Canada Faces Military Housing Crisis and Scraps $178M Ukraine Vehicle Deal: Forces Under Pressure

Canadian Military Housing: Decades of Neglect Come to Light

In a revealing report released on October 22, 2025, Auditor General Karen Hogan delivered a stark assessment of living conditions for Canadian Armed Forces (CAF) members. After inspecting three major bases—Esquimalt in British Columbia, Gagetown in New Brunswick, and Trenton in Ontario—Hogan’s team found many residential buildings in a state of severe disrepair. Some structures date back to the era of the Great Depression, and out of 35 buildings examined, 32 required at least one urgent repair.

“That might mean that building didn’t have safe drinking water…toilets weren’t working, or there was structural damage to the exterior walls,” Hogan explained in a post-report news conference. The findings paint a picture that many civilians would consider unacceptable, let alone the men and women entrusted with Canada’s defense. The report makes it clear: these are not conditions anyone should be expected to endure, especially not the country’s military personnel.

National Defence’s own records underscore the scale of the problem, indicating that at least 25 percent of their quarters need major repairs or fail to meet operational requirements. Compounding the issue is a chronic failure to meet internal spending targets for infrastructure maintenance—a situation acknowledged by Defence Minister David McGuinty. “We’re working actively to improve all of that,” McGuinty said, pointing to recent investments and pay increases intended to recruit and retain soldiers. But he also admitted, “This is long overdue. For decades now, governments successively have not been making the investments we need to make in our armed forces.”

The problems go beyond crumbling walls and faulty plumbing. Some base housing water systems have tested positive for lead, posing serious health risks. The Canadian Forces Housing Agency, responsible for managing these residences, faces a daunting shortfall: as of spring, only 205 units were available, while 3,706 applicants sat on waiting lists. This bottleneck is especially worrying as the CAF aims to add over 6,000 new members by April 2029.

Recruitment Struggles: Shortfalls and Systemic Barriers

Housing isn’t the only concern. The Auditor General’s separate report on recruitment highlights persistent difficulties in attracting and training new personnel. Despite receiving 192,000 online applications from 2022 to 2025, more than half of applicants withdrew within two months. Ultimately, just one out of every thirteen candidates was successfully recruited.

The military’s efforts to diversify its ranks by recruiting permanent residents have yielded limited results: only 2 percent of permanent resident applicants were brought onboard, compared to 10 percent of Canadian citizens. The recruitment process, intended to last between 100 and 150 days, is often twice as long due to security screening backlogs—which have grown from 20,000 to nearly 23,000 potential recruits over the audit period.

With the CAF falling short by 4,700 recruits over three years, the pressure to fill the ranks has led to the hiring of temporary instructors. Yet the audit warns that future training could be compromised by instructor shortages, stemming from insufficient incentives, high workloads, and equipment deficits.

Policy Shifts and Retention Risks

In 2024, a policy change gave new recruits priority access to available housing—a move intended to facilitate onboarding. However, this decision has sparked frustration among longer-serving members, who now find themselves at lower priority for scarce accommodations. Hogan’s office found that National Defence did not adequately assess the impact of this change, raising concerns about retention at a time when strengthening the CAF is critical.

The audit cautions: with housing stock stagnant and thousands of new recruits needed, seasoned personnel may be incentivized to leave, further straining operational readiness.

Canada Cancels $178M Armored Vehicle Deal for Ukraine

While grappling with internal challenges, Canada has also made headlines for its decision to scrap a high-profile defense contract. Nearly two years ago, Ottawa transferred 25 decommissioned light armored vehicles (LAVs) to Armatec Survivability, an Ontario-based defense firm, for refurbishment and delivery to Ukraine. The $178 million deal was intended to provide Kyiv with much-needed equipment in its ongoing war against Russia.

The plan, announced in coordination with Ukrainian President Volodymyr Zelenskyy’s visit to Ottawa, envisioned both new and rebuilt vehicles for Ukraine’s forces. Armatec had developed a prototype with enhanced weaponry and safety features, and proposed refitting surplus Bison and Coyote reconnaissance vehicles for various battlefield roles, including medical evacuation and logistics.

However, the contract was quietly terminated this summer, with Defence Minister David McGuinty confirming the decision to lawmakers but declining to provide details, citing confidentiality. Opposition critics, including Conservative defense critic James Bezan, accused the government of abandoning Ukraine at a critical moment. So far, Kyiv has only received newly built armored support vehicles from Canada.

The fate of the 25 vehicles originally handed over to Armatec remains uncertain, as the Canadian Commercial Corporation has declined to comment on the issue. Earlier, the CAF had planned to retire nearly 350 Bison and Coyote vehicles, with the refurbishment project pitched as a cost-effective way to repurpose aging assets while supporting Ukraine’s defense needs.

Despite the cancellation, Canada remains committed to aiding Ukraine. At the recent Ukraine Defense Contact Group meeting in Brussels, McGuinty announced over $35 million in new military assistance, including $30 million for armored vehicles and additional equipment. This follows the December 2024 delivery of 64 Coyote vehicles to Ukrainian forces.

Looking Ahead: Challenges and Choices

The twin pressures of crumbling infrastructure and complex international obligations leave Canada’s military at a crossroads. The housing crisis and recruitment bottlenecks threaten the CAF’s ability to maintain readiness and morale, while the abrupt cancellation of the Ukraine vehicle deal raises questions about Ottawa’s long-term defense strategy and support for allies.

Minister McGuinty insists reforms are underway, citing major investments and recent recruitment successes. Yet as the Auditor General’s reports make clear, resolving these deep-seated issues will require sustained effort—and perhaps a reevaluation of priorities.

Canada’s Armed Forces are being tested on multiple fronts. The convergence of domestic infrastructure neglect and shifting international commitments underscores the need for a coherent, forward-looking strategy—one that addresses the immediate needs of service members while balancing global responsibilities. Without such a plan, both morale and operational effectiveness risk further erosion.