Goals

Build a modern, ready, and respected military that can protect Canadians, defend our sovereignty, and respond quickly to threats. Do this by investing in domestic technology and fixing broken systems. The goals:

• Reach NATO’s 2% defence spending target in 2 years
• Speed up procurement times by 50% in 2 years
• Increase Canadian defence exports by at least 50% in 5 years

Background and Motivation

Canada’s military is in trouble. 1 in 10 positions in the Canadian Armed Forces (CAF) are unfilled. 72% of the active personnel are overweight¹. Half of our navy ships, air force planes, and army vehicles can’t be deployed because the equipment is outdated². In simple terms, if something big were to happen today, Canada is not ready.

Meanwhile, Canada is facing the greatest potential geopolitical threat to our nation since World War II. Russia is aggressive, China is expanding, and, most notably, the U.S. has put their allegiance into question. Canada is vulnerable and exposed on many fronts.

At the root of this, we have chronically underfunded and under-resourced our military. Canada promised NATO we’d spend 2% of our economy on defence. We’re not even close. We currently only spend around 1.4%, among the lowest of any NATO member. For any money we do spend, very little of it goes towards modernizing equipment and R&D compared to other NATO countries. 

The way we buy equipment is broken. Complex procurement systems that require sign off from multiple stakeholders means it takes more than 16 years on average to buy and approve new gear, a 66% increase since 2004³. Imagine trying to fight today’s wars with 2008’s tools. Despite drastic advancements in the battlefield use of drones and other forms of autonomous technology, we are still buying manned helicopters⁴. 

Our innovation system is stuck too — Canada’s defence tech program spends less in 20 years than the U.S. spends in one^5,6. And when small companies invent new tools that our military recognises could be useful, there’s no way to quickly experiment with them.

We also don’t make enough of our own defence technology. Most of our gear comes from foreign companies, who build with their own country’s interests first. Only 1 of Canada’s top 30 companies works with our military. In the U.S., 5 of their top 10 companies do.

If we keep this up, we will lose out on jobs, innovation, and global influence. Worse, we will lose our ability to defend ourselves. But we can turn this around.

The solution is clear: build a robust and nimble domestic defence industry, fix our broken systems, invest in smart partnerships, and recruit robust military personnel. This is about protecting our future, growing our economy, and making sure we can stand on our own two feet.

Real-World Solutions

Australia ‍

Australia, like Canada, long had a modest-sized military with reliance on allies. In recent years, it has embarked on modernization efforts, with an emphasis on domestic industry and high-tech systems. 

One signature initiative is the “Loyal Wingman” program – Australia partnered with Boeing to create an AI-powered fighter jet that supports unmanned flight⁷. This project was developed locally with Boeing Australia and Australian startups, producing cutting-edge aerospace tech, creating high-tech jobs, and has the potential to be exported to key allies globally.

South Korea

Under persistent threat from North Korea, South Korea has long spent heavily on defence. But in the past decade, they shifted from primarily importing arms to developing their own. 

They spend a healthy portion of their budget on procurement and R&D, which has led to systems like unmanned aerial vehicles and AI-powered surveillance⁸. The government has also fostered close ties to industry partners (e.g. Hyundai) allowing rapid scale of production of tanks and aircraft⁹. They are now the 8th largest arms exporter globally¹⁰. 

Germany

Germany underfunded its military for years. But with Russia’s 2022 invasion of Ukraine, the government announced a turning point in defence policy, approving a €100 billion special fund¹¹. 

This one-time infusion, more than double their annual defence budget, coupled with efforts to streamline procurement rules and cut red tape, is being used to upgrade critical equipment like fighter jets and helicopters.

What Needs To Be Done

Modernizing Canada’s military cannot wait. Urgent action is needed:

• Create an Office of Strategic Capital to invest more in Canadian defence tech

  • The Department of National Defence (DND) should create and fund a strategic office to help invest in companies working on deep tech and defence innovation. 
  • Incentives could be provided to invest in dual-use technologies (technologies used for both civilian and defence purposes), and manufacturing capabilities. 
  • Favourable financing options could also be provided for Canadian companies, shoring up our domestic R&D.

• Speed up procurement 

  • Pass an Order in Council to immediately streamline procurement requirements to be less rigid, simpler and faster to meet. 
  • Create a fast-track prototyping model similar to the U.S.’s “Other Transaction Authority”¹² to accelerate the experimentation and deployment of new technologies and non-traditional partners.
  • Create a dedicated defence innovation unit, similar to the U.S.’s DIU with the goal of operationalizing new technologies. 

• Form partnerships with military tech partners

  • Collaborate with leading defence tech companies to make Canada the testing ground for new systems. The Army, Navy and Air Force could all partner with autonomous vehicles, maritime systems and aircraft companies respectively. Our Arctic and southern borders in particular are ripe testbeds for autonomous machines and AI. 

• Allow Canadian defence tech to be sold abroad

  • Remove restrictions on selling defence technology to trusted allies and emerging strategic markets, reinforcing our strategic partnerships and incentivizing growth for Canadian defence companies.

• Shore-up our Armed Forces 

  • Introduce incentives such as tuition reimbursement, signing bonuses, infrastructure investment, and competitive salaries to boost military recruitment and retention.

• Commit to non-partisanship

  • Defending our country extends beyond any one party’s term. Have all major parties commit to defence strategies in order to maintain continuity long-term. 

• Separate DND and CAF

  • The Department of National Defence should take full responsibility for defence procurement and geopolitical strategy policy, while the Canadian Armed Forces should focus solely on warfighting and operational readiness. This will streamline efficiencies, reduce redundant areas of ownership, and ensure each department can focus on their own preparedness.

By doing this, Canadians will see NATO’s 2% defence spending target met, faster procurement times and an increase in Canadian defence innovation spending.

Common Questions

Isn’t this just more military spending during a cost-of-living crisis?
No. A strong military protects our economy, creates jobs, and prevents future emergencies that cost even more. Every dollar spent builds Canadian innovation.

Won’t this make Canada more aggressive on the world stage?
Not at all. A modern military helps Canada respond to crises, support peacekeeping, and defend our values — not pick fights.

Isn’t Canada too small to build its own defence tech?
Countries of similar size, e.g. Australia, have robust defence tech industries. With the right investment, we can be a global leader in the technologies that define tomorrow’s defence.

Aren’t defence exports risky for our reputation?
We’ll sell only to trusted allies. This helps our friends and grows Canadian jobs – just like the U.S., Australia, and others already do.

Conclusion

Canada needs a modern military now. That means investing in local innovation, speeding up procurement, and building a defence industry that supports our economy and our sovereignty. The world won’t wait for us to shore up our defences before picking a fight — we shouldn’t wait either.