5 things you should know about Canada’s new defence industrial strategy

OTTAWA – Prime Minister Mark Carney unveiled Canada’s first-ever defence industrial strategy Tuesday in Montreal.

It seeks to boost Canadian defence exports by 50 per cent within a decade.

The $6.6-billion plan sets out what the government calls a “build, partner, buy” model to source military gear domestically — especially for “sovereign capabilities” critical to national defence or Canada’s commitments to allies.

The plan says Ottawa also will seek to partner with other nations on procurement, or to buy off-the-shelf under conditions that feed back into the domestic industry.

Here are five things you need to know about the strategy:

Building ‘anchor firms’

The strategy leans heavily on boosting the role of small and medium-sized firms in defence procurement.

The last federal budget set aside $4 billion for a new program within the Development Bank of Canada to provide venture capital and advice to small and medium-sized firms.

The goal is to help those firms “sell into defence and security supply chains and scale up new technologies,” the strategy says.

The strategy says some government policies create “disproportionate administrative and financial burdens for smaller businesses.” Ottawa says it is looking to make it easier for those firms to participate in the defence sector.

Building at home

The strategy builds on the Carney government’s mantra of Canada being its own “best customer.”

“We will procure from Canadian firms to build and seize new opportunities in frontier areas, such as AI, quantum, cyber and advanced materials — technologies essential to the future of warfare and the modern economy,” the strategy says.

“Taking these essential steps will reduce reliance on foreign suppliers, foster national champions, secure sovereign control of our own equipment and IP, and create value across Canadian supply chains.”

To that end, the strategy focuses on key areas of Canadian expertise, including aerospace, digital cloud systems, training and simulations, and ammunition.

The new defence investment agency

The strategy proposes a new Defence Investment Agency.

In his speech Tuesday, Carney called the agency the “centrepiece” of the government’s new approach and said it will speed up procurement, cut red tape and expand domestic production.

Carney said the agency has three main objectives: protect Canada’s sovereignty, build its prosperity and strengthen its strategic autonomy.

“We start by defending Canadians,” Carney said, adding Canada hasn’t spent enough on defence or invested enough in its domestic defence industry.

“We’ve relied too heavily on our geography and others to protect us,” he added. “This has created vulnerabilities that we can no longer afford, and dependencies that we can no longer sustain.”

Building up the drone business

The strategy says it wants Canada to become a global leader in drone technology by establishing a “drone innovation hub” at the National Research Council.

“Drone technology especially is advancing rapidly. As the world has witnessed in Ukraine, drones are changing the nature of war,” the strategy says.

“It is essential Canada be a leader in drone and counterdrone research.”

Ammunition production

The strategy also commits to building a more robust domestic ammunition supply chain by 2029.

“One key component of modern munitions is nitrocellulose, a propellant used in a wide variety of firearms and artillery,” the strategy says.

“A priority under the Canadian Defence Industry Resilience program will be to establish a Canadian nitrocellulose production capability, with production to start in 2029.”

This report by The Canadian Press was first published Feb. 17, 2026.

— With files from Kyle Duggan