Statement Issued February 16 in Montreal – most of the money to Quebec as usual?
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The world is changing rapidly. The international rules-based order is fading, and technological change is expanding the fields of conflict. In response, Canada’s new government is focused on what we can control: rebuilding, rearming, and reinvesting in the Canadian Armed Forces (CAF). We are working fast and seeing results: Canada is on track to hit our 2% NATO spending target this fiscal year and applications to join the CAF are up nearly 13%.
To protect Canada’s sovereignty, build our prosperity, and strengthen our strategic autonomy, the Canadian government must change how we invest in defense. Canada’s defense procurement has long been too complicated, too slow, and too reliant on international suppliers, limiting the growth of our defense industries. This has left our workers and businesses with fewer opportunities, our domestic industries without the demand necessary to scale, and critically, the women and men of our military without the equipment they need to defend our sovereignty and that of our Allies.
Canada’s new government is changing this. Today, the Prime Minister, Mark Carney, launched Canada’s first Defense Industrial Strategy. This is a strategy to transform our defense industries by prioritizing Canadian suppliers and materials, investing in Canadian innovation and commercialization, and streamlining procurement to give businesses consistent and predictable demand. This will enable Canada’s aerospace, cyber, and other industries to scale up operations to sell more at home and to trusted partners around the world, creating high-paying careers for Canadians across defense supply chains.
The Defense Industrial Strategy positions Canadian industry to take advantage of $180 billion in defense procurement opportunities and $290 billion in defense-related capital investment opportunities in Canada over the next 10 years, with an anticipated $125 billion downstream economic benefit by 2035. The Defense Industrial Strategy will create 125,000 high-paying careers, increase our defense exports by 50%, raise the share of defense acquisitions awarded to Canadian firms to 70%, and grow Canadian defense industry revenues by 240%. Within a decade, we will raise maritime fleet serviceability to 75%, land fleets to 80%, and aerospace fleets to 85% to bolster Canadian defense.
In total, the Defense Industrial Strategy is an investment of over half a trillion dollars in Canadian security, economic prosperity, and our sovereignty.
The Defense Investment Agency (DIA) is central to this strategy. It will streamline processes, cut red tape, and speed up delivery. It will equip the CAF with what it needs, when it needs it, and will prioritize manufacturing and strategic partnerships with Canadian firms, including small and medium-sized businesses. The DIA will also lead Canada’s participation in joint procurement initiatives.
Canada’s Defense Industrial Strategy will strengthen security, create prosperity, and reinforce our strategic autonomy. The strategy has five pillars.
- Position Canada as a leader in defense production:
- Canada will build: In the areas of homegrown strength and key sovereign capabilities, such as shipbuilding, aerospace, space, land systems, and digital technologies. New defense procurements will prioritize Canadian firms and Canadian manufacturing as a matter of policy.
- Canada will partner: Where Canada lacks the capability to build domestically or there is an advantage to working jointly with partners, we will partner with trusted allies to deliver capabilities for the Canadian Armed Forces.
- Canada will buy: When it is not feasible to build domestically or partner with an ally, Canada will buy equipment from allies, with strong conditions that spur reinvestment into the Canadian economy, support careers in our defense industry, and ensure Canadian sovereign control over the operation and sustainment of the newly acquired assets.
- Buy Canadian will be the North Star toward a new way of doing business in defense acquisitions. Taking these essential steps will reduce overreliance on foreign suppliers, foster national champions in our defense industry, secure sovereign control of our own equipment and intellectual property (IP), and create value across Canadian supply chains.
- Make it easier to build in Canada by breaking down barriers between government and industry:
- Establish a permanent Defense Advisory Forum. Led by the DIA, the Forum will engage with Canadian defense industry partners to speed up acquisition processes.
- Accelerate the security clearance process for defense sector personnel to remove barriers to entry and support growth in the sector and needed security infrastructure.
- Scale up Canada’s defense and dual-use innovation, and export it to our allies:
- Utilize a new $4 billion Defense Platform at the Business Development Bank of Canada to ensure Canadian companies, including small and medium-sized businesses, have access to the capital they need.
- Implement the $379.2 million Regional Defense Investment Initiative to support the growth and integration of Canadian small and medium-sized businesses into domestic and international defense supply chains.
- Provide an initial amount of $656.9 million to support the development and commercialization of defense and dual-use technologies, including through the Strategic Response Fund, Innovative Solutions Canada, and the Life Sciences Fund.
- Create a Drone Innovation Hub at the National Research Council, with an investment of $105 million over three years, and develop an aircraft platform for research, development, demonstration, and qualification of new technologies for Canada’s defense industries with an investment of $459 million over five years.
- Create a new Bureau of Research, Engineering and Advanced Leadership in Innovation and Science (BOREALIS) to coordinate and accelerate defense research and innovation in frontier technologies.
- Reinforce Canada’s edge in high-value sectors like artificial intelligence, quantum, space, and others, championing Canadian industry to be a leader domestically and internationally.
- Boost Canadian defense exports through a new dedicated team for export promotion.
- Stand up a new Science and Research Defense Advisory Council later this year.
- Appoint new trade commissioners in the United Kingdom and key European Union markets to support Canadian business abroad and ramp up Canada’s presence at major global defense and aerospace trade shows.
- Support the sovereign control of Canadian defense-related IP for Canadian industry.
- Protect Canadian workers, industries, and supply chains:
- Launch the new Canadian Defense Industry Resilience Program, with initial investments starting this year, to strengthen Canada’s sovereignty. The initial focus will be to increase production capacity for Canadian defense businesses, and begin producing nitrocellulose – a critical, high-demand energetic material for artillery – in Canada.
- To build Canada’s future defense workforce, the Government will launch a Canada Defense Skills Agenda focusing on four key priorities: strengthening the defense industry talent pipeline, addressing urgent skills needs, expanding the supply of skilled workers, and partnering with provinces, territories, and Indigenous rights holders.
- Spearhead a coordinated national effort to strengthen Canada’s defense sector:
- Work with provinces, territories, and Indigenous rights holders, including in the North and the Arctic, to address security gaps, identify opportunities in technology and resources, and unlock new market opportunities for Canadian industry.
- Accelerate critical minerals projects and support the development of Canadian supply chains that are reliable, secure, and aligned with national defense and allied needs.
The Defense Industrial Strategy is a jobs strategy. It will create high-paying careers across the entire supply chain – from steel and aluminum welders to engineers, scientists, and manufacturers who turn Canadian resources into the equipment, ammunition, vehicles, and other critical capabilities that keep Canadians safe.
Canada’s new Defense Industrial Strategy will transform our military and defense supply chain – create good careers at home, open new markets for our businesses, and equip the CAF with the world-class equipment they need to protect Canada and our Allies.
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