Standing Committee on Government Operations and Estimates: February 10, 2026
Creation and Planning of the Defence Investment Agency
Date: February 10, 2026, 4:30 pm - 5:30 pm
Location: In person
On this page
General items
1. Opening statement
The Honourable Stephen Fuhr
Secretary of State (Defence Procurement)
Standing Committee on Operations and Government Estimates – Creation and Planning of the Defence Investment Agency
February 10th, 2025
Check against delivery
634 words
Hello everyone. Thank you for inviting me today.
I would like to acknowledge that we are gathered on the traditional, unceded territory of the Algonquin Anishinaabe people.
Thank you, Mr. Chair. I am pleased to appear before you today to discuss the Defence Investment Agency.
As Secretary of State for Defence Procurement, my primary responsibility is to make sure that the government provides the Canadian Armed Forces with the tools and equipment they need to defend Canada and Canadians.
For too long, defence procurement in Canada has been too slow, overly complicated, and fragmented across several departments. To address these shortcomings, the government is changing its approach.
This work builds directly on the recommendations of the National Defence Committee’s 2024 report, A Time for Change for Reforming Defence Procurement in Canada.
That is why we created the Defence Investment Agency, to bring coherence, speed, and accountability to the system. The Defence Investment Agency (DIA) is making procurements faster and more efficient.
We are prioritizing Canadian industry so that, whenever possible, we are buying here at home and strengthening Canada’s industrial capacity.
When urgent or operational needs require us to look abroad, we will work with trusted partners and secure the intellectual property needed for Canadian companies and workers to sustain that equipment here at home.
Canada has world-class capability and capacity in aerospace, shipbuilding, space, land systems, artificial intelligence, and advanced manufacturing. Leveraging Canadian expertise to build out our military will grow our economy while delivering the capabilities our Armed Forces require.
Presently, the government is working toward meeting our North Atlantic Treaty Organization (NATO) commitment of 2% of GDP in defence spending this fiscal year, 5 years ahead of schedule. We are also exploring opportunities to pull future procurements forward to ensure we are on a path to meeting NATO’s 5% Defence Investment Pledge by 2035.
The Defence Investment Agency is ramping up its operations and is already focused on a number of high-priority procurements.
Several major projects have already been transferred to the Agency, and more will follow as the organization expands.
With a number of these projects, we have taken important steps to streamline their delivery and create opportunities for Canadian industry.
With the Enhanced Satellite Communications Project – Polar, we announced a strategic partnership between Telesat and MDA Space, 2 Canadian companies with expertise delivering satellite communications and space-based infrastructure, to deliver this project faster and stimulate our economy in the process.
Meanwhile, we streamlined the award of a contract to purchase 6 Global 6500s to Bombardier to replace our aging Challenger fleet and set the Canadian Patrol Submarine Project on a path to delivery years earlier than originally anticipated.
Within the Agency, CEO Doug Guzman is now responsible for building and leading the DIA. His experience in capital allocation, project execution, and major financial operations is essential as we accelerate procurement and grow our defence industrial base.
As a first step, we’ve established the DIA as a Special Operating Agency within Public Services and Procurement Canada to benefit from the department’s expertise and long-standing relationships with industry.
This transitional structure is allowing us to stand up the organization quickly while we bring together the full complement of personnel and capabilities from Public Services and Procurement, National Defence, the Canadian Armed Forces, the Canadian Coast Guard, and Innovation, Science and Economic Development Canada.
The integrated experts report to the Agency’s CEO, who works with the Deputy Minister of PSPC. Together, they support me as the Secretary of State responsible for this new organization.
To meet the moment, we are making defence procurement faster and more efficient so that our Armed Forces and Coast Guard get what they need when they need it, while helping drive innovation and economic growth for Canada’s new reality.
I’m happy to take any questions you may have for me.
Thank you.
2. Defence Investment Agency
Issue
The Government of Canada has created a new Defence Investment Agency to modernize defence procurement.
Key facts
- On June 25, 2025, the Prime Minister announced Canada’s commitment to NATO’s Defence Industrial Pledge, which will see investments of 5% of annual GDP by 2035 in individual and collective security
- On October 2, 2025, the Prime Minister announced the creation of the new Defence Investment Agency, which will overhaul and streamline Canada’s defence procurement so the Canadian Armed Forces have the world-class equipment they need
- Doug Guzman started as its Chief Executive Officer in November 2025
- The Defence Investment Agency is a new Special Operating Agency within Public Services and Procurement Canada
Key messages
- We created the new Defence Investment Agency to protect Canadian sovereignty by quickly equipping the Canadian Armed Forces and Coast Guard with the world-class tools they need, while also bolstering our industrial capacity
- The agency will consolidate procurement processes, remove duplicative approvals and red tape, and provide industry with greater clarity and certainty
- The Defence Investment Agency will promote and focus investments leveraging the Canadian defence industrial base, where appropriate, creating new careers, growing our economy, and supercharging innovation in aerospace, shipbuilding, and advanced manufacturing
If pressed on ties to economic impact:
- with this centralized process of review and approval, procurements will advance faster so that we can equip the Canadian Armed Forces with the world-class tools that it needs
- we intend to better leverage defence procurement through this investment in Canadian workers, companies, and technologies. The Agency will help Canadian firms scale up, develop cutting-edge capabilities, and compete globally
If pressed on defence spending:
- the establishment of the Defence Investment Agency is a cornerstone of Canada’s plan to increase defence spending to 2% of gross domestic product in 2025 and to 5% by 2035
- this effort supports economic growth while better protecting Canadian sovereignty and strengthens our ability to work with Allies
- our goals is to reinforce defence supply chains and industrial capacity among allied nations, thus reaffirming Canada’s commitment to global security
Background
Until now, defence procurement in Canada has been divided across multiple ministers and accountabilities, and layers of oversight from central agencies. To meet the Government’s commitment to accelerate spending on defence, reforms to defence procurement are needed. The Defence Investment Agency will centralize accountability, leverage expanded authorities and introduce flexibilities in the procurement process to deliver faster procurement outcomes. Defence procurement in Canada now better aligns with our allies, such as the United Kingdom, France, and most recently Australia, which have dedicated and independent defence procurement organizations.
Reforming defence procurement has been the subject of several reports and studies. In June 2024, the Standing Committee on National Defence tabled a wide-ranging report entitled, A Time for Change: Reforming Defence Procurement in Canada. Also, in June 2024, the Parliamentary Budget Officer tabled a report on the rising costs and extended delays associated with the development and acquisition of polar icebreakers. In December 2024, the Auditor General of Canada tabled a report on the application of Industrial and Technological Benefits (ITBs) to defence procurements, noting areas for administrative improvements, and tabled an additional report on Canada’s Future Fighter Jets in June 2025. Taken together, consecutive reports indicate that the procurement process and overly customized specifications have led to avoidable cost increases and significant delays.
3. Budget 2025 – Defence spending
Advice to the Minister
Question: Why is this Government spending so much on Defence when there are other issues affecting Canadians?
- Canada faces a rapidly changing and increasingly uncertain world and must be ready and able to defend our territory, our people, and our values
- Budget 2025 proposes $81.8 billion in cash over 5 years to rebuild, rearm, and reinvest in the Canadian Armed Forces
- These investments will help recruit and retain a strong fighting force, while ensuring that our military has the equipment and infrastructure they need
- This also includes an initial investment of $6.6 billion to launch our Defence Industrial Strategy, to be released shortly
- Further, Canada is committed to strengthening transatlantic security and reaffirming our commitment to defend NATO territory in the face of ongoing Russian aggression
- In fact, Canada is set to meet NATO’s 2% defence-spending-to-GDP target this fiscal year—5 years ahead of schedule
- We are also on a pathway to meet NATO’s 5% Defence Investment Pledge by 2035, further demonstrating our unwavering commitment to collective defence and transatlantic security
- Taken together, these generational investments will provide our military with the necessary tools and equipment to protect our sovereignty and bolster our security
Quick facts
- Budget 2025 proposes to provide $81.8 billion over 5 years on a cash basis, starting in 2025 to 26, to rebuild, rearm, and reinvest in the Canadian Armed Forces. This includes over $9 billion in 2025 to 26 that was announced by the Prime Minister in June 2025
- The Budget highlights investments to meet the North Atlantic Treaty Organization’s (NATO) 2% of gross domestic product (GDP) target this year and put Canada on a pathway to meet the NATO Defence Investment Pledge of investing 5% of GDP in defence by 2035
Background
- The 2025 Federal Budget, Canada Strong, was introduced on November 4, 2025
- Budget 2025 states that Canada will make generational investments totaling over $280 billion across 4 key pillars:
- housing ($25 billion on an accrual basis over 5 years)
- infrastructure ($115 billion on an accrual basis over 5 years)
- defence and security ($30 billion on an accrual basis over 5 years),
- productivity and competitiveness ($110 billion on an accrual basis over 5 years)
- Under the theme of “Defending Our Sovereignty,” Budget 2025 lays out the Government’s plan to “secure Canada, fulfill our responsibility to shared security with our Allies, build a world class defence industrial base, and establish a new Defence Investment Agency that will accelerate the procurement process”
Rebuild, rearm, reinvest
- Budget 2025 proposes to provide $81.8 billion over 5 years on a cash basis, starting in 2025 to 26, to rebuild, rearm, and reinvest in the Canadian Armed Forces (CAF). This includes over $9 billion in 2025 to 26 that was announced by the Prime Minister in June 2025
- $20.4 billion over 5 years to recruit and retain a strong fighting force, including generational pay raises for the CAF and support to CAF healthcare
- $19.0 billion over 5 years to repair and sustain CAF capabilities and invest in defence infrastructure, including expanding ammunition and training infrastructure
- $10.9 billion over 5 years for upgrades to digital infrastructure at National Defence and the Communications Security Establishment, including those needed for modern warfare such as cyber defence
- $17.9 billion over 5 years to expand Canada’s military capabilities, including investments in additional logistics utility, light utility, and armoured vehicles, counter-drone and long-range precision strike capabilities, and domestic ammunition production, among other investments
- $6.6 billion over 5 years, starting in 2025 to 26, to strengthen Canada’s defence industry through a Defence Industrial Strategy
- $6.2 billion over 5 years to expand Canada’s defence partnerships, including expanded military assistance to Ukraine and increased military training and international policy programming
- $805 million over 5 years to the Canadian Coast Guard, the Canadian Security Intelligence Service, and Public Services and Procurement Canada (PSPC) for complementary initiatives to support Canada’s defence capabilities
Defence Industrial Strategy
- Budget 2025 announces $6.6 billion over 5 years for the forthcoming Defence Industrial Strategy, including $4.6 billion for the Strategy’s Early Moves
- National Defence initiatives outlined in the Budget include the establishment of the Bureau of Research, Engineering and Advanced Leadership in innovation and Science (BOREALIS), and funding to establish a sovereign space launch capability
- The Budget commits to publish a fulsome Defence Industrial Strategy in the coming months
Defence Investment Agency
- The DIA will focus on defence procurements valued at $100 million and above, including submarines and other critical capabilities that the CAF requires
- Budget 2025 proposes to provide $30.8 million over 4 years, starting in 2026 to 27, with $7.7 million ongoing to PSPC to establish the DIA
- Budget 2025 proposes to provide $52.5 million over 5 years, starting in 2026 to 27, with $12.2 million ongoing to PSPC to modernise and increase capacity for the Industrial Security Program to meet the needs of the DIA and support Canada’s defence industry
Operations
- Operations REASSURANCE and AMARNA are included in Budget 2025
- Specifically, the Budget reaffirms the Prime Minister’s announcement in August 2025 regarding the renewal of Operation REASSURANCE ($2.7B over 3 years)
- The Budget further proposes $300.1M over 3 years for Operation AMARNA ($155.8M of which is to be funded through existing National Defence reference levels)
Responsible Principals: Assistant Deputy Minister (Finance), Assistant Deputy Minister (Policy)
November 5, 2025
4. Budget 2025 - Defence Investment Agency
In Budget 2025, the government unveiled over $141.4 billion in new spending (offset by $51.7 billion in projected savings) over the next 5 years with a focus on: building a stronger Canadian economy; shifting from reliance to resilience; empowering Canadians; protecting Canada’s sovereignty and security; and creating a more efficient and effective Government.
Funding for the Defence Investment Agency (DIA) includes:
- Budget 2025 proposes to provide PSPC with $30.8 million over 4 years, starting in 2026 to 27, with $7.7 million ongoing to establish the DIA
- the DIA will accelerate the delivery of goods and services to better meet the needs of the CAF at the best value for Canadians by centralising processes and enhancing engagement and collaboration with Canadian industry and international partners
- the Agency’s focus will be on defence procurements valued at $100 million and above, including submarines and other critical capabilities that the CAF requires
- Budget 2025 proposes to provide PSPC with $52.5 million over 5 years, starting in 2026 to 27, with $12.2 million ongoing to modernise and increase capacity for the Industrial Security Program to meet the needs of the DIA and support Canada’s defence industry
5. Chief Executive Officer of the Defence Investment Agency
Issue
The appointment of Doug Guzman as Chief Executive Officer of the Defence Investment Agency.
Key facts
- On October 2, 2025, the Prime Minister announced the creation of the Defence Investment Agency to overhaul and streamline Canada’s defence procurement processes
- Mr. Doug Guzman was appointed as its Chief Executive Officer through an Order in Council for a 3-year term, effective November 12, 2025
- Mr. Guzman’s salary range is commensurate with the ‘Group Chief Executive Officer 8’ Compensation for Crown corporation Chief Executive Officer’s guidelines
- Mr. Guzman’s compensation contributes towards Canada’s NATO defence spending target
Key messages
- As Chief Executive Officer of the Defence Investment Agency, Mr. Guzman will continue to oversee military procurement and strategic decisions involving tens of billions of dollars of economic activity
- Mr. Guzman’s extensive private-sector experience in investment and wealth management is critical to successfully lead the centralization of defence procurement expertise from across the government and deliver on the Defence Investment Agency’s mandate
- He leads the Defence Investment Agency in consolidating and accelerating defence procurement processes to deliver the goods and services required by the Armed Forces while enhancing engagement and collaboration with Canadian industry and international partners
- Mr. Guzman provides leadership to ensure our Armed Forces and Coast Guard are equipped with the world-class capabilities needed to succeed, and strengthen Canada’s defence industrial base by fostering innovation, creating more jobs, and creating opportunities for Canadian companies across the country
Background
Mr. Guzman was a Canadian business leader with 3 decades of experience in global banking, wealth management, and financial services. Most recently, Mr. Guzman served as Deputy Chair of the Royal Bank of Canada (RBC), advising on enterprise priorities and, together with other members of the Group Executive, was responsible for setting the overall strategic direction of RBC. Immediately prior to his role as Deputy Chair, Mr. Guzman served as Group Head of Wealth Management and Insurance at RBC for 9 years.
Mr. Guzman’s appointment as Chief Executive Officer (CEO) of the Defence Investment Agency (DIA) is consistent with those made to other recently created Special Operating Agencies, including the Major-Projects Office and Build Canada Homes, where leadership for these Agencies are sourced from the private sector. Mr. Guzman’s private sector experience provides valuable insights and perspectives into earnest defence procurement reforms, including leveraging private-sector best practices, experimenting with novel approaches and introducing culture change to deliver on this critical mandate.
6. Defence Investment Agency's governing documents
Issue
Public release of the Defence Investment Agency’s Governing Documents (Framework Agreement and Business Plan).
Key facts
- N/A
Key messages
- The Defence Investment Agency’s Framework Agreement was developed collaboratively with partner departments to ensure alignment with Government of Canada standards and best practices for Special Operating Agencies
- The Framework Agreement describes how Agency management will be held accountable for results and in what form the Defence Investment Agency will report to Public Services and Procurement Canada
- The Agency’s Business Plan outlines the financial and service objectives, the human and financial resources required, and strategies necessary to meet them
- The Framework Agreement and Business Plan are both being updated with input from the Chief Executive Officer, in collaboration with relevant parties
- In the interest of transparency with Canadians, the updated Framework Agreement will be published on the Defence Investment Agency’s website once finalized
Background
The Defence Investment Agency (DIA) was created to support Canada’s delivery of ambitious defence procurement targets more efficiently while supporting the growth of Canada’s domestic defence industry. It is a Special Operating Agency of Public Services and Procurement Canada (PSPC) under the leadership of Chief Executive Officer, Doug Guzman, and reports to the Deputy Minister of PSPC during its initial phase.
The DIA’s governing documents, cover its mandate, governance, and accountability framework. The Framework Agreement, once updated, will be published on the DIA website so Canadians can better understand how the Agency operates.
Special Operating Agencies are entities within an existing department that function according to a Framework Agreement and Business Plan approved by the Deputy Minister, Minister, and Treasury Board.
The DIA’s key foundational documents – its Framework Agreement and Business Plan – were developed together with PSPC, the Department of National Defence, Innovation, Science and Economic Development, and the Treasury Board of Canada Secretariat.
Though Framework Agreements contain common elements, they are tailored to the precise needs of the organization. As conditions change, the Framework Agreement will be revised to reflect those changes. The Business Plan covers the financial and service objectives, the human and financial resources, and the strategies required to meet these objectives.
Key projects
7. Defence investments (includes North Atlantic Treaty Organization Commitments)
Advice to the Minister
Question: How does spending on National Defence benefit Canadians and how can Canada realistically meet a revised Defence spending target of 5% by the end of 2035?
- We are taking important steps to rebuild, rearm, and reinvest in the Canadian Armed Forces
- In fact, the National Defence budget has increased to $44.3 billion this fiscal year, as we make foundational investments in our forces
- This includes investments to expand and enhance military capabilities, strengthen Canada’s defence industries, and diversify our defence partnerships
- These investments will bring Canada’s defence spending to 2% of GDP within the current fiscal year
- Further, in June, the Prime Minister announced that Canada had agreed with NATO Allies to invest 5% of annual GDP in defence by 2035
- To meet this pledge, Canada will invest 3.5% of GDP in core military capabilities and a further 1.5% in critical defence and security-related infrastructure
- Major investments range from modern aircraft to submarines capable of patrolling our 3 coastlines
- Indeed, to advance the acquisition of our next fleet of submarines, we recently identified Thyssen Krupp Marine Systems and Hanwha Ocean as qualified suppliers
- Taken together, these investments reflect that the Government is committed to making the investments necessary to protect Canadians, defend our North, and support our Allies
Quick facts
Defence spending
- 2025 to 2026: Canada’s defence spending is projected to reach 2.01% of its Gross Domestic Product (GDP), with 22.6% devoted to major equipment, up from 1.47% of GDP and 18.3% on major equipment in fiscal year 2024 to 2025
North Atlantic Treaty Organization common funded budget
- In addition to investing in their own armed forces, all NATO Allies contribute directly to NATO’s budget based on an agreed cost-share formula derived from Gross National Income. Canada is the sixth largest contributor to NATO’s common funded budget
Background
- On June 25, 2025, Canada and its NATO Allies agreed to a new Defence Investment Pledge of investing 5% of annual GDP by 2035
- As part of this 5% pledge, Canada will invest 3.5% of GDP for core military capabilities, expanding on the June 9, 2025, announcement
- This includes further investments in Canadian Armed Forces, by modernizing military equipment and technology, building up Canada’s defence industries, and diversifying defence partnerships
- An additional 1.5% of GDP will be dedicated to investments in critical defence and security-related expenditure, such as new airports, ports, telecommunication, emergency preparedness systems, and other dual-use investments which serve defence as well as civilian readiness
Our North, Strong and Free
- Measures to increase and accelerate defence investment will complement Canada’s Defence Policy: ONSAF
- Announced on April 8, 2024, ONSAF features 6 major themes:
- supporting our people
- strengthening our foundations
- building an innovative industrial base
- defending Canada
- defending the Arctic and North America
- defending Canada’s global interests and values
- Further, ONSAF included investments of:
- $8.1 billion over 5 years (fiscal year 2024 to 25 to 2028 to 29); and
- $73 billion over 20 years (fiscal year 2024 to 25 to 2043 to 44)
Parliamentary Budget Officer analysis
- The PBO published a report on October 30, 2024, entitled The Fiscal Implications of Meeting the NATO Military Spending Target, in follow-up to its update in July 2024
- the report stated that additional spending would be required to meet the NATO 2% commitment but concluded that such expenditures are possible without unduly impacting Canada’s deficit-to-GDP ratio
- however, it reiterated a position that the PBO took in summer 2024, that ONSAF underestimates GDP growth and that, as a result, Canada’s defence budget would have to rise significantly to meet the NATO 2% target
- the PBO labelled the ONSAF GDP forecast as “erroneous” as it assumed a nominal GDP growth rate of 1.7%, which “does not even keep pace with inflation and therefore assumes a 4-year economic recession, almost twice the length of the country’s longest recession in the last 40 years”
- The PBO relies on its own methodology for calculating GDP, which it says is broadly similar to the Department of Finance’s methodology
- National Defence uses Canadian GDP figures provided by NATO, which use several data sources, including the Organization for Economic Co-operation and Development (OECD), and is a standard practice for NATO Allies
- While the timeline has accelerated for Canada to reach 2%, the PBO’s criticism of National Defence spending projections is likely to endure as long as methodological differences persist
- The PBO is preparing an updated report on Canada’s defence spending, which is expected to be released in fall 2025
Responsible Principal: Assistant Deputy Minister (Finance)
September 5, 2025
8. Procurement of Canadian F-35 jets
Issue
In December 2017, the Government of Canada launched an open and transparent competition to permanently replace Canada’s fighter fleet with 88 advanced jets, the Future Fighter Capability Project.
Note:
- all questions related to capability, technical issues, deliveries and requirements, in-service support costs, including the complete life-cycle costs, Auditor General Report on the F-35 entry into service, and current review of the F-35 acquisition should be answered by the Minister of National Defence
- all questions related to the Industrial and Technological Benefits Policy and Canadian Industry’s participation on the Joint Strike Fighter Program should be answered by the Minister of Industry and Minister responsible for Canada Economic Development for Quebec Regions
- all questions related to trade issues should be answered by the Minister of Foreign Affairs or Ministers responsible for Canada-US Trade as Public Services and Procurement Canada has no involvement
Key facts
- The project is estimated to be $27.7 billion, which includes associated equipment, initial weapons and ammunition, sustainment set-up and services, as well as the construction of Fighter Squadron Facilities (Cold Lake, (Alberta) and Bagotville, (Quebec))
Key messages
- The Government is committed to ensuring that members of the Canadian Armed Forces have the equipment they need to do their jobs and protect Canadians, while also ensuring the best value for Canadians
- The Government is currently reviewing the purchase of the F-35s to ensure that they represent the best fighter capability for our country with an optimal solution in terms of capability, price and economic benefits for Canadians and that this acquisition will drive significant work for Canadian industry over a 25-year period
- The Canadian industry is expected to have significant opportunities to contribute to the sustainment of fighters in areas such as the air vehicle and propulsion depots, training, maintenance of components and supply chain management over the life of the fleet
Background
As part of its defence policy, Our North Strong and Free, the Government of Canada has renewed its commitment to procure 88 advanced fighter jets for the Royal Canadian Air Force.
An independent fairness monitor oversaw the entire competitive process to ensure a level playing field for all bidders. An independent third-party reviewer was also engaged to assess the quality and effectiveness of the procurement approach.
On January 9, 2023, the Government of Canada announced that following an open, fair and transparent competition, Canada had finalized an agreement with the United States government and Lockheed Martin with Pratt & Whitney for the acquisition of F-35 fighter jets for the Royal Canadian Air Force.
On November 25, 2024, the Government of Canada announced that Canada has identified L3Harris MAS from Mirabel (QC) as a strategic partner. The company will collaborate with the Canadian government, the F-35 Joint Program Office and Lockheed Martin to explore the requirement for an air vehicle depot.
On March 14, 2025, the Prime Minister asked the Minister of National Defence (MND) to review the planned acquisition of the F-35 aircraft; the review is led by the Department of National Defence with input from key project stakeholders. The Independent Review Panel for Defence Acquisition will also provide separate advice to the MND.
The Office of the Auditor General of Canada has completed its Performance Audit of Canada’s Future Fighter Capability Project and tabled the report in Parliament on June 10, 2025. Key findings include significant cost increases, infrastructure delays, Royal Canadian Air Force pilot shortages and project management gaps.
9. Canadian Patrol Submarine Project
Issue
Canada has identified German company Thyssenkrupp Marine Systems (TKMS), and Korean company, Hanwha Ocean Co., Ltd. (Hanwha), as the 2 qualified suppliers for the Canadian Patrol Submarine Project.
Key facts
- On August 26, 2025, Canada announced the German company Thyssenkrupp Marine Systems, and Korean company Hanwha Ocean Co. Ltd. as the 2 qualified suppliers for the Canadian Patrol Submarine Project
- On November 14, 2025, the Government of Canada progressed to the next step in the Canadian Patrol Submarine Project procurement process by issuing proposal instructions directly to the 2 qualified suppliers, German company Thyssen Krupp Marine Systems supported by Germany and Norway, and Korean company Hanwha Ocean Co., Ltd. supported by the Republic of Korea. Proposals will be submitted to Canada in March 2026
- To avoid any gaps in Canadian submarine capabilities, Canada anticipates a contract award by 2028, with the delivery of the first replacement submarine no later than 2035
Key messages
- Canada has the largest coastline in the world, and it is essential that the Royal Canadian Navy be equipped with superior underwater surveillance capability to maintain our country’s security and sovereignty
- The Navy’s current Victoria-class submarine fleet is scheduled to be decommissioned in the mid-2030s and replacement submarines are needed
- The Government of Canada has identified 2 qualified suppliers in order to progress and accelerate their replacement by no later than 2035 to ensure a continuous Canadian submarine capability
Background
Through Canada’s defence policy, Our North, Strong and Free, the Government of Canada is providing members of the Royal Canadian Navy with the equipment they need to maintain current and future operational readiness.
Canada’s key submarine capability requirements will be stealth, lethality, persistence and Arctic deployability – meaning that the selected submarine must have extended range and endurance.
Through the Canadian Patrol Submarine Project, Canada will acquire a larger, modernized submarine fleet that will provide a unique combination of these capabilities to ensure that Canada can detect, track, deter and, if necessary, defeat adversaries in all 3 of Canada’s oceans while contributing meaningfully alongside allies and enabling the Government of Canada to deploy this fleet abroad in support of our partners and allies.
The Government of Canada remains committed to engaging Canadian industry and creating high-paying jobs at home through the Canadian Patrol Submarine Project
- as such, Canada intends to leverage work on the submarines to generate economic benefits for Canada’s marine and defence industry throughout the fleet’s operational life
10. National Shipbuilding Strategy
Issue
The National Shipbuilding Strategy is a long-term commitment to renew the vessel fleets of the Royal Canadian Navy and Canadian Coast Guard, create a sustainable shipbuilding sector, and generate economic benefits for Canadians.
Note: All questions related to budget, requirements, timelines, international comparisons, and project management should be directed to the Minister of National Defence.
Key facts
- As of December 2025, the Government of Canada has awarded approximately $54 billion in contracts under the National Shipbuilding Strategy to businesses across the country and, of these, $1.2 billion went to small and medium businesses with less than 250 employees
- In 2025 alone, the Government of Canada awarded approximately $16 billion in new contracts to Canadian companies under the Strategy, including approximately $62 million to small and medium businesses
- Since 2012, more than $11 billion in supplier development opportunities have been provided to Canadian suppliers
- of this amount more than $2.3 billion has gone to small and medium enterprises
- National Shipbuilding Strategy contracts awarded between 2012 and 2024 are estimated to contribute close to $38.7 billion ($2.8 billion annually) to Canada’s gross domestic product and to create or maintain approximately 21,400 jobs annually between 2012 and 2025
Key messages
- The National Shipbuilding Strategy is about Canadians and Canadian businesses working together to strengthen and renew our Naval and Coast Guard fleets
- So far, 10 large vessels and numerous small ships have been delivered, and many more are under construction across Canada
- We will continue working closely with industry to manage costs and schedules, and ensure the best value is provided to Canadians throughout the duration of these projects
If pressed on the River-class Destroyer Project:
- on March 3, 2025, the Government of Canada awarded the Implementation contract for the River-class Destroyer Project to Irving Shipbuilding Inc., to build the first batch of 3 ships
- the River-class Destroyer Project is expected to create or maintain over 5,000 jobs over the next 15 years, many of which will be in Halifax, Nova Scotia
- full-rate production on the first ship, His Majesty’s Canadian Ship Fraser, began April 25, 2025
If pressed on the Polar Icebreakers:
- the Canadian Coast Guard is acquiring 2 polar icebreakers which will strengthen its icebreaking fleet
- they will also support critical scientific research and environmental protection efforts, and ensure national security in the Arctic
- this investment enhances Canada’s maritime infrastructure and safeguards our sovereignty in the Arctic
- construction of both polar icebreakers is underway
- full-rate production of the future Canadian Coast Guard Ship (CCGS) Imnaryuaq started in July 2025 at Seaspan’s Vancouver Shipyards, while steel cutting for the future CCGS Arpatuuq took place in August 2025 at Davie North Yard Finland Oy, owned by Chantier Davie Canada Inc., marking the start of its construction phase
Background
The National Shipbuilding Strategy is a long-term plan to renew the Royal Canadian Navy and Canadian Coast Guard fleets. It aims to eliminate the boom and bust cycles of vessel procurement that have slowed Canadian shipbuilding in the past. Canadian shipyards involved are Irving Shipbuilding Inc. in Nova Scotia, Seaspan’s Vancouver Shipyards in British Columbia and Chantier Davie Canada Inc. in Quebec.
The River-class Destroyer Project Implementation contract, with an initial value of $8 billion (including taxes) outlines the terms and conditions for the construction and acceptance of the first 3 ships.
Seaspan’s Vancouver Shipyards was awarded a $3.15-billion contract (excluding taxes) to build 1 polar icebreaker and Chantier Davie Canada Inc. was awarded a $3.25-billion contract (excluding taxes) to build the other polar icebreaker.
The Davie icebreaker will be built using a hybrid domestic-international build strategy, with work split between Davie’s facilities in Quebec and its Finnish shipyard, Davie North Yard Finland Oy. With the evolving global climate, it is essential more than ever that Canada delivers ships to the Canadian Coast Guard in a timely manner so they can continue to work to protect Canadian sovereignty and security.
The National Shipbuilding Strategy continues to evolve and is strengthened by the Icebreaker Collaboration Effort (ICE) Pact, a partnership between Canada, Finland, and the United States that was signed into effect in November 2024. This collaboration seeks to accelerate Arctic and polar icebreaker production, boost the marine industries of all 3 nations, and enhance technical cooperation and information sharing to meet global demand for icebreakers.
11. National Shipbuilding Strategy – Accomplishments from January to November 2025
The National Shipbuilding Strategy (NSS) is Canada's long-term plan to renew the fleets of the Royal Canadian Navy (RCN) and the Canadian Coast Guard (CCG). The NSS has also been successful in rebuilding a domestic marine industry and creating sustainable jobs in Canada.
Project advancements
From January to November 2025, the NSS achieved milestones and showed significant progress in delivering the equipment needed by our partners to support their operational readiness and daily missions. Below are some key milestones for NSS projects for that period.
Pillar 1: Construction of large vessels
- Arctic and Offshore Patrol Ship 6, His Majesty's Canadian Ship (HMCS) Robert Hampton Gray, was delivered to the RCN Atlantic fleet
- Offshore Oceanographic Science Vessel, the Canadian Coast Guard Ship (CCGS) Naalak Nappaaluk, was delivered to the CCG
- Joint Support Ship (JSS) 1, the HMCS Protecteur, is undergoing final outfitting and integration work
- Full-rate production began on the first River-class destroyer vessel
- Construction began on the CCGS Imnaryuaq, the Polar Icebreaker being built by Seaspan’s Vancouver Shipyards
- Steel cutting took place for the CCGS Imnaryuaq, the Polar Icebreaker being built by Chantier Davie Canada Inc.
- Construction of JSS 2, the future HMCS Preserver, is advancing
- Pre-construction design work of the Multi Purpose Icebreakers is advancing
Pillar 2: Construction of small vessels
- The 10th and final Search and Rescue vessel built by Hike Metal Products Ltd, the CCGS Mira Bay, was delivered to the CCG
- The 10th and final Search and Rescue vessel built by Chantier Naval Forillon, the CCGS Baie de Gaspé, was delivered to the CCG
- Steel cutting took place for the Near-Shore Fishery Research Vessel, the CCG’s first hybrid vessel
- The design solicitation of offers for the Mid-Shore Multi-Mission (MSMM) project was posted in August 2025
- the MSMM is the largest and most significant project under Pillar 2 of the NSS
- The solicitation of offers for the Royal Canadian Mounted Police Next Generation Police Coastal Patrol Vessels project closed in October 2025, with 4 bids received
- the evaluation process is underway
Pillar 3: Vessel repair, refit and maintenance projects
Existing vessels received the necessary maintenance and upgrades to ensure their continued services.
- Work completed on CCGS George R. Pearkes
- Work completed on CCGS Leonard J. Cowley
- Work completed on CCGS Martha L. Black
- Work completed on CCGS Eckaloo
- Vessel conversion project completed on CCGS Judy LaMarsh
- Progress made on vessel life extension work for CCGS Tanu
- Work completed on HMCS Calgary
- Progress made on work for CCGS Terry Fox
Economic benefits
NSS contracts awarded between 2012 and 2024 are estimated to have contributed close to $38.7 billion ($2.8 billion per year) to Canada's gross domestic product (GDP) and created or maintained approximately 21,400 jobs annually between 2012 and 2025.
Since 2012, more than $11 billion in supplier development opportunities have been provided to Canadian suppliers. Of this amount more than $2.3 billion has gone to small and medium sized enterprises.
NSS large ship construction contracts awarded between 2012 and 2024 are estimated to contribute close to $23.0 billion ($1.65 billion annually) to Canada's GDP. These create or maintain approximately 12,890 jobs annually, through the marine industry and its Canadian suppliers, as well as consumer spending by associated employees.
NSS small ship construction contracts awarded between 2012 and 2024 are estimated to contribute close to $556 million ($39 million annually) to Canada's GDP. Money flowing from these contracts, as well as consumer spending linked to this investment, will help create or maintain almost 295 jobs annually throughout the marine industry and its Canadian suppliers.
NSS shipyards are on track to meet their economic benefits obligations under the Industrial and Technological Benefits Policy.
Innovation, Science and Economic Development Canada continues to implement the NSS Value Proposition (VP) to ensure the long-term sustainability of the Canadian marine industry.
The objective of the NSS Value Proposition (VP) is to benefit the broader marine industry to ensure its long-term sustainability. Under the NSS VP, large vessel shipyards are required to invest an amount equal to 0.5% of the value of their resultant contracts in 3 priority areas: human resources development, technology investment and industrial development.
As of March 31, 2025, NSS shipyards with large vessel projects had more than $69 million in combined NSS VP obligations and have identified or completed more than $68 million in investments. These investments will benefit the greater marine industry in the areas of human resources development, technology investment and industrial development.
Related documents
12. Industrial and Technological Benefits Policy
Question: How is the Government of Canada leveraging federal procurement for economic benefits for Canada?
Key messages (86 words)
- The Industrial and Technological Benefits Policy is the government’s main tool for leveraging economic benefits from large defence and Canadian Coast Guard procurements
- The Industrial and Technological Benefits Policy supports Canada’s economy by sustaining thousands of high-quality jobs across Canada, in firms of all sizes, particularly in the defence, aerospace and marine sectors
- Canada’s Industrial and Technological Benefits Policy requires companies awarded major defence and Canadian Coast Guard contracts to undertake business activity in Canada equal to the value of the contracts they have been awarded
Supplementary messages
- The Government of Canada is committed to providing the Canadian Armed Forces and the Coast Guard with the equipment they need to protect Canada and contribute to international peace and security
- The Industrial and Technological Benefits (ITB) Policy is making an impact from coast to coast. The resulting business activities help scale up companies, support Canada’s Key Industrial Capabilities, and encourage exports, innovation and skills development
- The overall portfolio includes 103 active projects with ITB obligations of over $64 billion, including over $35.5 billion in business activities completed, over $13 billion in progress, and over $15 billion in future work opportunities
Background
- The Industrial and Technological Benefits (ITB) Policy applies to certain defence and Canadian Coast Guard procurements over $100 million that are not subject to trade agreements or for which the national security exception is invoked. Defence procurements valued between $20 and $100 million are assessed for the possible application of the Policy
- Under the ITB Policy, contractors that bid on major defence and Canadian Coast Guard contracts must submit an economic proposal to Canada, called a Value Proposition
- the Value Proposition is a weighted and rated element of the bid selection process and is scored alongside technical and cost requirements. Innovation, Science and Economic Development Canada (ISED) determines the economic benefit requirements for each Value Proposition on a procurement-by-procurement basis through extensive industry engagement and market analysis
- The beneficiaries of ITB-motivated business activity are Canadian companies of all sizes, including domestic firms headquartered in Canada and Canadian subsidiaries of foreign multinationals
- post-secondary and public research institutions also benefit from business decisions undertaken by prime contractors with ITB obligations, specifically related to R&D and skills development and training
- regardless of the beneficiary, ITB credit for eligible business activities is measured in Canadian content value, or that portion of the value of a product or service that involves costs associated with Canadian goods and services
- Small and Medium-sized Businesses (SMBs) account for the majority of firms in the Canadian defence industry, but face particular challenges in participating in global value chains
- to support SMBs, the ITB Policy’s Value Proposition generally requires prime contractors to involve SMBs in fulfilling 15% of their overall ITB obligation
- The ITB Policy is estimated to contribute more than 40,000 jobs and nearly $5 billion to Canada’s GDP annually
- more than 720 Canadian organizations are benefitting from active ITB projects, including more than 460 SMBs and over 45 academic and research organizations
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13. Buy Canadian
Issue
On December 16, 2025, the Government of Canada announced the coming into force of core elements of the Buy Canadian Policy to strengthen domestic industries and ensure federal procurement spending benefits Canadian businesses.
Key facts
- In fiscal year 2024 to 2025, Public Services and Procurement Canada, as Canada’s central purchasing agent, awarded $55.6 billion in contracts for goods, services and construction
- of this, approximately $50.9 billion (91%) was awarded to suppliers operating in Canada
- Between April and December 2025, Public Services and Procurement Canada, as a common service provider, awarded 1,078 contracts and amendments for approximately $2.3 billion to suppliers located outside of Canada
- of this amount, 376 contracts and amendments were awarded for defence purposes representing 88% ($2.0 billion) of the total value
Key messages
- Effective December 16, 2025, the government rolled out the core elements of Buy Canadian and new procurement rules that apply across all federal institutions
- The new policies help create strong Canadian supply chains by prioritizing Canadian suppliers and Canadian-made goods and services whenever possible in major federal acquisitions
- These measures support key Canadian sectors, including steel, aluminum and wood products, and help Canadian industries become more self-sufficient and resilient to changes in the global economy
Background
On September 5, 2025, the Prime Minister announced an expanded Buy Canadian Policy that introduces a suite of new measures to prioritize Canadian suppliers, materials, and innovation across federal procurement and funding programs.
On November 4, 2025, the Prime Minister outlined nearly $186 million in new funding from Budget 2025 to fully implement the Buy Canadian Policy and ensure it delivers lasting results for Canadian businesses and workers.
On December 16, 2025, the Minister of Government Transformation, Public Works and Procurement and Quebec Lieutenant, announced the coming into force of core elements of the Buy Canadian Policy, which fundamentally changes how the federal government purchases goods and services.
Public Services and Procurement Canada developed the Buy Canadian Procurement Policy Framework that encompasses a number of new measures.
Policies under the framework that have come into force, effective December 16, 2025, include:
- the Policy on Prioritizing Canadian Suppliers and Canadian Content in Strategic Federal Procurement that gives priority to Canadian businesses and Canadian content for major federal procurements
- this applies immediately to large, strategic procurements valued at $25 million and over, and will expand to contracts valued at $5 million and above by spring 2026
- the Policy on Prioritizing Canadian Materials in Federal Procurement that requires suppliers working on defence and construction contracts valued at $25 million and over to use Canadian steel, wood products and aluminum where these inputs are necessary
- the Policy will have the required flexibility to introduce additional materials as required
Measures that are expected by spring 2026 include:
- full implementation of the Policy on Reciprocal Procurement to further restrict eligibility for non-defence procurements to Canadian goods and services or those from our trusted trade partners
- these new measures build on the Interim Reciprocal Procurement Policy that launched in July 2025, which limited the federal non-defence procurement market to suppliers located in Canada and from our trading partners
- launch of a Small and Medium Business Procurement Program that will create specific streams of procurement for small and medium businesses and will also help them navigate the federal procurement system more easily
14. Increasing Indigenous involvement in procurement
Issue
Public Services and Procurement Canada, in partnership with Indigenous Services Canada and the Treasury Board of Canada Secretariat, is actively working to increase the participation of Indigenous businesses in federal procurement.
Note: All questions regarding the Indigenous Business Directory, verification of Indigeneity and alleged cases of Indigenous misrepresentation should be directed to Indigenous Services Canada.
Key facts
- As of January 6 2026, there are approximately 2750 businesses on the Indigenous Business Directory, led by Indigenous Services Canada
- All departments have a minimum target to award 5% of the total value of procurements to Indigenous businesses
- In 2023 to 2024, Public Services and Procurement Canada awarded 3.4% ($143 million) of the total value of its procurements to Indigenous businesses
Key messages
- Public Services and Procurement Canada is committed to economic reconciliation with Indigenous Peoples, and is working with Indigenous Services Canada and the Treasury Board of Canada Secretariat to increase Indigenous participation in federal procurement to meet the minimum target of 5% government-wide
- We are taking concrete action to increase Indigenous participation in procurement including:
- applying approaches to ensure Indigenous participation is considered in the development of procurement processes; including Indigenous Participation Plans in contracts to provide subcontracting opportunities and other economic benefits; and
- providing dedicated procurement opportunities to Indigenous businesses
Background
On August 6, 2021, the Government of Canada announced a mandatory requirement for federal departments and agencies to ensure that a minimum of 5% of the total value of contracts are held by Indigenous businesses by 2024 to 2025. The announcement included Canada’s commitment to continue meaningful engagement with Indigenous partners to co-develop a longer-term transformative approach to Indigenous procurement and to increase the capacity of Indigenous-owned businesses to compete and receive more federal procurement contracts.
Public Services and Procurement Canada (PSPC) did not achieve its 5% target commitment in the 2023 to 2024 fiscal year; however, concrete actions are being taken to help increase Indigenous business participation in federal procurement, including applying Indigenous-by-default measures to consider Indigenous participation in all procurements; developing Indigenous Participation Plans to boost subcontracting with Indigenous businesses and provide employment and training opportunities for Indigenous Peoples; using limited bidding among prequalified Indigenous offerors; updating supply methods to include Indigenous businesses; structuring and unbundling projects to enable competitive Indigenous bids; and incorporating weighted Indigenous criteria in bid evaluations. PSPC also continued to increase awareness of federal procurement opportunities through its outreach and engagement activities.
Starting in 2024 to 2025, PSPC’s methodology to calculate the 5% target will include the value of subcontracts awarded to Indigenous companies by non-Indigenous suppliers.
15. Key messages and considerations for the Secretary of State’s public appearances on Defence Procurement
Key messages
General:
- the Government of Canada has taken, and continues to take, action with a bold plan to bolster Canada’s strategic defence sector. The Government has been actively and strategically investing in the defence sector for many years
- Canada's defence policy, Our North, Strong and Free, includes a focus on strengthening the foundations of our military, modernizing existing capabilities, and acquiring new ones. The policy also emphasizes defending Arctic sovereignty, and strengthening Canada’s ability to operate in the region amid growing strategic and geopolitical interest
- Public Services and Procurement Canada (PSPC) works in partnership with other Canadian federal departments to deliver defence related goods and services, including those called for in Canada’s defence policy
- recent events have reminded us modern military capacity is still needed to protect and defend our sovereignty and our values, at home and abroad
- with the ever-accelerating pace of technological advancement of both allies and adversaries, Canada faces ongoing challenges to ensure that our military equipment remains technologically capable of meeting the missions demanded of them
- Public Services and Procurement Canada is committed to economic reconciliation with Indigenous peoples, and is working with Indigenous Services Canada and the Treasury Board of Canada Secretariat to increase Indigenous participation in federal procurement to meet the minimum target of 5% government-wide
- the Government is committed to ensuring that members of the Canadian Armed Forces have the equipment they need to do their jobs and protect Canadians, while also ensuring the best value for Canadians
- as the Government of Canada remains committed to supporting the Canadian defence manufacturing industry, Canada’s aerospace industry is expected to have numerous opportunities to support the sustainment of new aircraft fleets, particularly in areas such as
- maintenance
- training
- lifecycle management
- the Government of Canada is strengthening strategic industries to build a more resilient economy and better support Canadian workers and businesses through the new Buy Canadian Policy
- this policy was announced on September 5, 2025, and later expanded on with the release of the policy framework on November 10, 2025
Potential areas of interest
- Defence Policy Update: Released in April 2024, the Defence Policy Update, Our North, Strong and Free, commits Canada to reaching the 2% of GDP spending target as agreed to amongst NATO members in 2023. Central to this pledge, Our North, Strong and Free discusses speeding acquisition and advancing defence procurement reform to reduce the operational and financial risks of delays and gaps between capabilities being retired and new ones being added. Noting the $12.6 billion in GDP and 78,000 jobs across Canada’s economy in 2023, this update also promises to maintain an innovative and effective defence industrial base through sustained strategic partnerships founded on transparency and trust
- the Secretary of State may wish to elaborate on how PSPC values the opportunity CANSEC provides to cultivate a stronger, more cohesive partnership with Canada’s defence industry
- Defence Industrial Strategy: The Department of National Defence is developing a Defence Industrial Strategy (DIS), which aims to bring strategic coherence to increased defence investment, ensure the Canadian Armed Forces (CAF) has what it needs to defend Canada, protect Canada’s sovereignty, and meet current and future threats
- it will also cultivate an improved relationship between Government and industry, support the defence industrial ecosystem, and leverage Canada’s network of domestic and international partners
- the DIS will aim to strengthen Canada's capabilities in traditional defence industries as well as to develop dual use technologies with defence applications in areas such as quantum and AI while leveraging CAF infrastructure needs to enhance national resilience through strengthened supply chains and transportation links, particularly in the North
- most importantly, the DIS will ensure the CAF has secure, assured, and timely access to the capabilities they need to defend Canada and support our Allies and partners
- DND is engaging regularly with Canadian industry, think tanks and academia, as well as with provincial, territorial and Indigenous stakeholders
- the Secretary of State may wish to mention the synergy between the Defence Investment Agency and the DIS, since agile and streamlined procurement processes will be needed to ensure Canada can cultivate and leverage a robust defence industrial base that also provides economic benefit to Canadians
- Defence Investment Agency: The Prime Minister of Canada announced on October 2, 2025, that the Government of Canada was moving forward with the creation of the Defence Investment Agency (DIA) to streamline high-priority procurements, work with Canadian industry to create jobs, strengthen our defence industrial base, and drive innovation, as well as align defence investments with Canada’s strategic and operational needs
- this agency will manage over $60 billion in upcoming investments and consolidate procurement processes previously spread across multiple departments the DIA will be housed within the Public Services and Procurement Canada (PSPC) portfolio
- it is designed to reduce bureaucratic delays, enable earlier engagement between industry and the Canadian Armed Forces, and align procurement with operational needs
- the agency will also tie defence investments to domestic industrial benefits, supporting innovation in aerospace, shipbuilding, and advanced manufacturing
- Doug Guzman, former Deputy Chair of RBC, was appointed CEO, with oversight by Secretary of State (Defence Procurement) Stephen Fuhr
- the DIA is expected to help Canada meet NATO’s 2% GDP defence spending target and contribute to the 5% Defence Investment Pledge by 2035
- Continuous Capability Sustainment: With the ever-accelerating pace of technological advancement of both allies and adversaries, Canada remains challenged to ensure that our military equipment fleets remain technologically capable of meeting the missions demanded of them.
- The current paradigm of inserting technology upgrades mid-life cycle or via other discrete methods is not allowing Canada to properly keep up with technological changes as well as ensuring the operational relevance of increasingly digitally enabled platforms
- as a result, consultations with industry to explore regular ongoing improvements in the future to better sustain military equipment fleets are ongoing
- National Shipbuilding Strategy (NSS): The NSS is a long-term commitment to renew the fleets of the Royal Canadian Navy (RCN) and the Canadian Coast Guard, create a sustainable marine industry, and generate economic benefits for Canadians. As a key part of Canada’s broader defence strategy, the NSS is revitalizing Canadian shipyards and constructing vessels, strengthening domestic shipbuilding capacity, and reinforcing Canada’s sovereignty and national interests. Through the NSS, Canada has established strategic partnerships with 3 Canadian shipyards, namely Seaspan’s Vancouver Shipyards Co Ltd, Irving Shipbuilding Inc (ISI), and Chantier Davie Canada Inc (CDCI), for the construction of large vessels. ISI and CDCI are also engaged in ongoing work to support and upgrade the Halifax-class frigates to ensure they remain operational until the new River-class destroyers enter into service
- in addition to these strategic partnerships, many other Canadian companies are contributing to the delivery of these large ship construction and repair efforts, as well as the delivery of small vessels and undertaking other vessel repair, refit, and maintenance work through competitive procurement processes
- in November 2023, CDCI acquired Helsinki Shipyard Oy (HSO), now renamed to Davie Nordic Yards (DNY), in Finland, which is 1 of the main ice class and Arctic vessels constructors in the world
- Canada has very little insight into the current activities and levels of employment at DNY
- Icebreaker Collaboration Effort (ICE) Pact: The Icebreaker Collaboration Effort (ICE Pact) is a trilateral partnership among Canada, Finland, and the United States designed to ensure that the Arctic and Polar regions remain peaceful, cooperative, and prosperous. Established in response to the growing geopolitical significance of the Arctic, it focuses on enhancing economic and security cooperation, specifically through the shared development of best-in-class Arctic icebreakers and related polar capabilities
- for Canada, the ICE Pact presents new opportunities for the shipbuilding sector by leveraging shared expertise and capabilities developed under the NSS, while promoting a key role for Canadian shipyards and supply chains
- it continues to gain momentum following the June 2025 National Coordinator Meeting in Ottawa, with deepening trilateral collaboration across strategic and operational areas
- the November 2025 Ministerial and Coordinator Meeting was held in Washington, D.C., marking the Pact’s one-year anniversary and showcasing the trilateral successes
- additionally, recent industry-led efforts, such as Chantier Davie’s acquisition of shipyards in Finland and the United States, and Seaspan Shipyards’ trilateral partnership to deliver the Arctic Security Cutter of the United States Coast Guard, demonstrate the kind of innovation and cooperation the ICE Pact is designed to foster
- more opportunities like these will continue to emerge as the trilateral partnership evolves
- Indigenous procurement (minimum 5% target): On August 6, 2021, the updated Procurement Strategy for Indigenous Business was officially announced. The new mandatory target for the award of at least 5% of the total value of federal procurement contracts to Indigenous businesses will be phased in with full implementation expected by 2024 to 2025
- through industry engagement, Canada is seeking views on how to best implement and succeed here
- Canadian Program for Cyber Security Certification (CPCSC): The US Department of Defense published the final rule for its Cybersecurity Maturity Model Certification 2.0 on October 15, 2024. All contractors with the US Department of Defense will have to meet new cyber security controls in order to bid on US defence contracts. Canada has announced its own certification, the Canadian Program for Cyber Security Certification, which is technically identical to the US program. Canada is working to have the 2 certifications mutually recognized
- many of the attendees at the Canadian Aerospace Summit have or are interested in US DoD contracting opportunities
- with the publication of the final rule, they will want to know what Canada is doing and when its own certification program will be implemented
16. Military assistance donations to Ukraine
- I recently had the honour of attending the Ukraine Defense Contact Group
- We heard from our Ukrainian partners and discussed their most urgent needs
- I reiterated that Canada’s support for Ukraine is unwavering
- Since February 2022, Canada has committed nearly $22 billion in multi-faceted support to Ukraine, including over $6.5 billion in military assistance
- This includes $2 billion in military assistance this fiscal year to provide urgently needed equipment and supplies
- The Ukraine Defense Contact Group also oversees a number of Capability Coalitions, which coordinate and mobilise military support
- Canada contributes to many of these Coalitions, including to strengthen Ukraine’s drone and cyber defence capabilities
- We are also proud to have a leadership role in the Air Force Capability Coalition
- As part of this effort, we are delivering essential training to Ukrainian F-16 pilots in Canada
- Taken together, these investments reflect our enduring commitment – alongside partners and Allies – to the security and sovereignty of Ukraine
Quick facts
- Since February 2022, Canada has committed over $6.5 billion in military assistance to Ukraine
- On August 24, 2025, on the 34th anniversary of Ukraine’s independence, Prime Minister Carney announced that the $2 billion envelope in military assistance for this fiscal year was fully allocated:
- approximately $835 million to procure critical capabilities, including armoured vehicles, medical equipment, spare parts, small arms, ammunition, explosives, drone capabilities, and other urgently needed equipment
- approximately $680 million (USD 500 million) to purchase a package of US capabilities under the Prioritised Ukraine Requirements List (PURL) Initiative to strengthen Ukraine’s air defence capabilities and provide other urgently needed military assistance
- $220 million to purchase drone, counter-drone and electronic warfare capabilities, including investments in joint ventures between Ukrainian and Canadian industry
- $165 million to support Canada’s work in Ukraine Defense Contact Group Capability Coalitions
- $100 million to source ammunition through the Czech Ammunition Initiative
- Of the 89 Armoured Combat Support Vehicles committed to Ukraine, 49 were delivered between fall 2022 and fall 2024, and the remaining vehicles are currently being delivered with the final vehicle scheduled to arrive before the end of 2025
- On October 15, 2025, the Minister of National Defence (MND) attended the 31st Ukraine Defense Contact Group meeting
- On July 21, 2025, during the 29th Ukraine Defense Contact Group meeting, the MND announced that Canada will donate $20 million to support the Leopard 2 Maintenance and Repair Service Centre in Poland
- On June 6, 2025, the MND announced that Canada would donate additional armoured vehicles from CAF inventory, including Coyote Armoured Vehicles, along with $30 million to conduct repairs and for the purchase of new equipment and ammunition
- This donation complements Canada’s previous donation of armoured vehicles. The MND further announced that Canada would donate $5 million in electronic warfare anti-jammer kits from Canadian industry
Background
Ukraine Defense Contact Group
- Co-chaired by the United Kingdom and Germany, the Ukraine Defense Contact Group (UDGC) brings together over 50 countries, providing a mechanism for identifying Ukraine’s critical equipment needs; enabling Allies and partners to facilitate donation assistance to Ukraine; and building the long-term capabilities of the Armed Forces of Ukraine (AFU)
- Canada is an active member in the Air Force, Armour, Drone and Information Technology Ukraine Defense Contact Group (UDCG) Capability Coalitions
- at the 2024 NATO Summit, Canada announced an allocation of up to $389 million to support training for pilots in Ukraine’s Armed Forces as well as provide critical equipment to support Ukraine’s safe operation of aircraft
- Canada has committed up to $2 million in funding to strengthen Ukraine’s cyber capabilities through the UDCG’s Information Technology Capability Coalition (ITCC), and leads the ITCC’s Cyber Security Working Group
- Canada has contributed $5 million to strengthen Ukraine’s drone capabilities through the UDCG’s Drone Capability Coalition. Canada also co-leads the Drone Capability Coalition’s Joint Ventures Working Group with Latvia
- Canada’s priority objectives for the UDCG include coordinating its military assistance donations and the delivery of urgent priority equipment to Ukraine, supporting the AFU’s long-term capability development, reinforcing concrete Canadian commitments to Ukraine, and providing updates on Canada’s new military assistance commitments
- On February 16, 2025, then-Minister of National Defence Bill Blair reaffirmed Canada’s support for Ukraine during the 26th UDCG and announced that Canada would deliver 2 additional F-16 simulators from Canadian industry, for a total of 4 simulators
Bilateral Materiel Cooperation
- In December 2024, Canada and Ukraine signed a General Security of Information Agreement to further information-sharing and strengthen the protection of sensitive information on industrial security and national defence, thereby bolstering military interoperability
- In February 2025, Canada and Ukraine signed a Defence Materiel Cooperation Memorandum of Understanding to enable a variety of government-to-government defence materiel cooperation activities, including exchanges of information, materiel and equipment, and test and evaluation
- In August 2025, Canada and Ukraine signed a Letter of Intent concerning the joint production of defence material
- the Letter of Intent will help enable investments in joint ventures between Ukrainian and Canadian industry
Responsible Principals: Strategic Joint Staff, Canadian Joint Operations Command, Assistant Deputy Minister (Policy), Canadian Army, Assistant Deputy Minister (Materiel)
October 11, 2025