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Cabinet officials

Canada Aims to Transform Defence Industry with New Strategy

Strategic Insights

— 2 min read

Canadian Federal Industry Minister Mélanie Joly believes that by investing in aerospace and shipbuilding, the country can achieve significant economic and strategic gains, including job creation in manufacturing, strengthened ties with Europe, and a renewed relationship with the private sector. The government is currently finalizing its Defence Industrial Strategy, which will shape the future of Canada's defence industry and aims to transform the country's status as a laggard to a leader in the sector.

Key Takeaways:

  • The Canadian government is working on a Defence Industrial Strategy, which aims to transform the country's status as a laggard to a leader in the defence industry.
  • The strategy focuses on strengthening ties with Europe and rebuilding the country's aerospace sector to resemble its former self, such as the Avro Arrow program of the 1950s.
  • The government aims to rebuild Canada's shipyards to become an export market for the rest of the world.
  • Minister Joly has asked the Business Development Bank of Canada to support small to medium-sized enterprises that make up the defence sector's supply chains.
  • The government plans to provide financial supports to commercially viable businesses operating in the full scope of defence and security industries.
  • The military and private sector must be able to work together to rebuild trust and create jobs.
  • Companies want contracts, not subsidies, to support the defence industry.
  • Supports being rolled out by the government for Canada's steel sector are part of the push toward building sovereign defence capabilities.
  • The government aims to be more self-sustaining in its military capabilities, with companies like Seaspan signing memoranda of understanding with Canadian steel suppliers.

Statistics:

  • The NATO target of 5% GDP for defence spending by 2035 will require Canada to spend up to $150 billion annually, more than double its existing budget.
  • 40% of the 600 companies that make up Canada's industrial base are subsidiaries of U.S.-headquartered firms.
  • The Canadian government aims to work with other countries and NATO members to become more connected and self-sustaining in its defence capabilities.

Sources:

  • "Federal Industry Minister Mélanie Joly says aerospace and shipbuilding are areas where Canada can excel as the government prepares its Defence Industrial Strategy..." - The Globe and Mail
  • The mandate letter from Minister Joly to the Business Development Bank of Canada, obtained by The Globe and Mail, specifically mentions the need to support small to medium-sized enterprises in the defence sector.
  • Seaspan's memorandum of understanding with Algoma Steel Inc. and Stigterstaal Canada, aimed at assessing the feasibility of Algoma supplying steel to Seaspan for the shipbuilding sector.

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