Canada plans major defense spending boost over next decade

By David Ljunggren and Leah Schnurr

OTTAWA (Reuters) - Canada, under pressure from the United States to boost military spending, said on Wednesday it planned to increase its defense budget by nearly three quarters over the next decade as it buys new jets and ships.

Defence Minister Harjit Sajjan said the overall budget would jump by 73 percent to C$32.7 billion ($24.2 billion) in 2026/27 from C$18.9 billion in 2016/17, with the biggest increases coming in later years. The minister was unveiling a new 20-year defense policy.

Sajjan, who recently complained about the low level of military expenditure, spoke a day after Foreign Minister Chrystia Freeland said Canada would have to play a larger global role as the administration of U.S. President Donald Trump retreated from multilateralism.

Sajjan told a news conference the policy would result in "a Canada that is strong at home, secure in North America and engaged in the world."

He said the boost would take total defense expenditures to 1.4 percent of GDP by 2024/25 from 1.2 percent now. Other estimates put Canada's spending at closer to 1.0 percent.

Sajjan said Canada would hold an open competition to buy 88 advanced fighter jets to replace its ageing fleet of 77 CF-18 planes. The defense review said the new planes would need to operate seamlessly with planes of Canada's allies and estimated the cost at between C$15 billion to C$19 billion.

($1 = 1.3514 Canadian dollars)

(Reporting by David Ljunggren and Leah Schnurr; Editing by Denny Thomas and Chizu Nomiyama)