Although spread broadly, a large sum of the investment is being funnelled into the procurement and sustainment of equipment, amounting to CAD36.9 billion. 

Canada has unveiled its 2025 federal budget, earmarking a substantial CAD82 billion (USD58 billion) towards defence over the next five years to rebuild, rearm, and reinvent the Canadian Armed Forces (CAF).

Announced on 4 November, the budget is the largest defence spending increase in decades for Canada, meaning it will spend 2% of GDP on defence this year and put it on track to meet NATO’s 5% spending target by 2035.

The key components and investments over the next five years outlined in the budget include:

• Expanding Canada’s military capabilities, with CAD17.9 billion allocated for acquiring new logistics, light utility, and armoured vehicles; counter-drone and long-range precision strike systems; and bolstering domestic ammunition production.
• Repairing and sustaining the CAF’s equipment and defence infrastructure, backed by CAD19 billion, including expanded ammunition and training facilities.
• Recruiting and retaining CAF members, supported by CAD20.3 billion.
• Modernising the digital infrastructure of the Department of National Defence, CAF, and the Communications Security Establishment, with CAD10.9 billion allocated.

Alongside these investments, a new Defence Industrial Strategy will be launched in the coming months, supported by CAD6.6 billion, to strengthen Canada’s defence industry and supply chains.

A new Defence Investment Agency will also be established to overhaul and streamline Canada's defence procurement as well as the government’s relationship with industry. The agency will focus on defence procurements valued at CAD100 million and above, including submarines and “other critical capabilities that the CAF requires”.

The budget also includes CAD9 billion in the fiscal year 2025-26, as announced by Prime Minister Mark Carney in June 2025.

The funding is much needed considering Canada has historically spent around 1.3% of GDP on defence, far below NATO's initial 2% spending target. Similar to Europe, it is realising that it must reduce its reliance on the US and be more responsible for its own security.

Despite the detailed investment plan, the question regarding Canada’s procurement of 88 F-35 aircraft still remains, following a review into the procurement which was announced earlier this year.