Canada has failed both to adequately fund its military and to build up the domestic defence industry, Prime Minister Mark Carney said on Feb. 17 as he rolled out an ambitious new plan to grow the defence sector.

Canada’s first-ever defence industrial strategy, unveiled Feb. 17 by Carney in Montreal, sets new guidance on procurement and funding decisions, looks to hike Canadian firms’ share of federal defence contracts to 70 per cent and vows to add 125,000 defence sector jobs over the next decade.

“Over the last few decades, Canada has neither spent enough on defence nor invested enough in our defence industries and we have relied too heavily on our geography and other countries to protect us,” Carney said. “This has created vulnerabilities we can no longer afford and dependencies we can no longer sustain.”

The $6.6-billion plan, which bills itself as a “paradigm shift” for how government engages with industry, will prioritize building military gear domestically — especially to cover “sovereign capabilities” critical to national defence or Canada’s commitments to allies.

If Ottawa cannot build at home, it will partner with allies or buy directly from them under “strong conditions that spur reinvestment into the Canadian economy,” the strategy document says.

The strategy warns of a need to “mitigate” the risk of Canada getting locked into advanced military systems owned and controlled by foreign governments that can exert control over their intellectual property.

Christyn Cianfarani, president of the Canadian Association of Defence and Security Industries, called the introduction of the defence industrial strategy a “historic turning point.”

“For the first time, we can see a clear, accountable vision for the defence sector” that comes with specific targets to grow Canada’s sovereign industrial capabilities, she said.

The document states that Ottawa will select certain Canadian defence firms as “key strategic partners” and enter into formal partnerships with them to build “world-leading champions that can meet Canada’s needs.”

The strategy seeks to increase Canada’s defence exports by 50 per cent within a decade — just as the European Union looks to massively scale up defence spending in response to Russia’s war on Ukraine.

“We will be very deliberate and open in terms of defence and security partnerships we sign with allies throughout the world and what opportunities that opens up, and be clear about what the guardrails are around … the types of exports we would envision with those countries,” Carney said.

“We will be broadening our partnerships. We’re deepening with our closest allies.”

The document also promises a suite of policy shifts to come — such as planned legislative changes to the new Defence Investment Agency to make it an independent office.

The agency is currently housed within Public Service and Procurement with a staff compliment of just 85 people, which is set to expand to roughly 400.

But the strategy cautions that “even with more efficient defence procurement, Canadian companies will still need to engage with multiple agencies.”

Conservative Leader Pierre Poilievre dismissed the document as a “salad bowl of buzzwords” and called on Ottawa to instead cut bureaucracy and streamline its purchasing decisions.

The government pledges in the document to advance a package of reforms early this year to its industrial technological benefits policy, which sets out how procurement projects get graded in terms of how they contribute to the domestic economy.

It promises a new strategy on expanding production of critical minerals tied to defence and the creation of a new program to support domestic production of ammunition and explosives.

The strategy said by 2029, Ottawa will stand up a new plant to produce nitrocellulose, which is a propellant used in munitions.

Also on Feb. 17, the government set new serviceability targets for its fleets — the percentage of military vehicles ready to be deployed.

The government set deployment-ready targets of 75 per cent for the maritime fleet, 80 per cent for land vehicles and 85 per cent for aerospace — targets that national defence officials called ambitious but achievable. According to publicly released figures from National Defence, the last reported serviceability levels were 59.6 per cent for the maritime fleet, 51 per cent for land vehicles and 42.3 per cent for aerospace.

The department cited personnel shortages, past underfunding, aging vehicles and other supply chain issues as factors affecting the availability of military platforms.

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