Key facts
- DND recorded $47.8 billion in spending for the 2025-26 fiscal year, about 34 percent above the roughly $35.7 billion initially planned, according to its departmental results report.
- Higher 2025-26 spending allowed Canada to reach NATO's defence benchmark of 2 percent of gross domestic product.
- The Defence Investment Agency awarded Telesat an initial $2.3 billion in August to deliver the first phase of the Enhanced Satellite Communications Project – Polar, with MDA Space also sharing in the work.
- The CP-140 Aurora fleet will not receive self-defence systems or wideband global satellite communications, and two aircraft were left unmodified.
Canada’s Department of National Defence spent $47.8 billion in the 2025-26 fiscal year, a figure about 34 percent higher than the roughly $35.7 billion the department had planned, according to SpaceQ Media Inc.’s reporting of the department’s results report. The increase let Canada reach the NATO defence-spending mark of 2 percent of gross domestic product. DND attributed the rise to faster investment to re-equip the military and to the Canadian Coast Guard’s move into the department in September 2025. The explanation appears in the departmental results report covering National Defence and the Canadian Armed Forces, and the benchmark was reached in the fiscal year covered by the report.
The department awarded MDA Space a $32 million Surveillance of Space 2 contract in February 2026. The deal runs through the Defence Investment Agency and covers ground-based telescopes built to detect and track objects in Earth orbit. The department established a strategic partnership with Telesat Corporation and MDA Space for the Enhanced Satellite Communications Project – Polar to build up Canadian Armed Forces military satellite communications. The contract came after the fiscal year ended March 31.
The Defence Investment Agency gave Telesat an initial $2.3 billion in August for the first phase of the Enhanced Satellite Communications Project – Polar, and MDA Space is also sharing in the work. The award followed the end of the 2025-26 fiscal year on March 31. The contract is part of the strategic partnership to build up Canadian Armed Forces military satellite communications under the Arctic section of the results report.
Work on the Tactical Narrowband SATCOM – Geosynchronous project faced delays because of resourcing constraints. The project covers Canadian Armed Forces narrowband military satellite communications through its ground network infrastructure. Full operational capability is now forecast for March 2027.
The CP-140 Aurora patrol aircraft fleet received upgraded sensors and mission systems under the Aurora Incremental Modernization Project, keeping the fleet flying until retirement in 2030. The fleet will go without self-defence systems and wideband global satellite communications. Two aircraft remained unmodified.
The department signed a $48.4 million deal for a radar prototype meant to operate over the horizon from the Northwest Territories. It also agreed with Australia to co-develop Arctic radar technology. The 2026-27 plan swaps the radar program for NORTHWATCH. That system will combine ground and space-based sensors.
DND’s Innovation for Defence Excellence and Security program ran the Gateway to the Stars challenge. The effort advanced communications by low Earth orbit satellites, and Halifax’s Galaxia and Toronto’s Kepler Communications won contracts.
In March, the department chose NordSpace, Canada Rocket Company and Reaction Dynamics for $8.3 million apiece under the Launch the North IDEaS challenge. The goal is a small rocket capable of reaching orbit by 2028. The department signed a 10-year, $200 million lease for a dedicated pad at Maritime Launch Services’ Spaceport Nova Scotia. The Launch the North section on Canada’s sovereign access to space mentions the lease.
During the year, the department opened new IDEaS challenges. One looks at exploiting the connection of Earth and space systems to extend communications coverage. Another covers tactical-grade clocks for GPS-denied environments in the North. These challenges sit within DND’s Innovation for Defence Excellence and Security program.
The next departmental results report, for 2026-27, will cover the Enhanced Satellite Communications Project – Polar contract. For 2026-27, the department plans a $25 million Space Rocketry Challenge and a review to turn the Royal Canadian Air Force into an Air and Space Force. The next report lists these items under what to expect, alongside the ESCP-P coverage. DND’s research and development work produced advances across space domain awareness—monitoring and tracking objects in orbit—through prototyping and testing, and the department identified space domain awareness as one of five focus areas.
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