'It’s a dependency': Carney touts diversifying defence procurement beyond the U.S. in new strategy

OTTAWA — Prime Minister Mark Carney unveiled his government’s defence industrial strategy on Tuesday, promising to build up Canada’s defence industries and seek out partnerships beyond the United States.

“Let me start by acknowledging that there are many strengths to this partnership that we have with the United States,” said Carney during a press conference in Montreal. “But it is a dependency, and it’s a dependency we want to change in a positive way by building up our defence capacities here and our other partnerships abroad.”

Back in June, Carney said roughly 75 per cent of Canada’s defence capital spending goes to the U.S. In the federal budget in November, Carney’s government committed $6.6 billion over the next five years to help develop a strategy to address that dependence.

Canada has committed to meeting the North Atlantic Treaty Organization (NATO) spending commitment of five per cent of GDP by 2035.

Originally promised before Christmas, the policy aims to develop and strengthen “sovereign capabilities” in key areas of the supply chain, including aerospace, ammunition, digital systems including artificial intelligence and quantum computing, sensors and specialized manufacturing.

The strategy has lofty goals, including increasing the share of defence acquisitions awarded to Canadian firms from 30 per cent to 70 per cent, growing defence revenues for Canadian small and medium-sized businesses by more than $5.1 billion annually and increasing Canada’s defence exports by 50 per cent.

Carney promised this strategy will result in 125,000 jobs across the Canadian economy and $125 billion of downstream economic benefits by 2035.

The government hopes that much of this will be achieved through the Defence Investment Agency, a newly formed agency aimed at streamlining Canada’s national defence procurement system, which has long been criticized for lengthy delays. The agency is headed by former Royal Bank of Canada executive Doug Guzman, a former colleague of Carney’s. Guzman told a committee last week that he was consulted on the new strategy.

While the agency currently operates under the department of Public Services and Procurement Canada, the federal government aims to establish the agency as a stand-alone entity through legislation that will be tabled this spring.

More to come.

National Post

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