Canada’s New Defence Capital Spending Plan Sets Ambitious Targets: PBO
Ottawa (Ontario), October 29, 2025
Canada’s defence capital spending is projected to reach unprecedented levels according to a new report from the Parliamentary Budget Officer (PBO).
Under the federal government’s new defence policy, Our North, Strong and Free: A Renewed Vision for Canada’s Defence (ONSAF), the Department of National Defence (DND) is expected to spend $322.9 billion (on a cash basis) over the next 20 years. This is $108.1 billion more than forecast in the PBO’s 2024 report, which assessed capital spending under the previous defence policy, Strong, Secure, Engaged (SSE).
“Annual capital spending is expected to peak at $25.7 billion in 2030-31 and remain above $10 billion for nearly every year of the plan,” said Jason Jacques, interim PBO. “This increase reflects new projects initiated under ONSAF, changes to existing projects, and the policy’s new 20-year timeline which extends to 2044-45.”
The report does not assess how the new capital spending plan aligns with NATO spending targets.
Jacques also cautioned that “the scale of the planned investments is unprecedented in recent decades, but previous trends show that actual spending might fall short of projections.”
Under SSE, actual capital expenditures between 2017-18 and 2023-24 were $18.5 billion less than originally projected. The new plan indicates some spending on existing capital projects has been postponed to later years.
“Delays in project delivery have historically led to funding being pushed into the future,” Mr. Jacques noted. “This trend appears to continue under the new plan, which may face additional pressure from inflation and rising procurement costs.”
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