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Canada Unveils $2-Billion Overhaul of Armed Forces Compensation

Tiered raises up to 20 percent, service-based lump sums plus enhanced allowances aim to address chronic staffing shortages in key military trades

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Canadian Armed Forces members will receive a long-awaited pay raise touted as the largest in a generation, confirmed Prime Minister Mark Carney Fri., Aug. 8, 2025 during a whirlwind tour of CFB Trenton/8 Wing air base. DEREK BALDWIN PHOTO/The Intelligencer
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Overview

  • Military Factor adjustments will retroactively boost entry-level privates’ pay by 20 percent, junior ranks by 13 percent and senior officers by 8 percent, with full implementation by late fall.
  • A new Military Service Pay benefit will award annual, pensionable lump sums from $2,000 for five to ten years of service up to $6,000 for those with 21 or more years.
  • Recruitment allowances of $10,000 at basic training completion, $20,000 upon trade qualification and another $20,000 at first contract renewal target critical under-staffed occupations.
  • Environmental allowances for field and sea duty will become a flat $100 per day while domestic operations earn $45 per day and Arctic deployments receive an extra 50 percent of land or 25 percent of sea duty pay.
  • The $2 billion-a-year package is being rolled out over the next 12 months to support Canada’s pledge to reach NATO’s 2 percent GDP defence target by spring 2026 and its 5 percent goal by 2035.