Quick Read
- Canada’s new Defence Industrial Strategy (DIS) is a $6.6-billion plan, part of an $82-billion defence spending over five years.
- The DIS aims to award 70% of defence contracts to Canadian businesses and create 125,000 new jobs over a decade.
- A “build-partner-buy” framework prioritizes domestic production, then allied co-development, and finally foreign purchases under strict conditions.
- Key priority areas include AI, quantum, aerospace, digital systems, and autonomous technologies.
- A new standalone Defence Investment Agency (DIA) will streamline military procurement.
OTTAWA (Azat TV) – The Canadian government has unveiled its comprehensive $6.6-billion Defence Industrial Strategy (DIS), a pivotal plan designed to dramatically reshape the nation’s defence sector by prioritizing domestic production, fostering innovation, and creating 125,000 new jobs over the next decade. Details of the strategy, which serves as a roadmap for an ambitious $82 billion in defence spending over the next five years, were published by media outlets on Sunday, February 15, 2026, marking a significant shift towards enhancing Canada’s sovereign capabilities and national resilience amidst an increasingly complex global security landscape.
After years of lagging behind international peers in defence spending, Canada is now committed to increasing its defence expenditure to two percent of its GDP this fiscal year, with a target of five percent by 2035. This renewed focus comes as Canada seeks to solidify its self-reliance and protect its vast territories, including Arctic sovereignty, a critical concern for the large, diverse nation. The DIS is central to this ambition, aiming to ensure that the bulk of this substantial investment directly benefits Canadian companies and workers.
Canada’s Defence Industrial Strategy: A ‘Buy Canadian’ Imperative
The core of the new Defence Industrial Strategy is a clear ‘Buy Canadian’ directive, positioning domestic production as the ‘guiding North Star’ for procurement. The federal government has set an ambitious target to award 70 percent of all defence contracts to Canadian businesses, a substantial increase from current levels. This commitment is expected to generate 125,000 new quality defence jobs across the country over the next decade, significantly boosting Canada’s ethnically diverse workforce and economy.
Under the DIS, Canada will adopt a strategic ‘build-partner-buy’ framework. This approach mandates that the government will first prioritize building defence products and services domestically. If domestic production is not feasible, the strategy then encourages co-development partnerships with trusted allies. Only as a last resort, and under conditions that ensure benefits flow back into Canadian industry and maintain sovereign control, will solutions be purchased from foreign defence contractors. This marks a profound shift, signaling Canada’s intent to reduce reliance on external suppliers and cultivate its own industrial base.
Matt Lombardi, co-founder of Canadian defence innovation network The Icebreaker, emphasized the significance of this shift, stating to BetaKit that the ’emphasis on ‘build’ as the first priority before ‘partner’ and ‘buy’ is a huge shift and shows the government is listening to Canadian defence companies about building sovereign capability.’ Eliot Pence, founder and CEO of Dominion Dynamics, echoed this sentiment, calling the DIS an ‘overdue and meaningful shift that rightly prioritizes build–partner–buy, faster procurement at the speed of the threat, and the deliberate cultivation of Canadian defence champions.’
Strategic Priorities and Technological Advancement
The DIS identifies ten key priority areas deemed crucial for Canada’s sovereign capabilities. These include aerospace platforms, ammunition, digital systems (such as secure cloud, artificial intelligence, quantum computing and communications), in-service support, personnel protection, advanced sensors (including marine and quantum sensors), space-based intelligence and communications, specialized manufacturing (for land vehicles and surface ships), training and simulation, and uncrewed and autonomous systems. This focus on high-tech and strategic sectors aims to build ‘world-leading’ Canadian defence firms.
The strategy explicitly seeks to increase federal investment in defence research and development (R&D) by 85 percent and aims to more than triple total defence industry revenues while growing exports by 50 percent. The plan also details intentions to help scale promising Canadian small and medium-sized businesses (SMBs) into ‘national champions,’ recognizing their potential to contribute significantly to the defence ecosystem. This includes providing concierge support for SMBs navigating government contracts and engaging in formal strategic partnerships with industry to develop global leaders in these priority areas.
Overhauling Procurement and Future Outlook for Canadian Defence
To support the ambitious goals of the DIS, Canada is moving to establish the Defence Investment Agency (DIA) as a standalone entity. Initially housed within Public Services and Procurement Canada, the DIA will now coordinate defence procurement across the government, a move prompted by the realization that multi-departmental oversight had made the process too slow to address urgent needs. This institutional reform is designed to streamline military procurement, ensuring it can keep pace with evolving threats and technological advancements.
The strategy also signals Canada’s intention to forge new defence-industrial relationships with international partners beyond its closest traditional allies, including the European Union, United Kingdom, Australia, New Zealand, Japan, and the Republic of Korea. This diversification aims to strengthen Canada’s position in the global defence market and enhance its collective security commitments.
While acknowledging the ‘daunting—but doable’ targets, Pence cautioned that the real challenge lies in sustaining the political attention required to overhaul the procurement system over the next decade. Conservative Member of Parliament James Bezan, however, expressed skepticism, stating that ‘when it comes to national defence and security the Liberals have been all talk and no action,’ raising concerns about the government’s ability to deliver on its promises and prevent costly overruns, which the strategy does not explicitly detail how to avoid. The strategy also makes only one mention of Russia and no specific mention of China, despite increasing global geopolitical tensions.
The new Defence Industrial Strategy represents a critical inflection point for Canada, signaling a profound commitment to national self-sufficiency and economic growth through a revitalized domestic defence sector. By prioritizing indigenous capabilities and fostering innovation in key technological domains, the strategy aims to enhance Canada’s security posture while leveraging its diverse industrial strengths to build long-term national resilience in an unpredictable world.