Prime Minister Mark Carney tours the facilities of CAE Inc. in Montreal, where he unveiled Canada's new industrial defence policy on Tuesday.Christinne Muschi/The Canadian Press
Prime Minister Mark Carney says his new strategy to rebuild Canada’s defence industry by doubling the share of Ottawa’s military spending that goes to domestic suppliers will reduce reliance on the United States for such equipment at a time of heightened concern that U.S. dependence makes Canada vulnerable.
Since taking office, Mr. Carney has complained about the fact that three-quarters of government spending on defence capital outlays – such as major weapons platforms – goes to U.S. suppliers, even as Canada’s neighbour has become increasingly protectionist under President Donald Trump.
On Tuesday, Mr. Carney unveiled a defence industrial strategy to build up Canadian self-sufficiency across 10 categories of “sovereign capabilities,” from ammunition and aerospace to drones and artificial intelligence. The Globe and other media reported details of the strategy earlier this week.
“The assumptions that defined decades of Canadian defence and foreign policy have been turned upside down,” Mr. Carney said at a news conference in Montreal.
“Over the last few decades, Canada has neither spent enough on our defence nor invested enough in our defence industries. We’ve relied too heavily on our geography and others to protect us. This has created vulnerabilities that we can no longer afford and dependencies that we can no longer sustain.”
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Mr. Carney said there are many strengths to the defence partnership Canada has with the United States, “but it is a dependency,” he added. He said Ottawa will turn the situation around by “building up our defence capacities here and our other partnerships abroad.”
He said Canada has signed more than a dozen defence partnerships on four continents over the past six months, including joining the European Union’s Security Action for Europe program last week.
Mr. Carney said domestic companies supply about one-third of Canada’s military gear. He added that he wants to more than double that by 2035, driving domestically sourced procurement to 70 per cent of overall spending.
Canada will continue to turn to U.S. technologies to supply some of its defence requirements, he said.
“Our first responsibility as government is to defend Canadians,” he said. “We will always be choosing the best supplier for those defence needs.”
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But he said Ottawa will demand more benefits for Canada when it partners with U.S. suppliers.
“We want partnership, we want development, we want to be part of the supply chains,” Mr. Carney said.
In a background briefing Tuesday, a senior federal government official told reporters that 43 per cent of federal defence contracts are currently awarded to Canadian companies. Ottawa’s new goal is 70 per cent by 2035.
The Globe and Mail is not identifying the official because they were not authorized to discuss the matter publicly.
The Prime Minister summed up the new strategy, backed by $6.6-billion over five years, as “build, partner, buy.” This means Canada will increase its defence industry where possible before looking abroad for partnerships or foreign procurements.
This includes the already-launched Defence Investment Agency, which aims to centralize and streamline procurement for projects more than $100-million. Its mandate is to cut red tape, speed up approvals and prioritize Canadian suppliers while ensuring faster delivery of equipment to the Canadian Armed Forces.
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The federal government says over 10 years, the new strategy aims to create 125,000 high-paying jobs, increase defence exports by 50 per cent and boost Canadian defence industry revenues by 240 per cent. Over this period, Ottawa says it will boost Canada’s ability to repair and maintain its own maritime, air and land fleets.
David Perry, president of the Canadian Global Affairs Institute, a think tank, welcomed the initiative but cautioned against expecting quick shifts in how much Canada relies on the United States for military gear.
“We need to be realistic about how much will change and how fast. We have tens of billions of purchases of U.S. equipment ordered but yet delivered,” Mr. Perry noted. “If Mr. Carney is highly successful in implementing this strategy, our buying patterns will change over years. If less so, it will take decades.”
The government also promised to streamline export controls, which regulate the sale of weapons and technology with military applications to foreign countries.
Mr. Carney pledged that any efficiencies in this area would not undermine regulations intended to prevent sales of arms to countries that might commit human rights abuses. He said Canada has Europe in mind when it contemplates boosting arms exports but said exports to other countries would come with “guard rails.”
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Last June, when Mr. Carney announced the biggest investment in Canadian defence spending in more than 70 years − to meet a target of 2 per cent of gross domestic product set by NATO − he declared that Canada was “too reliant on the United States” and said more of Ottawa’s military dollars should remain at home.
He has justified a more self-reliant approach by citing the profound break in the post-Second World War rules-based international order, triggered by Mr. Trump’s protectionist and mercurial treatment of allies.
Conservative defence critic James Bezan called the industrial strategy ambitious, but questioned the creation of a separate agency to handle major procurement, saying “political will and leadership” are more important.
He expressed skepticism that European Union countries would buy significant military goods from Canada. “They’re the most protectionist region in the world, in my mind.”
Philippe Lagassé, an associate professor at Carleton University who researches defence and procurement, said the new industrial policy is silent on what constitutes a Canadian company, leaving open the possibility that foreign subsidiary companies could qualify.
He said it will be difficult for Canada to reduce its reliance on American-made military equipment without an updated defence policy. Canada’s existing policies, which spell out priority military missions for Canada, date from 2017 and 2024 when defence spending was much lower. Mr. Carney has announced tens of billions of new spending since to boost defence expenditures to 2 per cent of GDP by this spring.
“The policy frameworks that we have in place are based on 1.7 per cent of GDP and have led the military to buy a good deal of American equipment, Prof. Lagassé said.
“We’re still working from a defence policy before the rupture the Prime Minister talks about.”
He said the defence of North America will be central to any new military policy. In the past, this key mission has led to defence equipment that was interoperable with American forces and often U.S. made, including the F-35 fighter jet and the P8 maritime patrol aircraft.