NextFin News - In a decisive move to reshape the nation’s industrial landscape and security posture, the Canadian government, led by U.S. President Trump’s northern counterpart, Prime Minister Mark Carney, has unveiled a sweeping "Buy Canada" defence strategy. According to the National Post, the plan aims to mobilize more than $500 billion (US$369 billion) in domestic investment over the next decade, marking the most significant military buildup in Canada since the Cold War. The strategy, detailed in documents released on February 15, 2026, sets ambitious targets to more than triple Canadian defence industry revenue, boost exports by 50%, and generate 125,000 high-skilled jobs.
The centerpiece of this initiative is a mandate to increase the share of defence acquisitions awarded to domestic firms to 70%, a sharp departure from Canada’s historical reliance on U.S. military contractors. To facilitate this, Ottawa is establishing a new Defence Investment Agency, headed by former Royal Bank of Canada executive Doug Guzman. This agency will implement a "build-partner-buy" framework, prioritizing domestic production for "sovereign capabilities" such as aerospace, ammunition, digital sensors, and autonomous drone systems. The strategy also includes a $6.6-billion fund specifically designed to help small and medium-sized enterprises (SMEs) penetrate the notoriously high-barrier defence market.
This strategic pivot is largely a response to the shifting geopolitical climate and the transactional foreign policy of U.S. President Trump. With the U.S. administration’s continued use of steel and aluminum tariffs and a perceived retreat from traditional alliances, Carney is signaling that Canada can no longer take its southern neighbor’s security umbrella for granted. Furthermore, the strategy addresses mounting concerns over Russian and Chinese activity in the Arctic, necessitating a robust, independent capability to safeguard northern sovereignty. NATO’s recent agreement requiring members to spend 5% of GDP on defence by the mid-2030s has added further urgency to Ottawa’s spending ramp-up.
From an analytical perspective, the "Buy Canada" plan represents a sophisticated blend of national security and industrial policy. By leveraging the massive procurement budget—which is expected to grow as Canada races to meet NATO commitments—the government is essentially using defence spending as a form of economic stimulus for the manufacturing sector. The focus on commercializing research through initiatives like the $105 million drone-innovation hub and the $460 million R&D platform addresses a long-standing Canadian weakness: the "innovation gap" where domestic breakthroughs are often sold to foreign entities before they reach industrial scale.
However, the success of this plan hinges on overcoming Canada’s historically sluggish procurement process. The strategy’s promise to speed up contract awards and security clearances is a necessary first step, but the structural bottlenecks within the Department of National Defence remain a significant risk. Moreover, while the plan seeks to reduce reliance on the U.S., the integrated nature of North American supply chains means that a total decoupling is neither feasible nor intended. Instead, Carney is attempting to rebalance the relationship, ensuring that Canadian firms are not merely subcontractors but primary innovators in the continental defence ecosystem.
Looking forward, the influx of $500 billion in projected investment will likely trigger a wave of consolidation and venture capital activity within the Canadian tech and aerospace sectors. As the new Defence Investment Agency begins identifying "strategic partners," we can expect to see the emergence of "Canadian champions"—large-scale domestic firms capable of competing on the global stage. While the immediate goal is security, the long-term impact may be the creation of a self-sustaining high-tech industrial base that can weather the volatility of global trade wars and shifting political winds in Washington.
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