Build it here or buy it there? Canada’s defence plan meets Trump’s new arms agenda

The canadian river regime’s long-awaited defence industrial strategy officially landed on tues and arrives in the shade of a push by the Trump administration to further make the United States the arms-maker of choice among allies.

The new strategy has been in the works for more than a year and promises to use defence investment to leverage the Canadian economy and jobs.

It sets out a series of important, high benchmarks for the country to achieve over the next decade, including buying and maintaining most of the military’s equipment domestically. 

"Defending Canada means more than the size of our military," Prime Minister Mark Carney said during the formal unveiling of the strategy in Montreal on Tuesday.

"It also means the strength of our industries, the resilience of our economy and our capacity to act independently when it matters most. Our national security and our economic security go hand in hand."

Carney asked if Canadian defence industry can compete as U.S. Ramps up military production strategy

The strategy was supposed to be released last week but the tragic mass shooting in Tumbler Ridge, B.C., prompted the federal government to impose an embargo on release of the document.

At the centre of the plan is what is being described as a "build, partner, buy" philosophy. 

This means prioritizing buying from Canadian defence manufacturers. If that can’t be done, the next step will be to partner with allied nations to acquire the equipment, attracting investment and intellectual property rights to Canada.

"Only after exhausting these options will we buy from abroad," Carney said. "Even then, we will ensure that the maximum benefits are returned to Canada throughout the value chain, including through a modernized industrial and technological benefits regime."

The strategy sets the goal of awarding 70 per cent of federal defence contracts to Canadian firms within a decade. In a background technical briefing on Tuesday, senior defence officials said that currently, 43 per cent of federal defence contracts are awarded to Canadian firms.

The new strategy also proposes to raise the serviceability rates of Canadian military equipment to 75 per cent of the navy’s ships, 80 per cent of the army’s vehicles and 85 per cent of the air force’s planes. At the moment, the serviceability rate for the navy sits at 68 per cent, the army is at 51 per cent and the air force at 42 per cent. 

A senior defence official said that with more personnel, new equipment and improved spare parts, the goals set out in the new strategy are "aggressive but achievable targets."

The strategy identifies 10 key sectors in the defence industry where military equipment can be built in Canada to support not only the Canadian Armed Forces but create an arms and high-tech weapons export sector — something previous Canadian governments, especially the Liberals under Justin Trudeau, were reluctant to do.

One of the driving forces behind the defence industrial strategy has been Carney's assertion that Canada relies too much on the U.S. For the manufacture of its weapons systems. He’s been quoted at various times saying 75 cents of every federal dollar Canada spends on military purchases goes to the Americans.  

The F-35 stealth fighter is a perfect, politically charged example — a $27-billion purchase that the Carney government has been reviewing for a year with an eye to possibly switching to the Saab Gripen-E, which the Swedish defence company says can be manufactured in Canada.

The new Canadian strategy comes several days after U.S. President Donald Trump signed an executive order establishing what he calls "the America First arms transfer strategy."

His intent is similar to the Canadian blueprint — Trump wants to further build U.S. Arms-making capacity for weapons that are most "operationally relevant" to American forces and also support domestic reindustrialization.

His executive order, signed on Feb. 6, also says Washington will work with partner nations who "have invested in their own self-defense and have a critical role or geography for executing" the U.S. National Security Strategy.

One of the pillars of the Trump administration's plan is to accelerate the sale of American-manufactured military equipment to allies.

"Thanks to President Trump’s leadership, our partners and allies are beginning to take on more responsibility for the security of their region. To ensure they are able to do this effectively, the United States must be able to reliably and rapidly deliver them the best military equipment in the world," said the executive order.

How that will square with Canada’s desire to buy less from the U.S. And manufacture more at home remains to be determined.

Wendy Gilmour, a Canadian and former assistant secretary general for defence investment at NATO, said she doesn’t believe the two strategies will collide directly.

"Most of the time, we are not in direct competition with the Americans," said Gilmour, who pointed out that Canadian defence firms have for decades focused on building parts rather than finished pieces of defence equipment.

One exception is the light armoured vehicle manufacturer General Dynamics Land Systems Canada in London, Ont. That company, however, is an American-owned subsidiary.

"There's nothing in this strategy that says that we're not gonna continue to be a branch plant economy for military capabilities," Gilmour said. 

During his appearance before the House of Commons government operations and estimates committee, Defence Procurement Minister Stephen Fuhr attempted to reassure MPs that his agency and the defence industrial strategy weren't just about the economy.

"The primary lens for defence procurement isn't going to be investment. It's an additional lens," Fuhr testified.

He said that while Canada needs to build out its economy in ways it didn’t have to a year ago, the focus is still on getting the Canadian military the equipment it needs.

"If that thing exists in Canada, why would we not buy it from ourselves? Give the CAF what they need while we stimulate our own economy to meet the moment because of this tariff situation and other pressures that are on us economically," Fuhr said.

One thing the defence industry has been looking for in the new Canadian strategy is how it will make it easier for homegrown companies to actually sell to the Department of National Defence.

At the moment, many Canadian companies — especially high-tech startups — complain it's easier to sell to allies, such as the United States, than it is to Canada.

One illustration of that is that the Canadian Commercial Corporation has a long-standing agreement with the Pentagon, dating back to the end of the Second World War, which sees Canadian companies treated as U.S. Domestic suppliers when it comes to bids.

Senior reporter, defence and security

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