February 17, 2026 l Dalena Reporters
Canada is moving to strengthen its national defence industrial base with a newly articulated Defence Industrial Strategy (DIS) aimed at reducing reliance on foreign suppliers particularly U.S. arms producers and building up domestic capability to support both national security and economic growth. Recent government announcements and strategy documents outline a major shift in how Ottawa plans to align defence spending with industrial policy and sovereignty goals.
Why the Change? Sovereignty Through Capability
The strategy comes as part of Canada’s broader effort to enhance sovereignty the ability to produce, procure and sustain military equipment and technologies independently, rather than relying heavily on external sources. Historically, around 70 percent of Canadian defence equipment has been sourced from U.S. manufacturers, leaving Canada exposed to external market shifts, supply chain bottlenecks and geopolitical pressures. The new approach seeks to reverse that trend by steering a larger share of defence procurement toward Canadian firms and partners.
Through this strategy, the government hopes to stimulate robust growth in Canada’s defence sector by:
- Boosting defence-related research and development by roughly 85 percent over the next decade.
- Increasing defence industry revenues by more than 240 percent.
- Growing defence exports by about 50 percent.
- Creating up to 125,000 jobs in high-skill manufacturing and related sectors.
These economic and industrial aims are being pursued alongside commitments to meet and exceed NATO defence spending targets having already brought forward its goal to reach two percent of GDP on defence outlays to the 2025–26 fiscal year, with an ambition to reach up to five percent by 2035.
Key Elements of the Strategy
The emerging plan is not just about spending more money it’s about channeling that spending in ways that strengthen Canada’s defence supply chains and technical know-how. Elements include:
- Reforming the defence procurement system to eliminate duplication and delays, and ensure that equipment procurement works efficiently with domestic industrial capacity a central theme in discussions about Canada’s new DIS.
- Building a stronger domestic arms and technology base so that future military projects whether for aircraft, ships, vehicles, or security systems involve Canadian expertise and manufacturing.
- Pursuing diversification of partnerships, including access to expanded markets in Europe and elsewhere, positioning Canada as a partner of choice beyond its traditional U.S. defence relations.
Analysts say the strategy reflects a recognition that industrial and military capability are increasingly intertwined in a period of shifting geopolitics, trade pressures, and rising global tensions. Canada’s government argues that a strong domestic defence industry will reinforce both national security and economic resilience.
What This Means Going Forward
If successfully implemented, Canada’s defence industrial strategy could transform the country’s role in defence manufacturing, helping Ottawa:
- Reduce dependence on imported major systems like fighter jets and naval vessels — including reconsidering some legacy deals — in favour of more indigenous production.
- Foster new partnerships with European and global allies, opening alternative supply channels and export opportunities.
- Create well-paid jobs in technology, engineering, and manufacturing sectors tied to national defence.
At its core, the strategy is an affirmation that military capability, industrial capacity, and economic strength are essential elements of Canada’s sovereign defence posture — even as global pressures and strategic competition continue to reshape defence policy priorities.