Yesterday, Canada released its $6.6 billion Defence Industrial Strategy (DIS), at a moment of significant global instability and amid a broader trend of allied nations publishing their own investment and procurement plans. The CDA Institute welcomes the DIS as a timely and important roadmap for strengthening Canada’s strategic autonomy and defence industrial base in support of meeting its defence investment commitments over the next decade. Among the most notable benchmarks announced are:
- Increasing the share of defence acquisitions awarded to Canadian firms to 70 percent;
- Boosting government investment in defence-related research and development by 85 percent;
- Growing total Canadian defence industry revenues by more than 240 percent;
- Increasing defence revenues for Canadian small and medium-sized businesses by more than $5.1 billion annually;
- Expanding Canada’s defence exports by 50 percent; and
- Creating 125,000 new high-quality jobs across the Canadian economy.
Achieving these objectives will rely on a cross-sectional approach defined in the DIS as Build–Partner–Buy, with Canadian sovereignty, intellectual property, and job creation at its core. This includes building sovereign capabilities where feasible and required; diversifying Canada’s trading partners beyond the United States; and procuring off-the-shelf capabilities when necessary.
The DIS identifies ten priority sovereign capabilities central to Canada’s growth and long-term resilience, ranging from aerospace and ammunition to sensors, space, and autonomous systems. This list is expected to evolve as Canada’s defence requirements continue to change. In several of these areas, Canada already demonstrates competitive strength—including shipbuilding, communications, space, and aerospace—sectors where the DIS aims to encourage industry to double down, scale up, and become even stronger and more globally competitive. Together, the strategy’s comprehensive assessment of current capacity and its clear articulation of future investment priorities should send a reassuring signal to markets and industry.
Furthermore, the DIS recognizes the imperative for closer collaboration between government and industry, placing small- and medium-sized businesses (SMBs), the backbone of Canada’s industrial base, front and centre. The strategy proposes measures intended to streamline processes, strengthen regional engagement, expand venture capital access, and provide export support, collectively improving the ease of doing business and accelerating industrial growth.
The DIS is also forward-looking, outlining plans for a new skills agency to attract and develop talent, initiatives to secure critical supply chains needed to support the CAF, and research funding under BOREALIS that signals investment in defence innovation, though funding levels remain modest relative to other expenditures. Among the proposed reforms, the Defence Investment Agency will operate as a distinct entity from its earlier conception under Public Services and Procurement Canada.
Ultimately, the DIS provides much-needed strategic direction and affirms to the private sector the government’s commitment to long-term defence investment. As expected, however, many elements hinge on uncertain factors, such as sustained economic growth, expanded domestic production capacity, and viable export markets.
The coming months will be critical in determining how effectively the policy translates into action and whether indicators such as business confidence and procurement flow begin to reflect the DIS’ ambition. It will also be important to monitor international reactions—both from the United States, which may interpret Canada’s push for strategic autonomy as something more than it is, and from other allies and partners seeking new opportunities for collaboration and investment.
Most importantly, the document should not be read as a one-size-fits-all solution, but rather as a starting point for correcting years of underinvestment in the CAF and the broader defence community. For the first time in decades, economic security and national defence are being treated as mutually reinforcing objectives—sending a clear signal to both Canada’s allies and adversaries.
The CDA Institute will continue to advance public understanding through informed, rigorous analysis in support of Canada’s defence and security priorities.
