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The Defence Industrial Strategy (DIS), launched on 17 February 2026 by Prime Minister Mark Carney and operationalised through the newly constituted Defence Investment Agency within the Department of National Defence, is the first standalone Canadian industrial-strategy document explicitly covering the defence-industrial base. It builds on but is distinct from the 2024 Defence Policy ("Our North, Strong and Free") and consolidates a procurement, R&D, supply-chain resilience, defence-export-promotion and indigenous-supplier participation architecture that previously sat across multiple disconnected programs.
The framework operates as a hierarchy:
1. Build. For "sovereign capabilities" — areas of existing Canadian industrial strength or where sovereign control is deemed essential — contracts are directed to Canadian firms as a matter of policy. The Strategy explicitly contemplates use of the national security exception to set aside trade-agreement obligations (CETA, CPTPP, USMCA, WTO GPA) and exclude foreign bidders. 2. Partner. Where Canada lacks domestic capability, the government will pursue co-development partnerships with trusted allies — prioritising Europe, the UK and Indo-Pacific partners (a deliberate diversification away from US-only dependency). 3. Buy. Where neither domestic build nor allied partnership is feasible, Canada will buy from allies — but with strong reinvestment conditions ensuring Canadian sovereign control over operation and sustainment of the acquired assets.
The DIS introduces new CCV thresholds with a proposed Canadian Company Boost for firms meeting 70–100% domestic-content thresholds. This restructures bid-evaluation and contract-eligibility rules across federal defence procurement, comparable in spirit to Buy American preference architecture but tailored to Canada's smaller domestic supplier base.
Canada.
Armed Forces by 2030 — the DIS sits on top of this base.
Shipbuilding, aerospace, space, land systems, digital technologies, cyber, AI, quantum — plus dual-use linkages into critical minerals processing (where it interacts with the existing 2025-10-31 DPA critical-minerals stockpile filing).
A formal framework for identifying and onboarding "strategic partners" — select Canadian defence firms designated for long-term sovereign control over critical IP — is expected no later than summer 2026.
Canadian over-reliance on foreign suppliers (particularly US primes). Combined with the Build–Partner–Buy framework and CCV requirements, this creates a structural domestic-content preference layer in the world's 6th-largest defence procurement market — a non-trivial market-access shift for US defence primes (LMT, RTX, GD, BA, NOC) that have historically dominated Canadian defence procurement.
toward European, UK and Indo-Pacific partners opens incremental procurement share for BAE, Airbus, Leonardo, Thales, Saab, MBDA, Hanwha, KAI, Mitsubishi Heavy Industries — at the relative expense of US incumbents.
defence-adjacent names (CAE, Magellan Aerospace, MDA Space, Heroux- Devtek, Bombardier Defence) sit upwind of the CAD 180 bn procurement pipeline and the Canadian Company Boost preference structure.
US CHIPS / IRA, EU Chips / CRMA, Japan ESPA, Australia FMIA, India PLI as a peer-tier sovereign-industrial instrument — the first Canadian filing in this lineage covering defence (vs. the 2022-12-08 Critical Minerals Strategy upstream node).
supply-chain screening of foreign defence-component inputs, operationally complementing the 2024-10-01 Canada-China surtax order and the 2024-03-22 ICA modernisation perimeter.
to NATO calls for clarity from allies on defence-industrial-base capacity and provides a domestic political vehicle for Canada's accelerated NATO spending trajectory.
Canadian Company Boost — bid-evaluation rules will only crystallise once Public Services and Procurement Canada (PSPC) publishes the operational procurement directives.
exception — scope of foreign-bidder exclusion depends on this list.
(expected summer 2026) and the IP / ownership conditions attached.
carve-outs — whether the DIS triggers a USTR Section 232 / Section 301 response or remains within the USMCA defence-procurement framework.
shipbuilding (likely the largest single bucket given the National Shipbuilding Strategy pipeline) vs. aerospace, AI, quantum.
Mile Fund (referenced in the 2025-10-31 DPA filing) — whether DIS procurement spend leverages these vehicles for project finance.