Canada Defense Procurements
In April 2024, Canada issued a Defense Policy Update (DPU), entitled Our North, Strong and Free: A Renewed Vision for Canada’s Defence, which outlines a plan to invest additional resources to modernize the Canadian Armed Forces (CAF). The plan includes increased spending of $6 billion over 5 years and $54 billion over 20 years for the acquisition of naval vessels, tactical vehicles, submarines, advanced surveillance systems, technologies, services, and trainings. In July 2024, Canada further announced increased spending plans for it to meet NATO’s defense spending target of 2% GDP by 2032. Canada’s growing demand for advanced defense capabilities offers U.S. companies ample opportunities. The following are some of Canada’s major defense priorities:
In January 2023, Canada finalized a $15 billion deal to purchase 88 F-35A Joint Strike Fighters to enhance Arctic security and continental defense as part of its Future Fighter Capability Project. The first four aircraft are due in 2026 and the full fleet is expected by 2032. Alongside this project, Canada is investing $11.5 billion in infrastructure and support capabilities needed for an effective response to air-based threats. This investment offers opportunities for U.S. firms with expertise in infrastructure development, strategic tanker transport aircraft support, and modernization of air weapons training infrastructure.
Canada’s National Shipbuilding Strategy (NSS) is a multi-decade plan aimed at modernizing Canada’s naval fleet. The Canadian Surface Combatant (CSC) program, valued at over $44 billion, aims to replace existing destroyers and frigates with up to 15 new warships. In June 2024, Canada announced that initial construction began on this new fleet with the vessels expected to be operational by 2035. U.S. companies specializing in ship design, propulsion systems, and combat systems can find opportunities within the CSC project.
Canada and the U.S. continue to collaborate closely on defense initiatives, particularly North American Aerospace Defence Command (NORAD) modernization. In June 2022, Canada announced a $28.5 billion plan to modernize NORAD over the next two decades to ensure a robust and unified defense posture. Canada is looking to install a new long-range radar system, known as the Arctic Over-the-Horizon Radar (A-OTHR), to provide early warning radar coverage from the Canada-US border to the Arctic circle. The system is expected to be operational by 2028, with full operational capability by 2031. The project is part of a larger effort, which includes other initiatives, such as the Polar Over-the-Horizon Radar and a classified network of sensors called Crossbow. U.S. companies can leverage this partnership to develop interoperable technologies and contribute to joint defense projects.
Canada’s Department of Defence (DND) is also prioritizing cybersecurity solutions to protect its communication networks and infrastructure and virtual reality (VR), augmented reality (AR), and artificial intelligence (AI)-driven platforms. U.S. firms can capitalize on this growing need thanks to sophisticated and proven solutions in the field.
The U.S. Commercial Service in Canada is closely following the developments in this critical industry. We stand ready to support your advocacy and export promotion efforts. For further information, please contact: Commercial Specialist Mehdi Azeriah