International Security

Contribution to NATO — Readiness Initiative (Funding – Budget 2021)

  • Canada’s commitment to its NATO Allies and partners is unwavering, especially in the face of Russian aggression.
  • Not only has this Government raised defence spending, but every day, members of the Canadian Armed Forces are deeply engaged in NATO operations, promoting peace and stability.
  • To support these efforts, National Defence requested $103.0 million in these Main Estimates to support Canada’s increased commitments to NATO under the NATO Readiness Initiative.
  • As part of Budget 2021 announcements, this funding will support activities related to the operational readiness of one additional Royal Canadian Navy frigate, which supports NATO missions.
  • This funding will be used to service the fleets, perform maintenance, perform testing and evaluation, and train personnel.

Key Facts

  • NATO Readiness Initiative: An Alliance commitment to enhance the pool of high-readiness forces and capabilities available for collective defence and crisis response.
    • It is distinct and separate from other designated NATO activities and on-going operations.
  • Budget 2021: Announced $541.2 million for National Defence over five years starting in Fiscal Year 2021-22 to fund the cost increases associated with the increased NATO Readiness Initiative commitment and the activities required to prepare:
    • One additional frigate: $103.0M allocated annually, over five years, starting in Fiscal Year 2021-2022.
    • Six additional fighter jets: $26.2M total allocation, beginning in Fiscal Year 2023-2024.
      • Funding will support the following activities:
        • $5.8M for the procurement of Pack-Up Kits equipment in Fiscal Year 2023-2024; and,
        • $20.4M to increase fleet sustainment activities as a result of the additional yearly flying hours in Fiscal Year 2024-2025 and 2025-2026.
  • Budget 2022:
    • To reinforce Canada’s national defence, announcements in Budget 2022 will provide a total of more than $8B (on a cash basis) in new funding over five years—on top of planned increases associated with Strong, Secure, Engaged, which will:
      • Strengthen Canada’s contributions to our core alliances;
      • Bolster the capabilities of the Canadian Armed Forces;
      • Continue to support culture change and a safe and healthy working environment in the Canadian Armed Forces; and,
      • Reinforce Canada’s cyber security.
    • To increase the capabilities of the Canadian Armed Forces, Budget 2022 proposes to provide $6.1B on an accrual basis ($7.4B cash) over five years, starting in 2022-23, in order to meet our defence priorities, including:
      • Ensuring our continental defences;
      • Fulfilling commitments to our allies; and,
      • Investing in equipment and technology to immediately increase the capabilities of the Canadian Armed Forces.
  • One additional frigate: $103.0M in funding allocated during Fiscal Year 2022-2023 will support the following activities:
    • $58.0M to support the necessary work for three docking work periods;
    • $19.8M to support maintenance work for ship systems;
    • $14.1M to support fighting capabilities; and,
    • $11.1M in National Inventory Control Point spare parts.

Defence Spending:

  • Canada is the 6th largest contributor to NATO’s commonly funded budget, in comparison to other NATO members.
  • Canada is forecasted to spend 1.34% of GDP on defence in Fiscal Year 2022-23.
  • Canada’s forecasted defence spending will increase to 1.48% by 2024. The main contributor for the increase is the Budget 2022 announcement.
  • Canada is forecasted to spend approximately 28.5% of its defence expenditures on major equipment in 2024, far exceeding the 20% NATO guideline.

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