Defence budget


The Department of National Defence (DND) is the largest department within the federal government in terms of budget and size. In 2020-21, DND’s budget accounted for approximately 7.7% of the total Main Estimates for Canada.

DND funding is comprised of multi-year reference levels approved by Treasury Board each year and accessed through the Parliamentary Estimates process.

Canada’s current defence policy – Strong, Secure, Engaged – made a long-term (20 year) funding commitment that will allow the Canadian Armed Forces (CAF) to grow its force size and enhance the capabilities required to meet Canada’s defence needs.


The Department receives an appropriation from Parliament on an annual basis. The cash budget is approved initially through the Main Estimates and can be revised up to three times per year through the Supplementary Estimates.

This cash appropriation is used to make payments for salaries, operating and maintenance costs, grants and contributions, the purchase of capital equipment, and the construction of real property infrastructure.

DND’s Main Estimates 2020-21 are $23.3 billion, comprised of various votes as well as statutory funding (mainly comprised of funding related to employee benefit plans totalling approximately $1.5 billion). The votes are:

  • Vote 1 – Operating ($16.1 billion);
  • Vote 5 – Capital ($5.1 billion);
  • Vote 10 – Grants and Contributions ($209 million);
  • Vote 15 – Payments in respect of the long-term disability and life insurance plan for members of the Canadian Forces ($423 million);

The largest portion of the budget is allocated to Personnel (37%), Operating (33%) and Capital (21%).

Funding sought in fiscal year 2020-21 through the Main Estimates process represented approximately 92% of the Department’s budget with the remaining coming from the Supplementary Estimates, carry forward, and other adjustments. DND leverages the Supplementary Estimates process in order to access funding for CAF military operations and major capital projects as funding requirements are better defined by this point in the year. This also promotes effective financial management of departmental resources in minimizing lapses at year-end.

The Capital Investment Fund is the source of funds for the acquisition, construction or betterment of tangible capital assets by the Department. The current defence policy – Strong, Secure, Engaged – facilitates the long-term financial planning of both capital and operating requirements.


Due to the COVID-19 pandemic, departmental slowdowns have occurred in training, travel and recruitment. These internal slowdowns, coupled with significant reductions in capacity in Canadian industry, has resulted in reduced spending in 2020-21 and the likelihood of higher than usual lapses in both Operating and Capital budgets. It is currently predicted that the 5% Operating Budget Carry Forward (OBCF) for 2020-21 will be exceeded. DND will request a re-profile for all unspent operating funding above the OBCF limit. This request will be subject to Department of Finance approval. Additionally, as the department does not have a Capital Budget Carry Forward (CBCF), any unspent capital funding will be re-profiled.

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