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Hi all,
This morning the Government of Canada released an update to Canada's defence policy entitled “Our North, Strong and Free: A Renewed Vision for Canada’s Defence.” At the top level, it commits to investing $8.1 billion over the next five years, and earmarks $73 billion over the next 20 years with the aim of bringing Canada’s defence spending-to-GDP ratio to 1.76% by 2029-30 and achieving NATO’s target of 20% for major equipment expenditures as a proportion of defence funding though no date is specified. More details on the financial profile will be released in the upcoming federal budget on April 16.
- DPU Webinar: Join us on Wednesday, April 10, at 1:00pm EDT, when CADSI and CGAI will provide initial reactions to the DPU.
- Read CADSI’s response to the Defence Policy Update
Key Messages
- This defence policy update is encouraging because funding is attached that we hope can be counted on. With $8.1B tied to the first five years, and many elements still under consideration, much of the investment plan will be left to future governments to implement.
- The Policy acknowledges that a Canadian Domestic Industrial Base (DIB) is integral to Canadian national security and the effectiveness of the CAF and that the DIB must be strengthened for resiliency, capacity and key capabilities.
- What the government’s commitment to a new relationship with Canada’s defence industry means:
- Collaborating on both current requirements and road-mapping the future – not just more of the same types of engagements that currently exist.
- Mirroring the approach of our allies, who unabashedly preference their domestic firms when it makes sense to do so, which can greatly speed up the acquisition process.
- If the technology, service, or equipment is Canadian-made, and it’s something that meets the CAF’s needs, we buy it.
- The solution to procurement reform cannot only be increased reliance on foreign-made military equipment and services. NATO’s targets – and its Defence Production Action Plan – are based on the idea that each member nation is responsible for building and sustaining a defence industrial base that can contribute to greater allied capacity and deterrence.
- Canadian industry is committed to working with the government to implement this plan – as it does not include details of how the elements in DPU will be implemented.
Other Highlights:
- It is encouraging that $8.1B is tied to the first five years of the DPU as companies are counting on that. Much of the funding committed is in outer years.
- The plan includes exploring options for several new and expanding capabilities. These include submarines, ground-based air defence, long-range air- and sea-launched missiles, surveillance and strike drones and counter-drone capabilities, modernized artillery capabilities, upgrading or replacing the tank fleet, and also exploring the establishment of a light armoured vehicle production program.
- The government plans to establish a Canadian Armed Forces Cyber Command and, with the Communications Security Establishment, create a joint Canadian cyber operations capability.
- There is no mention of Canada’s recent decision to seek membership in AUKUS Pillar 2.
- Canada will join the NATO Innovation Fund, which will allow for a new venture capital source for Canadian firms.
- While acknowledging that “defence procurement takes too long in Canada and needs to be faster and more effective,” the policy does not propose specific procurement reforms. Instead, it points to the PSPC-led Procurement Reform Initiative as a process by which this may be achieved.
- The policy mentions pursuing “newly forming defence trade arrangements among trusted partners” and “increased use of government-to-government arrangements where it makes sense to develop strategic partnerships.” How this can be done in a way that also builds Canada’s DIB is not detailed.
Resources (Plain links):
- Policy update: canada.ca/en/department-national-defence/corporate/reports-publications/north-strong-free-2024.html
- Backgrounder: canada.ca/en/department-national-defence/news/2024/04/our-north-strong-and-free-a-renewed-vision-for-canadas-defence.html
- Strong, Secure, Engaged (SSE): canada.ca/en/department-national-defence/corporate/policies-standards/canada-defence-policy.html
- CADSI Response: defenceandsecurity.ca/media/article&id=421&t=c
Questions?
If you have any questions, please email Mindy Pearce mindy@defenceandsecurity.ca.
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