Toronto 
Prime Minister Mark Carney has announced the largest pay raise for the Canadian Armed Forces (CAF) in a generation, as part of a $9 billion investment for 2025–26 aimed at strengthening military capabilities and meeting NATO’s 2% defence spending target this year. The plan also contributes to a long-term goal of allocating 5% of GDP to defence by 2035.
The new pay structure, retroactive to April 1, 2025, will raise salaries for all CAF members.
Colonels and above will receive an 8% increase, lieutenant-colonels and below will see a 13% boost, and starting pay for privates in the Regular Force will rise by 20%. A Military Service Pay benefit will be introduced to reflect years served.
Additional allowances and incentives will be phased in over the next year. Instructors at the Canadian Forces Leadership and Recruit School will be eligible for up to $12,000 annually in extra pay, while those at other training establishments can receive up to $8,400. Members at designated training schools will also receive $300 per month.
Environmental allowances for land, sea, and submarine duties will return to a flat rate of $100 per day while deployed. Personnel involved in domestic operations such as disaster relief will receive $45 per day, with higher pay for Arctic deployments — an additional 50% of land duty allowance or 25% of sea duty allowance.
Recruitment incentives for critical occupations will include $10,000 upon completion of basic training, $20,000 once qualified in trade, and a further $20,000 for re-signing after the first contract. Posting allowances will shift to a flat rate: $13,500 for the first three moves, $20,050 for moves four to six, and $27,000 for subsequent relocations. Enhancements to Imposed Restriction benefits will include $7,000 annually for food, $4,200 for transportation, and $2,400 for incidentals.
According to the news release, the measures will increase the CAF’s overall compensation and benefits envelope by approximately 20%, with 13% allocated to the Military Factor adjustment and Military Service Pay, and 7% to other initiatives.
“The women and men of our Canadian Armed Forces make Canada strong,” Carney said. Defence Minister David J. McGuinty described the move as recognition of their service, while Chief of the Defence Staff General Jennie Carignan said the changes would improve retention, support families, and encourage Canadians to serve.
Improvements to Compensation and Benefits for the Canadian Armed Forces
