The Canadian federal government's new $6.6-billion defence industrial strategy is designed to significantly boost contracts awarded to Canadian manufacturers and suppliers. The plan aims to increase the percentage of contracts given to these firms from 43% last year to a target of 70%. This initiative underscores a commitment to developing domestic capabilities in key sectors such as aerospace, ammunition, and digital services. However, while the strategy is ambitious, the criteria for defining a 'Canadian firm' have sparked confusion among industry experts and stakeholders.

An official briefing prior to the public announcement of the strategy indicated that the government's definition of Canadian firms centers around the idea of building sovereign capabilities rather than strictly adhering to ownership models. The government is likely to support any business that maintains significant operational bases within Canada, rather than solely those categorized by Canadian ownership. This broad interpretation raises questions about how contracts will be allocated and could lead to competition with foreign firms that have strong Canadian operations.

Ultimately, this defense strategy seeks to develop a robust manufacturing ecosystem within Canada while prioritizing national interests in the defense sector. The lack of clarity surrounding the 'Canadian firm' definition may pose challenges as industry players navigate new opportunities. It highlights the complexities of balancing domestic production goals with the realities of an increasingly integrated global defense market.