The Liberal government unveils a comprehensive defence-industrial strategy valued at $6.6 billion, designed to bolster Canada’s domestic military sector and reduce dependence on U.S. suppliers for equipment.
Enhancing Sovereignty and Arctic Security
“In this uncertain world, it is more important than ever that Canada possess the capacity to sustain its own defence and safeguard its own sovereignty,” the strategy states. “This is especially important when it comes to protecting Canada’s Arctic sovereignty and promoting a secure North.”
Officials delayed the release last week due to Prime Minister Mark Carney postponing travel amid a mass shooting in British Columbia, with the full announcement now scheduled for later this week.
Job Growth and Industry Support
The plan targets small and medium-sized businesses, encouraging their entry into the defence market by prioritizing Canadian-made equipment over foreign contractors. It projects the creation of 125,000 jobs over the next decade.
Recent data shows the Canadian defence sector currently supports over 81,000 jobs. The strategy overhauls the industrial technological benefits policy, factoring in economic advantages during contract awards.
Canada plans partnerships with reliable “Canadian champions” that meet budgets and timelines. In return, these firms gain access to research funding, export assistance, financing, and testing facilities. “They will be expected to deliver capability on time and on budget and support national sovereignty through their Canadian supply chains, while also ensuring continued value for money,” the document specifies.
Procurement and Export Goals
The initiative raises the share of defence contracts awarded to Canadian companies from about 50% to 70%, countering pressures from U.S. tariffs on manufacturing. It also seeks a 50% increase in defence exports and more than 240% growth in total industry revenues.
This aligns with efforts to accelerate defence spending in line with NATO pledges, amid alliance-wide pushes following U.S. President Donald Trump’s past criticisms.
Strategic Priorities and Partnerships
The strategy emphasizes reliable northern infrastructure and greater autonomy amid risks of resurgent imperial ambitions and strained alliances, while reaffirming strong ties with the U.S.
Russia’s invasion of Ukraine represents one instance of global order disruption. Canada aims to deepen defence industry collaboration with the European Union, United Kingdom, Australia, New Zealand, Japan, and South Korea through additional trade commissioners, military trade fairs, and strengthened supply chains in aerospace, drones, ammunition, and sensors.
Procurement preferences rank domestic production first, allied manufacturing second, and foreign purchases last. “The rise of new powers, increasing protectionism, and shifting dynamics in international relations have also underlined the necessity of thinking differently about the intersection of Canadian sovereignty, defence needs, and economic development,” it notes.
The strategy faced multiple delays, originally anticipated last fall and promised by Christmas before slipping past that deadline.
