´´Sovereignty is not declared - it is maintained through capability.´´

Canada’s Defence Strategy
A Core Enabler of Economic Prosperity

In Rebuilding Canada’s Economic Prosperity, I introduced seven critical enablers that must work together to strengthen productivity, competitiveness, and national capacity. This post focuses on the third enabler: Defence Strategy.

Defence Strategy is not only about military readiness. When designed intentionally, it strengthens sovereignty, reduces reliance on foreign powers, expands industrial capacity, and supports long‑term export growth.

In a world where economic and security interests are increasingly intertwined, Defence Strategy becomes a foundational enabler for national prosperity.

The Global Shift in Defence Strategy

Across much of the world, defence planning is being reshaped by a renewed focus on sovereignty. Countries are placing greater weight on the ability to develop, maintain and secure their own critical systems, rather than relying on increasingly unreliable defence alliances. This shift extends beyond personnel and hardware. It includes software, data, artificial intelligence, and the intellectual property that underpins modern defence capabilities.

For Canada, this global trend reinforces the logic behind our own multi‑year investments in defence modernization. These commitments are often viewed through a purely military lens, but they also carry broader economic implications. As Canada and other nations localize production and secure domestic expertise, we have an opportunity to strengthen our own industrial base and position our country as a trusted partner and supplier within an unstable global environment.

At the same time, Canada faces the same reality as many of our partners: no single country can develop every capability alone. The scale and complexity of modern defence needs require collaboration. Strategic partnerships — whether through co‑development, shared research, or integrated supply chains — allow countries to combine expertise, pool resources, and accelerate innovation in ways that would be difficult to achieve independently. For Canada, this means pairing domestic capacity with carefully chosen international, reliable partners to ensure both resilience and relevance.

Canada also brings something distinctive to these partnerships: reliable access to critical natural resources. Our steel, aluminum, rare minerals, and energy inputs are essential to modern defence manufacturing and advanced technology production. When combined with our engineering talent, regulatory stability, and trade access, these resources make Canada a constructive and dependable partner for countries seeking secure, reliable, long‑term industrial relationships.

This collaborative approach aligns well with Canada’s trade architecture. With preferential access to 51 countries through 15 trade agreements, Canada is well positioned to support partners seeking reliable, values‑aligned sources of advanced technologies — including aerospace, cyber, autonomous systems, and other dual‑use technologies. By modernizing our defence capabilities at home and engaging in purposeful partnerships abroad, we create the conditions for expanding our export footprint. In this sense, defence spending becomes more than a national security requirement – it becomes a strategic economic tool that supports innovation, diversification, and long‑term prosperity.

Why Defence Modernization Matters
for Canada’s Future

Canada’s defence posture has been weakened by decades of underinvestment. The Canadian Armed Forces (CAF) face equipment shortages, aging platforms, and limited capacity to operate in a rapidly changing global environment.

The world Canada must navigate today is more volatile than at any point since the end of the Cold War:

  • Cyberattacks target governments, infrastructure, and businesses.
  • Drones and long‑range weapons have transformed modern conflict.
  • The Arctic is becoming a zone of strategic competition.
  • Canada currently participates in ~37 missions worldwide.
  • U.S. political instability and unpredictability have introduced new risks to Canada.

Modernization is no longer optional. It is essential for protecting our sovereignty, partnering with and supporting allies, and ensuring Canada remains economically stable in a world where security and prosperity are deeply interconnected.

Canada’s Modernization Financial Commitment

Canada is now committed to one of the largest multi‑decade defence modernization efforts in its history:

  • $81.8 billion over 5 years for modernization
  • $19 billion for the acquisition of 88 F‑35A fighter aircraft
  • $70–$90 billion for F‑35 lifecycle sustainment
  • $40–$60 billion for 8 to 12 advanced diesel‑electric submarines.
  • $60–$84 billion for 15 advanced frigates

In total, Canada is on track to invest approximately $270–$330 billion in defence modernization and sustainment over the next 25 years (2025 to 2050).

The aforementioned information is my best assessment based on available sources. It is approximately correct, not precisely wrong.

Additional background context can be found at:

Leveraging Debt Financing

Canada’s military modernization will require the country to Debt-Finance its planned $270 – $330 billion investment.

This level of investment can be leveraged as a national economic strategy that not only modernizes Canada’s military, but also increases exports to those countries covered under Canada´s 15 trade agreements that we would partner with to acquire, develop and implement our modernization needs.

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