Adrian Wyld/The Canadian Press
Eliot Pence is the founder of Tofino Capital and the former head of international growth for Anduril Industries.
For most of history, a country’s strength has depended not just on fielding the best military equipment but on its capacity to afford it. Balancing capability with cost has always been the practical constraint shaping military readiness. The appeal of equipping soldiers with the most advanced drones, radar and software is understandable – what government wouldn’t want to give its troops every possible advantage?
But in Canada’s case, this logic often backfires. The pursuit of “best-in-class” foreign systems – often encouraged by the appeal of interoperability, proven performance, aligned requirements and ease of integration – can come at the expense of building domestic capacity, ultimately undermining both sovereignty and long-term effectiveness.
Prime Minister Mark Carney‘s promise to speed up defence purchasing could break this cycle, accelerating procurement timelines to bolster domestic innovation and rebuild Canada’s sovereign industrial capabilities. By streamlining acquisitions, the government can ensure both immediate military readiness and long-term strategic autonomy.
It’s, in a way, a chicken-and-egg issue. Canada has no meaningful defence industrial base to speak of. It does not build its own combat-ready submarines, advanced munitions, advanced energetics or large-scale drones. And while it has a uniquely advanced outer space hardware industry, it is incapable of sending any of it to space on its own. So Canada procures equipment – often at eye-watering prices – from allies, chiefly the United States. But while Canadians may believe they’re getting the best, the truth is uncomfortable: We’re not.
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Foreign equipment is rarely delivered to Canada in its highest-performance configuration. In some cases, this is a user error: An Auditor-General inquiry found that F-35 fighter jet deliveries would lack the ability to communicate via Canada’s satellite systems, particularly affecting operations in the Arctic. In other cases, usage agreements may require the consent of the seller, such as when Canada received “on loan” military code-capable GPS receiver cards from the United States. Canada’s non-inclusion in AUKUS, a privileged framework for co-developing or co-deploying advanced technologies between Britain, Australia and the U.S., ensures its second-fiddle status. What Canada receives may feel like a step above others, but it is rarely the best.
Even this illusion is built on a shaky foundation, because what we think of as best-in-class is rapidly evolving with each new front line. The war in Ukraine has laid this bare. There, some of the world’s most celebrated defence platforms – products of billion-dollar contracts and decades-long procurement cycles – are being outmanoeuvred and outperformed by those of smaller, more agile companies that can iterate quickly, deploy at scale and build for the battlefield’s brutal realities.
Chief of Defence Staff, Gen. Jennie Carignan.Ashley Fraser/The Globe and Mail
The central tension in modern defence technology is no longer just about quality, it’s about tempo. The exquisite versus the attritable. The bespoke versus the scalable. This is the axle on which 21st-century warfare now turns. And yet Canada, by relying on the elegant and foreign, finds itself boxed out of the most consequential military innovation race of our time.
This issue is compounded by the fact that Canada’s defence procurement system routinely overspecifies requirements, extending timelines, inflating costs and effectively sidelining domestic industry. It now takes 16 years on average to buy and approve new gear, a 66-per-cent increase since 2004.
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Local firms die in the time it takes to go from R&D contract to multiyear procurement. There is no consistent pathway nor a national strategy to develop defence export markets. As a result, Canadian companies start behind – sometimes even in their own backyard.
The outcome is predictable: Engineers and manufacturers are deprived of the capital and incentive to build sovereign solutions, while the government ends up acquiring legacy systems that are outdated the moment they are fielded.
Worse still, a program designed to ensure that foreign companies invest back into building Canadian capacity did not meet any of its objectives, nor was much known about its total costs, according to the government’s own audit. This is especially troubling given that Canada’s defence sector is more than three times as R&D-intensive as manufacturing overall, yet employs fewer people than the dairy industry. Dairy, not defence, remains the country’s priority when it comes to investing domestically.
This is a call for strategic investment, not blind protectionism. When a country chooses to procure domestically – especially in defence – it signals to its industrial base that their work matters. That signal catalyzes capital formation. It spurs the creation of new hardware startups. It draws in dual-use technologists. And over time, quality improves. Innovation compounds.
If Canada continues to treat defence as a procurement problem to be solved abroad, we will never escape our dependency. But if we treat it as an industrial strategy to be developed at home, we might just become a country capable of exporting the very kit we now overpay to import.