This is from a larger publication, Alternative federal budget 2026-27: Bridge to independence
Introduction
In June 2025, the prime minister announced that Canada had agreed to a North Atlantic Treaty Organization (NATO) Defence Investment Pledge of spending five per cent of gross domestic product (GDP) by 2035.1Office of the Prime Minister, “Canada joins new NATO defence investment pledge,” Government of Canada, June 25, 2025, .
Then in February 2026, the prime minister announced the Defence Industrial Strategy, describing it as “an investment of over half a trillion dollars” including $180 billion in defence procurement and $290 billion in defence-related capital investment over the next 10 years.2Office of the Prime Minister, “Prime Minister Carney launches Canada’s first Defence Industrial Strategy,” Government of Canada, February 17, 2026, .
By March 2026, the Government of Canada highlighted that it had achieved the NATO defence spending target (two per cent of GDP) in the 2025-26 fiscal year and affirmed Canada is committed to meeting the five per cent target by 2035.3Department of National Defence, “Canada achieves the 2% of gross domestic product defence spending benchmark,” Government of Canada, March 26, 2026, .
Despite this unprecedented increase from $41 billion in 2024-254Department of National Defence, Spending, Government of Canada, November 21, 2024, . to $63 billion in 2025-265Department of National Defence, “Canada achieves the 2% of gross domestic product defence spending benchmark,” Government of Canada, March 2026, . and to an estimated $159 billion per year by 2035-36,6Alex Ballingall, “Defence spending plan will send federal budget deficit soaring, watchdog warns,” Toronto Star, May 4, 2026, . it seems that policy-makers are giving more attention to percentage spending targets than a strategic assessment of the specific territorial defence requirements of Canada. These proposed spending increases, without major tax increases, will mean major cuts to social programs, multilateral engagement, international assistance, and actions on fighting the climate crisis.
The federal government must shift from politicized defence spending targets to an evidence-based approach, determining what level of expenditures are necessary to ensure the safety and security of Canadians. It should also recognize a wider definition of security that includes the value of investing in multilateral engagement, diplomacy, peace and stability, as well as measures to address the climate crisis.
Overview
At the 2025 NATO Summit, Canada pledged to allocate 3.5 per cent of GDP in defence spending and 1.5 per cent of GDP in critical defence and security-related investments.7Office of the Prime Minister, “Prime Minister Carney announces Canada has achieved NATO 2% defence spending target,” Government of Canada, March 26, 2026, .
The prime minister has indicated that the five per cent target would cost $150 billion a year.8Murray Brewster and Peter Zimonjic, “Canada agrees to five percent GDP defence spending,” CBC News, June 25, 2025, . This could mean about $107 billion in direct military spending and about $43 billion in security-related spending. According to the prime minister, that 1.5 per cent or estimated $43 billion could be spent on “new airports, ports, telecommunication, emergency preparedness systems, and other dual-use investments.”9Office of the Prime Minister, “Canada joins new NATO defence investment pledge,” Government of Canada, June 25, 2025, .
This AFB argues that there should be a greater strategic evaluative assessment of how dollars are allocated for direct military spending and that a wider definition of security-related investments should be developed. There also needs to be a stronger evaluation of the implications, including on human rights, the environment, and labour justice, of this dramatic increase in military spending.
F-35 combat aircraft
On January 9, 2023, the government confirmed that Canada will be procuring the F-35A combat aircraft from Lockheed Martin.10Department of National Defence, Future Fighter Capability Project, Government of Canada, October 6, 2025, . By March 2025, the defence minister indicated that Canada had paid for the first 16 F-35s but was “examining other alternatives” for the remainder of the fleet.11Murray Brewster, “Canada reconsidering F-35 purchase amid tensions with Washington, says minister,” CBC News, March 14, 2025, .The Parliamentary Budget Officer has reported that the total estimated life cycle cost of the 88 F-35s is $73.9 billion over a 45-year period.12Office of the Parliamentary Budget Officer, “Life cycle cost of new F-35 fighter jet fleet estimated at $73.9 billion, says PBO,” Office of the Parliamentary Budget Officer, November 2, 2023, .
Concerns have been raised about the reliability of the F-35, its technical suitability in the Arctic, and whether Canada should have combat aircraft with offensive, pre-emptive first strike capabilities.
There has also been speculation that Canada could buy about 40 Lockheed Martin F-35 fighter jets, perhaps for offensive missions, and as many as 80 Saab Gripen E fighter jets for Arctic defence.13John Ivison, “Sources say Ottawa considering Swedish jets over F-35s for half of fleet,” National Post, January 28, 2026, .
There is also the issue14David Pugliese, “Defence analysts warn U.S. will control key systems on F-35 fighter jets, putting Canada at risk,” Ottawa Citizen, March 9, 2025, . that “the U.S. will have full control over upgrades and software improvements necessary to keep the Canadian military’s new fleet of F-35 fighter jets flying.” This question about long-term support undermines the credibility of the F-35 purchase.
Other notable major purchases
The government has also committed to the $20 billion purchase of 12 new submarines,15Murray Brewster, “Deadline day: $20B submarine showdown puts Korean and German bids in spotlight,” CBC News, March 2, 2026, . more than $5 billion for Airborne Early Warning and Control (AEW&C) aircraft,16Daniel Leblanc, “Canada to pick between Swedish and U.S. radar planes to protect skies,” CBC News, May 6, 2026, . some portion of a $1.1 billion deal with Lockheed Martin for M142 High Mobility Artillery Rocket Systems (HIMARS),17Murray Brewster, “Pentagon procurement post reveals Canada quietly locked into HIMARS deal,” Radio-Canada International, May 1, 2026, . and $2.49 billion for 11 new MQ-9 Reaper drones from U.S. defence contractor General Atomics.18Murray Brewster, “Canadian military buying armed drones for $2.49B,” CBC News, December 19, 2023, .
In September 2023, the U.S. State Department approved the sale to Canada of $313 million in munitions—including 219 Hellfire missiles and laser guided bombs—for the Reaper drones.19Murray Brewster, “Air force will have to wait even longer to get armed drones, Defence Department says,” CBC News, October 24, 2023, . It has also been reported that the drones will be able to carry 250- and 500-pound bombs as well as “low collateral damage” bombs.20David Pugliese, “New military drones will have ‘limited’ capabilities at first,” Ottawa Citizen, April 8, 2026, .
While armed drones can have both offensive and defensive roles, the Canadian Global Affairs Institute has warned that “Canadians should be concerned about how the Canadian Forces would propose to employ drones, and whether such use would be in compliance with Canada’s international law obligations.”21Craig Martin, What Role and Rules for Canada’s Armed Drones?, Canadian Global Affairs Institute, December 2018, .
“Golden Dome” missile defence
In October 2025, Minister of Defence David McGuinty indicated that Canada is in discussions with the United States about an air defence shield over North America.22Murray Brewster, “Without saying ‘Golden Dome,’ McGuinty touts U.S. missile defence co-operation,” CBC News, October 8, 2026, . While the minister did not use the term “Golden Dome” in his remarks at that time, he acknowledged Canada is “talking to the United States now about what we call a continental shield, because we’re going to need one.”23Steven Chase, “McGuinty defends Canada’s Golden Dome collaboration with U.S., citing potential threats,” The Globe and Mail, October 15, 2025, .
U.S. President Donald Trump has stated that it would cost Canada US$61 billion (about $83 billion) to join the Golden Dome initiative.24Murray Brewster, “The Golden Dome is where Canada’s F-35 debate and Trump’s Greenland threat meet,” CBC News, January 31, 2026, .
In 2022, Canada pledged to spend $40 billion over 20 years on helping to modernize NORAD, including with new radar and detection systems.25Steven Chase, “McGuinty defends Canada’s Golden Dome collaboration with U.S., citing potential threats,” The Globe and Mail, October 15, 2025, .
The Defence, Security and Resilience Bank
Canada will be the headquarters for a new Defence, Security and Resilience Bank (DSRB) to “provide long-term, low-cost financing for defence, security, and resilience initiatives,”26Department of Finance, “Canada welcomes progress towards the establishment of the Defence Security and Resilience Bank and hosting its headquarters,” Government of Canada, April 29, 2026, . something akin to a World Bank for financing the arms industry and government arms purchases.27Pippa Norman, “Canada chosen as host country of multinational defence bank,” The Globe and Mail, May 1, 2026, . In November 2025, the president and chief operating officer of the DSRB organizing group, suggested that Canada might put in $2 billion in direct funding and a further $8 billion in “callable capital” the bank could draw on if needed.28House of Commons Standing Committee on Industry and Technology, Evidence: Meeting 13, Parliament of Canada, November 2025, .
Increasing military exports
In 2024, Canada exported approximately $2.5 billion in controlled military goods and technology to non-U.S. destinations.29Global Affairs Canada, Annual Report on Strategic Goods and Technologies Pursuant to Section 27 of the Export and Import Permits Act—2024, Government of Canada, May 29, 2026, . That was an increase from $2.1 billion in 2023 and $2.1 billion in 2022.
Project Ploughshares has conservatively estimated the total value of contracts of Canadian military exports to the United States at well over $1 billion annually.30Kelsey Gallagher, “Canada’s arms exports in 2022,” Project Ploughshares, September 18, 2023, . The Canadian Association of Defence and Security Industries (CADSI) places the figure at about $1.44 billion.31Canadian Association of Defence and Security Industries, “CADSI reacts to U.S. tariffs,” CADSI, March 4, 2025, . They say that “Canadian defence exports to the U.S. account for 32 per cent of all annual sales within our industry, valued at over $4.5 billion.”
The government has now committed to increase the export of Canadian-made military goods by 50 per cent by hiring a “new dedicated team for export promotion” and appointing “new trade commissioners in the United Kingdom and key European Union markets to support Canadian business abroad and ramp up Canada’s presence at major global defence and aerospace trade shows.”32Office of the Prime Minister, “Prime Minister Carney launches Canada’s first defence industrial strategy,” Government of Canada, February 17, 2026, .
While the government has not put a dollar figure on a 50 per cent increase in the export of military goods, the numbers suggest a $2 billion increase.
When Canadian military equipment is exported to governments implicated in human rights violations or in situations marked by serious violations of international law and human rights norms, it undermines Canada’s international reputation, as well as peace and security.
There has been no announcement of any new measures to assess the human rights implications of up to $2 billion in new military exports—and despite documented concerns about the use of U.S. weapons in illegal wars and genocide, parliament voted against the No More Loopholes Act, which would have imposed restrictions on those exports.33House of Commons, Hansard: Sitting 94, Parliament of Canada, March 11, 2026, https://www.ourcommons.ca/DocumentViewer/en/45-1/house/sitting-94/hansard. Canada’s failure to regulate all of its military exports on a case-by-case basis is inconsistent with its obligations under the Arms Trade Treaty.34Kelsey Gallagher, “Situating Bill C-233 within Canada’s arms control framework,” Project Ploughshares, November 24, 2025, .
Red-tagging union activists
In September 2025, the International Trade Union Confederation (ITUC) reported: “Northrop is a serial violator of consumer and labour protections…. The company also has the lowest unionization rate among major U.S. arms manufacturers (just four per cent).”35International Trade Union Confederation, Corporate Underminers of Democracy 2025, International Trade Union Confederation, September 2025, . It then comments that “this was no accident. Industry researchers have described it as ‘a conscious strategy of the big weapons-making firms to outsource work to non-union subcontractors and states with anti-union ‘right to work’ laws.’”
The New York City-based Human Rights Watch has further noted: “The Philippine government has accused union leaders and members of being combatants or supporters of communist insurgency, putting them at great risk of harassment and violence. This sinister and at times deadly practice, known as ‘red-tagging,’ has become a serious threat to labor rights in the Philippines.”36Human Rights Watch, “Philippines: Dangerous ‘red-tagging’ of labor leaders,” Human Rights Watch, September 25, 2024, . Despite this, companies, including Lockheed Martin and Elbit Systems,37,38 sell weapons to the Philippines.
Sam Gindin has also recalled how then-Canadian Auto Workers (CAW) president Bob White opposed a contract for “fighter helicopters” that would have been built in a unionized factory in Winnipeg because “we couldn’t ignore the impacts on people who would suffer from Canadian and U.S. militarism, the victims of imperial aggression abroad, people who were going to be bombed.”37Sam Gindin and Simon Black, “Swords into ploughshares,” Midnight Sun, November 30, 2021, .
The current agenda to dramatically increase military spending lacks a scrutiny of the implications for workers in Canada and abroad. The AFB would aim to procure from Canadian industry, with an emphasis on direct engagement with private sector unions in the aerospace and defence sector to scale up industrial benefits.
CADSI
The Ottawa-based Canadian Association of Defence and Security Industries (CADSI) describes itself as “the unified voice of Canada’s defence, security, and emerging technology industries.”38Canadian Association of Defence and Security Industries, “Championing Canada’s Defence, Security and Emerging Technology Sectors,” CADSI, 2026, . Its membership includes the world’s biggest weapons companies. Despite the profitability of its corporate members, the Government of Canada provides annual funding to CADSI (including $250,000 in 2025, $291,400 in 2024, $208,600 in 2023, and $241,752 in 2022).
CADSI organizes the annual CANSEC “defence, security & emerging technology event” that connects the world’s most profitable weapons companies with delegations from 60+ countries,39Canadian Association of Defence and Security Industries, “Canada’s leading defence, security & emerging technology event.,” CADSI, 2026, https://www.defenceandsecurity.ca/CANSEC/. including countries implicated in human rights violations, such as the Philippines, Mexico, Peru, Israel, the United States and Saudi Arabia.
Arctic security
Melting sea ice has opened previously unexploited regions for resource extraction in Canada’s North, driving competition and fears of potential clashes in this environmentally fragile but critically important region.
Sovereignty is rooted not only in military presence but also thriving Northern communities. Paths forward must be rooted in reconciliation, ensuring equity for these communities and respect for Indigenous sovereignty, rights, and titles.
Lockheed Martin has highlighted the role of the F-35 in the defence of the Arctic.40Lockheed Martin, “Canada: The F-35: Next generation Canadian air power,” F-35 Lightning II, 2026, . The government has argued that “a modern fighter jet fleet is essential for defending Canada and Canadian sovereignty and contribute to our NORAD and NATO commitments, now and in the future.”41Department of National Defence, Future Fighter Capability Project, Government of Canada, October 6, 2025, . And yet Michael Byers has previously commented “The F-35 has only one engine. This fact alone renders it problematic for use in Canada’s Arctic and extensive maritime zones.”42Michael Byers, One Dead Pilot: Single-engine F-35 a bad choice for Canada’s arctic, Canadian Centre for Policy Alternatives, June 2014, https://www.policyalternatives.ca/wp-content/uploads/attachments/Single_Engine_F35s_a_Bad_Choice.pdf.
In April 2026, Ernie Regehr, senior fellow in Arctic Security and Defence at The Simons Foundation Canada, commented that “effective defence, in the Arctic and all of Canada, rests ultimately on war prevention and the peaceful resolution of disputes.”43Ernie Regehr, “Of opportunities and warning signs along the militarization highway,” The Simons Foundation Canada, April 2026, . He further highlighted that “in the Arctic the Inuit also have sovereign responsibilities in their constitutionally protected homelands, and there is a formal obligation [for the Department of National Defence] to pursue meaningful consultation and consent for developments or initiatives that affect their homelands.”
Actions
The AFB will move Canada’s defence budget allocation (set to reach $150 billion a year by 2035) away from an arbitrary percentage of GDP and instead determine funding based on the needs of legitimate territorial defence.
The AFB will allocate funds to conduct an independent assessment of the territorial defence needs of Canada and an appropriate level of defence spending on a multi-year basis to fulfill the territorial protection of Canada.
The AFB will cancel Canada’s planned $19 billion acquisition of Lockheed Martin F-35 combat aircraft and reduce the proposed number of submarines to be acquired through the Canadian Patrol Submarine Project from 12 to four to more realistically reflect current Royal Canadian Navy staffing availability. While budgetary savings would result from the F-35 cancellation, no contract has yet been awarded for the submarines and buying them isn’t yet on the government’s books.
The AFB will cap the NORAD modernization program and refuse any spending on the “Golden Dome” (U.S. President Donald Trump has stated Canada would need to pay US$61 billion to join the missile defence system).
The AFB will cancel $2 billion in direct funding and a further $8 billion in “callable” capital to the Defence and Security Resilience Bank (DSRB), a proposed financial institution that would accelerate the global arms race and funnel public money directly to arms manufacturers.
The AFB will mandate an independent review and renegotiation of the Defence Production Sharing Agreement (DPSA) with the United States to ensure full public reporting and case-by-case stringent assessments of the estimated $2 billion annual transfer of military goods, including parts and components, in compliance with international law.
The AFB will rescind Defence Industrial Strategy funding aimed at both increasing the export of military goods and technology by 50 per cent and Canada’s presence at major global defence and aerospace trade shows.
The AFB will eliminate the annual funding (on average $250,000 a year) allocated to the Canadian Association of Defence and Security Industries (CADSI), the association that organizes the annual CANSEC arms show in Ottawa.
The AFB will provide $1.095 billion toward the acquisition of sixteen DHC-515 Firefighter aircraft to augment climate response efforts, to be acquired by the RCAF as the first federally owned-and-operated waterbombers.
The AFB will allocate funding for multilateral engagement, diplomacy, peace and stability, including for a Civil Peace Service (CPS) to promote human rights and peace on a long-term basis in crisis zones and conflict regions and to strengthen the Protection Mechanism for Human Rights Defenders and Journalists in Mexico to address the threats they face from military and security forces.
