A new federal strategy would see Canada not only scale up its stash of military gear, but also start making more of it at home.
What happened: Ottawa is planning a shot in the arm to Canada’s domestic defence industry with a plan, expected to be released today, to spend 70% of the country’s defence budget with Canadian firms.
That would more than triple revenue for Canadian defence companies and create 125,000 jobs over a 10-year period, according to the government.
The plan also sets out a target of increasing defence exports by 50% and dramatically increasing the serviceability rates of Canada’s military equipment, more than half of which is now “not serviceable.”
Why it matters: The strategy marks a clear break from Canada’s current practice of leaning on American contractors to supply the military, and marks the start of the country’s largest military buildup since the early years of the Cold War.
By 2035, the plan calls for Canada to spend 5% of its GDP on defence, which would be a greater share than any OECD country currently allocates to security except for Israel. It’s a dramatic shift in spending that would reshape Canada’s economy.
Why it’s happening: The document makes no bones about what’s behind the policy, saying that Canada must “possess the capacity to sustain its own defence and safeguard its own sovereignty” in a world where “old alliances” are no longer reliable.
Yes, but: One big question mark is what will constitute a “Canadian company,” a concept that the feds have previously taken an expansive view of, including foreign companies so long as they operate and employ people in Canada. “The ambition is pointed in the right direction,” Vass Bednar of the Canadian Shield Institute told The Peak, “but we need a much more rigorous definition of a “Canadian” company so that these new defence dollars don’t flow to Palantir ‘Canada’ or Lockheed Martin ‘Canada’ while IP flows out of the country.”—TS