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flag Canada to boost defence spending to $150B by 2035, aiming for 5% of GDP, sparking deficit and funding concerns.

flag 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. flag 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. flag 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. flag Carney says public sector reductions would occur naturally through attrition. flag Investors are closely watching Budget 2025 for financing details, as the defence push may boost military contractors but strain broader economic stability.

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