MONTREAL — In early 2002, Glenn Cowan touched down in Kandahar as part of the first wave of regular Canadian Army troops deployed to Afghanistan, serving in a U.S.-led brigade combat team.
After joining Canada’s elite special operations unit Joint Task Force 2 in 2003, he spent the next 13 years collaborating with American soldiers on raids, rescues and reconnaissance missions.
“If you’re going to get into a fight with someone, you want the Americans on your side -- full stop,” said Cowan, founder of Ottawa-based venture capital firm ONE9, which focuses on national security investments.
The same might be said of the gear Canadian troops use, and the industry behind it.
An infusion of fresh defence funding is poised to flood parts of Canada’s aerospace, manufacturing and information technology sectors in a bid to reduce reliance on the United States. But experts say this country will remain firmly fastened to its neighbour due to the deep integration of their supply chains and the sheer scale of American military-industrial might.
While not a weapons powerhouse, Canada has expertise in areas ranging from flight simulation and shipbuilding to armoured vehicles and artificial intelligence, as well as abundant critical minerals -- tungsten for tanks or germanium for night-vision goggles, for example.
The $9.3-billion in additional defence spending announced by Prime Minister Mark Carney on Monday is poised to boost those sectors, with the goal of greater procurement from domestic companies and sales to allies.
“We’re too reliant on the United States,” stated Carney, who said it had started “to monetize its hegemony, charging for access to its markets.”
“We will ensure that every dollar is invested wisely, including by prioritizing made-in-Canada manufacturing and supply chains. We should no longer send three-quarters of our defence capital spending to America.”
But a massive cash injection means Canada will have to scale up fast, including via foreign suppliers, said Jim Kilpatrick, in charge of global supply chain and network operations at Deloitte.
“Defence supply chains can often go 10 or 11 tiers deep,” he said, stressing their complex international reach.
“Canada will not be self-sufficient in defence products required by our military.”
The country’s relatively small production capacity means it will continue to shell out money on American equipment, technology and aircraft.
Canada’s entire defence production industry generated $14.3 billion in revenue in 2022, according to a Royal Bank of Canada report this week.
RBC found that while the vast majority of the nearly 600 defence firms were Canadian-owned, they took in only half of the revenue. The other half went to foreign-owned companies, underscoring the plethora of smaller domestic firms and the outsize presence of American defence contractors on Canadian soil.
A hefty chunk of federal spending will likely continue to flow to those American juggernauts, which provide tens of thousands of jobs north of the border.
“The wider Canadian economy features a lot of branch plants,” noted David Perry, CEO of the Canadian Global Affairs Institute.
General Dynamics churns out light armoured vehicles bristling with turreted mortars and assault guns in London, Ont., as well as tactical communications systems in Ottawa. Lockheed Martin works on “advanced technology systems” such as naval command software in five provinces. Defence contractor RTX counts 8,500 employees across 14 cities and 2,500 suppliers in Canada.
While the high-tech weapons and machinery of their facilities come to mind at the mention of defence procurement, much of the extra funding this year may well go to more mundane items.
Housing and infrastructure upgrades for Canadian troops make up some of the biggest priorities for Chief of the Defence Staff Gen. Jennie Carignan, she told Quebec radio host Patrick Lagace on Thursday.
Those concerns require less specialized knowledge than F-35 stealth fighters or an arctic patrol fleet. And the spending reaches businesses beyond the purely military realm.
“Some of it is done through the big stuff -- we think about fighter jets. But a lot of it pays for office furniture, software licenses, electricity contracts, snow removal, grass cutting,” said Perry.
Taking a step back, he framed military investment in terms the prime minister, formerly the head of the Bank of Canada and the Bank of England, could appreciate.
“If you think of our defence relationships as an investment portfolio, the PM is saying we’re way over-indexed in the Dow Jones and the S&P,” he said, citing American stock exchanges.
The question is how much Canada can diversify.
“Our existing relationship with the United States is the cornerstone of our previous defence policies. So if that is changing, then it’s important for the government to articulate exactly how that’s going to get shaped out.”
This report by The Canadian Press was first published June 13, 2025.
Christopher Reynolds, The Canadian Press
