As Canada advances its new Defence Industrial Strategy, the country has a chance to strengthen national security while building a more competitive domestic defence industry. Achieving that vision will require a procurement system that enables Canadian companies to participate, innovate, and scale.
Canada is entering a new phase in its defence policy.
The federal government’s emerging Defence Industrial Strategy recognizes something long understood by our allies. A strong defence sector does more than equip the military. It drives innovation, creates skilled jobs, strengthens supply chains, and generates economic activity across the country.
From advanced manufacturing and aerospace to cyber security, artificial intelligence, critical minerals, and shipbuilding, the defence economy touches nearly every sector of Canada’s industrial base.
If implemented well, the new strategy has the potential to create the conditions for Canada’s defence sector to grow and compete globally. It can help position Canadian firms within allied supply chains, support regional economic development, and ensure that the Canadian Armed Forces have access to the technologies they need to complete their missions effectively and safety.
But if the goal is to truly change how Canada builds, partners, and buys military equipment, one issue must be addressed with urgency.
Procurement: The Barrier to Entry
For years, discussions about Canada’s defence procurement system have focused on barriers. The language often used suggests that the system is just unnecessarily complicated.
That is not quite right.
In many cases, the problem is more fundamental. The system operates like a locked door.
Consider security clearances. For many companies hoping to enter the defence sector, obtaining a clearance is the first step to participating in procurement processes. Yet businesses often discover they cannot obtain a clearance unless they already have work with the military.
The Cost of Delay
Delays represent another structural challenge.
Defence procurements in Canada are notorious for moving to the right. Programs that are announced with clear timelines often slip by months or years as requirements evolve, reviews expand, or the government’s finances change.
Every time a procurement shifts to the right, the pool of potential bidders shrinks.
Participating in a defence competition requires significant investments of time, capital, engineering resources, and legal expertise. Companies must assemble teams, develop proposals, and dedicate staff for extended periods with no guarantee of success.
Large multinational firms may be able to absorb those costs. Many small to medium-sized companies, especially the new Canadian companies the Defence Industrial Strategy is aiming to attract, cannot.
When timelines stretch and uncertainty grows, smaller and mid-sized firms simply step away. With fewer bidders, the government faces higher prices and fewer options. Competition decreases. Innovation suffers.
If Canada wants its Defence Industrial Strategy to succeed, procurement must become faster, clearer, and more accessible to Canadian industry.
Industry Is Ready to Contribute
The encouraging news is that interest from the business community is already strong.
At the Canadian Chamber of Commerce, we are hearing from companies across the country asking how they can contribute to Canada’s defence economy. Manufacturers want to know which components to build. Technology firms want to understand how their software or cyber capabilities can support military needs. Resource companies are exploring how critical minerals can strengthen defence supply chains.
In other words, the Canadian industry is ready.
The question is whether the system will allow them to participate.
Opening the Door to Canadian Innovation
A modern defence procurement system should function as a gateway. One that connects Canadian talent, innovation, and industrial capacity with the mission of equipping the Canadian Armed Forces.
Canada has the companies. Canada has the expertise. And Canada has the opportunity to build a stronger defence economy that benefits both our security and our prosperity.
The key now is simple.
Unlock the door.
Learn how the Canadian Chamber of Commerce is supporting Canadian businesses in strengthening the country’s defence economy at https://chamber.ca/.
