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Ottawa Wants to Build a War Machine. It Can’t Even Build a Helicopter
In 1986, Canada set out to build its own helicopter. The goal was not just to replace the Royal Canadian Navy’s Sea Kings—so old that many entered service before the moon landings—but to rejuvenate a domestic industry.
Yet changes in government, alongside years of technical setbacks, shifting specifications, and escalating costs, repeatedly delayed the replacement. Contracts were cancelled, revived, and redesigned. In the meantime, Sea King crews contended with electrical failures and engine breakdowns, while mechanics routinely cannibalized retired fuselages for parts. The helicopter ultimately delivered in 2015—the CH-148 Cyclone—arrived decades after the Sea Kings belonged in a museum, and only after Ottawa spent billions keeping the aging aircraft safely in the air.
The Cyclone fiasco endures as one of the country’s most notorious procurement disasters. It also serves as a cautionary tale at a time when defence policy is back in vogue. Amid a decline of the American-dominated liberal order, hard power is retaking its place as the main currency of international relations. In his Davos speech back in January, Prime Minister Mark Carney called this a “rupture”—a messy and violent interregnum marked by an insidious return to the geopolitical Darwinism of the nineteenth century. At a time when a tired global system of rules and treaties staggers on amid a spike in spectacular acts of brutality and lawlessness, Carney urged mid-sized countries to form a collective counterweight against rogue hegemons.
His government has been busy trying to meet the moment. Last June, it committed to the North Atlantic Treaty Organization’s target of members spending 5 percent of gross domestic product on defence by 2035. In November, it committed an extra $81.8 billion over five years toward modernizing the Canadian Armed Forces (CAF). A month later, it unveiled a $357.7 million Regional Defence Investment Initiative with the intention of distributing the money across the country to build up manufacturing clusters—shipbuilding in one region, aerospace in another, artificial intelligence elsewhere.
Perhaps the biggest plank arrived in February, with the release of the Defence Industrial Strategy (DIS). The plan touts investment promises totalling more than half a trillion dollars. By steering more contracts toward Canadian firms, it envisions creating 125,000 jobs and growing the country’s defence industry to more than three times its current size within a decade. Military expansion is part of the project. The bigger plan is unwinding Canada’s dependence on foreign—especially American—technology, infrastructure, and supply chains.
These are laudable vows to reverse the neglect and underinvestment that have left Canada’s military in shambles. However, this industrial blueprint amounts to targets on paper. Implementation will collide with wickedly complex real-world obstacles. Experts predict that Ottawa’s ossified management style isn’t agile enough to fully grasp the speed at which technologies are developed in the private sector. They also warn that Canadian companies building those new technologies struggle to hold onto their ideas, patents, and talent in a country that has done an astonishingly poor job of protecting intellectual property.
Future direct military spending of 3.5 percent of GDP alone will eclipse $150 billion annually, according to government estimates. “There’s going to be a lot of money sloshing around in this system,” cautioned Richard Shimooka, a senior fellow at the Macdonald-Laurier Institute. “The question is whether that leads to something we can sustain and actually benefits the long-term Canadian economy. Or will it be a sugar high, where we set up a few factories, build some equipment and then shut it down, wasting a whole bunch of money that could have been better used somewhere else?”
Polling conducted by Nanos Research in late 2025 suggests 65 percent of Canadians believe the country needs a strong military in today’s world to be effective in international relations. But that level of support may ebb as the bills come due. David Pugliese, a veteran Canadian defence reporter, told me he predicts defence spending could become easy prey for opposition attacks in the coming years. “If you’re going to spend over $150 billion per year on defence by 2035, the Canadian taxpayer and politician is going to want jobs.”
It’s a mammoth task, though not impossible. But vast sums, compressed timelines, and politically motivated targets—it all seems like a textbook environment for mismanagement and underperformance. Canada could end up even more unequipped to deal with a more hostile world. It could be Cyclones all the way down.
Since the end of the Cold War, the CAF has been structured mainly to fight overseas threats through joint operations. “We’ve been able to ignore or downplay the defence of Canada,” Philippe Lagassé, associate professor and the Barton chair at the Norman Paterson School of International Affairs at Carleton University, told me.
That’s rapidly changing. Canada is a giant land mass with multiple coastlines and far removed from many of its allies. Defending the homeland while fulfilling our treaty obligations is a tall order. NATO’s Article 5 provision commits Canada to aiding fellow alliance members that fall under attack. Participation also demands military interoperability with partner forces. The North American Aerospace Defense Command (NORAD) binds Canada and the United States together in ensuring aerospace surveillance and control over North America, including vast stretches of the Arctic. This calls for greater CAF strength in sea and air. The DIS explicitly aims to beef up all of these strategic capabilities, in part so Canada can more assertively safeguard its own backyard.
Factoring into this is massive technological change. Adversaries can now harass or deceive a larger opponent at great expense to the target. Last fall, for example, flat-footed NATO militaries in Europe scrambled their most advanced fighter jets and precision-guided munitions to destroy cheap Russian drones that probed their airspace.
Many experts believe Canada’s rearmament should prioritize affordable, expendable systems that provide advantage in wars of attrition. Ukrainian forces have used millions of aerial drones, land robots, and AI-powered targeting systems to freeze the conflict along the 1,250-kilometre front lines. They have kept shipping lifelines in the Black Sea open using only unmanned surface vessels. In 2025, Russia lost north of 30,000 soldiers per month for virtually no territorial gain. “It is short sighted to assume that war will eventually revert back to dominance by artillery, armoured columns, and mass infantry assaults,” says Vladyslav Urubkov, head of the military department at the Come Back Alive Foundation, a charity that helps equip Ukrainian soldiers.
As Carney acknowledged in February, drones and autonomous weapons have “changed the very nature of warfare.” Bloomberg reports that an upcoming NATO leaders’ summit to be hosted by Türkiye in early July will focus on getting alliance members to funnel investments toward drones and emergent AI-powered military technologies.
Yet America’s growing ambivalence toward NATO risks leaving a giant chasm when it comes to alliance understanding and adoption of emerging military tools. “What people miss out of this equation,” says Lagassé, is that the US was “the coordinating power and technological keystone of the alliance that others could work around.”
Take America’s satellite intelligence or cyber offence capabilities, for example. When Washington was a rock-solid partner, other NATO countries didn’t have to develop these capabilities on their own; they could concentrate their efforts elsewhere. But those days are over. Lagassé predicts smaller powers will struggle to maintain operational standards easily or effectively. “In some cases, this is going to happen more bilaterally,” he says, as lesser military powers pool their resources. “But that can raise the costs significantly.”
The DIS volunteers Canada to fill some of the void. For one, it intends for the Department of National Defence’s new Bureau of Research, Engineering and Advanced Leadership in Innovation and Science (BOREALIS) to coordinate and accelerate defence-related research and innovation in frontier technologies. And this isn’t wholly magical thinking. Canada has world-class research institutions and talent working in advanced, high-value sectors such as AI, quantum computing, and space technologies. But it’s perhaps impossible to overstate how difficult—and pricey—it may end up being. Canada’s past struggles in building bespoke systems underscore why.
The Cyclone program is, in fact, one of many examples of grand defence ambitions gone awry. Take the National Shipbuilding Strategy, or NSS. Launched in 2010 by the Stephen Harper government, the NSS sought to create homegrown replacements for the federal fleet of warships and research vessels. Its initial price tag: as much as $38 billion. Work for large vessels was at first divided across shipyards in Halifax and Vancouver. A third shipyard in Lévis, Quebec, was added in 2023. Billions of dollars in cost overruns ballooned the budget above $84.5 billion by 2022. That figure is surely much higher now.
Insufficient technical skills and tradespersons like experienced welders have contributed to lengthy delays. And although nearly three dozen smaller vessels and six Arctic and offshore patrol ships have been delivered, the up to two dozen planned icebreakers will start arriving only in 2030. The first of fifteen River-class destroyer surface combat ships are slated for completion beginning in the early 2030s—two decades after the program began. The final ships won’t be delivered until 2049.
Yet the federal government and many commentators, including labour unions, argue the NSS is a success. As evidence, they point to roughly 20,000 jobs created and $30 billion in GDP contributions since 2012.
Nevertheless, it’s a sobering sign of how inefficiently Canada’s lumbering industrial system operates, warns Lagassé. “When you build domestically, it is going to be slower and cost more. But that’s the reality if you want to sustain Canadian industry. There will be a premium that you’re going to have to accept,” he says.
Another roadblock is that Canadian forces are very integrated into the US system, both in equipment and mindset. Canadian military leaders have even taken deputy command of integrated units. Ultimately, this legacy of loyalty risks making the CAF overly deferential to American priorities, contributing to what some call a “hollow force” posture—an outwardly imposing military that cannot fight effectively.
“At a time when the Canadian military badly lags other modernized forces, the DND is risking procuring weapons, platforms, and assets that look efficient for deterrence operations but may not contribute to the CAF’s capacity to win an armed conflict,” warns Andrew Erskine, a defence researcher and fellow at the Institute for Peace and Diplomacy think tank. He points to Canada’s $2.6 billion purchase of twenty-six High Mobility Artillery Rocket Systems (HIMARS) from the US. That’s money better spent on legions of first-person drones and ground robotic vehicles. “This brings up an important question: are we building a force for deterrence or a combat force that is adaptable, scalable, and sustainable in war?” Erskine says.
Shimooka, from the Macdonald-Laurier Institute, adds that Canada’s institutional culture in government remains painfully cautious. This may ultimately sabotage initiatives meant to embrace cutting-edge technologies originating in the private sector. “The way the government operates is overly rigid, stuck in the 1970s. It doesn’t conform to how businesses manage themselves anymore.”
The latticework of departmental overlap in Canadian military procurement decisions can result in a kind of death by inertia. Multiple persons—from DND; Public Services and Procurement Canada; Global Affairs Canada; Treasury Board secretariat; Innovation, Science and Economic Development Canada; and more—might all need to sign off on something for it to proceed. Created in October 2025, the new Defence Investment Agency (DIA) has been tapped to play a lead role in collapsing this down to a single approval process and slashing associated red tape.
But the agency’s design may be self-defeating, as it’s structured to focus on investments of $100 million or more. The small and medium-sized enterprises that comprise 92 percent of Canada’s defence industrial base might be bypassed because they fall outside the agency’s scope. The government said in March it would reduce that threshold, but Shimooka is unimpressed. “It mostly embodies ideas that have percolated in the bureaucracy,” he argues. “It’s just an expression of that.”
Yet procurement gridlock is only part of the challenge. The harder question is whether Canada even knows how to cultivate the kinds of technologies modern wars depend on. This is where the dual-use angle comes in. The concept encompasses goods and infrastructure with both military and commercial value. Drones, batteries, robotics, and satellites come to mind. Same for heavy transport, emergency medical equipment, and cybersecurity programs.
Fostering a critical mass of dual-use firms for a future conflict first requires proving their products work. But Canada isn’t at war, so, for the foreseeable future, the likeliest place for that testing would be civilian life. Drones could be widely used for approving building permits and agriculture production. Or delivering aid to communities cut off by wildfires. Batteries could help bring power to Northern rural communities. Satellites could track wildlife movement in remote regions. Who in the DND will champion that?
Using defence dollars to invest in dual-use tech thus amounts to a calculated leap of faith. Just don’t expect senior officials to be universally keen on it. This resonates with Olena Kryzhanivska, a postdoctoral fellow with the Canadian Global Affairs Institute. She points to the dilemma facing senior bureaucrats: “No one wants to be the person who signs off on the final approval document, especially when it involves risk or working with new companies.”
Indeed, most promising Canadian defence tech start-ups are still waiting for contracts to arrive. The federal government is dangling billions of dollars in promises, but delivery is struggling to break through a “molasses layer” of bureaucracy, the founder of a space-based technology company told The Logic in late April. “They’re trying, but government is struggling to get capital out in the same way that it has traditionally.”
Canada’s problem isn’t just getting technology built. It’s keeping it Canadian. Ottawa and the provinces have both bizarrely handed away reams of intellectual property generated by publicly funded research.
A Centre for International Governance Innovation paper in 2023 found that the majority of all intellectual property from Canada’s top universities was ultimately flowing to foreign companies. The most jarring example is Huawei. The Chinese state-backed telecom juggernaut has obtained numerous patents for 5G wireless and AI technologies developed in collaboration with researchers from five Canadian universities.
Lack of Canadian control over intangible assets like data, patents, and IP could play spoiler for the DIS. “The idea that we can just wake up tomorrow and be global leaders in defence does not make any sense,” Jim Hinton, an IP lawyer and professor at Western University who co-authored the 2023 CIGI paper, told me. The main reason, he says, is that US defence contractors hold thousands of patents in Canada, stemming from the symbiotic nature of our two countries’ integrated military supply chains. Boeing, General Dynamics, Lockheed Martin, L3Harris, and Raytheon all have subsidiaries in Canada.
The Cyclone became a vivid illustration of the problem. Because the aircraft was built by Sikorsky Aircraft in Stratford, Connecticut, Canada never obtained full control over the technology embedded inside it. Ottawa bought the helicopter but not the underlying proprietary electronics and flight-control architecture that make it work. As a result, Canada often requires contractor approval for upgrades, repairs, or modifications.
“The majority of Canada’s most vibrant defence industrial companies are heavily exposed to US systems,” adds Shimooka. It’s a vulnerability that extends across the commercial economy, whether it’s Slack for workflow management or Zoom for video calls. Likewise, Google for search or Amazon for cloud storage. Plus, Visa or Mastercard to cover purchases. Even Cohere, Canada’s crown jewel AI company, is deeply reliant on US networks and hardware. The Carney government’s new national AI strategy openly admits the country depends on digital infrastructure we “do not own, govern or meaningfully influence.”
This has the effect of severely narrowing homegrown tech companies’ freedom to operate—a concept referring to start-ups’ room to create and license their own IP without being beholden to someone else’s.
“If we try to develop our own dual-use drone technology for military use,” Hinton warns, “you can expect US defence companies to be beating down our door and an army of litigators threatening lawsuits saying we don’t have the right to do that, grinding things to a halt.” Most lawmakers remain oblivious to this, he says, given the intangibles economy is opaque by design. “I see it every day in discussions with executives and chief technology officers—it’s not the world that the public thinks it is. It’s about leverage and not about fair and neutral rules, and Canada has no leverage. We have the innovation policy framework of a developing country.”
Many Canadian defence firms’ dependence on American components may also sandbag their ability to compete abroad. Under the US’s International Traffic in Arms Regulations, Washington can impose steep fines or blacklist companies that export military gear containing US products to third-party countries without explicit American approval. That could complicate Canada’s participation in Security Action for Europe, the European program Ottawa joined in early February. The initiative is designed to help participating countries finance purchases from each other, but if Canadian-made systems still rely heavily on US technology, Washington could retain an effective veto over where those products are ultimately sold.
The DIS does promise to reduce overreliance on foreign suppliers, foster national defence industry champions, and secure control over IP generated through research and development to create value across domestic supply chains. But to do this will require enacting parallel policy reforms to consolidate various definitions of what, exactly, qualifies as a “Canadian” business. For example, the Income Tax Act definition hinges on a corporation being resident in Canada—without specifying what residency means. The Investment Canada Act alternately defines it as simply having a location, employees, and assets here. But all of that still leaves plenty of room for interpretation.
Lobbyists for foreign defence contractors will try to weaponize these ambiguities, predicts Matthew da Mota, a research director at the Canadian Shield Institute. “They’re going to push the narrative that it’s a choice between the best tools available and Canadian tools. Or they’ll say their Canadian capital, offices, or employees are ‘proof’ that they’re Canadian companies when they may not be.”
Similar issues exist around the definition of dual-use items. In a directive last updated in December 2023, the DND deemed it vaguely as “a product or technology that has both civilian and military applications and that is subject to Canadian and/or foreign export regulations.” This malleable framing will place a greater burden of discretion on policymakers.
“A cup could be designated dual-use if the military bought enough of them,” da Mota joked. But he raises a serious issue. Civil servants, government officials, and military officers will be constantly pressed to prioritize what dual-use tech they need from a sea of options. Plus, which Canadian companies should be favoured as long-term suppliers—including to partners abroad. “It’ll be important to not over-designate things as dual-use but be very intentional about it,” da Mota says. “That way, investment can be channelled in the right ways to get companies to grow.” Choosing narrow specializations, he suggests, could be Canada’s clearest pathway to becoming a military technology leader and top exporter in a few select areas.
But nothing is guaranteed. The Council of Canadian Innovators made this clear in a press release after the DIS was published. “Absent clear authority that ties capital allocation to Canadian ownership and control of IP for any technology developed and deployed,” the tech association said, “these investments will export strategic value and erode Canada’s long-term economic and security advantage.”
There’s also a deeper credibility problem. For defence spending on this scale to be politically sustainable, the public has to believe the system can deliver. Right now, that belief is shaky. The DND, in recent years, has spent $34.8 million on sleeping bags unsuited to Canadian winters; a 2017 program to replace 1,600 light utility vehicles won’t be completed until 2030; and it took until 2024 to retire Browning pistols in service since the Second World War.
That track record might once have been shrugged off as routine dysfunction. But the country is already contending with housing costs, strained health care, climate pressures, weak productivity, and an aging population. Military spending at 3.5 percent of GDP—more than $150 billion annually—will demand trade-offs. Without visible competence, it will be difficult to persuade Canadians that defence deserves that share of limited fiscal and political capital.
Here, Canada might take some lessons from Ukraine. Kryzhanivska highlights how Kyiv has created what’s casually referred to as the “Amazon for War.” In 2025, two digital marketplaces were established—one under the Ministry of Defence and another, the Brave1 Marketplace, under the Ministry of Digital Transformation—whereby a military officer is given a secure online spending account to order weapons and materiel that correspond directly to their particular unit’s needs.
“Through these systems,” Kryzhanivska says, “the market effectively decides which of Ukraine’s more than 900 defence producers, both private and state owned, remain in the ecosystem and which must either adapt or exit.” Ukraine’s iteration cycle for military hardware is now just four to six weeks. For software, one to two weeks.
There is a final risk too: that technological hype gets ahead of operational reality. “Not every commercially successful technology translates into military effectiveness,” warns Branka Marijan from Project Ploughshares. Consider Microsoft’s HoloLens augmented-reality headsets. Microsoft’s ten-year, $22 billion (US) contract was taken over by American defence tech firm Anduril in early 2025. The supposedly game-changing technology continues to fall flat in real life. Despite several redesigns of the headsets, American soldiers routinely complain that the devices give them nausea and suffer from terrible battery life.
What’s more, Marijan says, Canada has to be careful that strengthening defence capacity does not inadvertently render companies vulnerable to espionage and cyberattacks—or worse. “Once civilian firms are seen as part of the defence architecture, they also become more attractive targets for adversarial states.” Russian-linked cyber actors have targeted Canadian private sector organizations for years in retaliation for Canada supporting Ukraine’s defence, according to the Canadian Centre for Cyber Security.
“We are trying to meet too many objectives, when really there should just be the defence of the nation and work progressively from there,” says Shimooka. “If we were serious about our defence, we’d take a two-stage approach. First, we’d buy the systems we need but can’t produce ourselves for another ten years from foreign suppliers. Then, we’d make the investments necessary to result in actual Canadian-made capabilities being delivered in 2035 or 2040. We should have already done that in 2017, but we did the exact opposite.”
It’s too late for that now. Instead, the Carney government has launched an enormous gamble to transform the CAF into a modern fighting force. Forty years ago, the country wanted a world-class military helicopter and ended up with a three-decade debacle. It now wants a world-class war machine. The question hanging over Ottawa is whether it learned the right lessons—or simply convinced itself that bigger ambitions will produce better outcomes. The next fiasco will unfold in a far less forgiving world.
The post Ottawa Wants to Build a War Machine. It Can’t Even Build a Helicopter first appeared on The Walrus.
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