Canada’s new defence industrial strategy sets out a series of important, extraordinarily high benchmarks for the country to achieve over the next decade, including buying and maintaining most of the military’s equipment domestically.
The long-awaited plan, which was developed more as a response to NATO’s call for industrial clarity among allies than to annexation threats by the Trump administration, sets a goal of awarding 70 per cent of federal defence contracts to Canadian firms within a decade.
It also proposes to raise the servicability rates of Canadian military equipment to 75 per cent of the navy’s ships, 80 per cent of the army’s vehicles and 85 per cent of the air force’s planes.
Outdated equipment and a lack of spare parts has taken its toll, with — according to figures obtained by CBC News last year — 54 per cent of the navy, 55 per cent of the air force and 46 per cent of the army vehicles deemed as “not serviceable.”
The strategy pours more money into defence-related research and development. It also proposes to increase Canada’s defence exports by 50 per cent, with the goal of creating an additional 125,000 jobs across the country by 2035.
The strategy was slated to be released last week, then it was embargoed by the federal government following the tragedy in Tumbler Ridge, B.C. On Sunday, the Financial Times, a U.K.-based publication, began reporting on it.
It is now apparently slated to be released on Tuesday.
The plan has $6.6 billion behind it. The money is carved out of the Liberal government’s broader $81.8-billion defence reinvestment plan, which was part of last year’s federal budget.
Cutting down on foreign suppliers
At the core of the strategy is what’s being described as a “Build–Partner-Buy” procurement framework, which is intended to reverse what the document calls an over-reliance on foreign suppliers — notably the United States.
“Canada cannot afford to outsource its national defence,” the strategy states.
Prime Minister Mark Carney has made that point repeatedly over the last year, including in an interview with CBC’s Power & Politics last spring.
“Seventy-five cents of every dollar of capital spending for defence goes to the United States. That’s not smart,” Carney told host David Cochrane.
Prime Minister Mark Carney sat down for a wide-ranging one-on-one interview with CBC’s Power & Politics host David Cochrane on Tuesday. Carney addressed Canada’s current relationship with the U.S. along with the challenges ahead for his new government, including housing affordability and separatist sentiment in Alberta.
The strategy proposes that building military equipment domestically will be the default option for the federal government, “particularly in areas of key sovereign capability or where Canada already has deep strengths.”
The strategy pointedly suggests there are certain things that, for national security reasons, a country should be building itself.
In contrast to other countries, such as the United Kingdom, the Canadian defence-industrial strategy has produced a vague list of 10 industrial sectors it wants sovereignty over.
The list includes many things the country is already doing: ammunition production, the creation of digital and cloud-based services, sensors, space-based platforms for surveillance, training and simulation and specialized vehicle manufacturing.
Topping the sovereign capability list is aerospace, a reference that could have political significance for the political debate over whether the purchase of U.S.-manufactured F-35 stealth fighter will proceed. Last on the list is drones, both aerial and underwater.
The U.K.’s defence industrial strategy, released last fall, was far more specific in terms of sovereignty capabilities the country was prepared to get behind. Britain said it would safeguard its nuclear deterrent through the renewal of its submarine fleet, missile technology and building more armoured vehicles at home.
Partnerships with Canadian companies
To accomplish Canada’s objectives, the Carney government said it will enter into formal strategic partnerships with select Canadian companies. These partnership would have an eye “to building world-leading champions that can meet Canada’s needs — securing domestic ownership and control over critical intellectual property (IP) and capacities” that will support the country’s geopolitical interests.
Where Canada cannot build alone, the strategy calls for deeper partnerships with trusted allies, particularly in Europe, the United Kingdom and the Indo-Pacific.
The new Canadian strategy was released several days after U.S. President Donald Trump signed an executive order establishing what he calls the America First Arms Transfer Strategy.
Much like the intention of the Canadian blueprint, Trump wants to further build U.S. arms-making capacity and essentially make the country the first-choice arms maker.
The government has waved off repeated concerns about competing with the United States and possibly not finding export markets for Canadian-made systems. Several ministers have, in the past, noted the recent defence co-operation deals signed with countries like Denmark and even the European Union, which are intended to open the door for Canadian companies.
Wendy Gilmour, a Canadian and former assistant secretary general for defence investment at NATO, described the document as a good starting point.
She said she is concerned, however, that the report simply extends the long-time Canadian tradition of using defence purchasing as economic leverage at the expense of the military.
“It’s more about our industrial and economic agenda, then perhaps it is explicitly about what military capabilities Canada believes it must have to protect our sovereignty and to contribute to deterrence and defence,” said Gilmour.
“At the moment because of Canada’s fiscal situation, there is a desire to use the investment in the reconstitution of the Canadian Forces as a driver for economic prosperity and to address some of the difficulties our economy is having because of the loss of the American market. We see in some other nations that they are very focused on delivering defense capability. The danger in Canada is that that message gets diffused.”
