Canada unveils Defence Industrial Strategy to boost domestic military production support Canadian businesses and strengthen national security from Waterloo Ontario

Global politics isn’t what it used to be.

Supply chains are fragile, alliances are being tested, and wars are no longer fought only with boots on the ground but with code, satellites and advanced manufacturing.

Against that backdrop, Canada is making a decisive move to strengthen its own footing.

The federal government has unveiled a sweeping Defence Industrial Strategy, positioning it not just as a military plan, but as a long-term economic and sovereignty blueprint.

The announcement was first made by Prime Minister Mark Carney on February 17, 2026, and was further highlighted in Waterloo, Ontario, by International Trade Minister Maninder Sidhu.

At its core, the strategy is about control—control over Canada’s security, supply chains, and economic future.

Defence as a Driver of Prosperity, Not Just Protection

For years, defence policy largely focused on procurement and operations.

This new strategy broadens the lens.

It treats the defence industrial base as a pillar of national prosperity, not just military readiness.

Canada is pursuing what officials describe as a “whole-of-government” approach.

That means departments aren’t working in silos.

Trade, industry, defence and foreign affairs are being aligned to support long-term defence investments while helping Canadian firms scale globally.

A key target stands out: increase Canadian defence exports by 50 percent.

That’s not incremental. That’s transformative.

To make that happen, Global Affairs Canada’s Defence Exports Division will play a more strategic role, offering stronger visibility into export opportunities and helping Canadian companies navigate complex global defence markets.

The goal is clear—Canadian innovation shouldn’t stop at the border.

Rebuilding and Rearming with Domestic Strength

Officials have been candid about the changing global environment.

The so‑called “rules-based international order” is under strain. Strategic competition is intensifying.

Emerging technologies—from AI to advanced aerospace systems—are reshaping modern conflict.

Rather than relying excessively on external suppliers, Canada wants to rebuild and reinvest at home.

That means aligning long-term military procurement with domestic industrial capabilities.

When the Canadian Armed Forces need ships, surveillance systems, aerospace components or cybersecurity tools, the government wants Canadian businesses positioned to deliver.

This approach also strengthens supply chains.

Recent global disruptions—whether from pandemics or geopolitical tensions—exposed vulnerabilities in relying too heavily on foreign manufacturing.

A stronger domestic defence ecosystem adds resilience.

Working Closely With Trusted Allies

None of this signals isolationism. In fact, collaboration with trusted partners remains central.

Canada has long been embedded in allied defence structures such as NATO and continental security partnerships.

The new strategy emphasizes co-development and joint production with like‑minded allies, ensuring interoperability while supporting Canadian firms in multinational projects.

Defence production is rarely a solo endeavor.

Aircraft systems, naval platforms, and high-tech sensors often involve cross-border supply networks.

Canada’s approach aims to ensure its companies are at the table—not just as subcontractors, but as innovators and leaders.

Jobs, Innovation and High-Paying Careers

Beyond geopolitics, there’s a domestic economic angle that’s hard to ignore.

Defence industries are often technology-heavy and skill-intensive.

Advanced manufacturing, robotics, cybersecurity, aerospace engineering—these are sectors that generate well-paying, high-skilled employment.

By making what the government calls “generational investments,” Ottawa is betting that defence modernization can double as an innovation engine.

Regions like Waterloo, already known for technology and research capacity, stand to benefit.

But the strategy is designed to extend beyond one province, supporting businesses and workers across the country.

When governments commit to long-term defence procurement, it provides predictable demand.

Predictability, in turn, encourages private investment in research, facilities and workforce development.

Strategic Autonomy in a Fragmented World

One phrase running through the strategy is “strategic autonomy.”

It doesn’t mean Canada intends to act alone; rather, it reflects a desire to avoid being overly dependent during moments of crisis.

If supply routes are disrupted or geopolitical tensions spike, a robust domestic defence industry ensures the Canadian Armed Forces can still access the equipment and support they need.

This isn’t entirely new thinking. Canada has historically maintained aerospace and shipbuilding capacities, and initiatives like the National Shipbuilding Strategy already aim to sustain domestic naval construction.

What’s new is the comprehensive framing—bringing trade diversification, export growth, industrial capacity and military transformation under one strategic umbrella.

What’s Next?

The real test will be implementation.

Increasing defence exports by 50 percent will require aggressive market development, stronger financing tools and competitive products.

Companies will need support navigating export controls, security requirements and international procurement standards.

Expect more targeted funding announcements, expanded trade missions focused on defence markets, and deeper collaboration with allied governments.

Procurement processes may also evolve to prioritize domestic capability building while remaining compliant with international trade commitments.

Another key step will be workforce development.

If Canada wants to scale advanced manufacturing and defence technology, it must invest in training engineers, technicians and cybersecurity specialists.

Monitoring and accountability will also matter. A strategy of this scope needs measurable milestones, not just ambitions.

The Bigger Picture

Canada’s Defence Industrial Strategy reflects a broader global trend: countries are reconnecting national security with industrial policy.

Rather than treating defence spending purely as a cost, Ottawa is presenting it as a long-term investment in sovereignty, resilience and prosperity.

By aligning trade diversification with military modernization, the government is betting that security and economic growth can reinforce each other.

Whether the ambitious export targets and industrial expansions materialize remains to be seen.

But one thing is certain—Canada is no longer viewing defence as a narrow military issue.

It’s positioning it as a cornerstone of its national future.

Summary

Canada has launched its first comprehensive Defence Industrial Strategy under Prime Minister Mark Carney, with Trade Minister Maninder Sidhu highlighting its importance in Waterloo, Ontario.

The strategy aims to strengthen the country’s defence industrial base through a whole-of-government approach, increase defence exports by 50 percent, enhance coordination via Global Affairs Canada’s Defence Exports Division, and align military procurement with domestic industrial capacity.

Framed as both a national security and economic initiative, the plan seeks to reinforce supply chains, create high-paying jobs, collaborate with trusted allies and ensure the Canadian Armed Forces have reliable access to critical equipment.

In a rapidly shifting global landscape, Canada is positioning defence not just as protection, but as a pillar of sovereignty and long-term prosperity.