The world is changing rapidly. The international rules-based order is fading, and technological change is expanding the fields of conflict. In response, Canada’s new government is focused on what we can control: rebuilding, rearming, and reinvesting in the Canadian Armed Forces (CAF). We are working fast and seeing results: Canada is on track to hit our 2% NATO spending target this fiscal year and applications to join the CAF are up nearly 13%.

To protect Canada’s sovereignty, build our prosperity, and strengthen our strategic autonomy, the Canadian government must change how we invest in defence. Canada’s defence procurement has long been too complicated, too slow, and too reliant on international suppliers, limiting the growth of our defence industries. This has left our workers and businesses with fewer opportunities, our domestic industries without the demand necessary to scale, and critically, the women and men of our military without the equipment they need to defend our sovereignty and that of our Allies.

Canada’s new government is changing this. Today, the Prime Minister, Mark Carney, launched Canada’s first Defence Industrial Strategy. This is a strategy to transform our defence industries by prioritising Canadian suppliers and materials, investing in Canadian innovation and commercialisation, and streamlining procurement to give businesses consistent and predictable demand. This will enable Canada’s aerospace, cyber, and other industries to scale up operations to sell more at home and to trusted partners around the world, creating high-paying careers for Canadians across defence supply chains.

The Defence Industrial Strategy positions Canadian industry to take advantage of $180 billion in defence procurement opportunities and $290 billion in defence-related capital investment opportunities in Canada over the next 10 years, with an anticipated $125 billion downstream economic benefit by 2035. The Defence Industrial Strategy will create 125,000 high-paying careers, increase our defence exports by 50%, raise the share of defence acquisitions awarded to Canadian firms to 70%, and grow Canadian defence industry revenues by 240%. Within a decade, we will raise maritime fleet serviceability to 75%, land fleets to 80%, and aerospace fleets to 85% to bolster Canadian defence.

In total, the Defence Industrial Strategy is an investment of over half a trillion dollars in Canadian security, economic prosperity, and our sovereignty.

The Defence Investment Agency (DIA) is central to this strategy. It will streamline processes, cut red tape, and speed up delivery. It will equip the CAF with what it needs, when it needs it, and will prioritise manufacturing and strategic partnerships with Canadian firms, including small and medium-sized businesses. The DIA will also lead Canada’s participation in joint procurement initiatives.

Canada’s Defence Industrial Strategy will strengthen security, create prosperity, and reinforce our strategic autonomy. The strategy has five pillars.

1. Position Canada as a leader in defence production:
   • Canada will build: In the areas of homegrown strength and key sovereign capabilities, such as shipbuilding, aerospace, space, land systems, and digital technologies. New defence procurements will prioritise Canadian firms and Canadian manufacturing as a matter of policy.
   • Canada will partner: Where Canada lacks the capability to build domestically or there is an advantage to working jointly with partners, we will partner with trusted allies to deliver capabilities for the Canadian Armed Forces.
   • Canada will buy: When it is not feasible to build domestically or partner with an ally, Canada will buy equipment from allies, with strong conditions that spur reinvestment into the Canadian economy, support careers in our defence industry, and ensure Canadian sovereign control over the operation and sustainment of the newly acquired assets.
   • Buy Canadian will be the North Star toward a new way of doing business in defence acquisitions. Taking these essential steps will reduce overreliance on foreign suppliers, foster national champions in our defence industry, secure sovereign control of our own equipment and intellectual property (IP), and create value across Canadian supply chains.
2. Make it easier to build in Canada by breaking down barriers between government and industry:
   • Establish a permanent Defence Advisory Forum. Led by the DIA, the Forum will engage with Canadian defence industry partners to speed up acquisition processes.
   • Accelerate the security clearance process for defence sector personnel to remove barriers to entry and support growth in the sector and needed security infrastructure.
3. Scale up Canada’s defence and dual-use innovation, and export it to our allies:
   • Utilise a new $4 billion Defence Platform at the Business Development Bank of Canada to ensure Canadian companies, including small and medium-sized businesses, have access to the capital they need.
   • Implement the $379.2 million Regional Defence Investment Initiative to support the growth and integration of Canadian small and medium-sized businesses into domestic and international defence supply chains.
   • Provide an initial amount of $656.9 million to support the development and commercialisation of defence and dual-use technologies, including through the Strategic Response Fund, Innovative Solutions Canada, and the Life Sciences Fund.
   • Create a Drone Innovation Hub at the National Research Council, with an investment of $105 million over three years, and develop an aircraft platform for research, development, demonstration, and qualification of new technologies for Canada’s defence industries with an investment of $459 million over five years.
   • Create a new Bureau of Research, Engineering and Advanced Leadership in Innovation and Science (BOREALIS) to coordinate and accelerate defence research and innovation in frontier technologies.
   • Reinforce Canada’s edge in high-value sectors like artificial intelligence, quantum, space, and others, championing Canadian industry to be a leader domestically and internationally.
   • Boost Canadian defence exports through a new dedicated team for export promotion.
   • Stand up a new Science and Research Defence Advisory Council later this year.
   • Appoint new trade commissioners in the United Kingdom and key European Union markets to support Canadian business abroad and ramp up Canada’s presence at major global defence and aerospace trade shows.
   • Support the sovereign control of Canadian defence-related IP for Canadian industry.
4. Protect Canadian workers, industries, and supply chains:
   • Launch the new Canadian Defence Industry Resilience Program, with initial investments starting this year, to strengthen Canada’s sovereignty. The initial focus will be to increase production capacity for Canadian defence businesses, and begin producing nitrocellulose – a critical, high-demand energetic material for artillery – in Canada.
   • To build Canada’s future defence workforce, the Government will launch a Canada Defence Skills Agenda focusing on four key priorities: strengthening the defence industry talent pipeline, addressing urgent skills needs, expanding the supply of skilled workers, and partnering with provinces, territories, and Indigenous rights holders.
5. Spearhead a coordinated national effort to strengthen Canada’s defence sector:
   • Work with provinces, territories, and Indigenous rights holders, including in the North and the Arctic, to address security gaps, identify opportunities in technology and resources, and unlock new market opportunities for Canadian industry.
   • Accelerate critical minerals projects and support the development of Canadian supply chains that are reliable, secure, and aligned with national defence and allied needs.

The Defence Industrial Strategy is a jobs strategy. It will create high-paying careers across the entire supply chain – from steel and aluminum welders to engineers, scientists, and manufacturers who turn Canadian resources into the equipment, ammunition, vehicles, and other critical capabilities that keep Canadians safe.

Canada’s new Defence Industrial Strategy will transform our military and defence supply chain – create good careers at home, open new markets for our businesses, and equip the CAF with the world-class equipment they need to protect Canada and our Allies. 

Quick facts

• Canada’s defence sector is an important contributor to the economy with close to 600 firms directly accounting for 36,000 jobs in 2022, supporting a total of 61,200 jobs across the defence value chain. These companies generated $14.3 billion in revenues that same year and contributed $7.4 billion to GDP across the defence value chain.
• The Canadian defence sector is one of the most research and development-intensive, spending $440 million in 2022, with the vast majority invested by the industry itself. It is more than three times as research and development-intensive as Canadian manufacturing overall, and its share of employees in high-end science, technology, engineering, and mathematics jobs is more than 2.5 times as great.
• Today’s announcement builds on targeted actions the government has taken to rebuild, rearm, and reinvest in our military, including:
  • Increasing defence investments to 2% of GDP, or approximately $63 billion, in 2025-26, and to 5% of GDP by 2035.
  • Providing pay raises to all Canadian Armed Forces members.
  • Launching the new Defence Investment Agency to overhaul and streamline Canada’s defence procurement.
  • Outlining $81.8 billion to rebuild, rearm, and reinvest in CAF members in Budget 2025.
• The new Strategy also positions Canada as a leader in the European Union’s Readiness 2030 plan, a multilateral effort with our European allies to reinforce defence supply chains and industrial capacity among allied nations.
• Our government intends to make the Defence Investment Agency a standalone entity through legislation this spring, serving as the single point of contact for defence-related investment and procurement.