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Tasha Kheiriddin: Carney's defence strategy is a plan to bloat the bureaucracy

It's great the Liberals are starting to take defence seriously, but bureaucratic growth will get in the way

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Canada’s defence industry got a $6.6 billion boost Tuesday, as Prime Minister Mark Carney formally unveiled Ottawa’s new Defence Industrial Strategy. The plan promises to create 125,000 new jobs over 10 years and award 70 per cent of defence contracts to Canadian companies, through a “Build-Partner-Buy” framework that prioritizes domestic industry. It is part of the government’s plan to increase Canadian military spending to five per cent of GDP by 2035, in line with NATO targets. 

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First, the plaudits. It’s nice to see the federal government finally taking defence seriously. The Canadian military is long overdue for an overhaul, and in our new tariff-mad world, finding another use for domestic steel production and displaced workers is a great idea. But before businesses start beating ploughshares into swords, they should look at the strategy’s fine print – or lack thereof.  

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The biggest issue: Ottawa does not define what constitutes a Canadian company. Is it one headquartered in Canada? One that has a certain number of Canadian employees? One that doesn’t funnel profits offshore through holding companies? Nobody knows. 

And that’s a problem. Retired Vice-Admiral Mark Norman says many defence contractors worry that the term will be open to interpretation — and create an uneven playing field. “Home-grown” Canadian firms want protection, but the rules aren’t explicit,” Norman told National Post. “Meanwhile, a subsidy of a multinational that employs 10,000 people in Canada fears it could be excluded.”  

To remedy this, Norman suggests that the government create “categories” of what constitutes a Canadian firm, based on different criteria, such as jobs or investment, to ensure enough players can participate. 

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But that raises the second issue: sovereignty. The strategy highlights new partnerships, with Europe, Britain and the Indo-Pacific. According to Phil Gurski, Former Intelligence Analyst with CSE and CSIS, any engagement with foreign countries or multinationals presents risk.  

“Alliances can be good today — but you cannot predict tomorrow,” Gurski told National Post. “We have relied on Americans too long — so it sounds great that we buy jet fighters from Sweden. But what happens 10 years from now, if they have a radical change of government?” In his view, purely Canadian content should get priority. 

But that raises the third issue: capacity. The report names 10 key sovereign capabilities: aerospace, ammunition, digital systems, maintenance support, personnel protection, sensors, space, specialized manufacturing, training and simulation, and uncrewed autonomous systems. Nitrocellulose, the compound used to make explosives, is also a domestic priority, with production scheduled to start in 2029. 

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If there’s insufficient production capacity, we won’t be able to hit that 70 per cent target. We also need to get money out the door, fast, to ensure companies can scale production, Gurski says.

Which brings up the final issue: bureaucracy. Like a hydra, Ottawa has sprouted a myriad of new agencies, councils and programs to support the strategy. These include the Defence Investment Agency, the Defence Advisory Forum, the Science and Research Defence Advisory Council, BOREALIS (the Bureau of Research, Engineering and Advanced Leadership in Innovation and Science), the Canadian Defence Industry Resilience Program (CDIR) and the Northern Operational Support Hubs Program (NOSH). 

According to Norman, “Every one of these needs a secretariat to support it, otherwise they will not deliver.” Cue the expansion of bureaucracy, which tends to slow down decision making, not speed it up. The strategy also includes no hierarchy of needs and framework of authority, to make it clear who has the final say on what.  

Unsurprisingly, perhaps, Conservative Leader Pierre Poilievre has dismissed the plan as a “salad bowl of buzzwords” that won’t deliver, and is calling on Ottawa to instead cut bureaucracy and streamline the government’s purchasing decisions.  

And that would be a good idea. As NATO expert and defence consultant Goran Pesic put it, “One cannot help but consider whether the government is quietly preparing for the possibility of near-term conflict.” Not a pleasant prospect, but one Canada cannot afford to ignore. 

Tasha Kheiriddin is Postmedia’s national politics columnist.

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