Canada’s New Defence Strategy Is Bold and Unprecedented. Will It Work?

Prime Minister Mark Carney unveiled the Defence Industrial Strategy yesterday morning in Montreal. The first document of its kind for Canada—one shaped, in no small part, by the country’s altered relationship with an increasingly unpredictable and predatory United States—the DIS sets out a national approach to our defence industry.

For decades, governments assumed that security could be solved by buying the right gear from the right allies at the right time. The DIS suggests that era is ending. By linking the long-term needs of our armed forces to economic policy, the DIS reframes sovereignty as an industrial question: What must Canada’s military do to design, build, maintain, and supply itself at home?

Throughout the day, The Walrus reached out to national security experts, policy analysts, scholars, and former diplomats for their insights into the strategy. You’ll find their responses below, in some cases edited for length and clarity.

• Patrick Lennox
• Wesley Wark
• Wendy Gilmour
• Peter Jones
• Philippe Lagassé
• Vincent Rigby
• Ann Fitz-Gerald
• Heather Exner-Pirot

“Few policy bets have carried higher stakes.” Patrick Lennox Former Royal Canadian Mounted Police Intelligence Manager

The Carney government’s Defence Industrial Strategy has been in the works for many months, which is common inside federal bureaucracy. Indeed, it’s important not to get too hung up on word choices because, by the time a document like this gets published, it’s been through more revisions than anyone in the public service would care to admit. As my old boss at the Treasury Board Secretariat used to say, “every dog’s gotta leave its mark.” 

So let’s focus on the underlying message, which is actually quite profound. The DIS is an ambitious course of action for a dangerous age. Having been through a long experiment with neoliberalism, the Canadian government is getting back into the macroeconomic game with bravado. At the heart of the strategy is using the power of the public purse to establish a “clear, long-term demand signal to Canadian industry for defence and dual use goods so it can be better prepared to meet the requirements of the Canadian Armed Forces.” 

What this means is that the government will work with private-sector defence firms to establish an array of sovereign capabilities without which Canada cannot defend itself. It’s going to get into the business of picking “national champions” it hopes to turn into world-leading defence industrial firms. It’s also going to secure the supply chains required to construct these capabilities—from raw materials, all the way through to functional kit. Industries include aerospace, ammunition, digital systems, in-service support, specialized manufacturing, personnel protection, space, sensors, training and simulation, and uncrewed and autonomous systems (or drones). 

Canada’s defence procurement history doesn’t bode well here, but the government seems to be acknowledging it has played a role in that reputation. Fixing it, however, will require industrial partners willing to do their part. This must be a two-way street. Reliable demand must be met with reliable supply. The government will have to make this message clear to the champions it anoints; it will need to choose them carefully. This strategy is for all the marbles. Get this right, as a nation, and we survive. If greed takes over—if Canadian tax dollars are drained into a burgeoning military industrial complex that holds profit above any commitment to sovereignty—it all goes sideways fast. 

The DIS’s bureaucratese might not suggest this, but it is important to read between the lines and recognize the gravity of what the Carney government is setting out to create: a sovereign defence industrial base that will supply the material required to defend the nation from direct attack. Few policy bets have carried higher stakes.

“The strategy doesn’t say ‘Canada is back,’ but that is the plan.” Wesley Wark National Security Expert

The Defence Industrial Strategy is, like all government strategies, a message in a bottle. It’s meant to reach multiple shores, multiple audiences: government itself, the public, allies and partners, and adversaries.

For the government, it’s a road map to achieving more sovereign military capacity in a new world of volatility and danger. The road map is, first, build in Canada where possible, with up to 70 percent of acquisitions going to Canadian firms. Second, partner with trusted allies, especially the Europeans, to procure. Third, buy off the shelf (that means, essentially, the US market) but, even then, with economic benefits to Canada. Huge quantities of money will flow, but defence expenditure will be, we are promised, an engine of economic growth for Canada. This plan is more than ambitious. If the promise is fulfilled, it will be for the first time since World War II. But doubters and status quo proponents will circle around.

The message for the public is simple, perhaps deceptively so. Investing, hugely, in a defence industrial base is a win for Canada and a win for the Canadian economy. That win depends on whether Canada can truly wean itself off its branch-plant status with the US, can truly excel in key defence production sectors, and can find major export markets for its products in a world increasingly hungry for military gear but also increasingly competitive. Canadians will have to see these wins delivered in pocketbook ways over the next decade, including in new job opportunities and skills training. Canadians will also have to fully onboard the message that Canadian sovereignty is truly at risk in an age of global “rupture.”

The public message is also, of course, addressed to Canadian industry. Lots of promises about finding better pathways to support and collaboration with industry, but also a key identification of the defence sectors where Canada wants to focus. There are no less than ten of these, many high-tech. Aerospace, space platforms, sensors, drones, and digital systems with military applications all make the list. Some of these, such as drones, sensors, and even space platforms, are more aspirational than yet fully realized. Others, such as digital systems, are pioneer fields.

The strategy promises a “drone innovation hub” at the National Research Council. I would have liked to see the promise extend to a major drone manufacturing hub and centre for excellence, funded by the government and managed by the private sector.

For allies and partners, the message of the DIS is twofold. Canada is open for business, both investment and manufacture, but with clear economic benefits to Canada, attention to national security risks, and with protections for intellectual property. The other message is that Canada plans to export military capabilities the world needs. That will require a fundamental shift in government support, more “boots on the ground”: trade envoys, diplomats, defence officials, as the strategy has it. This effort will be focused especially on Europe. Canada also promises to develop strong critical-minerals supply chains vital to defence production, both for itself and for allies.

Finally, for adversaries. The message: Canada is fully committed to rebuilding its military and defending its sovereignty, including in the Arctic. The strategy doesn’t say “Canada is back,” but that is the plan.

“Canada’s allies are not waiting for perfect solutions that meet complicated bureaucratic criteria.” Wendy Gilmour Former NATO Assistant Secretary and National Security Expert

“Security, sovereignty and prosperity” is the tag line for Canada’s new Defence Industrial Strategy. This long-awaited document is intended to ensure that the Canadian Armed Forces have the equipment they need to defend Canada and meet core alliance commitments in North America (NORAD) and the Euro-Atlantic area (NATO).

However, yesterday’s announcement was heavily weighted toward the economic opportunities associated with Canada’s renewed commitment to defence investment—perhaps at the expense of conveying a sense of urgency around delivering the military capabilities Canada currently lacks.

The new DIS is described on the Government of Canada’s website as both a “jobs strategy” and a “long-term plan to support national prosperity and economic security.” Prime Minister Carney is clear that “security and prosperity are mutually reinforcing foundations,” and he has highlighted ambitious plans—connected to real budget numbers—to rebuild, rearm, and reinvest in the CAF. This clarity on intent and funding is important and overdue.

While the strategy outlines steps underway to modernize procurement tools and engage industry more systematically, the scale of the challenge—and the pace at which both our allies and competitors are moving—means incremental progress is no longer sufficient. The real test of the DIS will be whether it translates into rapid, disciplined procurement decisions that deliver usable capability to the Canadian Armed Forces.

Canada’s allies are not waiting for perfect solutions that meet complicated bureaucratic criteria. They are fielding systems, scaling production lines, and rebuilding stockpiles at pace. If our DIS does not materially shorten procurement timelines, simplify authorities, and empower decision makers to accept managed risk in pursuit of practical delivery, it will struggle to meet the demands of the strategic environment it is meant to address. This is where urgency must be injected into the system. Canada does not have the luxury of delivering core military capabilities over the next decade when operational gaps exist today—in Arctic surveillance and response, in precision munitions and their delivery systems, in cyber defence (and offence) and in integrated air and missile defence for both homeland and expeditionary operations.

Defence spending can and should be leveraged to strengthen domestic industry and diversify international markets but only if the primary metric of success remains capability delivered to the CAF—on time, in service, and at high readiness. Clear political direction, ruthless prioritization, and a bureaucracy rewarded for delivery rather than process compliance are critical.

The DIS is a starting point; whether it becomes a credible instrument of sovereignty will depend entirely on what is delivered and how quickly.

“It would be nice to have an idea, in policy terms, of what all this is for.” Peter Jones Professor in the Graduate School of Public and International Affairs at the University of Ottawa and Former Senior Civil Servant

Three points:

First, the growing signals which have been sent over the past few weeks that the government intends to buy a mixed fleet of fighter aircraft have been given yet another boost by yesterday’s Defence Industrial Strategy.

It is very difficult to imagine that the government could now opt for anything other than a mixed fleet. Saab’s offer to produce in Canada, and to make Canada’s Gripen production line a part of future exports to third countries, are the very embodiment of the “Build, Partner, Buy” objectives which are fundamental to this strategy. It would be very hard to turn around and say that the first major acquisition after the release of the strategy is going to turn its back on it; that we are going to “Buy” F-35s, when we can “Partner and Build” Gripens.

Second, the DIS is another announcement in a series of defence statements, which have included the commitment to achieve 2 percent of gross domestic product this year and 5 percent by 2035. All good stuff—but, it would be nice to have an actual defence policy to anchor all of this. We are in danger of getting things backward; usually, countries announce what they want their armed forces to do, and why that is important, before they announce what they will spend and how they will procure the equipment.

So far, the government has committed to spending a lot more on defence and to significantly boost Canada’s defence industry, but it would be nice to have an idea, in policy terms, of what all this is for. An accompanying foreign policy would be helpful too. Of course, the broad strokes are known, but the details matter. When can we expect them? The danger of the present approach is that we will build our armed forces around what we think our defence industry can provide. Supporting defence industries and jobs are very important goals, but should the issue of what our industry can provide be the driver of what we ask our armed forces to do?

Finally, the dramatic increase in production envisaged under the strategy will create a defence industry in Canada that can produce more than our armed forces, even expanded, can use. Once Canadian industries have spun up to produce large volumes of stuff, they are inevitably going to go abroad in search of markets to sustain production lines. The strategy is quite explicit. On page twenty-nine we read, “Canada will actively pursue opportunities to grow Canada’s defence exports.”

Presumably, much of this will go to allies and like-minded countries, who are also increasing their defence spending. But can they absorb it all, or will we eventually look for customers amongst the less salubrious nations of the world? Canada has had a complex relationship with arms exports. In the past, even as they quietly sought to make sales, Canadian governments have been highly sensitive to criticisms that such exports fuel conflicts or support undemocratic regimes.

Nowhere is this schizophrenic approach more in evidence than in our Export Control Regime for military equipment; a system which seeks to simultaneously encourage and strangle weapons exports. Look for that to change in favour of explicitly encouraging exports, and look for key constituencies on the left of the Liberal Party to react badly when it does.

“An ambitious plan punctuated by prudence and compromise.” Philippe Lagassé Barton Chair at the Norman Paterson School of International Affairs at Carleton University

The Defence Industrial Strategy is a solid but measured document—at least as compared with the prime minister’s rhetoric of late. Carney has told us that we’re living through a rupture, not a transition; this strategy is more about transitioning to deal with the rupture.

Start with its vision statement: “A robust Canadian defence industry that provides technological and operational advantage to the Canadian Armed Forces and its security partners in their mission to defend Canada, and maximizes growth, job creation and economic benefits for all Canadians.” By 2035, the DIS promises “an estimated $180 billion in total direct investment in defence procurement, $290 billion total investment in defence-related infrastructure, and $125 billion in downstream economic activity—more than half a trillion dollars of overall investment in Canada.”

How does the DIS propose to achieve these aims? By building “a more strategic relationship with Canadian industry.” When acquiring capabilities, “the Government will prioritize domestic production where feasible and partner with trusted allies where necessary” (emphasis to highlight the hedging found throughout).

The DIS promises to address long-standing weaknesses in Canada’s industrial policy: support for research and development, protection of intellectual property, nurturing small and mid-size firms, investing in skills and training, and promoting exports to create a globally competitive defence sector. Important and worthwhile, yet it feels purposefully restrained. Where did all catalyzing go, prime minister?

A consistent theme throughout the strategy is the need to reduce Canada’s dependence on foreign suppliers and buy as much from Canadian firms as possible. The DIS further states that the government will “enter into formal strategic partnerships with identified Canadian industry partners with a view to building world-leading champions.” These national champions will get all sorts of perks, including directed procurements, research and development money, and exports help.

There’s a catch. These national champions “will be expected to deliver capability on time and on budget and support national sovereignty through their supply chains, while also ensuring continued value for money.”

I get nervous when I read stuff like that. It tells me that expectations between government and industry may be misaligned at a time when mutual respect and understanding are sorely needed. Worse, it hints at an unwillingness to be honest with Canadians about the kinds of trade-offs involved in promoting national champions.

One assumes that these national champions will have to be Canadian through and through. The document is noticeably silent when it comes to defining what counts as a Canadian company. The way I read it, the DIS is emphasizing national outcomes, like sovereign IP and supply chains, rather than focusing on ultimate national ownership or head office location—an interpretation reinforced when this question came up at the recent tech brief.

When Canada can’t build capabilities on its own, partnerships will be sought. The DIS gets slippery here. It speaks about “trusted allies.” The beauty of this wording is that it can mean different things to different people. Those who want Canada to reduce its dependence on the United States can take that to mean non-American allies. The Department of National Defence and Canadian Armed Forces, on the other hand, can read it as continuing to work closely with the US, given that the relationship remains much the same at military-to-military levels.

When building Canadian capabilities or producing them with partners isn’t possible, the DIS states that Canada will buy foreign. When Canada does so, efforts will be made to reduce the risks associated with foreign governments controlling the platforms for those capabilities. This is where the actual vulnerabilities lie. You don’t need secret “kill switches” when you can leverage IP, software upgrades, and maintenance to bring us to heel.

A careful reading of DIS reveals an ambitious plan punctuated by prudence and compromise. If Ottawa hopes to achieve even half of what’s set out in the DIS, the government will need to marshal far more vigour to match its vision.

“Having ‘sovereign capabilities’ is fine, but what are they actually supporting?” Vincent Rigby Professor at Max Bell School of Public Policy at McGill University and Former National Security and Intelligence Advisor to the Prime Minister

Rebuilding the Canadian military and solidifying the country’s defence industrial base are essential components of Prime Minister Carney’s effort to achieve strategic autonomy for Canada in a time of international upheaval and uncertainty. The first Defence Industrial Strategy is, therefore, long overdue but welcome.

At first blush, the strategy hits the right notes. Its goals, strategic pillars, sovereign capabilities and core framework (“Build, Partner, Buy”) are all sensible. It aims, above all, to reduce Canada’s dependence on the US defence industry by increasing significantly the share of defence acquisitions awarded to Canadian firms, while at the same time growing defence exports, strengthening research and development, and creating jobs. It is an ambitious strategy—some targets may be too ambitious—but it needs to be. As the government spends massive new amounts on defence, the country requires a bold industrial strategy.

There are quibbles. For example, there is an overwhelming emphasis on economic development as opposed to actual defence capabilities. The prime minister’s website proclaims that the DIS is a “jobs strategy,” but it is also about giving our military the right tools to operate in an increasingly dangerous world (and not simply domestic operations “to defend Canada” as implied in the vision). The made-in-Canada approach makes sense as a means of building our economy, but when domestic firms can’t step up, the CAF will still need to acquire equipment from allies, including the US, to perform their mission.

Enormous importance is attached to the new Defence Investment Agency’s role in implementing the strategy. This is reasonable, but the agency—announced last year in an effort to streamline and coordinate military procurement—is an untested body still in the process of being stood up. Will it rise to the challenge? Much is riding on it.

Finally, the government still needs to articulate a new defence policy as part of a broader National Security Strategy. The DIS covers one critical element in the defence endeavour, but it is no proxy for a comprehensive policy that links security priorities with industrial support. Having “sovereign capabilities” is fine, but what are they actually supporting?

The devil is in the details. The government now has the strategy and the initial resources to support it ($6.6 billion in the last budget). Now comes the hard part.

“Turning this investment into lasting value will require more coordinated thinking.” Ann Fitz-Gerald Director of the Balsillie School of International Affairs

Canada’s new Defence Industrial Strategy is a meaningful step forward—and resembles more of an actual strategy than many policy documents that Canada has produced in this space. Its emphasis on strengthening Canadian firms is long overdue and reflects how allies have operated for years. Credit is due to the government for recognizing that defence capability, economic resilience, and industrial policy are now inseparable.

The creation of a Defence Advisory Forum—a table where officials, military leaders, and industry sit together to pressure-test ideas in real time—is also an important development, aligning Canada more closely with allied practice. It offers a model that should be extended to other critical policy domains.

The strategy creates the conditions for the country to bring unique value to NATO—and particularly to US partners—through deliberate investment in niche, high-value capabilities. Areas such as Arctic operations, data-driven systems, and dual-use technologies (such as drones) are all areas where Canada can strengthen hemispheric security.

That said, turning this investment into lasting value will require more coordinated thinking. While the strategy rightly emphasizes AI, cybersecurity, quantum technologies, and IP, it underplays two major sources of power in today’s economy: data and standards. Data here means the operational and technical information generated by modern defence and industrial systems: sensor outputs, maintenance logs, training data, software telemetry, supply-chain records, and performance records. Standards are the ground rules for how that data is collected, stored, and exchanged between systems. Standards decide which technologies can plug into each other, who accesses the data, and who holds the keys when something needs upgrading.

Without control over data and standards, Canadian firms risk becoming suppliers rather than leaders, even when they own valuable intellectual property. This leaves our assets vulnerable to capture by others. Closing these gaps will be essential if the firms this strategy helps build are to remain Canadian—and competitive—over time.

“Canada is well placed to be an arsenal of democracy on the raw materials front.” Heather Exner-Pirot Director of Energy, Natural Resources and Environment at the Macdonald-Laurier Institute

The Defence Industrial Strategy appears when a specific concern is taking hold: Western dependence on China for critical minerals used in defence applications. The Russia–Ukraine war reminded everyone that defence industrial capacity is key to winning wars of attrition, harkening to former President Franklin D. Roosevelt’s concept of US industrial capacity in World War II being the “arsenal of democracy.” In the event of a protracted conflict with China, their superior capacity up and down the manufacturing supply chain would inevitably grant it the upper hand.

What’s more, China has a monopoly on some key materials and components needed for basic military equipment and has already shown its willingness to restrict exports of commodities in the wake of its tariff war with the United States. Such vulnerability is now seen as unacceptable and a matter of national security.

That’s why the Joe Biden Administration began more aggressively investing in mines and refining capacity, something which continued under President Donald Trump. Seven projects have been funded in Canada, in commodities such as tungsten, bismuth, and cobalt. Interestingly, Canada matched these US Department of Defense investments through Natural Resources Canada (NRCan), not the Department of National Defence.

For its part, NATO released its priority list of critical minerals in December 2024. As a major resource producer and exporter, Canada has an obvious role to play in ensuring the alliance has some level of independence and sufficiency in raw-materials supply chains. The attraction of meeting some of Canada’s defence spending commitments through investments in mining and processing, which the NATO minerals list helps justify, have further spurred action.

The 2025 budget specifically earmarked $443 million towards the DIS to support the development of processing technologies, joint investments with allies in Canadian critical minerals projects, and the development of a critical minerals stockpiling mechanism.

The DIS does not go much further than what has already been announced but commits to publishing a strategy by the end of the second quarter for producing, processing, stockpiling, and procuring defence-related minerals. It specifically highlights Canadian capacity in aluminum, germanium, gallium, graphite, and tungsten, a good list drawn from NATO priority minerals that Canada could and should lead on. It also commits to helping the tariff-impacted sectors of aluminium and steel to pivot and retool to manufacture the products and grades needed by the defence sector.

The one wild card out of the DIS is a specific reference to developing Canada’s production of nitrocellulose (also known as guncotton), a key ingredient in artillery ammunition derived from forest products. China has been expanding its footprint in the sector, including by buying up Canadian forest-product producers. Keen and dedicated defence supply chain observers have blown the whistle on the dual use of such products, and it is gratifying to see the DIS respond.

This highlights one of Canada’s underutilized latent defence capabilities: the enormous prowess of its mineral, energy, and forest industries. In the event of a conflict that would necessitate a rapid ramp up of Western defence industrial capabilities, Canada is well placed to be an arsenal of democracy on the raw materials front. The DIS makes small steps to better position us for such an eventuality.