The Liberal government introduces major reforms to bolster Canada’s domestic defence sector, aiming to reduce dependence on U.S. military suppliers. The new defence-industrial strategy, scheduled for release this week, emphasizes building national capacity to maintain defence capabilities and protect sovereignty, particularly in the Arctic region.

Announcement Delay and Core Objectives

Originally slated for last week, the rollout was postponed after Prime Minister Mark Carney halted travel in response to a mass shooting in British Columbia. This $6.6-billion initiative targets small and medium-sized enterprises, encouraging their entry into defence manufacturing while shifting procurement toward Canadian-made equipment over foreign alternatives.

The plan projects the creation of 125,000 jobs over the next decade. Currently, the sector sustains more than 81,000 positions, according to a government update from last December.

Procurement Reforms and Economic Benefits

Ottawa plans to overhaul its industrial and technological benefits policy, prioritizing economic impacts in contract awards. Partnerships with reliable Canadian firms will offer incentives like research funding, export support, financing, and testing facilities.

“They will be expected to deliver capability on time and on budget and support national sovereignty through their Canadian supply chains, while also ensuring continued value for money,” the strategy states. It seeks to raise the share of defence contracts awarded to Canadian companies from about 50 percent to 70 percent, countering pressures from U.S. tariffs on manufacturing.

Additional goals include boosting defence exports by 50 percent and expanding overall industry revenues by more than 240 percent.

Strategic Priorities Amid Global Shifts

As Canada accelerates defence spending to fulfill NATO pledges, the strategy stresses reliable northern infrastructure and greater autonomy amid risks of resurgent imperial ambitions and strained alliances. It reaffirms strong ties with the United States while highlighting Russia’s actions in Ukraine as a threat to global stability.

Canada aims to deepen defence collaborations with the European Union, United Kingdom, Australia, New Zealand, Japan, and South Korea. Measures include deploying additional trade commissioners, attending military-industrial trade shows, and strengthening domestic supply chains for aerospace, drones, ammunition, and sensors.

Procurement preferences rank building equipment domestically first, allied production second, and foreign purchases last. “The rise of new powers, increasing protectionism, and shifting dynamics in international relations have also underlined the necessity of thinking differently about the intersection of Canadian sovereignty, defence needs, and economic development,” the document notes.

“In this uncertain world, it is more important than ever that Canada possess the capacity to sustain its own defence and safeguard its own sovereignty. This is especially important when it comes to protecting Canada’s Arctic sovereignty and promoting a secure North.”