Prime Minister Mark Carney has unveiled a comprehensive defence industrial strategy aimed at reducing Canada's heavy reliance on United States defence procurement while strengthening domestic capabilities. The announcement came during a press conference in Montreal, where Carney acknowledged the strengths of the U.S. partnership while emphasizing the need for greater autonomy.
Acknowledging Dependency While Charting New Course
"Let me start by acknowledging that there are many strengths to this partnership that we have with the United States," Carney stated during the Montreal announcement. "But it is a dependency, and it's a dependency we want to change in a positive way by building up our defence capacities here and our other partnerships abroad."
The strategy comes as data reveals that approximately 75 percent of Canada's defence capital spending currently flows to American suppliers and manufacturers. This significant financial outflow has prompted the government to commit substantial resources toward developing a more balanced approach to defence procurement.
Financial Commitments and Strategic Goals
In the federal budget presented last November, Carney's government allocated $6.6 billion over the next five years specifically to address this dependency issue. The funding will support the development of what officials are calling "sovereign capabilities" across critical sectors of the defence supply chain.
The strategy targets several key areas for development and strengthening:
- Aerospace and aviation technologies
- Ammunition production and manufacturing
- Digital systems including artificial intelligence and quantum computing
- Advanced sensor technologies
- Specialized manufacturing capabilities
Ambitious Targets for Canadian Defence Industry
The newly unveiled strategy establishes several ambitious targets for Canada's defence sector transformation:
- Increasing the share of defence acquisitions awarded to Canadian firms from 30 percent to 70 percent
- Growing defence revenues for Canadian small and medium-sized businesses by more than $5.1 billion annually
- Increasing Canada's defence exports by 50 percent
- Creating approximately 125,000 jobs across the Canadian economy
- Generating $125 billion in downstream economic benefits by 2035
New Agency to Streamline Procurement
A central component of the strategy involves the newly formed Defence Investment Agency, which aims to address long-standing criticisms of Canada's defence procurement system regarding lengthy delays and bureaucratic inefficiencies. The agency is currently operating under the Department of Public Services and Procurement Canada but is slated to become a stand-alone entity through legislation expected this spring.
Doug Guzman, a former Royal Bank of Canada executive and former colleague of Carney's, heads the new agency. Guzman confirmed to a parliamentary committee last week that he had been consulted extensively during the development of the new strategy.
Aligning with International Commitments
The strategy aligns with Canada's commitment to meet North Atlantic Treaty Organization (NATO) spending targets of five percent of GDP by 2035. Originally promised before Christmas, the policy represents a significant shift in how Canada approaches defence procurement and industrial development.
The announcement marks a pivotal moment in Canada's defence policy, signaling a deliberate move toward greater strategic autonomy while maintaining important international partnerships. The government's approach balances the recognition of existing relationships with the United States with a clear determination to build stronger domestic capabilities and diversify international defence partnerships.
As the strategy moves forward, observers will be watching closely to see how these ambitious targets translate into concrete results for Canada's defence industry and its position within the global defence landscape.
