Strengthening Canada’s Industrial Sovereignty and Defence Diplomacy

The pace of change with respect to defence investments in Canada has been extraordinary. Earlier this year, in the span of a few weeks, Prime Minister Mark Carney went from a commitment to reaching 2% of GDP in defence spending by the end of this fiscal year to signing on to the NATO target of 5% of GDP by 2035.

Most recently, Prime Minister Carney announced another key defence initiative: the launch of a Canadian Defence Investment Agency to accelerate defence procurement and remove red tape. Other essential pieces are expected to be put in place in short order by the federal government—notably a defence industrial strategy and a new bureau for defence innovation.

Building Defence Capacity with Strategic Intent

As Canada deploys defence investments, there is no question that it will need to move with alacrity to boost defence capacity. And it must do so in a thoughtful and strategic way, with a nation-building mindset. This means integrating all our key overarching objectives as a nation, with regard to productivity, innovation, job creation, national security, and trade and security relationship diversification.

Next, Canada needs to demonstrate its commitment to its sovereign capabilities. Without that step, we risk being swept up in procurement strategies that sustain the capabilities of other nations to the detriment of Canadian industries.

Leveraging Canada’s World-Class Expertise

Our expertise in strategic areas is our most important asset as we seek to rebuild our nation’s defence strength. Aerospace, surveillance and sensor technologies, shipbuilding, and AI are a few examples of sectors where Canada has world-class, leading-edge capabilities and is well-positioned to be a net contributor of solutions for our allies.

The products we manufacture and the innovations we develop can not only fuel Canada’s resurgence in defence—they can also be the building blocks of critical partnerships with like-minded nations.

The Promise of a Defence Investment Agency

Such a strategy would not only enhance our ability to respond to global threats and support our Canadian Armed Forces with the most advanced technologies, but it would also increase our credibility internationally by positioning ourselves as a supplier of key solutions based on sovereign capabilities. As a result, Canada would be much more influential—geopolitically, geostrategically, and geoeconomically—on the world stage.

Aiming High: Turning Investment into Nation-Building

Aiming high and thinking big will be necessary to build up and maintain social acceptability for the unprecedented level of defence investments we are about to undertake.

Overarching priorities should include the need to create substantial economic benefits for Canada through these investments and to diversify our defence and security partnerships. There is also an impetus to harness expertise in civilian sectors and dual technologies like artificial intelligence and quantum computing.

Channelling all these priorities and having them coalesce into a real nation-building enterprise—driving productivity and innovation while reinforcing our national security and defence—will not be for the faint of heart.

Toward a Forward-Looking Defence Industrial Strategy

A forward-looking Canadian Defence Industrial Strategy, providing clear demand signals and setting the stage for earlier, pre-tender engagement between government, armed forces, and industry on our national security needs, and solutions harnessing or elevating Canadian sovereign capabilities, should be our lodestar.

The world has changed. As Prime Minister Carney remarked earlier this year, the Canadian economy is being restructured mostly because of the geopolitical turbulences that we are observing. “We must fundamentally reimagine our economy,” he added.

We believe this is a generational opportunity for Canada to become an international leader in defence and economic diplomacy. A key part of this strategy should leverage our sovereign capabilities.

A Pivotal Juncture for Canada

Canada stands at a pivotal juncture—one that demands the resolve and strategic foresight to shape Canada’s approach to defence and economic diplomacy with confidence, purpose, and vision. The launch of the new defence procurement agency is an excellent step in that direction.