with Indigenous communities.

National Defence Engagement in the Atlantic and Eastern Region

• The RCN maintains relationships with 13 Indigenous communities and the Kwilmu’kw Maw-klusuaqn (KMKNO), representing the Mi’kmaq of Nova Scotia.
• Discussions focus on supporting military operations, sharing infrastructure project details, building Indigenous contracting capacity, incorporating Indigenous knowledge to protect marine life, and participating in cultural ceremonies at Defence establishments.
• Since 2022, the Royal Canadian Air Force (RCAF) at 5 Wing Goose Bay have been consulting with Indigenous partners regarding the potential resumption of Low-level Flying Training. Further engagement through a Preliminary Flying Proposal in March 2026, which aims to strengthen collaboration and improve communication between the 5 Wing operations and Indigenous communities whose traditional territories overlap with the training area. This approach is intended to address challenges identified during earlier consultations.
• The CCG is strengthening marine emergency readiness by advancing 12 multiyear funding agreements that support Indigenous SAR training, exercises, and preparedness, while also supporting 9 Indigenous‑operated boats for SAR and environmental response through the Indigenous Community Boat Volunteer Program.

National Defence Engagement in the Pacific and Western Region

• The RCN has strong relationships with Esquimalt, Songhees, Sc’ianew, Snaw-naw-as, and T’souke Nations and is developing new partnerships with an additional 18 Nations.
• The Te’mexw Treaty Association negotiations – representing Songhees, Sc’ianew, Snaw-naw-as. Malahat, and T’souke Nations – are nearing completion. The treaties will intersect with several significant National Defence real property holdings on southern Vancouver Island. While operational authorities remain intact, the treaty framework will reshape how National Defence engages with Nations on land use, access, environmental responsibilities, and future planning. Canadian Forces Base Esquimalt is developing a number of relationship agreements with several of these Nations to better define how National Defence activities will be conducted on their treaty lands going forward.
• National Defence has established communication protocols with Tl’esqox and T’Souke Nations and is pursuing similar agreements with two other Nations for central British Columbia training area lands for the Canadian Army.
• The RCAF at 19 Wing Comox has been working with K’omoks First Nation to bolster Indigenous awareness among RCAF staff and to cultivate a positive working relationship with K’omoks First Nation. It has also been working with local First Nations to raise awareness about future procurement opportunities related to 19 Wing.
• The RCAF is actively engaged with K’omoks Nation regarding the lease back of Goose Spit lands at Canadian Forces Base Comox, as outlined in the Nation’s initialed treaty. This collaboration focuses on a wide range of shared priorities, including mutual benefits related to Defence property, support for military activities, communication protocols, early infrastructure consultations, capacity building, mitigation of impacts on marine mammals (including endangered Southern Resident Killer Whales) and fish, Indigenous access for traditional practices, as well as maritime security and emergency response.
• The CCG continues to advance long‑term, collaborative relationships with Indigenous partners. This includes building a generational partnership with the Musqueam Indian Band through the 25 year Canada–Musqueam Stewardship and Marine Management Agreement, supporting the Reconciliation Framework Agreement for Bioregional Oceans Management and Protection with 14 North Coast Nations, and establishing the first Indigenous‑led CCG Auxiliary to enhance marine emergency response in remote coastal areas.

• CSE’s mandate and powers are set out in the Communications Security Establishment Act the CSE Act).
• This legislation came into force in August 2019.
• CSE’s five-part mandate includes:
  • foreign signals intelligence
  • cyber security and information assurance
  • active cyber operations
  • defensive cyber operations
  • technical and operational assistance to federal partners

Legal Framework and Authorities

• CSE is Canada’s foreign signals intelligence agency and the technical authority for cyber security and information assurance.
• The CSE Act authorizes CSE to carry out two types of foreign cyber operations: active and defensive.
• Defensive cyber operations allow CSE to take online action to defend Canada against foreign cyber threats, such as disabling a foreign server targeting Canadian networks.
• These operations can also protect systems designated by the Minister of National Defence, including energy grids, telecommunications, healthcare, banking, and elections infrastructure.
• Active cyber operations allow CSE to disrupt foreign threats such as terrorist groups, cyber criminals, hostile intelligence agencies, and state-sponsored hackers.
• Cyber operations must relate to international affairs, defence, or security and are conducted in accordance with Canadian and international law.
• Cyber operations require Ministerial Authorization under the CSE Act, with consultation or consent from the Minister of Foreign Affairs depending on the type of operation (Active Cyber Operations require consent. Defensive Cyber Operations require consultation).
• CSE’s activities must not target Canadians or any person in Canada.
• Canada’s cyber operations are governed by a strong framework of independent review, internal oversight, and operational compliance.
• Operations are subject to checks and balances including rules of engagement, targeting protocols, and collateral damage assessments.

Operational Capabilities and Cyber Defence

• CSE’s cyber and technical expertise helps identify, prepare for, and defend against severe and persistent cyber threats.
• The Canadian Centre for Cyber Security (Cyber Centre) consolidates key cyber security units under one roof, providing expert advice and operational support.
• The Cyber Centre defends Government of Canada systems using tools like sensors that detect malicious activity across networks and cloud environments.
• In 2024-25, the Cyber Centre responded to 1,155 cyber security incidents reported by federal institutions.
• The Cyber Centre supports secure communications, conducts supply chain integrity assessments, and monitors threats to high-priority government projects.
• CSE and the Canadian Armed Forces (CAF) collaborate on specialized cyber capabilities and joint operations.
• Joint CSE/CAF cyber operations are conducted under the CSE Act, the Crown Prerogative, and the National Defence Act.

Strategic Partnerships and Collaboration

• The Cyber Centre works with industry partners to share threat information and prevent cyber incidents.
• It establishes strategic partnerships with critical infrastructure operators to share intelligence and integrate cyber defence technologies.
• In 2024-25, the Cyber Centre collaborated with mobile network operators and global experts to enhance 5G network resilience.
• The Cyber Centre participated in over 200 speaking engagements across sectors such as energy, health, finance, and telecommunications.
• It also conducted 13 tabletop exercises and 7 technical briefings on topics like AI, quantum threats, and cybercrime.
• The Cyber Centre conducted 1,371 supply chain risk assessments, evaluating technical vulnerabilities and vendor practices.
• It increasingly collaborates with provinces, territories, and private sector partners on supply chain risks.

National Cyber Security Strategy (NCSS)

• In February 2025, the Government of Canada released its new National Cyber Security Strategy (NCSS).
• The NCSS outlines a long-term plan to partner with provinces, territories, law enforcement, industry, Indigenous communities, and academia.
• The strategy is guided by two principles: whole-of-society engagement and agile leadership.
• It focuses on three pillars: protecting Canadians and businesses, making Canada a global cyber leader, and disrupting cyber threat actors.
• The CCDC helps critical infrastructure, businesses and Canadians benefit from shared intelligence and best practices, improving Canada’s ability to prevent and respond to cyber attacks and creating a safer digital landscape for Canadians.
• The Cyber Centre, as part of CSE, provides operational leadership within CCDC. It drives engagement with critical infrastructure operators and industry partners, shares actionable threat intelligence, and promotes best practices to strengthen Canada’s cyber resilience.
• CSE received funding of $4.1M in 2025-26 and $6.9M for 2026-27 for the implementation of CCDC.

Public Engagement and Support

• The Cyber Centre provides Canadians and businesses with a trusted source for cyber security advice and guidance.
• It supports federal institutions in responding to incidents and enhancing cyber resilience.
• In 2024-25, the Cyber Centre worked with 150 federal organizations, delivering briefings to departments at higher risk of cyber threats.
• It provided 38 biweekly threat briefings to over 600 IT professionals in critical infrastructure sectors.
• The Cyber Centre urges Canadian companies impacted by cyber threats to contact them via toll-free number (1-833-CYBER-88), email (contact@cyber.gc.ca), or the Canadian Centre for Cyber Security website.

• Canada is not immune to threats to its digital infrastructure. As new technologies emerge and our adversaries develop new techniques over time, investments are needed to both leverage these new capabilities and secure our digital infrastructure.
• The new Defence Investments aim to modernize Canada’s Top Secret systems to support national defence, security, and international affairs.
• This covers foundational investments in Canada’s Top Secret ecosystem, including Canada’s Top Secret Network, artificial intelligence and cryptography.
• These investments strengthen Canada’s sovereignty and security, ensure the protection of sensitive information, and position Canada as a capable and trusted partner in global defence and intelligence collaboration.

Threat environment

• Canada’s digital environment is increasingly vulnerable to adversaries and technological advances such as quantum computing.
• CSE assesses that as early as the 2030s, a powerful enough quantum computer will exist that will break the cryptography used today to secure communications worldwide.
• The Government of Canada relies on cryptography to protect sensitive information, communications, and information technology systems from cyber threats and unauthorized access.
• To address this reality, Canada, in line with its Five Eyes allies, continues to modernize and harden its operations and services for its Top-Secret environment.
• The recent defence investments will enable the delivery of resilient and sovereign Canadian solutions to enhance security, interoperability and integrity of classified operations and services.

2025-26 CSE Spending to date towards NATO target

• As of 13 March 2026, CSE has spent $1.39B or 84% towards the 2% NATO target of $1.65B, which are CSE’s total authorities.
• CSE has spent $341.9M or 92% of the Supplementary Estimates A funding of $370.1M.
• CSE’s year-to-date spending level of 84% is consistent with historical trends. Due to the complex requirements and long lead times associated with specialized Digital and IT procurement, 60% of CSE’s operating expenditures typically occur in Q4.
• CSE has exercised on-ramps and is now forecasting to fully utilize allocated budgets this fiscal year.

Supplementary Estimates C

• Supplementary Estimates C (Supps C) 2025-26 were tabled in the House of Commons on 12 February 2026.
• National Defence requested $1 billion, which includes $560.9 million for projects in the Capital Investment Fund, $313.7 million for the Strategic Tanker Transport Capability Aircraft project and $127.3 million for the expansion of the Canadian Coast Guard’s security role.
• Treasury Board Secretariat requested $1 billion to accelerate expenditures relating to defence and national security.
• CSE’s 2025-26 Supps C represent a net funding decrease totaling ($448.5K) resulting from two interdepartmental transfers.
  • Transfer of ($23.5K) to the Global Affairs Canada (GAC) for Foreign Service Directives (FSDs); and
  • Transfer of ($425K) to the Treasury Board Secretariat (TBS) to support the Comptrollership Program.
• A listing of 'Frozen Allotments in Voted Authorities’ is also included in the final SEC page proofs and identifies a CSE transfer totaling ($22.5K) for the Communications Community Office.

Supplementary Estimates B

• Supplementary Estimates B (Supps B) 2025-26 were tabled in the House of Commons on 7 November 2025.
• In these Supps B, CSE requested a net funding increase of $70.0 million. Details below:
• Funding of $9.5M for CSMI Phase 2B Project to support the development and implementation of cryptographic capabilities as part of the CCMP Project.
  • CSMI Phase 2B replaces the Government of Canada’s (GC) aging core cryptographic infrastructure and completes the development and implementation of new cryptographic key management systems that are required to protect the GC and Canadian Armed Forces communications and information.
• Reprofiled funding of $22.5M from 2023-24 and 2024-25 for the Canadian Cryptographic Modernization Program (CCMP) Project to re-align lapsed funding with new project timelines.
• This funding will be used to support the CCMP to modernize the Government of Canada’s aging cryptographic equipment and infrastructure in order to safeguard classified information and maintain Canada’s ability to establish secure communications both nationally and internationally.
  • A net funding increase of $38.0M resulting from six interdepartmental transfers:
    1. Transfer of $30.0M from the Department of National Defence (DND) relating to Information Management and Information Technology (IM/IT) support services.
       • $17.2M for Top Secret Network Convergence; and
       • $12.8M for IM/IT support provided to the Canadian Armed Forces Cyber Command.
    2. Transfer of $6.5M from DND relating to the CSMI Phase 2B Project.
    3. Transfer of $2.9M from Shared Services Canada to support the Secure Communications for National Leadership program (SCNL).
       • This program provides secure mobile phone capabilities for Ministers and senior officials. The SCNL is a joint PCO, CSE and SSC initiative that enables a modern, mobile and secure means of communications for Ministers and senior officials classified up to SECRET.
    4. Transfer of $806K to the Global Affairs Canada for Foreign Service Directives.
       • GAC is a common service provider for Government of Canada operations abroad and receives compensation for the increased cost of operations resulting from staff being posted at Canadian missions and liaison offices by other government departments.
    5. Transfer of $493K to Royal Canadian Mounted Police for Law Enforcement Record Checks.
    6. Transfer of $150K to Employment and Social Development Canada to support Policy Horizons Canada.
       • Policy Horizons Canada is the Government of Canada’s centre of excellence in foresight. Policy Horizon Canada’s goal is to empower the Government of Canada with a future-oriented mindset and outlook to strengthen decision making.

Canadian Top Secret Network (CTSN)

• The Canadian S&I community comprises several distinct but interconnected communities: intelligence, law enforcement, defence, security, and foreign affairs.
• The efficient and effective functioning of this community relies on the right information getting to the right people securely and at the right time in order to take timely and decisive action.
• The Canadian Top Secret Network (CTSN) allows information to be shared at the Top Secret level across the Canadian S&I community. CSE runs Canada’s Top Secret Network (CTSN).
• CTSN also enables clients across the Government of Canada and the Five Eyes to access CSE’s intelligence reporting.