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UPDATE 2-Canada plans major defense spending boost over next decade

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OTTAWA, June 7 (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 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.

Sajjan spoke as he unveiled a new 20-year defense policy one day after Liberal 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."

Canada will hold an open competition to buy 88 advanced fighters to replace its fleet of 77 CF-18 planes, more than the 65 new jets the previous Conservative government had planned.

The defense review said the jets would need to operate seamlessly with planes of Canada's allies and estimated the cost at between C$15 billion to C$19 billion.

Ottawa said last year it wanted to buy 18 Boeing Corp Super Hornets as an interim measure but has since threatened to scrap the plan unless the U.S. firm drops an anti-dumping challenge against planemaker Bombardier Inc.

Sajjan 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.

He declined to comment when asked whether the spending would result in a larger budget deficit than the Liberals are already forecasting.

North Atlantic Treaty Organisation members have committed to spend two percent of GDP on the military, a target few meet. Trump last month upset NATO leaders by insisting they commit more funds.

Asked whether he thought Trump would be satisfied, Sajjan said: "This defense policy is for Canada".

One major uncertainty is that the Liberals may not be in power in a decade's time. They took office in 2015 and Canadian governments usually last between eight and 10 years.

The government confirmed longstanding plans to buy 15 new ships and said the cost would rise to between C$56 billion and C$60 billion. The plan was announced by the Conservatives, who put the cost at C$26.2 billion. ($1 = 1.3514 Canadian dollars) (Reporting by David Ljunggren and Leah Schnurr; Editing by Denny Thomas and Chizu Nomiyama)