Budget blowout: CSE promised almost 50% increase

The Supplementary Estimates (A) for fiscal year 2025-2026, tabled on 9 June 2025, indicate that the Carney government plans to boost CSE's budget to $1.591 billion in this fiscal year. That's nearly 50% higher than the agency's spending in 2024-25, the fiscal year just completed, which according to current estimates was about $1.1 billion (the exact number won't be known until later this year). 

As the chart below shows, CSE's budget has been on an upward trajectory almost continuously since the late 1990s. The agency's proposed 2025-26 budget is eight times as large as it was at the end of the 1990s — after adjusting for inflation. 

(The spike in 2014-15 was the result of a one-time $300-million payment made when CSE's main headquarters complex, the Edward Drake building, was completed.)

The initial impetus for the agency's explosive growth was the spending burst that came in the wake of the 9/11 attacks in the U.S., as Ottawa geared up for a role in the Global War on Terror (TM).

But what kept the money flowing was the emergence of the Internet and ubiquitous computing, which created a huge new target surface for intelligence gathering, corresponding new vulnerabilities that required improved cyber security efforts in Canada, and, more recently, an expanding arena for covert action through active and defensive cyber operations in the Global Information Infrastructure.

That 25-year process has already seen CSE grow from around 900 employees in the 1990s to more than 3,500 in March 2024. The current number is undoubtedly even higher (we should get an update to March 2025 in the next few days): in October 2024, CSE Chief Caroline Xavier revealed that the agency was on track to grow to between 4,000 and 5,000 employees over the next few years. 

With this latest budget increase, that number seems sure to go even higher.

CSE was already slated for a budget increase in the Main Estimates, which were tabled on May 27th and promised the agency $1.221 billion. The Supplementary Estimates (A) added $370 million to that total, describing it not particularly helpfully as "Funding for digital tools and capabilities." 

Since hiring a lot of new staff takes time, if CSE does manage to spend the full $1.6 billion now promised to it, a lot of that new money will likely have to go to equipment purchases or upgrades, which does seem broadly consistent with the description provided in the Supplementary Estimates.

A possibly related question is whether the $1.6 billion number will turn out to be a spike, like the one in 2014-15, or the start of a new, accelerated growth phase for CSE. 

With Ottawa apparently seized with determination to shovel defence doors out the door as fast as possible (and CSE spending evidently counting as part of defence spending broadly defined), I expect this year won't be the end of the agency's growth, but I do think it likely that this new phase will slow to somewhat more "normal" levels of growth in future years.

We'll have to see how it all plays out.