Dollars and Sense: Canada’s Defence Industrial Strategy
By Dave Perry, 22 June 2026
[This is an excerpt of an article in Vol. 22, No. 1 of Canadian Naval Review. For the full free access article, click on the link below.]
On 17 February 2026 Prime Minister Mark Carney released Security, Sovereignty and Prosperity: Canada’s Defence Industrial Strategy. Known around Ottawa as the DIS (pronounced diss), the document was slightly delayed, but in several respects well worth the wait. Although significant work remains to flesh out the strategy, it clearly outlines that the government of Canada wants a larger defence industry, more defence innovation, and plans both to export more defence goods from Canada and to buy more from Canadian industry.
The DIS sets out a number of aggressive targets for both the Canadian defence industrial base and Canada’s future purchases. Regarding the industry, the strategy sets out as goals: increasing overall revenue by more than 240%; increasing the defence revenues of Canadian small- and medium-sized businesses by more than $5.1 billion a year; increasing Canada’s defence exports by 50%; and creating 125,000 quality new jobs. With respect to Canada’s future purchases, the document outlines an intent to increase the share of defence acquisitions awarded to Canadian firms to 70% and increase government investment in defence research and development by 85%. In combination, the document anticipates that direct procurement activity, related investment expenditures and their downstream economic impacts will result in over a half a trillion in economic activity by 2035.
The strategy is centred around developing sovereign capabilities, which are defined as “those [capabilities] without which Canada cannot defend its sovereignty or meet its allied commitments.”1 They form the linchpin of the strategy, and the criteria for identification as sovereign includes that it must be: “critical to the ability to defend Canada; an area of strength in Canada or have the potential to be one; and in demand by our Allies and partners to support collective defence and enable exports.”2 The sovereign capabilities fall into 10 major capability areas. These areas are:
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Current Issue: Vol. 22 No. 1 (2026)
It’s that time again! Soon there’ll be a new issue of CNR hitting the streets. To whet your appetite, here is a preview of what’s in the issue.
As usual, the issue contains a smorgasbord of material, with something for everyone. Our first article takes us to China and outlines how it has become a shipbuilding powerhouse. The second article discusses Canada’s participation in the Gulf War, as we reach the 35th anniversary of the conflict. The third article argues that RCN veterans should be seen as strategic assets and treated and trained as such. The final essay outlines some of the defence capabilities that are being ordered/built, particularly relating to the Arctic, even in the absence of a new defence policy to provide strategic direction.
And, of course, we have our usual Making Waves commentaries. In response to enthusiastic discussion on Broadsides (our online discussion forum), we have a commentary about whether geography is destiny for Canada – i.e., as a small (in terms of population) country next door to the United States, does Canada have options for defence? There’s a commentary asking if naval art is dead, a commentary about naval capabilities for the Arctic, and a commentary about how the RCN can make the navy more visible to Canadians.
And, of course, we have our regular columns. “A View from the West” looks at whether China is indeed capable of/intending to invade Taiwan in 2027. “Dollars and Sense” examines the Defence Industrial Strategy, and “Warship Developments” updates us on recent naval developments.
Naturally, we have our usual amazing photos!
The spring issue will be in the mailbox of people who are lucky enough to be subscribers! It’s not too late for you to subscribe. See here for the Table of Contents.
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