Mobile Menu

Business Environment Profiles - Canada

Government funding for defense

Published: 31 May 2024

Key Metrics

Government funding for defense

Total (2024)

25 $ billion

Annualized Growth 2019-24

5.5 %

Definition of Government funding for defense

This indicator measures federal spending on defense, which Statistics Canada defines as any expenditure on the military, civil defense, foreign military aid, research and development pertaining to the military, in addition to other relevant items. Data for this report is sourced from Statistics Canada and is presented in constant dollars.

Analyze the wider world in which businesses operate

We measure the upstream and downstream ramifications on thousands of industries so businesses can monitor their external operating environment. Explore membership options today.

Purchase options

Included in an IBISWorld Membership

Our industry reports include 35+ pages of data, analysis and charts, including:

  • Industry Financial Ratios
    Industry Financial Ratios
  • Historical and Forecast Growth
    Historical and Forecast Growth
  • Industry Market Size
    Industry Market Size
  • Industry Major Players
    Industry Major Players
  • Profitability Analysis
    Profitability Analysis
  • SWOT Analysis
    SWOT Analysis
  • Industry Trends
    Industry Trends
  • Industry Operating Conditions
    Industry Operating Conditions

Recent Trends – Government funding for defense

Over the five years to 2024, federal spending on defense is projected to increase at an annualized rate of 5.5%, reaching $25.1 billion. Defense spending in Canada has remained relatively constant, having stayed below 2.0% of GDP for more than a decade. In 2014, each NATO member nation agreed to spend 2.0% of its GDP on defense. However, Canada has consistently missed the benchmark. Despite not reaching 2.0% of GDP, defense spending as a share of GDP has trended upward, though only slightly from 1.2% in 2015 to 1.3% in 2019. In 2020, defense spending increased during the COVID-19 pandemic, providing for an uncharacteristic surge in growth. In 2021, defense spending continued to expand due to GDP growth during the period. In early 2022, Ukraine was invaded by Russia. This spurred a NATO response for its members to increase defense expenditure. However, it is anticipated that Canada will stay below the 2.0% despite NATO's expected target defense spending to GDP ratio of 2.0%.

Show more

5-Year Outlook – Government funding for defense

Over the next five years, IBISWorld estimates that defense spending will increase at an annualize...

Looking for IBISWorld Industry Reports?

Gain strategic insight and analysis on thousands of industries.

Trusted by More Than 10,000 Clients Around the World

  • IBISWorld client - VISA
  • IBISWorld client - ADP
  • IBISWorld client - Deloitte
  • IBISWorld client - AMEX
  • IBISWorld client - Bank of Montreal