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Canada to boost defence spending to $150B by 2035, aiming for 5% of GDP, sparking deficit and funding concerns.
Prime Minister Mark Carney has pledged to raise Canada’s defence spending to $150 billion by 2035, aiming for 5% of GDP to meet NATO targets, up from the current $62.7 billion with $9 billion added this year—the largest military increase since World War II.
Economists warn the move could widen the projected $65 billion deficit, requiring tough choices like tax hikes, increased borrowing, or cuts to programs such as dental care, pharmacare, and daycare.
The government plans to fund the expansion through accelerated spending, domestic manufacturing, and existing resilience initiatives, with companies like MDA Space, Bombardier, and CAE Inc. expecting major contract gains.
Carney says public sector reductions would occur naturally through attrition.
Investors are closely watching Budget 2025 for financing details, as the defence push may boost military contractors but strain broader economic stability.
Canadá aumentará el gasto en defensa a $ 150B para 2035, con el objetivo del 5% del PIB, lo que provocará déficit y preocupaciones de financiación.