4 takeaways from Canada’s new Defence Industrial Strategy

Ottawa has announced a massive shift in its defence spending strategy that aims to benefit Canadian firms. The nation is poised to invest over half a trillion dollars in Canadian security, economic prosperity, and sovereignty. Officials are eager for that money to stay local wherever possible.

The new Defence Industrial Strategy positions Canadian industry to take advantage of $180 billion in defence procurement opportunities and $290 billion in defence-related capital investment opportunities in over the next 10 years, with an anticipated $125 billion downstream economic benefit by 2035. 

“The work of defending Canada is the work of building Canada,” said Prime Minister Mark Carney. “Security and prosperity are mutually reinforcing foundations of the true North, strong and free. Our new Defence Industrial Strategy ensures Canada remains a sovereign nation, in charge of its own destiny. That’s Canada strong, and that’s what we are building, together.”

The strategy comes at a critical time in Canadian history. In a recent speech, Carney established that the the globe’s “rules-based order” has faded and relationships with key allies, like the U.S., can no longer be counted on.

We pored over the new strategy and teased out these key themes that Canadian builders should be aware of.

1. Priortizing Canadian businesses

Local firms will get the first crack at work. Officials say buy-Canadian will be the “North Star” of future defence procurement. New defence procurements will prioritise Canadian firms and Canadian manufacturing as a matter of official policy. Where Canada lacks the capability to build domestically or there is an advantage to working jointly with partners, it will partner with allies to deliver capabilities for the Canadian Armed Forces. When it is not feasible to build domestically or partner with an ally, Canada will buy equipment from allies, with “strong conditions” that spur reinvestment into the Canadian economy, support careers in our defence industry, and ensure Canadian sovereign control over the operation and sustainment of the newly acquired assets.

2. Streamlining procurement

At the heart of the strategy is the Defence Investment Agency (DIA), an organization established in last October to replace Canada’s historically slow, fragmented procurement system with a centralized, high-speed executive body. Led by CEO Doug Guzman (formerly of RBC), the DIA is designed to act more like a private-sector investment firm than a traditional bureaucracy. Its primary mandate is to consolidate approvals and “cut red tape,” specifically targeting the acceleration of high-priority acquisitions valued at $100 million or more to ensure the military receives equipment on contemporary timelines rather than decadal ones.

This agency will lead a permanent Defence Advisory Forum and provide concierge supports—such as “industry days,” procurement inventories, and dedicated ISED navigators—to help small and mid-sized businesses (SMBs) manage administrative complexity. Crucially, the government will also fast-track security clearances for personnel and facilities to remove long-standing barriers to growth.

Beyond administrative reform, the government aims to cultivate “National Champions” by entering into formal strategic partnerships with select Canadian firms. By Summer 2026, a framework will be launched to identify partners who will receive significant advantages, including direct procurement, R&D funding, and export support. In exchange for these benefits, these champions must secure domestic control over critical intellectual property, maintain Canadian supply chains, and guarantee the timely delivery of military capabilities to support national sovereignty.

3. Funding trades development

Certain trades could see a boost for training. Part of the plan is launching the Canada Defence Skills Agenda to address labor shortages and strengthen national sovereignty through a future-ready workforce. This initiative prioritizes upskilling current workers, attracting youth via expanded apprenticeships, and modernizing federal programs to focus specifically on defense-related trades. Supported by $383 million for sectoral alliances and access to a $5 billion Strategic Response Fund, the agenda aims to bridge urgent skills gaps while helping businesses adapt to global market shifts.

The strategy also focuses on expanding the talent pool by aligning immigration streams—such as the Global Talent Stream and Federal Skilled Trades Program—with the specific needs of the defense industry. By partnering with provinces, territories, and Indigenous rights holders, the government intends to harmonize training pathways, improve the recognition of foreign credentials, and enhance labor mobility across the country. This coordinated effort ensures that as the defense industry scales, it has a sustainable pipeline of professionals, from welders and technicians to specialized engineers.

4. Turbocharging natural resource projects

Ottawa want the secure supply chains right at the source. Officials are positioning Canada’s natural resource sector as the foundation of national security by accelerating critical minerals projects and retooling the domestic steel and aluminum industries. Under this strategy, these materials are no longer treated as simple commodities but as strategic assets essential for sovereign control over the defense supply chain. A $5 billion Strategic Response Fund has been allocated to help Canadian producers pivot their operations toward the specialized, high-grade materials required for military hardware, aerospace, and armored vehicles.

A major focus of this initiative is the domestic production of 10 of the 12 minerals NATO identifies as defense-critical, including gallium, germanium, graphite, and tungsten. By expanding processing, stockpiling, and procurement within Canada, the government aims to insulate the military from geopolitical supply disruptions. On the global stage, Canada is taking a leadership role through the G7 Critical Minerals Production Alliance to ensure that these resources—including Canada’s massive high-grade uranium deposits—are secured for both domestic use and trusted allies.