Backgrounder: Canada is strengthening defence, sovereignty, and industrial capacity through investments and partnerships
Backgrounder
Canada is making generational investments to strengthen national defence, reinforce sovereignty, modernize military capabilities, and build a stronger Canadian defence industrial base.
At CANSEC 2026, the Government of Canada is advancing initiatives that support operational readiness, accelerate innovation, strengthen partnerships with Canadian industry and Allies, and create economic opportunities for Canadians across the country.
These initiatives build on Canada’s broader commitment to rebuild, rearm, and reinvest in the Canadian Armed Forces (CAF) while strengthening long-term economic resilience, technological capacity, and national security.
CANSEC is Canada’s largest defence and security industry event, bringing together government, military, industry, and international partners to discuss defence, innovation, and security priorities.
Strengthening Canada’s defence and security
Canada continues to invest in the capabilities, technologies, partnerships, and procurement approaches required to defend Canadians and contribute to continental and global security.
At CANSEC 2026, the Government of Canada is advancing initiatives to modernize defence capabilities, strengthen readiness, and deepen collaboration with partners and industry while supporting long-term defence preparedness. These efforts are also designed to deliver broader benefits for Canadians across the economy and national security.
These initiatives will support:
- accelerated capability delivery
- reinforced interoperability with Allies
- national security
- economic growth
- technological innovation
- skilled jobs
- industrial development
- resilient supply chains
- long-term sovereignty and readiness
Key initiatives include:
Airborne Early Warning and Control
The Airborne Early Warning and Control (AEWC) initiative will provide the Royal Canadian Air Force (RCAF) with an advanced airborne command, control, and surveillance capability to detect, track, and respond to threats at long range.
- The Government of Canada is entering into discussions with Saab of Sweden as the preferred supplier for the AEWC capability.
- Engagement with Saab as the preferred supplier does not constitute a contractual commitment by the Government of Canada.
- The AEWC project is being advanced by the Defence Investment Agency and aligns with the Defence Industrial Strategy. Under the BUILD–PARTNER–BUY framework, this initiative demonstrates the PARTNER approach, where Canada collaborates with trusted allies to develop capabilities while ensuring industrial and economic benefits for Canada.
- Saab’s GlobalEye solution is built on the Bombardier Global 6500 aircraft, a Canadian-manufactured platform. This approach combines Canadian aerospace expertise with advanced mission systems and would support domestic production and Canadian participation in global aerospace and defence supply chains.
- This initiative could generate significant economic benefits for Canadians through highly skilled employment, domestic industrial growth, technology integration, and expanded participation of Canadian companies across the aerospace and defence sectors. Saab is anticipated to partner with Bombardier and other Canadian companies, creating opportunities for workforce development and future export growth.
- The initiative could include meaningful transfer of technology and knowledge, alongside sustained collaboration with Canadian industry, supporting domestic capability development and long-term industrial benefits.
Next Steps
- Canada’s negotiation team will undertake targeted engagement with SAAB to further explore key requirements, including commercial, technical/military, and economic considerations.
Building Canada’s defence industrial capacity
Canada is working with industry, innovators, and partners to strengthen domestic defence production, improve procurement agility, support Canadian businesses, and build a more resilient and competitive defence industrial base.
The following initiatives announced at CANSEC 2026 support long-term industrial growth, innovation, and sovereign capability development across Canada.
Strategic Partnership Framework
The Strategic Partnership Framework guides how the Government of Canada will work with industry, on a selective and need‑driven basis, to ensure the CAF have the capabilities they need to meet Canada’s defence and security objectives.
These partnerships will enable more coordinated, long-term collaboration to develop and sustain key industrial capabilities. This will strengthen Canada’s defence and dual-use industrial base, enhance interoperability with allies, and support jobs and economic growth. It will also provide industry with greater predictability on long-term priorities and a clearer pathway to contribute to Canada’s defence and security.
Defence Concierge Service
The Concierge Service is intended to help defence and dual-use firms navigate the array of resources, procurement pathways and supports that are available to them across the government.
This new service, which will be implemented in a phased approach, will be housed at Innovation, Science and Economic Development Canada and will leverage knowledge, networks and relationships across Canada’s entire economy to help companies of all sizes with pathfinding the solutions they need when they need them.
Defence Advisory Forum
The Defence Advisory Forum (DAF) is intended to strengthen collaboration and dialogue between government, industry, and stakeholders on defence procurement, capability development, and industrial priorities.
- The DAF will be chaired by the Minister of National Defence, the Minister of Industry and Minister responsible for Canada Economic Development for Quebec Regions, and the Secretary of State for Defence Procurement. The Forum will bring together representatives from across the defence industry. Industry membership will rotate and will be representative of the sovereign capabilities outlined in Canada’s Defence Industrial Strategy (DIS), national and regional associations, and Indigenous groups.
- The DAF will facilitate earlier and more meaningful dialogue on defence priorities, capability needs, delivery considerations, and DIS implementation.
- The DAF will play a central role in delivering on the commitments made in the DIS, delivering critical capabilities to the CAF and Canadian Coast Guard faster and supplied by a strong, domestic defence and national security industry.
- A solicitation of interest for industry participation will be issued on June 1, 2026, and the inaugural meeting is anticipated in September 2026.
Accelerating innovation and emerging technologies
Canada is investing in innovation to help equip the CAF with modern and adaptable capabilities while supporting Canadian technological leadership.
Innovation initiatives announced at CANSEC 2026 support:
- emerging defence technologies
- Canadian innovators and SMBs
- research and development
- dual-use innovation
- collaboration between government, academia, and industry
Supporting facts:
- Investments in innovation support operational effectiveness and long-term economic growth.
- Defence innovation contributes to Canada’s technological competitiveness and sovereign capability development.
Delivering benefits for Canadians
Projects and partnerships announced at CANSEC 2026 will help create opportunities for Canadian workers and businesses while strengthening Canada’s long-term defence and security capabilities.
Expected outcomes include:
- increased industrial activity across Canada
- strengthened domestic supply chains
- improved collaboration between government and industry
- enhanced operational readiness
- accelerated innovation and capability delivery
- greater opportunities for Canadian businesses and workers
Industrial and Technological Benefits (ITB) Modernization
The ITB Policy is being modernized to leverage the focus of defence procurement in growing Canada’s defence industrial base. The updated policy will create more high-quality defence jobs in Canada, strengthen the competitiveness of Canadian companies and direct investment toward priority defence sovereign capabilities that are critical to Canada’s security and economic prosperity.
Key changes to the Policy are intended to:
- Incentivize strategic investments that build Canada’s defence industrial base—including new facilities, critical infrastructure, and transfers of intellectual property, by introducing a new Strategic Investment Transaction category.
- Support small- and medium-sized businesses (SMB) through a suite of enhanced tools including an updated definition for what constitutes an SMB; introduction of a Small Mid-Capitalization category, giving firms that have successfully scaled above 250 full-time personnel an additional five years of crediting for small and medium sized businesses; and elimination of the $1 million cap on transaction value for SMB credit boost.
- Enhance opportunities for Canadian suppliers, with higher credits for investments by established Canadian firms with strong domestic supply chains and for direct work undertaken with SMBs.
- Encourage early investment by providing up-front ITB credit at the time of the investment by a contractor to support the growth of, and future sales by, Canadian companies.
- Focus ITB commitments on procurements of higher value by raising the threshold for applying the ITB Policy to $25 million, aligning with current defence procurement authorities.
- Advance development of Canada’s sovereign capabilities through incorporation of a new targeted list of priorities to guide ITB commitments toward priority areas critical to Canada’s security and resilience.
- Address workforce shortages by introducing strong incentives for investments in skills development and training, including a 10X multiplier for initiatives supporting Indigenous workforce development – the largest multiplier available under the ITB Policy.
In addition, a 90-day service standard for ITB transaction approvals will be introduced to improve predictability, transparency, and timeliness for industry and stakeholders.
Together, these changes mark a significant step toward modernizing Canada’s defence procurement and industrial strategy. The government is working in closely with industry partners to develop a robust and resilient defence sector equipped to support Canada’s defence and economic priorities for the years ahead.
Supporting facts:
- In 2024, the ITB Policy is estimated to have contributed over $5 billion to GDP and more than 40,400 jobs annually in Canada.
- More than 710 Canadian organizations, of which over 60% are SMBs, are recipients of activities from ITB obligations active in 2024.
- Nearly 50% of the value of ITB obligations is committed to domestic production directly on defence and security procurements.
Between 2020-2024, there was a 95% increase in economic obligations resulting from active contracts.
In 2024, the Canadian defence industry:
- generated close to $17.3 billion in revenues;
- contributed 81,800 jobs to the Canadian economy, representing an increase of 3,500 jobs between 2022 and 2024;
- was over 2.5x more science, technology, engineering and mathematics -intensive and over 3x more research and development-intensive than the broader manufacturing sector;
- had close to 55% of its supply chain expenditures with Canadian suppliers;
- exported close to $8 billion in goods and services, of which 70% was to Canada’s Five Eyes allies; and had SMBs that represented over 90% of firms.
Quick facts
- Canada achieved NATO’s 2% defence investment benchmark in 2025–26.
- Budget 2025 includes more than $81 billion over five years for defence investments.
- Canada is investing approximately $87 billion over 20 years in NORAD modernization and continental defence.
- Canada’s defence sector supports high-skilled jobs and innovation across Canada.
- CANSEC is one of North America’s largest defence and security industry events, hosted annually by the Canadian Association of Defence and Security Industries.
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