Canada has launched its first Defense Industrial Strategy as part of a whole-of-government effort to strengthen national security, economic resilience and industrial capacity.
On Friday, Maninder Sidhu, Canada’s minister of international trade, said in a press release from Global Affairs Canada the strategy is expected to create an additional 125,000 high-paying jobs and increase the nation’s defense exports by 50 percent.
“Nearly half of what we produce is already sold abroad, and by expanding into new markets, we’re turning global demand into growth here at home,” the official noted during his visit to Waterloo, Ontario.
What Is Canada’s Defence Industrial Strategy?
Canadian Prime Minister Mark Carney introduced the Defence Industrial Strategy to strengthen the local defense industrial base and encourage collaboration with allies to diversify trade and deliver critical capabilities for the Canadian Armed Forces.
According to Global Affairs Canada, the strategy will increase investments in core military capabilities and accelerate the nation’s capability to meet the NATO pledge to allocate 5 percent of its gross domestic product toward defense by 2035.
Ottawa has already committed to increasing defense spending by 2 percent of its GDP in the 2025-2026 cycle.
“The Government of Canada will focus first on building in Canada, particularly in areas of key sovereign capability or where Canada already has deep strengths,” said David McGuinty, minister of national defense; Melanie Joly, minister of industry; and Stephen Fuhr, secretary of state for defense procurement in a joint message to the public. “And when we partner with allies to build together, or buy off-the-shelf, we will do so under conditions that flow back into domestic industry and ensure Canadian sovereign control.”
What Is the Buy Canadian Policy?
The Defense Industrial Strategy aligns with Canada’s Buy Canadian Policy, which reshapes federal procurement to prioritize domestic suppliers and content in major government contracts.
Under the policy, strategic federal projects valued at $25 million or more will prioritize bids with strong Canadian content, including manufacturing and research and development conducted domestically. Beginning in spring 2026, the framework will also apply to projects worth $5 million or more.
Federal construction and defense projects valued at $25 million or more must use Canadian-produced steel, aluminum and wood when at least $250,000 worth of such materials is required and a domestic source is available.