Defence policy update raises spending by $8B with focus on Arctic, cyber security

Defence Minister Bill Blair has unveiled Canada's long-promised defence policy update with a focus on enhancing Arctic and cyber security.

Defence Minister Bill Blair unveiled Monday $7.9 billion in new spending on the Canadian Armed Forces over the next five years in a long-promised update to Canada’s defence policy, but this will still not meet the country’s target under NATO.

By the end of the new five-year plan in the 2029-30 fiscal year, Canada is expected to be spending 1.76 per cent of GDP on defence, still below the NATO target of two per cent of GDP, according to the policy update document.

The first major defence policy update since 2017 says the Canadian Armed Forces (CAF) need to address three major factors that are reshaping the world stage: climate change disproportionately changing Canada’s Arctic; autocracies and disruptive states like Russia challenging the international order; and new technologies “rapidly redefining” conflict.

The total budgeted spend in this five-year plan is $8.1 billion, with $157 million of this being funds reallocated from the last defence policy update in 2017.

In the upcoming April 16 federal budget, defence spending is set to rise by $612 million, growing incrementally by $500 million for the next two years, and then by about $300 million for the final two years, as outlined in the update.

The bulk of this year’s new spending is focused on sustaining naval vessels and other military equipment, budgeted at $495 million.

While the NATO GDP target is not expected to be met, the policy document says Canada is “on track to exceed” the NATO target of putting 20 per cent of defence spending into major equipment expenditures.

Military leadership including, Chief of the Defence Staff Gen. Wayne Eyre and Vice-Admiral Angus Topshee, have publicly spoken about the need to better maintain key military equipment, including frigates, to ensure operational readiness.