Australia and Canada have finalized a A$2.5 billion (US$1.8 billion) agreement for Australia to supply its Over the Horizon Radar (OTHR) system to Canada, marking Australia's largest-ever defence export. The deal, announced on June 22, 2026, aims to enhance Canada's military surveillance capabilities in the increasingly contested Arctic region.
Details of the Agreement
Under the agreement, Australia will transfer its OTHR technology to Canada, combining Australia's expertise in over-the-horizon radar with Canada's leadership in Arctic defence and long-range domain awareness. The system is designed to detect and track objects beyond the line of sight, providing early warning and surveillance coverage across vast distances. Prime Minister Anthony Albanese confirmed that industry partner BAE Systems Australia will begin delivering Canada's Australian Over the Horizon Radar (A-OTHR) capability on July 1, 2026.
Strategic Importance
The deal reflects the shared strategic interests of both nations amid growing geopolitical tensions. Albanese stated, "Australia and Canada's relationship is grounded in decades of operational cooperation, shared strategic interests, and deep collaboration through the Five Eyes partnership." He added that the agreement is a milestone for Australia's defence exports and will deepen defence-industry cooperation. The Australian government emphasized that working together on OTHR systems will support early warning and surveillance in the Indo-Pacific and North Atlantic, contributing to collective security in an increasingly complex strategic environment.
Economic and Industrial Impact
The project is expected to sustain approximately 300 high-value technical jobs in Australia. The deal also strengthens ties between the two countries as they navigate a return to great-power politics and the erosion of the global rules-based order. In a speech to the Australian parliament earlier this year, Canadian Prime Minister Mark Carney urged Canada and Australia to use their reputations as stable, trustworthy democracies to lead coalitions resisting domination by the United States, China, and other major powers.
Broader Context
Canada's investment in OTHR technology is part of its broader effort to bolster its military presence in the Arctic, a region experiencing increased strategic importance due to climate change and geopolitical competition. The radar system will enhance Canada's ability to monitor air and maritime traffic in the far north, improving domain awareness and national security. For Australia, the export represents a significant step in its defence industry ambitions, showcasing its advanced radar technology on the global stage.
