<\/p>\n
Prime Minister Mark Carney admitted that Canada has underinvested in defence and relied \u201ctoo heavily\u201d on the United States for protection over the past few decades\u2014a situation he said has become untenable amid economic threats and challenges to Canadian sovereignty.\u00a0<\/p>\n
\u201cThis has created vulnerabilities that we can no longer afford and dependencies that we can no longer sustain.\u201d<\/p>\n
Prime Minister Mark Carney<\/p>\n
\u201cThis has created vulnerabilities that we can no longer afford and dependencies that we can no longer sustain,\u201d Carney argued on Tuesday at defence simulation tech company CAE\u2019s headquarters in Montr\u00e9al. He was there to officially unveil a key pillar of the federal government\u2019s plan to reduce its military dependency on the US, with an ambitious target of nearly doubling the number of defence contracts awarded to domestic firms.<\/p>\n
Canada\u2019s $6.6-billion CAD Defence Industrial Strategy<\/a> (DIS), which BetaKit first reported on<\/a> earlier this week, offers a roadmap for ensuring that Canadian industry reaps the rewards of the nearly $82 billion<\/a> that the feds plan to pour into defence over the next five years.<\/p>\n Among other priorities, the DIS indicates Canada will focus on buying Canadian, investing in areas where the country has existing strength or potential to lead (like in AI and quantum), and helping scale some of the country\u2019s\u00a0 small and medium-sized defence businesses into \u201cnational champions.\u201d<\/p>\n \u201cIt\u2019s a bold plan to get our armed forces what they need when they need it,\u201d Carney said. \u201cIt\u2019s a bold plan to scale Canadian defence companies and to put hundreds of billions of dollars into strategic sectors of our economy while creating over 125,000 high-paying jobs across Canada.\u201d<\/p>\n Canada is now on pace to invest two percent of its GDP into defence this fiscal year. The country is targeting five percent by 2035, a figure that would mean spending a total of $180 billion on defence procurement and another $290 billion on defence-related infrastructure. Carney said these commitments reflect \u201cthe magnitude of the threats that we have to confront.\u201d<\/p>\n Carney previously indicated<\/a> that three-quarters of Canadian defence spending has in the past flowed south of the border. On Tuesday, he said that while there are \u201cmany strengths\u201d associated with Canada\u2019s defence relationship with the US, it is in Canada\u2019s best interest to reduce its US dependency by building up both the country\u2019s domestic defence capabilities and partnering with other nations.<\/p>\n RELATED: Feds\u2019 $6.6-billion Defence Industrial Strategy takes aim at building a \u201crobust\u201d Canadian defence sector<\/a><\/p>\n The DIS introduces a \u201cbuild-partner-buy\u201d framework for defence procurement in which the country and its DIA will focus first on local companies as the feds look to increase the share of defence contracts awarded to domestic businesses to 70 percent. Carney emphasized this would represent \u201ca big, big shift\u201d compared to the status quo of just 43 percent.<\/p>\n If buying purely homegrown solutions is not feasible, Canada intends to explore co-development partnerships with trusted allies. \u201cOnly after exhausting those first two options will we buy from abroad,\u201d Carney said.<\/p>\n Federal government representatives indicated that this framework will be forward-looking and will not be retroactively applied to existing partnerships or contracts with foreign suppliers. Some of the feds\u2019 recent defence deals with US suppliers include agreements to purchase fighter jets<\/a>, rocket and combat management tech<\/a>, and data analytics software<\/a>.<\/p>\n When buying from abroad, the feds intend to negotiate to ensure that domestic industry benefits and Canada retains control over key sovereign capabilities and intellectual property.<\/p>\n As the country looks to boost defence exports by 50 percent, Carney said it will work with other countries, both within and beyond NATO membership. \u201cWe\u2019re keeping [partnerships] with our closest allies; there will be some broadening, [and] there will be guardrails,\u201d Carney said.<\/p>\n RELATED: The year Canadian tech embraced defence<\/a><\/p>\n Carney stressed that the DIS is not about isolation: \u201cIt means being strong enough to be a partner of choice, rather than a dependent. It means building a domestic defense industrial base so we are never hostage to the decisions of others when it comes to our security.\u201d<\/p>\n Some industry leaders BetaKit has spoken with<\/a> have hailed the DIS\u2019 focus on buying Canadian, faster procurement, and deliberately cultivating champions as a positive. Matt Lombardi, co-founder of Canadian defence innovation network The Icebreaker, called it \u201ca welcome shift.\u201d Dominion Dynamics founder and CEO described its targets as \u201cdaunting\u2014but doable,\u201d while also noting that executing on these plans will require sustained political attention over the next decade.<\/p>\n In a statement<\/a> on Tuesday, Council of Canadian Innovators chief strategy officer Dana O\u2019Born said the DIS identifies \u201cthe right instruments,\u201d including investment, financing, Industrial and Technological Benefits Policy reform, and more details about the Defence Investment Agency<\/a> (DIA), but could use some more \u201cbinding requirements, transparent milestones, and real accountability\u201d to ensure it becomes operational.<\/p>\n