What counts as a Canadian firm under the defence industrial strategy?

Canada's $6.6-billion defence industrial strategy aims to raise the share of contracts awarded to Canadian firms to 70 per cent but does not define what qualifies as a "Canadian firm," with officials saying the emphasis is on building sovereign capabilities in Canada.

Canada unveiled a $6.6-billion defence industrial strategy that seeks to increase the share of defence contracts awarded to Canadian firms to 70 per cent, up from 43 per cent last year. The strategy focuses on building sovereign capabilities such as aerospace, ammunition and digital services in Canada. It does not provide a formal definition of "Canadian firm," and government officials told reporters the priority is where capabilities are built rather than ownership. Industry groups and policy experts say the question is complex because many large Canadian defence operations are subsidiaries of U.S. multinational firms. Key details: - The strategy sets a target of 70 per cent of contracts for Canadian firms and includes $6.6 billion in funding. - The document does not define "Canadian firm"; officials described sovereign capabilities as the primary focus rather than corporate ownership. - The federal Buy Canadian Policy requires a Canadian presence and limits subcontracting that would result in minimal value added in Canada; the strategy aims to extend that approach into military procurement. - The Canadian Association of Defence and Security Industries (CADSI) said defining "Canadian supplier" will be up to the government and that industry expects clear, harmonized definitions linked to security and sovereignty. - Experts note many Canadian defence facilities are subsidiaries of U.S. firms such as Lockheed Martin and General Dynamics, and past policies have encouraged foreign investment and acquisitions by international companies. - The strategy uses a "build-partner-buy" framework, emphasizes prioritizing intellectual property control and sovereign capability where possible, and government officials said IP arrangements can be negotiated. Summary: The strategy intends to boost domestic defence production and prioritize building and retaining key capabilities in Canada while keeping flexibility to partner or buy when needed. Undetermined at this time.