Prime Minister Mark Carney and Chief of the Defence Staff General Jennie Carignan, right, at the Canadian Forces Base in Trenton Ont., on Friday. Mr. Carney's $2-billion investment comes after he promised to increase Canada’s defence spending to 2 per cent of its GDP.Spencer Colby/The Canadian Press
Ottawa is spending $2-billion to increase pay and improve benefits for members of the Canadian Armed Forces, as part of a plan to boost military expenditures this fiscal year and bring Canada closer to its NATO commitment.
The new compensation and benefits package, which will come into force in late fall, is the biggest to be introduced since 1998.
Prime Minister Mark Carney announced the changes Friday at a military base in Trenton, Ont. The outlay makes up part of the more than $9-billion he has promised to spend this fiscal year to bring Canada’s defence expenditure up to 2 per cent of its GDP. By 2035, Mr. Carney has pledged to hike that to 5 per cent in line with a recent target by North Atlantic Treaty Organization countries.
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NATO members had been under pressure from U.S. President Donald Trump to increase their contributions to the military alliance’s collective defence.
The pay increase was also part of the Liberal Party’s platform ahead of the spring election.
“As the demands on our Canadian Armed Forces have increased, their resources and their salaries have not kept pace, and these are the men and women we trust to wear the Maple Leaf, the Canadian flag, and to risk their lives for it,” he said.
The improved compensation package includes pay increases of 8 per cent for colonels and above, 13 per cent for lieutenant-colonels and below, and 20 per cent in starting pay for privates working full-time (13 per cent for those working part-time). All increases will be on top of base pay and retroactive to April 1, 2025.
The pay raise will apply to full-time and part-time CAF members, including the Canadian Rangers, and the Cadet Organizations Administration and Training Service. However, it falls short of the 20-per-cent across-the-board increase federal Defence Minister David McGuinty alluded to in June.
Philippe Lagassé, an associate professor at Carleton University’s Norman Paterson School of International Affairs, said while the mix of benefits announced by the federal government adds up to a healthy improvement, Ottawa could have been bolder with its pay increase for middle ranks given its emphasis on retention.
“I was a little struck by the fact that that middle cadre of people who we’re really trying to retain aren’t getting the full 20-per-cent increase,” he said.
The last pay increase approved for CAF members was received in March of 2021.
Mr. Carney says the pay raise will apply to full-time and part-time CAF members.Cole Burston/Reuters
Despite meeting its recruitment target in the last fiscal year, staffing shortages remain a key issue for many operations throughout Canada’s military. For example, 53 of 116 CAF occupations, or about 45 per cent, are filled to less than 75-per-cent capacity.
To encourage higher enrolment in critical occupations, such as dental assistants and vehicle technicians, a $50,000 incentive will now be given out incrementally to those joining these roles.
To support the Prime Minister’s focus on defending Canada’s sovereignty and increasing its presence in the Arctic, CAF members deployed in the North will receive up to an additional 50 per cent of their environmental allowance, which is a benefit given out to members working in adverse conditions. Members working on named domestic operations will also receive an additional $45 per day.
Instructors within the CAF will also be given further financial incentives, including $300 per month for those posted to a designated training school.
Members will also receive an annual Military Service Pay benefit, which will be paid as a lump sum and based on years of service and enrolment date. For example, full-time members who have served five to 10 years will receive a lump sum of $2,000. The scale increases incrementally, capping out at $6,000 for full-time members who have served for more than 20 years.
Benefits for full-time CAF members asked to relocate will transition from being based on a member’s pay scale to their number of moves.
For example, for each of a member’s first three moves, they will receive $13,500. That number bumps up to $20,050 for moves four through six and $27,000 for all subsequent moves.
Improvements to food, transportation and incidental allowances for members moving without their family, and therefore maintaining a second household, will also be implemented.
On Thursday, a report published by Reuters cited an informal recommendation by Canadian defence officials to move ahead with the purchase of 88 Lockheed Martin Corp F-35 fighter jets.
The procurement of the U.S. aircraft has been highly contested since it was introduced in 2023. In March, Mr. Carney launched a review of the purchase, saying he was considering trimming the order to the U.S. company and seeking more cost-effective alternatives from other countries.
Speaking to reporters on Friday, Mr. Carney said that review is not yet complete and no final advice had been given to the government. He added that considerations such as value for money, as part of the country’s broader NATO commitment, will play a key role in Ottawa’s final decision.
“With respect to the commitment, the resources that we’re going to put in, that quadrupling of resources by the end of this decade, we have a responsibility to make sure that those are spent in the way that has a maximum impact.”