Alberta's industrial and technology sectors are positioned to be major beneficiaries of the federal government's newly announced plan to inject an additional $81 billion into Canada's defence budget over the next five years. This assessment came from former Defence Minister Peter MacKay during a defence industry roundtable in Edmonton.
Long-Awaited Investment Hailed as "Heartening"
Speaking to dozens of industry executives at the Edmonton Unlimited innovation hub on Monday, December 1, 2025, MacKay called the spending promises from Prime Minister Mark Carney's government "heartening and long overdue." The massive financial commitment is aimed at modernizing the Canadian Armed Forces and ensuring Canada meets its NATO defence spending obligations.
MacKay, who served as defence minister under Prime Minister Stephen Harper, emphasized that procuring major military systems is a complex endeavour far removed from consumer shopping. "If you're buying large military equipment, you can't get it at Canadian Tire. You cannot buy this off the shelf," he stated, highlighting the specialized nature of defence contracting.
Opportunity Amid Bureaucratic Challenges
While optimistic about the potential for Canadian, and specifically Albertan, industry, MacKay drew on his experience to caution about the hurdles within Ottawa. He recalled the "massive cross-threaded nature of departments" where the Treasury Board, the Department of National Defence (DND), and the Prime Minister's Office often had conflicting priorities.
This bureaucratic tango, he noted, frequently led to DND returning unspent funds at each fiscal year's end because purchases couldn't be finalized in time. "The key will be forging international partnerships to acquire battle-ready gear and manage the complex supply chains," MacKay explained, pointing to areas like in-service support and maintenance as ripe for private sector involvement.
Prime Focus for Small and Medium Enterprises
MacKay identified a particularly significant opening for smaller companies within the massive spending package. "Finding those partnerships and working through various departments and agencies is where I believe the largest opportunity is for small- and medium-sized enterprises, because it's the technology," he told the audience.
The federal plan also includes some organizational restructuring, such as folding the Coast Guard into the Royal Canadian Navy. While MacKay saw merit in these changes, he warned against relying on bureaucratic reshuffles to satisfy the NATO target of spending two per cent of GDP on defence. "This is not really what NATO had envisioned when it says get to two per cent, because you're not really adding new capability," he clarified.
Despite the challenges, the former minister expressed encouragement at the government's stated urgency. "I'm heartened to hear the prime minister use language like, 'We're going to do this at unprecedented speed' and 'We're going to make massive investments,'" MacKay concluded, signalling that the time for Alberta's defence and tech sectors to engage is now.
