Carney’s ‘Buy Canada’ defence plan targets billions in new domestic investment

Ottawa wants to more than triple Canadian defence industry revenue, boost defence exports by 50 per cent and create 125,000 jobs over 10 years

Canada will spend more of its growing military budget with domestic firms under a defence-industrial strategy that’s meant to unleash more than $500 billion (US$369 billion) in investment over a decade.

The government wants to more than triple Canadian defence industry revenue, boost defence exports by 50 per cent and create 125,000 jobs over a 10-year period. A centrepiece of the policy is a goal to boost the share of defence acquisitions awarded to Canadian firms to 70 per cent, a big shift for a country that has long relied on U.S. military contractors for much of its equipment.

Prime Minister Mark Carney had planned to unveil the strategy last week but postponed it after one of the deadliest mass shootings in Canadian history occurred in British Columbia.

The government’s aims are to signal military-spending priorities to investors, give a lift to Canada’s tariff-hit manufacturing base and reduce reliance on the U.S. for security.

“Long-held assumptions have been upended — about the end of imperial conquest, the durability of peace in Europe, and the resilience of old alliances,” the document says. “It is more important than ever that Canada possess the capacity to sustain its own defence and safeguard its own sovereignty.”

Canada is embarking on its largest military buildup in decades, driven by an aggressive U.S. administration and mounting concern about Russian activity in the Arctic. After years as a NATO spending laggard, the country is racing to increase its military outlays. NATO members have agreed to spend five per cent of gross domestic product on defence and security by the middle of the next decade.

The promised windfall has set off a rush among companies seeking government and investor backing. But Canada has long been sluggish in procurement and there are bottlenecks to defence exports — barriers the strategy aims to fix.

To build “Canadian champions,” the government will identify firms as strategic partners, to which it will offer research funding, capital-spending support and export promotion in exchange for on-time delivery and Canadian supply chains, the strategy document says.

It includes a list of “sovereign capabilities” where it wants to reduce supply-chain vulnerabilities. They include aerospace, ammunition, digital systems, sensors and autonomous systems such as drones.

The new Defence Investment Agency, led by former Royal Bank of Canada executive Doug Guzman, will apply a “build-partner-buy” framework: build at home when possible, partner with allies when helpful, and buy abroad when necessary.

The document explicitly notes concerns about the U.S. only in relation to tariffs, but it echoes Carney’s Davos speech by alluding to U.S. President Donald Trump’s retreat from alliances and more confrontational foreign policy. It names Russia once and avoids mentioning China, even as the latter country expands its Arctic footprint.

Trump’s steel and aluminum levies have hammered producers, and the strategy promises help to retool toward defence-grade products. Still, it says: “Canada has a long history of working closely with the United States and looks forward to a continued strong Canada-U.S. defence relationship.”

The plan creates a government unit to pursue high-value foreign contracts, adds trade commissioners in U.K. and the European Union and expands Canada’s presence at major defence and aerospace trade shows.

The strategy aims to speed up the awarding of smaller contracts with faster security clearances.

Carney is also trying to tackle a long‑standing problem: Canada excels in research but struggles to commercialize it. The strategy commits to a $105 million drone-innovation hub, a new Science and Research Defence Advisory Council, a $460 million R&D platform and says Borealis — a new defence innovation accelerator — will pick its first projects by the third quarter.