Defence Minister David J. McGuinty announced significant pay and benefit improvements for Canadian Armed Forces (CAF) members on November 14, 2025.
What’s Changing for CAF Members
McGuinty confirmed that CAF personnel received a pay raise directly in their bank accounts, retroactive to April 1, 2025.
This increase comes from a “modernization” of the Military Factor — a pay component that reflects the unique demands of military service. The government describes this as the most significant compensation update for the military in decades.
More Than Just a Pay Raise
In addition to higher pay, the CAF will roll out a new Military Service Pay, paid annually based on years of service.
The government also increased several allowances:
- Posting allowances, to ease financial strain when soldiers relocate.
- Imposed-Restriction (IR) benefits: more money for those living apart from their families due to postings.
- Environmental allowances for dangerous or harsh duty: for field, ship, and Arctic deployments.
- Domestic operations and Arctic deployment allowances: CAF members now earn daily pay when working in these roles.
- Instructor allowance: training staff at military schools will get extra monthly pay plus daily rates based on how much they teach.
Why the Government Is Doing This
McGuinty said these improvements show Canada’s deep respect for CAF members and their families. He emphasized that this package recognizes the sacrifices service members make, from separation from loved ones to 24/7 readiness.
More also see it as a strategic investment: improving pay and benefits helps retention, morale, and recruitment of skilled military personnel.
Broader Defence Context
These changes align with a broader plan by Carney’s government to reinvest in Canada’s military.
In 2025–26, DND will significantly increase defence spending — including major upgrades to infrastructure, fleet capacity, and personnel.
McGuinty has also introduced new legislation to modernize the military justice system, aiming for transparency and accountability in how service members are treated.
How the Military Reacted
According to a message from the Chief of the Defence Staff and senior CAF leadership, the compensation package represents a “historic adjustment” — about a 20% increase in the overall pay and benefits envelope.
They say the changes reflect feedback from service members and will help make military service more sustainable, especially for those who frequently relocate or train new recruits.
