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:
1. Aerospace. Aerospace Platforms, Avionics and Aircraft Communications;
2. Ammunition. Common Ammunition, Battle-Decisive Munitions, Small Arms, Missiles and Bombs;
3. Digital Systems. Secure Cloud, Artificial Intelligence, Quantum Computing and Communications, Integrated Command, Control and Communications, and High-Assurance Communications Equipment;
4. In-Service Support. Naval, Land, Air;
5. Personnel Protection. Medical Countermeasures;
6. Sensors. Marine Sensors, Quantum Sensors, Electronic Warfare;
7. Space. Space-Based Intelligence, Surveillance and Reconnaissance, Space Domain Awareness, Satellite Communications, Space Launch;
8. Specialized Manufacturing. Land Vehicles/Surface Ships, including Icebreakers and Marine Systems;
9. Training and Simulation. Naval, Land, Air; and
10. Uncrewed and Autonomous Systems. Uncrewed and Autonomous Land, Aerial, Underwater and Surface Systems (including Uncrewed Collaborative Platforms).
As can be seen here, these high-level categories further break out into what officials count as 32 smaller segments,3 itemizing a broad initial list of industrial capabilities Canada will focus on developing.
The other elements of the strategy include strengthening the relationship between government and industry by facilitating engagement, improving security accreditations and enhancing services provided to companies to help them understand government programming. The industry component includes a focus on developing or obtaining Canadian Intellectual Property, building a robust small- and medium-sized business sector, expanding export promotion, and developing the defence workforce. Another area focuses on securing supply chains with the introduction of a new investment fund to bolster key production, with an initial focus on ammunition and explosives already announced,4 along with steps to strengthen the supply of raw materials including steel, aluminum and critical minerals. Finally, the policy makes a commitment to reform the Industrial Technology Benefits Policy by aligning it with the sovereign capabilities and making other enhancements to align with feedback from industry.
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To read the full, free access article, go to https://www.navalreview.ca/wp-content/uploads/public/vol22num1/cnr_vol22_1_Perry.pdf
Image: A cropped image from the front cover of the Defence Industrial Strategy. Credit: Government of Canada
