Ottawa’s shift away from US defence manufacturers aims to create 125,000 jobs

‘Buy Canadian’ strategy will raise military spending to 5 per cent of GDP and boost economy, new plan says.

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Canada aims to create 125,000 jobs by increasing military spending to 5 per cent of GDP over the next decade and shifting away from US arms manufacturers, according to a new strategy paper.

The paper, which is to be published on Tuesday, will set out Ottawa’s plan to bring production onshore in the latest step in the country’s “Buy Canadian” campaign.

Ottawa’s biggest military push since the second world war will aim to award Canadian firms 70 per cent of the country’s defence spending, up from about 50 per cent, boosting revenues for local businesses by more than C$5.1bn (US$3,7bn) annually.

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Canada and the US have long co-operated on the procurement of military goods and services. But the latest strategy states that Ottawa will be able to make “use of the national security exception to direct work to Canadian firms” instead.

Ottawa is already reviewing a 2023 contract to buy 88 F-35 fighter jets from the US. It is also seeking to buy 12 submarines capable of operating in Arctic conditions with competing South Korean and German bids due to be submitted next month.

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“Prioritising Canadian-owned and controlled firms and using procurement to deliberately scale them is needed,” says Eliot Pence, founder of Ottawa-based Dominion Dynamics, which develops high-tech military equipment that works in inhospitable environments like the Arctic.

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