**Government of Canada’s Defence Industrial Strategy cover. / SCREENSHOT**

Prime Minister Mark Carney set out the details of the $6.6-billion plan to build a new, made-in-Canada military production industry with the goals of making the country more self-reliant and energizing the economy.

The Defence Industrial Strategy promises to prioritize building military equipment at home, hike the share of defence contracts awarded to Canadian firms and add up to 125,000 new jobs over the next decade.

The goal, Carney said, is to go from using domestic defence procurement for roughly one-third of Canada’s needs to around 70%, and increase Canada’s defence exports by 50% over the next decade.

“Defending Canada means more than just increasing the size of our military. It also means the strength of our industries, the resilience of our economy and our capacity to act independently when it matters the most,” he said.

In its 2025 fall budget, Ottawa allocated $81.8 billion for defence over five years, $6.6-billion of which was set aside for the Defence Industrial Strategy.

‘Historic turning point’

Key to the policy is that military procurement will be directed to Canadian firms first, the prime minister said.

But “where we can’t build alone, we will partner with like-minded allies, helping to attract investment, transfer intellectual property and integrate supply chains so that public dollars flow back to Canada and Canadian jobs created right here,” he said.

At the same time, Canada’s defence industrial base will be “complementary” and not “competition” to American defence supply chains, he noted.

The announcement was enthusiastically welcomed in the business community as a major boost for this country’s defence manufacturing sector. But the big question mark is whether the federal government can overhaul its defence procurement system to award contracts quickly enough to make Carney’s policy work.

The Canadian Association of Defence and Security Industries (CADSI) called the announcement a “historic turning point.”

“For the first time, we can see a clear, accountable vision for the defence sector, with specific targets to grow and sustain the sovereign industrial capabilities that underpin our national security, economic resilience, and technological leadership,” Christyn Cianfarani, president and CEO of CADSI.

But “turning strategy into reality will now come down to execution at scale, scope, and speed,” she said. “The expectations for the public service and Canadian Armed Forces are crystal clear. In partnership with industry, they will need to move beyond existing culture, processes, and experience to get work under contract.”

This will be the job of the Defence Investment Agency, or DIA, which Carney said will streamline procurement, cut red tape and expand domestic production.