Carney's Defence Strategy Faces Criticism Over Bureaucratic Expansion Concerns
Prime Minister Mark Carney has formally unveiled Canada's new Defence Industrial Strategy, injecting $6.6 billion into the nation's defence industry with ambitious goals to create 125,000 new jobs over the next decade. The strategy, announced on February 17, 2026, at Canadian Aviation Electronics in Montreal, promises to award 70 per cent of defence contracts to Canadian companies through a "Build-Partner-Buy" framework that prioritizes domestic industry.
This initiative represents a significant component of the government's broader plan to increase Canadian military spending to five per cent of GDP by 2035, aligning with NATO targets. The announcement marks what many observers see as a long-overdue commitment to strengthening Canada's defence capabilities.
Praise for Defence Focus Amidst Growing Concerns
First, the positive developments deserve recognition. After years of neglect, the federal government is finally taking defence seriously. The Canadian military has been in desperate need of modernization, and in today's increasingly protectionist global economy, finding productive applications for domestic steel production and displaced workers represents a strategic opportunity.
However, before Canadian businesses begin transforming their operations to meet defence needs, they should examine the strategy's implementation details—or rather, the concerning lack thereof. The most pressing issue lies in Ottawa's failure to clearly define what constitutes a "Canadian company" for the purposes of this initiative.
Unclear Definitions Create Uncertainty
The strategy leaves critical questions unanswered: Is a Canadian company defined by its headquarters location? Does it require a specific percentage of Canadian employees? Must it demonstrate that profits remain within Canada rather than being funneled offshore through holding companies? Currently, nobody knows.
Retired Vice-Admiral Mark Norman highlights that many defence contractors worry this ambiguity will lead to inconsistent interpretation and create an uneven competitive landscape. "Home-grown Canadian firms want protection, but the rules aren't explicit," Norman told National Post. "Meanwhile, a subsidiary of a multinational corporation that employs 10,000 people in Canada fears it could be excluded from consideration."
To address this uncertainty, Norman suggests the government establish clear "categories" defining Canadian firms based on various criteria such as job creation or investment levels, ensuring sufficient participation across the defence industry.
Sovereignty and Capacity Challenges
Beyond definitional problems, the strategy raises sovereignty concerns. While emphasizing new partnerships with Europe, Britain, and the Indo-Pacific region, former intelligence analyst Phil Gurski warns that any engagement with foreign entities carries inherent risks.
"Alliances can be beneficial today—but you cannot predict tomorrow," Gurski explained to National Post. "We have relied too heavily on American partnerships for too long. While purchasing jet fighters from Sweden might sound advantageous now, what happens in ten years if they experience a radical change in government?" Gurski advocates for prioritizing purely Canadian content whenever possible.
The strategy identifies ten key sovereign capabilities: aerospace systems, ammunition production, digital systems, maintenance support, personnel protection equipment, sensor technology, space systems, specialized manufacturing, training and simulation, and uncrewed autonomous systems. Additionally, nitrocellulose—the compound essential for manufacturing explosives—has been designated a domestic priority, with production scheduled to commence in 2029.
However, this ambitious agenda raises capacity concerns. If domestic production capabilities prove insufficient, Canada will struggle to meet the 70 per cent target for awarding contracts to Canadian companies. Gurski emphasizes the need for rapid funding disbursement to enable companies to scale their production effectively.
Bureaucratic Growth Threatens Implementation
Despite the substantial financial investment and job creation promises, critics argue that bureaucratic expansion represents the strategy's fundamental weakness. The lack of clear definitions, combined with the complexity of managing multiple sovereign capabilities and international partnerships, could lead to administrative bloat that hinders rather than helps Canada's defence modernization.
While the government deserves credit for finally addressing long-standing defence needs, the success of this $6.6 billion initiative will depend on practical implementation details that currently remain undefined. Without clear guidelines and efficient bureaucratic processes, the Defence Industrial Strategy risks becoming another example of well-intentioned policy undermined by administrative inefficiency.
