House Standing Committee on Public Accounts (PACP): 2025 Report of the Auditor General of Canada Housing Canadian Armed Forces Members - April 13, 2026

• John Williamson
• Jean Yip
• Sébastien Lemire
• Ned Kuruc
• Gérard Deltell
• Kristina Tesser Derksen
• Ron McKinnon
• Tom Osborne
• Stephanie Kusie

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 occupy National Defence Residential Housing Units.

2025 Office of the Auditor General Report on Canadian Armed Forces Housing

• The audit made eight recommendations and found that:
  • National Defence did not manage the housing needs of the CAF to meet operational requirements; quarters are in poor physical condition, and many don’t offer enough space or 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 regarding Canadian Armed Forces Housing: Gaps to Fill: Housing and Other Needed Supports for Canadian Armed Forces Members and their Families

• The report found that CAF members and their families face serious challenges due to inadequate housing, frequent relocations, and limited access to essential services, prompting 25 recommendations for federal action to improve housing, financial support, and family well-being.

2025 Office of the Auditor General Report on Canadian Armed Forces Housing

• This audit focused on whether National Defence managed living accommodations to meet operational requirements and respond to the needs of Canadian Armed Forces (CAF) members.
  • Recommendations
    1. National Defence should define how quarters will be used to meet the operational need for living accommodation.
    2. National Defence should establish national management and information collection processes to ensure that standards for the allocation of quarters to CAF members are met.
    3. National Defence should ensure that it completes inspections of its quarters, and completes maintenance and repairs needed to maintain their physical condition.
    4. The Canadian Forces Housing Agency (CFHA) should ensure that it regularly reviews allocation decisions to ensure that applications have been correctly prioritized and that data used to make allocation decisions has been accurately captured. It should take corrective action as needed.
    5. The CFHA should ensure that condition assessments of Residential Housing Units are completed according to the required timelines, and the results are used to plan timely maintenance activities, renovations, and new construction.
    6. National Defence should complete its reassessment of the needs of the CAF for residential housing. It should then update its cost estimate and plan to meet any shortfall and implement it in a timely manner. It should regularly update its assessment to consider future growth of the CAF and changes in the geographical distribution of personnel.
    7. National Defence should establish and implement the living accommodation policies and procedures needed to ensure that the emergency shelter and accessibility needs of CAF members are met in a timely manner.
    8. National Defence should evaluate the impact of the living accommodations policy update on the wellbeing and retention of longer serving members of the CAF and act on the results.

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 23 September 2025, and highlights:
  • Challenges experienced in accessing suitable housing include long waitlists, deteriorating conditions of existing units and quarters, and rising rental costs.
  • Broader relocation-related challenges of CAF members and their families, especially in accessing health care, childcare, education, and employment for spouses.
• The Committee issued 25 recommendations urging the government to reverse rent increases, expand and renovate housing, improve contractor oversight, enhance relocation services, and collaborate with provinces and municipalities to support CAF families more effectively.
• A Government Response addressing these recommendations was tabled in the House on 26 January 2026.

2015 Office of the Auditor General Report on CAF Housing

• In Fall 2015, the Auditor General released a report on CAF Housing focused on whether the Defence Team managed military housing in a manner that supported housing requirements, that was consistent with government regulations and policies, and that was cost-effective.
• The audit found that National Defence’s policy aligned with government policy, but key internal requirements were not met – specifically, defining operational needs and assessing the private housing market.
• Additionally, National Defence lacked approved plans to meet current and future housing needs and faced constraints that limited effective modernization of its housing portfolio.
• In 2016, the House of Commons Standing Committee on Public Accounts examined the audit and issued three recommendations to National Defence.
• As a result, National Defence:
  • Updated its Living Accommodation Policy;
  • Completed a comprehensive assessment of the housing portfolio’s condition; and
  • Developed a long-term accommodation plan to address current and future housing needs.

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 members currently live in National Defence housing.

Shelter Charges

• For Fiscal Year 2025-26 the national average shelter charge was $1,066 per month in a housing portfolio made up of mainly of three- and four-bedroom units.
• For Fiscal Year 2026-27, the national average shelter charge is $1,133 per month.
  • This is an average increase of 5.1% or approximately $57 per month.
  • These adjustments will take effect 1 May 2026.
• Annual adjustments are made based on the Statistics Canada Consumer Price Index.
• When annual adjustments result in an increase, shelter charges are limited to a maximum of $100 per month to protect members from sudden and substantial changes.

Canadian Forces Housing Agency Construction Program

• Launched in fiscal year 2024-25, Phase 1 of the Construction Program, is delivering over 800 new units in nine locations experiencing significant housing pressures.
  • These are Gagetown, Halifax, Valcartier, Trenton, Kingston, Petawawa, Borden, Edmonton, and Esquimalt; locations with the highest number of Canadian Armed Forces (CAF) entrants, members on long-term training, and private sector market challenges.
  • Phase 1 is currently estimated at $600 million and has a target completion date of 2030.
• Announced on 24 February 2026, Phase 2 builds on the accelerated progress of the first phase:
  • Construction of primarily one and two-bedroom unit apartment buildings is planned at 25 locations, including approximately 280 units in Ottawa.
  • The five locations with the largest planned growth are Valcartier, Quebec, Petawawa, Ontario and Edmonton, Alberta, with over 1,000 new housing units each; Kingston, Ontario, with over 900 housing units, and Gagetown, new Brunswick, with over 500 housing units.
  • To enable this work, Defence Construction Canada issued an advanced procurement notice for potential projects valued at approximately $3.74 billion.
  • It is estimated that Phase 2 will be completed by 2034.
• The program aims to:
  • Support Indigenous employment, business growth and long-term economic reconciliation through mandatory procurement targets and site-specific Indigenous Benefits Plans aiming to exceed the mandatory 5% of the program’s contracting value to Indigenous businesses.
  • Advance the federal commitment to net-zero, climate-resilient and energy-efficient infrastructure.
  • Support substantial labour demand nationwide and drive procurement of Canadian materials, such as steel, lumber, concrete, and mechanical and electrical systems.
• Together, Phases 1 and 2 will deliver up to 7,500 new builds in 25 locations nationally.

Disclaimer: Data will fluctuate as studies, design, construction and other residential housing programs. In some locations, overplanning was built-in to manage delivery risk and provide flexibility as projects advance.

Military Housing Investments

• Investments under Our North, Strong and Free are enabling National Defence to construct approximately 800 residential housing units by fiscal year 2029-30 in Gagetown, Halifax, Valcartier, Trenton, Kingston, Petawawa, Borden, Edmonton, and Esquimalt.
  • Upcoming work: Further design and construction contracts are expected to be tendered and awarded in Edmonton, Petawawa, Kingston, Trenton, and Valcartier in early fiscal year 2026-27.
  • March 2026: Acquisition of a new $60 million apartment complex providing 140 additional housing units for CAF members posted to Halifax (occupancy expected fall 2026).
  • February 2026: Iron Maple Constructors Inc. awarded a $27.1 million contract to construct eight six unit apartment buildings in Halifax.
  • December 2025: Quad Pro Construction Inc. awarded a $25.6 million contract to construct eight six unit apartment buildings in Borden.
  • December 2025: Acquisition of a $19.1 million, 52 unit apartment building in Courtenay, BC to house CAF members posted to 19 Wing Comox.
  • October 2025: $5.1 million construction contract awarded to Nova Construction for two six unit apartment buildings in Valcartier.
  • October 2025: National Defence acquired a newly constructed privately developed apartment complex near Esquimalt for $23.3 million, providing 37 move in ready units.
  • June and September 2025: Republic Architecture Inc. awarded design contracts in Edmonton for two six unit apartment buildings ($200K) and five four unit row houses ($100,000).
  • April 2025: Construction of two six unit apartment buildings in Kingston awarded to DC&F Corp, with completion planned for FY 2026-27.
  • March 2025: Design phase of a Modified Design Build contract in Esquimalt awarded to Pomerleau Inc. ($2.2 million) to design 244 new units.
  • March 2025: Design phase of a Modified Design Build contract in Gagetown awarded to Pomerleau Inc. ($855,000) to design 40 units across 12 unit buildings.
  • February 2025: Design phase of a Modified Design Build contract awarded to Bird Construction Group Ltd. ($4.8 million) for 200 units across Borden, Kingston, and Petawawa.
  • Spring 2024: Construction began on six net zero ready buildings in Edmonton (36 units) under a $19 million contract with Bird Construction Group Ltd., the first residential net zero ready buildings in the federal government.

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 announced a total investment of $1.4 billion to build 1,400 homes and renovate 2,500 existing units.

Dual-Use Pathfinder Initiative

• As part of efforts to build homes on public lands, Budget 2024 announced that the government would explore the redevelopment of National Defence properties in Halifax, Toronto, and the Victoria area (i.e. Esquimalt) that could be suitable for both military and civilian uses. These are known as the “Pathfinder Sites”.
• Modern Methods of Construction: The Canadian Forces Housing Agency is collaborating with Build Canada Homes to support housing delivery by leveraging modern methods of construction.
• National Defence is exploring the benefits of modular and prefab construction. These benefits may include:
  • Higher quality construction (a controlled factory environment);
  • Faster on-site assembly than conventional construction;
  • Ability to manufacture housing all year round; and
  • Ability to deliver scale projects in markets with limited access to trades and construction expertise.

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 provided $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

• Our North, Strong and Free (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 1^st 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 $327 million to minor capital projects for existing infrastructure. In addition to buildings and facilities, this included $47 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.

Federal Contaminated Sites Action Plan

• Federal contaminated sites are land owned or leased by the federal government, or properties where the federal government has accepted responsibility for the contamination.
• Through the Federal Contaminated Sites Action Plan, National Defence is investing resources to clean up historical contamination and minimize future environmental impact from military activities by:
  • Introducing training and awareness of innovative and sustainable remediation techniques and technologies, and
  • Providing local stakeholders opportunities to recommend further preventative measures to National Defence.
• Throughout fiscal year 2026-27, National Defence will continue remediation at high priority contaminated sites, including:
  • Esquimalt Harbour Remediation Project (British Columbia);
  • Site-wide per and polyfluoroalkyl substances (PFAS) at Canadian Forces Base (CFB) Bagotville (Quebec);
  • Stony Point (Former Camp Ipperwash) (Ontario); and
  • Trichloroethylene (TCE) Contamination, CFB Valcartier (Québec).
• More broadly, remediation activities will be carried out by National Defence at 148 sites across the country.

Current State of Remediation Efforts

• National Defence has 1,973 sites reported in the Federal Contaminated Sites Inventory, 1,304 of which require no further action and are closed.
• Of the 669 open sites, 110 require additional assessment activities to confirm the presence and/or extent of contamination and 559 require additional remediation or risk management before they can be closed.
• 100 of the sites that require additional remediation or risk management are a high priority for action.
• National Defence has reduced its contaminated sites liability by at least 10% per year since fiscal year 2017-18. This progress is published in the National Defence Departmental Plan and the Departmental Results Report.
• The Defence Climate and Sustainability Strategy 2023-2027 commits to reducing contaminated sites liability by 10% per year to fiscal year 2026-27.

Per- and Polyfluoroalkyl Substances

• Per and Polyfluoroalkyl Substances (PFAS) are human‑made chemicals used for their repellent and lubricating properties and are found in some firefighting foams, as well as in textiles, cosmetics, and food packaging.
• From 1972 until the early 2010s, National Defence used firefighting foams for training in accordance with the standards and regulations in place at the time.
• Firefighter training now uses water, but firefighting foams are still required for emergencies, as they remain the safest and most effective way to extinguish fuel fires.
• When foams containing PFAS are used, National Defence follows standardized procedures to contain the foam and minimize environmental impacts as much as possible.

PFAS at Jack Garland and 22 Wing North Bay

• PFAS have been found in groundwater, surface water, soil, sediment, and fish on and around 22 Wing North Bay.
• The presence of PFAS is linked to the historic use of firefighting foams during training and operations at 22 Wing North Bay and the Jack Garland Airport.
• PFAS were detected in nearby private wells and in North Bay’s municipal water supply.
• PFAS levels in the municipal water supply meet provincial criteria, and the water remains safe to drink.
• National Defence provides alternate water sources or treatment, at no cost, to residents whose private wells exceed provincial PFAS criteria.
• National Defence continues to work closely with the City of North Bay, Ontario Ministry of the Environment, Conservation and Parks, and the North Bay Parry Sound District Health Unit.
• Through the Shared Responsibility Framework, with National Defence as the sponsoring department, the Government of Canada has provided up to $19.4 million to support PFAS remediation at the Jack Garland Airport.
• On 10 December 2025, National Defence confirmed an additional $99.6 million investment. It also entered into a contribution agreement of up to $8 million with the City to support the design of treatment upgrades and a six month pilot program to test PFAS treatment options at the North Bay Drinking Water Treatment Plant over a two year period.

PFAS at Canadian Forces Base (CFB) Bagotville

• PFAS contamination has been identified in surface water, sediment, soil, and groundwater on CFB Bagotville, linked to historical use of firefighting foams for training and operations.
• In 2023, PFAS were detected in three of five municipal supply wells in La Baie, prompting the province to recommend corrective action.
• Temporary water treatment began in early 2024 and, according to the City of Saguenay and the province, has successfully reduced PFAS levels to acceptable standards.
• The Government of Canada is providing up to $15.5 million to the City of Saguenay for a short‑term solution to address PFAS in the municipal water supply.

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• National Defence is working with the City of Saguenay to develop a contribution agreement to support a long‑term solution, with progress ongoing and an update expected in the coming months.

Unexploded Explosive Ordnance (UXO)

• UXO are military explosives that did not explode or function as intended.
• Some examples of UXO are bombs, rockets, grenades, artillery shells, flares, mortars, and hazardous residues that may remain after a partial or failed detonation.
• If touched or disturbed, UXO can cause injury or death.
• Over the years, hundreds of locations across Canada have been used for military training by members of the Canadian Armed Forces and foreign militaries to prepare for various conflicts.

Terrebonne: Divestment of St-Maurice Site and UXO Due Diligence

• The 652‑hectare St‑Maurice site in Terrebonne was used for munitions testing until 1967, with infrastructure being removed in the 1950s.
• The site includes wetlands, species at risk, and critical habitat complicating UXO clearance.
• In 2012, National Defence sold a 3.3‑hectare parcel near Highway 640 to the City of Terrebonne for the Urbanova interchange.
• Environmental assessments were provided, and the “as-is” sale required the City to retain a UXO expert for any type of excavation work.
• Despite the “as-is” sale, the Government of Canada has a legal obligation to dispose of all known UXO within Canada with National Defence assuming responsibility for the disposal of all UXO.
• UXOs were discovered in 2024 and the City sought ongoing UXO risk mitigation advice from National Defence in January 2025.
• In December 2025, the City awarded a $1.47‑million contract to a French contractor for the UXO clearance, which refers to the removal of UXO from the site and does not include disposal.
• Although the St-Maurice site has been declared surplus, further divestment will require over 15 years of UXO and environmental remediation.

Blair Rifle Range

• The former Blair Rifle Range, located in North Vancouver’s Northlands area, was used by the Canadian Armed Forces for training from the 1930s to the 1960s.
• As part of National Defence’s UXO program, surveys and clearance were conducted along trails and open areas in 2018.
• Since 2023, UXO clearance has expanded into forested areas.
• To date, approximately 30 of an updated estimated 54 hectares have been cleared.
• On 27 May 2025, National Defence UXO contractors located a full‑bodied, unexploded 2‑inch mortar illumination star.
• On 28 May 2025, a military disposal team safely moved and destroyed the item by on‑site detonation.
• To support safe community use, National Defence is continuing UXO clearance through 31 March 2026, with additional activities planned for fiscal year 2026–27.

UXO in Vernon, British Columbia

• In 1911, the City of Vernon requested that National Defence establish a military camp in the area.
• Vernon remains home to a Cadet Training Centre.
• National Defence leased surrounding lands for live munitions training until the mid‑1980s.
• Training involved live rounds, including artillery, mortars, tanks, and small arms.
• Since the 1960s, multiple clearance operations have uncovered numerous UXO at sites throughout the area.
• Following the Second World War, civilian fatalities occurred due to interactions with UXO, with the last reported incident in 1973.
• Ongoing clearance operations, public education, and guidance to landowners aim to reduce UXO risk.
• Most recently, in August 2025, Vernon Fire Rescue Services discovered UXO after the Boltres Creek wildfire burned 103 hectares of grassland.

Canadian Armed Forces Strength

• The authorized target strength of the Canadian Armed Forces (CAF) Regular Force is 71,500, and that of the Primary Reserve Force is 30,000.
  • As of 15 March 2026, the current Force Strength is approximately 67,000 Regular Force and 24,900 (Average Paid Strength) Primary Reserve Force members.
  • This is approximately 9,600 short of the authorized strength.
• In fiscal year 2025-26 (as of 15 March 2026), approximately 11,700 individuals joined the Regular Force and Primary Reserve, 17.7% of whom were women and 22.4% of whom identified as francophone.
  • Fiscal year 2024-25 intake: approximately 11,500 individuals.
  • Fiscal year 2023-24 intake: approximately 8,100 individuals.

Cost-of-Living Supports – Salary Increases

• On 8 August 2025, the Prime Minister and the Minister of National Defence announced the following updates to CAF compensation measures:
  • Pay adjustment (retroactive to 1 April 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 14 November 2025.
  • Military Service Pay (retroactive to 1 April 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.

Additional Compensation Measures

• Recruitment Allowance for Critical Occupations - Effective 1 November 2025
  • Members will receive $10,000 upon completion of basic training, $20,000 once qualified in a trade, and $20,000 upon completion of six years of service and a commitment to serve an additional three years.
• Instructors’ Allowance - Effective 1 January 2026
  • All members posted, attach-posted, or on temporary duty to a designated unit (not as a student or a candidate) will receive $300 per month. Instructors at Canadian Forces Leadership and Recruit School will receive an additional $35 per day they instruct, while instructors at other establishments will receive an additional $20 per day they instruct.
• Changes to Environmental Allowances - Effective 1 April 2026
  • The current monthly allowance, prorated for the number of years in the environment, will transition back to a daily flat rate of $100 per day, and will be received when the member is at sea or in the field.
• Domestic Operations and Arctic Allowance - Effective 1 April 2026
  • In addition to any environmental allowances being received, members will receive $45 per 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 1 April 2026
  • For Regular Force, the allowance is $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 November 1, 2025
  • A member will now receive a food allowance of $19.51 per day, a transportation allowance of $350 per month and an incidentals allowance of $200 per month.

“This is For You” Augmented Reality Experience

• In June 2025, National Defence launched the “This Is For You” Augmented Reality (AR) experience, which allows participants to:
  • Take flight as part of an aircrew delivering supplies to Canadian Forces Station Alert;
  • Participate as a soldier assisting Canadians during a natural disaster; or
  • Take action as a sailor on His Majesty’s Canadian Ship Harry DeWolf, whose crew locates 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 recruitment campaign that also includes national advertising, 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.

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.
• The first phase of the Canadian Forces Housing Agency Construction Program, launched in fiscal year 2024-25, is delivering over 800 new units in nine locations experiencing significant housing pressures. These are Gagetown, Halifax, Valcartier, Trenton, Kingston, Petawawa, Borden, Edmonton, and Esquimalt; locations with the highest number of CAF entrants, members on long-term training and private sector market challenges.
• Announced on 24 February 2026, Phase 2 builds on the accelerated progress of the first phase:
  • Construction of primarily one and two-bedroom unit apartment buildings is planned at 25 locations, including approximately 280 units in Ottawa.
  • The five locations with the largest planned growth are Valcartier, Quebec, Petawawa, Ontario and Edmonton, Alberta, with over 1,000 new housing units each; Kingston, Ontario, with over 900 housing units, and Gagetown, New Brunswick, with over 500 housing units.
• To enable this work, Defence Construction Canada issued an advanced procurement notice for potential projects valued at approximately $3.74 billion.

Auditor General Report on CAF Recruitment

• In its fall 2025 report Recruiting for Canada’s Military, the Auditor General noted:
  • The CAF did not meet its recruitment and training targets and lacked a clear understanding of the causes of applicant attrition during the recruitment process;
  • The CAF did not have sufficient basic training capacity to meet demand if recruitment targets were achieved;
  • Planning for new recruits did not fully meet demand and failed to adequately account for trained and effective members leaving the CAF;
  • Recruitment and training processes are inefficient and do not fully leverage modern tools such as electronic forms or automation; and
  • Security screening processes are affected by significant backlogs.
• 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) Funding

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

• Defence Construction Canada (DCC), as the contracting authority, acts on the Crown’s behalf to deliver construction, contract management and related services to the Department of National Defence and the Canadian Armed Forces, as mandated by the Defence Production Act, for defence construction projects exceeding $100,000.
• DCC in fiscal year 2024-25:
  • Awarded 1,023 contracts totalling $2.6 billion on behalf of National Defence. Such contracts relate to the maintenance and upgrade of current infrastructure as well as building new infrastructure.
  • Expended $1.5 billion in contract expenditures for National Defence, including the Communications Security Establishment.
  • $97.1 million in contracts with Indigenous businesses.

Defence Construction Canada

• Defence Construction Canada (DCC) is a federal agent Crown Corporation under the responsibility of the Minister of Public Services and Procurement Canada.
• DCC provides contracting, construction contract management, infrastructure and environmental services, and lifecycle support for Canada’s defence requirements.
• DCC supports National Defence through service-level arrangements at the national, regional, and local levels under a fee for service model.
• National Defence delegates financial authorities to specific DCC positions, including the authorization for payment of third-party contracts on behalf of National Defence.
• DCC is accountable to the Minister of National Defence for the exercise of this authority including the training of DCC staff to National Defence standards, and for the integrity of its internal financial controls and procedures.

Working with the Canadian Forces Housing Agency

• DCC and the Canadian Forces Housing Agency (CFHA) are working together to deliver the Construction Program for National Defence.
• In February 2026, as part of Phase 2 of the Construction Program, DCC issued an advanced procurement notice for potential projects valued at approximately $3.74 billion to support early engagement with industry.

Phase 2 Virtual Information Session (13 and 14 April 2026)

• DCC and CFHA are holding joint virtual industry information sessions on Phase 2 of the Housing Construction Plan on 13 (English) and 14 (French) April 2026.
• This session will provide an overview of the scope of the work to advance new residential housing projects at Canadian Armed Forces bases and wings across Canada, as well as the procurement and delivery approach.
• Participants will also receive insight into how industry can prepare for and engage in ongoing and upcoming procurement opportunities under the program.
• Attendance is optional but encouraged for firms interested in future housing projects under this program.

• On 26 March 2026, Prime Minister Carney announced that Canada achieved its North Atlantic Treaty Organization’s (NATO) 2% gross domestic product defence spending target.

Budget 2025

• Budget 2025 provided $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 the over $9 billion announced by the Prime Minister in June 2025.

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 at 6.6%.

Defence Spending – 2% of Gross Domestic Product Target

• In June 2025, the Prime Minister’s June 2025 announced over $9 billion investment in defence, to position Canada to meet its 2% Gross Domestic Product (GDP) target to the North Atlantic Treaty Organization (NATO).
• Budget 2025 reaffirmed our commitment to meet this target.
• The Budget included $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 25 June 2025, Canada and its NATO Allies agreed to a new Defence Investment Pledge of 5% of GDP, annually, by 2035.
• As part of this 5% pledge, Canada will invest 3.5% of GDP for core defence expenditures, which includes strengthening the foundation of National Defence through investments in our people, capabilities, infrastructure, and digital capabilities.
• The remaining 1.5% of GDP will be dedicated to investments in critical defence and security related expenditures, which will – among other things – protect our critical infrastructure, defend our networks, unleash innovation, and strengthen our defence industrial base.

Other Government Departments and Agencies’ Contributions to the NATO Investment Pledge

• On 2 September 2025, the Canadian Coast Guard (CCG) joined the National Defence portfolio resulting in the entirety of its budget being attributed to Canada’s defence expenditures on an ongoing basis whereas previously only 67% of its budget was counted.
• Eligible funding from other government departments also contributes to 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 5 February 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.
• The PBO estimates that meeting the 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.
• It 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) and the federal debt-to-GDP ratio by 6.3% of GDP by fiscal year 2035-36.

• Findings from the Fall 2025 Auditor General report on Canadian Armed Forces (CAF) Recruitment:
  • 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.
  • Security screening processes involve significant backlog.
• The authorized target strength:
  • Canadian Armed Forces Regular Force: 71,500
  • Primary Reserve Force: 30,000
  • Current Force Strength (as of 15 March 2026):
  • 67,000 Regular Force members
  • 24,900 (Average Paid Strength) Primary Reserve Force members
  • This is approximately 9,600 short of the authorized strength.
• Regular Force and Primary Reserve Intakes:
  • Fiscal year 2025-26 intake (as of 15 March 2026): 11,700 individuals
    • 17.7% of whom were women and 22.4% of whom identified as francophone.
  • Fiscal year 2024-25 intake: approximately 11,500 individuals.

Fall 2025 Auditor General report on Canadian Armed Forces Recruitment

• The objective was to determine whether the Canadian Armed Forces (CAF) recruits and trains the members it needs to meet operational requirements.
• The audit made six key recommendations:
  1. The CAF should collect and analyze information from applicants during the recruitment process to identify common reasons for “no further contact” and voluntary withdrawals and adjust recruitment strategies where appropriate.
  2. To support operational readiness, the CAF should implement and monitor actions to address understaffed occupations, particularly those that are in-demand.
  3. The CAF should take action to ensure sufficient investments in instructors, training infrastructure, and equipment to increase the number of recruits that can be trained and create a more stable, long-term training system and better align the Strategic Intake Plan with long-term personnel needs.
  4. The CAF should modernize the system supporting recruitment activities by implementing tools and processes that improve data quality integration and usability for recruiters and applicants.
  5. The CAF should adopt a consistent approach to manage basic and occupational training across the organization.
  6. The CAF should identify sustainable solutions to ensure the security screening process is efficient and timely to meet its needs.

Recent Improvements to Recruitment

• New Online Applicant Portal (launched 3 March 2025)
  • Designed to offer prospective candidates a more active role in the processing of their files, giving them the option to upload files electronically, book appointments online, and track the progress of their application.
• Probationary Period (went into effect on 31 December 2024)
  • This initiative responds to a recommendation from the Independent External Comprehensive Review and aims to support positive cultural change within the CAF while accelerating the intake of new members to address personnel shortages.
  • It enables applicants to receive a Reliability Status upon enrolment and begin Basic Military Qualification or Basic Military Officer Qualification training while their full security clearance and remaining administrative requirements are still being processed.
  • If, during this period, a recruit does not meet the required standards or fails to obtain the necessary clearances, they will be released from the CAF.
• Modernizing the Common Enrollment Medical Standard (announced in January 2025)
  • The CAF will now consider applicants with medical conditions for enrolment, including ADHD, anxiety and asthma, instead of automatically disqualifying them.
  • All individuals who are assessed to be medically fit may attempt basic training.
  • The new standard focuses on medical safety to attempt basic training and supports a case-by-case review of applicant files, helping to identify more individuals who are capable of successfully enrolling.
  • This approach ensures that the CAF continues to uphold the principle of Universality of Service, while modernizing recruitment practices to be more inclusive, efficient, and responsive to the needs of Canadians.

Northern Engagement and Operational Support Hubs (NOSH)

• The NOSH program will form a dispersed network of logistical stations comprised of several principal hubs and secondary nodes connected through multiple transportation spokes.
• Whitehorse, Resolute, Inuvik, Iqaluit, and Yellowknife have been announced as the locations for the NOSH.
• Cambridge Bay and Rankin Inlet have been announced as the first two Northern Operational Support Nodes of the NOSH.

National Defence’s Indigenous Reconciliation Program (IRP)

• Through Budget 2022, starting in fiscal year 2023-24, National Defence received up to $1.5 million in grants and contributions funding each year for four years through the Indigenous Reconciliation 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 opened on 1 April 2026.

Canadian Coast Guard – Indigenous Relations Program

• Within the Canadian Coast Guard (CCG) 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.

Indigenous Representation in the Canadian Armed Forces (CAF)

• As of 31 December 2025:
  • 2.8% of the Regular Force and Primary Reserve self-identified as Indigenous persons; with a target of reaching 3.5% by 31 March 2027.
  • 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, including:
  • The CAF Indigenous Experience Program;
  • The Indigenous Leadership Opportunity Year at the Royal Military College; and
  • Primary Reserve Indigenous Summer Programs.
• These programs provide valuable pathways for Indigenous individuals to explore or begin military careers.
• The programs recorded an 81% graduation rate from 2022 to 2025.

Northern Engagement and Operational Support Hubs

• On 6 March 2025, the Minister of National Defence, jointly with the Premier of Nunavut, the Mayor of Iqaluit and Nunavut Inuit leaders, announced that the selection of Inuvik, Iqaluit, and Yellowknife as locations for the Northern Operational Support Hubs (NOSH) program.
• This was further expanded by the Prime Minister’s announcement on 12 March 2026, which added two additional NOSHs in Whitehorse and Resolute, as well as the first two Northern Operational Support Nodes (NOSN) in Cambridge Bay and Rankin Inlet.
• The NOSH program will form a dispersed network of logistical stations comprised of several principal hubs and secondary nodes connected through multiple transportation spokes.
• These hubs and nodes will extend the operational reach of the CAF, reduce logistical constraints, and enhance support for operations in the North and Inuit Nunangat.
• National Defence is working with territorial governments and Indigenous partners to identify additional locations, including opportunities for multi-use investments that benefit both the CAF and surrounding communities.

Defence Industrial Strategy

• Indigenous engagement is central to the Government’s approach to 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 Defence Industrial Strategy 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.

Engagements

• The Inuit-Crown Partnership Committee Working Group on Sovereignty, Defence, and Security continues to advance joint defence priorities, including the co-developed workplan focused 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.
• In the Arctic, the CCG is:
  • Supporting capacity building across Inuit Nunangat through $10 million in Inuit Marine Engagement Capacity funding;
  • Co‑developing governance with Inuit Tapiriit Kanatami 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
  • Enable marine safety and security along the Canada-United States border through relationships with Indigenous communities.

National Defence Engagement in the Atlantic and Eastern Region

• 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 has:
  • Consulted with Indigenous partners regarding the potential resumption of low-level flying training.
  • Undertaken further engagement through a Preliminary Flying Proposal in March 2026 to strengthen collaboration and improve communication between the 5 Wing operations and Indigenous communities whose traditional territories overlap with the training area addressing challenges identified during earlier consultations.
• The CCG is strengthening marine emergency readiness through 12 multi-year funding agreements supporting Indigenous SAR training, exercises, and preparedness, and by supporting nine Indigenous‑operated vessels for SAR and environmental response through the Indigenous Community Boat Volunteer Program.

National Defence Engagement in the Pacific and Western Region

• The Te’mexw Treaty Association negotiations are nearing completion:
  • Represent Songhees, Sc’ianew, Snaw-naw-as, Malahat, and T’Sou-ke Nations.
  • These treaties will intersect with several significant National Defence real property holdings on southern Vancouver Island.
  • While operational authorities will remain intact, the treaty framework will reshape how National Defence engages with Nations on land use, access, environmental responsibilities, and future planning.
  • Esquimalt is developing relationship agreements with several of these Nations to better define how National Defence activities will be carried out on their treaty lands.
• 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.
  • 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 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; and
  • maritime security and emergency response.
• The CCG continues to advance long‑term, collaborative relationships with Indigenous partners by:
  • 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.
  • Establishing the first Indigenous‑led CCG Auxiliary to enhance marine emergency response in remote coastal areas.

The Five Pillars of the Defence Industrial Strategy

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

Anticipated Benefits of Implementing the Defence Industrial Strategy

• $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 – 10 priority areas for investment

• The Defence Industrial Strategy (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:

1. Aerospace

Aerospace Platforms, Avionics, and Aircraft Communications

2. Ammunition

Common Ammunition, Battle-Decisive Munitions, Small Arms, Missiles and Bombs

3. Digital Systems

Secure Cloud, Artificial Intelligence, Quantum Computing and Communications, Integrated Command, Control and Communications, High-Assurance Communications Equipment

4. In-Service Support

Naval, Land, Air

5. Personnel Protection

Medical Counter Measures

6. Sensors

Marine Sensors, Quantum Sensors, Electronic Warfare

7. Space

Space-Based Intelligence, Surveillance and Reconnaissance, Space Domain Awareness, Satellite Communications, Space Launch

8. Specialized Manufacturing

Land Vehicles / Surface Ships, including Icebreakers and Marine Systems

9. Training and Simulation

Naval, Land, Air

10. Uncrewed and Autonomous Systems

Uncrewed and Autonomous Land, Aerial, Underwater and Surface Systems (including Uncrewed Collaborative Platforms)

• Announced on 17 February 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 Rightsholders

• The Provinces, Territories, and Indigenous (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, industrial, and workforce development, including through the development of a Canada Defence Skills Agenda.
• Ontario
  • Ontario accounts for more than 35% of Canada’s defence industry employment, with strengths in combat vehicles, airborne sensors and warning systems, munitions, and aircraft manufacturing.
  • The province’s 2025 budget included targeted defence investments, notably a $215 million commitment to shipbuilding.
  • In March 2026, Ontario appointed CAF veteran Bernard Derible as its first Military Defence Representative to promote the province’s defence industry domestically and internationally.
• Québec
  • Quebec represents nearly 25% of Canada’s defence industry employment, with core capabilities in aircraft manufacturing, maintenance, repair and operations (MRO), munitions, and advanced digital technologies, including quantum.
  • The province has designated defence as a priority sector, enabled Investissement Québec to invest in certain defence firms, and established an Interministerial Committee on the Defence of Québec.
• Atlantic Canada
  • Atlantic Canada is home to COVE, aircraft MRO, and space launch.
  • Irving Shipbuilding Inc. in Halifax is a major partner under the National Shipbuilding Strategy.
  • Halifax also hosts the North Atlantic Treaty Organization's Defence Innovation Accelerator for the North Atlantic (DIANA), and the Centre for Ocean Ventures and Entrepreneurship (COVE), which hosts the Maritime Defence Innovation Secure Hub under the Bureau of Research, Engineering and Advanced Leadership in Innovation and Science (BOREALIS).
• Western and Northern Canada
  • Western and Northern Canada together account for approximately 20% of Canada’s defence industry employment.
  • Key activities include aircraft and naval MRO, shipbuilding, life sciences, and digital technologies, including quantum.
  • Notable contributors include SkyAlyne (CAE and KF Aerospace) in Manitoba and Saskatchewan, Cascade Aerospace in British Columbia supporting CC‑130 Hercules fleets, and Seaspan Shipyards as a National Shipbuilding Strategy partner.
  • British Columbia and Alberta have both adopted industrial strategies that prioritize defence‑related sectors.
• Indigenous governments and rightsholders
  • Indigenous governments and rightsholders are essential partners in building Canada’s defence industrial base, particularly in the North.
  • Alongside provinces and territories, they play a vital constitutional role, especially in natural resource and infrastructure development.
  • The DIS seeks to strengthen Indigenous participation in defence supply chains, infrastructure, and procurement, building on the mandatory minimum 5% Indigenous federal procurement target.
  • The DIS also forecasts an increased Indigenous multiplier through planned ITB policy changes in 2026.

Space Launch: $182.6 million over three years

• The Government of Canada has committed $182.6 million over three years, starting in 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 $8.3 million 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).
• Canada’s first DISH: Maritime DISH pilot in Halifax (21 November 2025)
  • 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
    • Artificial Intelligence-enabled maritime analytics.
• February 2026 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

• $6.6 billion over five years to the initial investments of the DIS 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 fiscal year 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.
  • $379.2 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^*

• 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.

^* Facts and figures from the ISED’s State of Canada’s Defence Industry Report – Spring 2024