Federal News
Canada Addresses Defence Procurement Vulnerabilities
March 25, 2026
Canada is actively addressing critical vulnerabilities in its defence procurement and supply chain exposed by the ongoing Iran conflict, particularly in missile supplies and domestic production capabilities. Despite initiatives like the Defence Industrial Strategy aimed at boosting domestic procurement and reducing foreign dependency, bureaucratic delays and global supply constraints continue to challenge rapid equipping of Canadian forces.
- The Department of National Defence and Defence Investment Agency are focusing on expanding domestic production, exemplified by a $1.4 billion investment in a new shell production line at IMT in Ingersoll, Ontario, enhancing munitions self-sufficiency.
- Procurement of advanced systems such as the SPIKE LR2 anti-tank system from Israel's Rafael for Canadian troops deployed in Latvia reflects ongoing modernization efforts.
- Multiple vendors including Lockheed Martin, Saab, DIEHL Defence, MBDA Systems, and Kongsberg with Raytheon are engaged or considered for missile and interceptor system contracts, indicating competitive opportunities in missile defence procurement.
- Procurement professionals should anticipate continued emphasis on domestic industrial capacity building, while managing challenges related to supply chain delays and international supplier dependencies.
- Industry stakeholders can leverage these developments by aligning capabilities with Canadian defence priorities, particularly in missile systems, munitions manufacturing, and rapid deployment support.
Agencies
Department of National Defence, Defence Investment Agency, Public Services and Procurement Canada, Canadian Forces
Vendors
Lockheed Martin, Saab, DIEHL Defence, MBDA Systems, Kongsberg and Raytheon
Contracts
, $1.4 billion