What is included in Canada’s C$6.6B defence industrial strategy?

The plan targets 70% domestic content on defence contracts, adds about 125,000 defence sector jobs, aims for a 50% export increase, and funds critical munitions capacity, including a nitrocellulose plant by 2029. The policy also reduces reliance on foreign-controlled IP, signaling greater roles for Canadian suppliers across components, ammunition, and sustainment.

How could the 70% domestic content target affect suppliers?

It steers more work to Canadian vendors and pushes primes to source locally or partner with domestic firms. Tier-2 and tier-3 suppliers may scale as integrators rebalance their supply chains. Expect stronger demand for machining, electronics, energetics handling, and MRO capabilities as programs align with the new content expectations.

Which timelines should investors watch?

Key markers include phased progress toward the 70% domestic content target, contract award calendars, production ramp schedules, and export bookings. The nitrocellulose facility by 2029 is central to munitions resilience. Consistent on-time delivery, growing backlogs, and capacity expansions can validate that scaling efforts are translating into durable revenue.

Does this reduce reliance on U.S. defence contractors?

Yes, policy signals point to less dependence on U.S. primes and foreign-controlled IP, with more Canadian-led work and technology retention. Allies are still relevant, but sourcing is set to rebalance toward local value. Investors should watch RFP criteria and subcontracting patterns to see how this shift appears in awarded work.

Law and Government

Canada Military Spending, February 17: $6.6B Defence Push Goes Local

ByDanny Kontos February 18, 2026February 18, 2026

Canada military spending is set to tilt local after Ottawa unveiled a C$6.6B defence industrial strategy on February 17. The plan targets 70% domestic content on contracts, 125,000 additional defence sector jobs, a nitrocellulose plant by 2029 to secure munitions inputs, and a 50% export lift. For investors, the pivot signals multi-year demand for Canadian components, ammunition, and MRO. We see reduced reliance on foreign-controlled IP and U.S. primes, and more room for homegrown suppliers. This article maps what changes, who could benefit, and the key risks to watch in canada military spending.