2024 Defence Policy Update: Highlights & Analysis for Industry

Samuel Associates is Canada's premier Defence Acquisitions Specialist firm, collaborating closely with the industry to secure a competitive edge in defence procurement across Canada, the US, and globally. We encourage early engagement with the Department of National Defence (DND) and the Canadian Armed Forces (CAF) on newly announced initiatives. Our strategic guidance helps clients contemplate necessary investments that align with DND/CAF's mandated capabilities exploration. Furthermore, we support our clients in actively participating in Canada's defence dialogue, stressing the significance of fulfilling the commitments outlined in the latest policy.

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Canada's new defence policy update, Our North, Strong and Free: A Renewed Vision for Canada's Defence, outlines several new initiatives that should be on the industry's radar.

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1) Defence infrastructure

The defence policy update pledges to modernize and repair defence infrastructure across the country. This will involve digitizing defence installations, greening military buildings, and expanding critical capabilities like runways. These investments create notable opportunities for construction, green technologies, and information technology firms. Indigenous-owned or led companies will have several opportunities here, particularly in the following areas: This commitment will involve up to $10 billion in spending.

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2) Defence digitization

A digital defence transformation will involve "overhauling outdated and analog processes to improve our ability to hire people and conduct security." The policy further states that: "This includes expanding the use of artificial intelligence-driven data management tools, initiatives to advance big data management, acquire analytical tools, and expand cloud-based computing on open and secure networks." These commitments build on existing digitization and AI strategies but provide a more robust policy footing for these investments. This presents a significant opportunity for information technology firms. The new policy outlines at least $500 million for digitizing health records alone.

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3) AWACS

The latest defence policy announced the Canadian Armed Forces' new capability: an airborne early warning aircraft (AWACS). This investment presents a notable opportunity for aerospace firms and their partners who provide intelligence, surveillance, and reconnaissance (ISR) systems. Given Canada's aerospace strengths, the AWACS investment presents a notable opportunity for the Canadian industry and its domestic and international partners. Although only $300 million has been pledged for the AWACS capability, this amount will increase once the project comes together.

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4) Tactical helicopters

The military's Griffon tactical helicopters have offered a versatile and dependable capability over several decades. While these helicopters have served the military well and are currently undergoing an upgrade, the time has come to plan a replacement. The new defence policy pledges $18 billion for new tactical helicopters. This investment promises to provide significant opportunities for Canadian industry.

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5) Cyber Command

The Canadian Armed Forces (CAF) will establish a Cyber Command in cooperation with the Communications Security Establishment. This new command will undertake defensive and active cyber operations. The latest defence policy invests nearly $3 billion in the CAF's cyber capabilities and the new Cyber Command.

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6) Naval sustainment and sensors

Canada will continue to operate its Halifax frigates and interim supply ships while the National Shipbuilding Strategy prepares to deliver new surface combatants and joint support ships. To maintain these fleets, the new defence policy will invest nearly $10 billion. This continued support for Canada's legacy fleets will offer suppliers important opportunities that can be leveraged once the new ships begin operating.

The new defence policy also includes nearly $1.4 billion for new sensors on Canada's Arctic Offshore Patrol Ships.

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7) NATO DIANA

Canada is committing over $100 million to the NATO DIANA initiative. This money will fund innovations in defence and offer important opportunities for Canada's cutting-edge defence firms.

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8) Artillery and strategic munitions

The war in Ukraine has exposed the limitations of NATO's existing munitions supply programs. To meet the demands of both the current war and the alliance's future needs, the new defence policy is pledging to invest nearly $10 billion in artillery and strategic munitions capacity and stocks.

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9) Land-based long-range missiles

In recognition of the new security environment revealed by the war in Ukraine, the defence policy update commits to acquiring long-range missiles for the Canadian Army. This capability has a budget of $2.6 billion.

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10) Future capabilities

Finally, Our North, Strong and Free: A Renewed Vision for Canada's Defence outlines several future capabilities that will be explored in the coming years.

These exploratory capabilities include:

• New submarines

• New tanks and light armoured vehicles

• New air and sea-launched missiles

• Counter-drone capabilities

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