Carney launches defence industry plan

Prime Minister Mark Carney has unveiled an ambitious new defence industrial strategy that aims to rebuild Canada’s military capacity while transforming the country’s domestic defence sector into a major economic engine.

Presenting the plan as a long-overdue course correction, Carney acknowledged that Canada has underinvested in both defence spending and its industrial base for decades. Recruitment in the Armed Forces has declined by roughly 15 per cent over the past 10 years, while procurement delays and foreign dependency have left gaps in readiness.

“We have relied too heavily on geography and on others to protect us,” the Prime Minister said, framing the new strategy as essential in a more volatile global environment.

At the heart of the plan is a “build, partner, buy” framework. The government intends to prioritize Canadian firms in military procurement wherever sovereign capability already exists. Only when Canada cannot build the equipment itself will it partner with trusted allies. Purchasing from abroad will be considered a last resort.

Currently, about 30 per cent of Canada’s defence procurement spending remains within the country. Under the new strategy, that figure is expected to rise to 70 per cent over the next decade. Overall procurement investments could total $125 billion during that period, helping Canada meet NATO commitments while strengthening domestic industry.

A newly created Defense Investment Agency (DIA) will oversee implementation. The agency is designed to streamline procurement, cut red tape, and accelerate delivery of equipment to service members. It will also coordinate efforts to expand domestic production and strengthen supply chains.

The government projects the strategy could generate more than 125,000 high-paying jobs nationwide, positioning defence manufacturing as a cornerstone of economic growth. Officials emphasized that defence is one of the most research-intensive sectors in the country, roughly three times more R&D-intensive than manufacturing overall, with spillover benefits into civilian innovation.

To accelerate technological development, federal investment in defence-related research and development will rise by 85 per cent. A new Bureau of Research, Engineering and Advanced Leadership, called Borealis, will coordinate innovation in areas such as artificial intelligence, quantum computing, robotics, and autonomous systems.

Regional strengths are expected to play a central role. Quebec’s aerospace sector, including advanced aircraft engines and simulation training technologies, was highlighted as globally competitive. Ontario’s expertise in combat vehicles, munitions, and naval construction is also expected to expand under the strategy.

Beyond economic growth, the policy emphasizes sovereignty, particularly in the Arctic. With evolving threats ranging from hypersonic missiles to space-based technologies, officials stressed the need to modernize NORAD and strengthen northern defence capabilities.

Carney described the initiative as a shift toward greater strategic autonomy. “Autonomy does not mean isolation,” he noted. “It means being strong enough to be a partner rather than a dependent.”

While reaffirming Canada’s close defence relationship with the United States, the Prime Minister said the country must diversify partnerships with Europe and Indo-Pacific allies to reduce single-source vulnerabilities and secure critical supply chains.

The new defence industrial strategy, he concluded, rests on a simple premise: security and prosperity are mutually reinforcing. By investing at home, Canada intends to ensure its Armed Forces are equipped for emerging threats and that the economic dividends of that investment stay firmly within its own borders.