Canada’s new defence industrial shift in how the country procures, partners, and builds for sovereign capability. The question is, how quickly can the system adapt while preserving accountability and operational readiness?
Given Canada achieved NATO’s 2% of GDP defence spending target in the 2025/2026 fiscal year, significant momentum will follow to deliver the capabilities for national defence and collective security.
“Canada’s new defence industrial strategy signals the most significant shift in defence procurement and industrial policy in decade. Its success now hinges on how quickly decision-making, incentives, and execution come together to support delivery.” — Gerry Faustino, Deloitte Canada defence industrial leader
Canada’s defence procurement system has long been constrained by fragmented authorities that create duplication and delays in delivering capability. The Defence Investment Agency establishes a single point of accountability to accelerate timelines for acquisition of critical military equipment and capability. If governance is well designed, this could materially reduce cycle times andrestore confidence in industry. The strategy also signals a shift toward strengthening sovereign industrial capacity by prioritizing domestic production, partnerships, and supply chains – this in response to historical underinvestment, global consolidation, and vulnerabilities created by reliance on foreign-owned suppliers.
These shifts will reshape market dynamics and require coordination across government, industry, and regions. In his speech at The World Economic Forum 2026 in Davos, Prime Minister Carney stated that Canada has “a recognition of what’s happening and a determination to act accordingly. We understand that this rupture calls for more than adaptation.” The first steps in Canada’s defence industrial strategy are doing exactly that: moving away from pure open competition in select cases introduces policy considerations that will take time to stabilize and will demand legislative alignment. Defence investment is being positioned as a national priority and driver of economic growth and resilience.
“Discipline and a willingness to accept policy risk in implementation will be paramount. The stakes extend beyond procurement efficiency
to supply chain assurance, economic outcomes, industrial sovereignty, and Canada’s ability to sustain capability in a contested geopolitical
environment.” — Darren Hawco, Deloitte Canada
defence executive advisor
Government must manage acceleration while maintaining oversight. National and international OEMs must reassess foot-print and partnerships. Canadian firms and SMEs must determine how to scale within an evolving industrial architecture. Acceleration is the objective, but speed without clear decision rights and ownership introduces risk and invites delays. Building national champions must be balanced with ecosystem resilience, recognizing SMEs’ vital roles across advanced manufacturing, software, and dual‑use tech. Leaders need flexibility in investments and partnerships, policy ambition should align with legal and fiscal realities to avoid gaps that create execution risk. Finally, procurement and sustainment pathways must enable rapid integration of emerging technologies, and teams should assess whether systems are ready to adopt and scale them.
Whether Canada mobilizes around this new strategy for sovereign strength and the future of industry will come down to how quickly ambition is translated into aligned decisions, clear accountability, and execution. Success depends on balancing speed with governance. All parties must prepare to come to the table to address evolution in policy, market capacity, and system readiness.