Canada is facing a critical juncture in its military procurement strategy as it works to modernize its defence capabilities amid evolving global threats and shifting geopolitical dynamics. After years of insufficient defence spending and a procurement approach focused more on regional economic development than operational readiness, the government is now taking steps to align military investments with actual defence priorities.

In March, Prime Minister Mark Carney announced that Canada had met NATO’s military spending benchmark of 2 percent of gross domestic product, marking a significant commitment to allied defence obligations. However, experts warn that increased budget allocations alone will not translate into enhanced military strength unless procurement processes become more efficient and focused on delivering combat-ready equipment.

Historically, Canada’s defence purchasing decisions have been influenced by efforts to maximize domestic job creation, leading to projects fragmented across multiple regions and companies. While politically advantageous, this approach has hindered the development of a fully operational, coordinated military force. Compounding the issue, Canada has long relied on the United States to anchor continental defence, allowing Ottawa to underfund its own military capabilities. With rising pressures from U.S. leadership and escalating threats from authoritarian states, that reliance is being reevaluated.

A notable shift in procurement strategy was evident when the federal government announced a $1.4 billion contract to increase production of heavy artillery shells, awarding the work to Canadian divisions of U.S.-based General Dynamics and IMT Precision. Although this move may appear contradictory to efforts to reduce dependence on the U.S., officials point out that these companies possess unique capabilities, intellectual property, and production capacity essential to meet the Canadian military’s urgent needs.

Similarly, Ottawa recently committed nearly $2 billion over four years to General Dynamics’ Land Systems-Canada division for the manufacture of armoured combat support vehicles. These decisions reflect a pragmatic approach that prioritizes existing expertise and manufacturing infrastructure over lengthy development of new domestic industries. While this strategy still involves involvement from multinational defence firms, commitments have been made to invest in Canadian jobs, research, and supply chains, aiming to balance economic benefits with strategic aims.

Critics caution that favoring established defence contractors could stifle competition and inhibit innovation from smaller startups. However, proponents argue that scaling up production to address immediate defence gaps requires leveraging established companies capable of rapid, high-volume manufacturing, with smaller firms integrating as suppliers within these broader supply chains.

Canada faces increased defence challenges, including securing its Arctic territory, fulfilling rising overseas military demands, and countering missile threats from Russia. Given these pressures, experts emphasize the urgency of securing reliable equipment and strengthening partnerships with trusted allies. While Canada may not be able to independently develop complex systems such as advanced submarines or fighter jets, it can assert itself as a critical component within global defence manufacturing networks, supporting domestic firms like Irving Shipyards and Bombardier where capabilities already exist.

The government’s current path underscores the necessity of evolving procurement away from a fragmented, job-driven framework toward a more coordinated, capability-focused approach. With years of underinvestment behind it, Canada’s defence apparatus must act swiftly to modernize and maintain readiness, responding effectively to an increasingly challenging international security environment.