Canada’s first Defence Industrial Strategy, launched in February 2026, aims to award 70% of defence acquisitions to Canadian firms and more than double industry revenues within ten years. For manufacturers, that means new lines, new buildings and new rules. A defence-ready plant is not just a bigger plant. Security, controlled goods, explosives licensing and benefits obligations all shape the design and the schedule, and they need to be planned in from day one.
The opportunity
The strategy, titled “Security, Sovereignty and Prosperity,” is built around a “Build-Partner-Buy” approach: build in Canada where possible, partner with allies next, and buy abroad as a last resort. The government expects $180 billion in procurement opportunities and $290 billion in defence-related capital investment over the next ten years. Its targets include 125,000 new jobs and a 50% increase in defence exports.
The industry is starting from a solid base. In 2024, Canada’s defence industry earned $17.3 billion in revenue, employed 37,700 people directly and exported about $8.0 billion. More than 90% of its 538 firms are small and medium-sized businesses. Ontario had the largest share of defence employment, 36%, in the 2022 data.
Facility investments are already under way. In March 2026, the government announced $1.4 billion for domestic ammunition production, including up to $305.4 million for IMT Precision’s 155mm shell plant in Ingersoll, Ontario. The plant is expected to employ at least 75 people at start-up and up to 400 at full production.
View the data
| Year | Revenues |
|---|---|
| 2014 | $9.2 billion |
| 2016 | $10.1 billion |
| 2018 | $10.7 billion |
| 2020 | $12.6 billion |
| 2022 | $14.3 billion |
| 2024 | $17.3 billion |
What makes a defence plant different
Industrial and Technological Benefits (ITB). On defence contracts the ITB Policy applies to, the prime contractor must do business in Canada equal to 100% of the contract value. That makes Canadian suppliers valuable partners. A new credit, the Strategic Investment Transaction, gives enhanced credit for investments that build industrial capacity, including “new facilities, increased production.” Plant investments can directly help a prime meet its obligations.
Controlled Goods Program. Any firm that examines, possesses or transfers controlled goods must register. That includes many US-origin defence articles and technical data. Each site needs a security plan covering storage, server location, access control and escorts for cleaners and contractors. Penalties reach $2 million and 10 years in prison.
Contract Security Program. Classified work needs an organization clearance and, often, a site inspection. The physical requirements are specific: operations, security and high-security zones; RCMP-approved containers; and floor plans showing intrusion alarms, door contacts and CCTV. The program is clear that the organization pays for any construction required. IT systems are inspected separately, after physical security is approved.
Explosives and energetics. Ammunition and energetics plants need a Natural Resources Canada factory licence. Applications require site plans with prescribed separation distances, building and HVAC/electrical/grounding details, and sometimes a quantified risk assessment or hazard and operability (HAZOP) review. Separation distances can decide where buildings go and how much land you need.
Automation and robot safety. Canada’s robot safety standard has been updated to CSA Z434:26, adopting the 2025 ISO 10218 standards. The new edition adds requirements such as cybersecurity for robot systems, which matters on a plant that must also meet IT security rules for classified work.
View the data
| Approval | Published standard |
|---|---|
| Controlled Goods registration | 32 business days (currently longer) |
| NRCan Division 1 factory licence | 60 business days |
| Designated Organization Screening | Up to 4 months |
| Secret clearance (per worker) | 75–120 business days, plus reliability |
| Facility Security Clearance | 6 months or more |
Funding that can help pay for the build
- Canadian Defence Industry Resilience (CDIR) Program. DND’s program explicitly covers design and construction of new capabilities, including equipment, infrastructure, land and buildings. Planned spending rises to $404.2 million in 2026-27 and $495.5 million in 2027-28.
- NRC IRAP Defence Industry Assist. $241 million in funding and advice for small and medium-sized firms, launched in January 2026.
- BDC Defence Platform. $4 billion in loans, venture capital and advisory services.
- FedDev Ontario. Runs a Defence Concierge Service that helps southern Ontario firms with ITB and bidding.
Government funding comes with reporting. Funders expect cost, schedule and milestone evidence, so the project controls you set up for construction double as the evidence you need to claim.
Where defence plant projects go wrong
On defence programs we’ve supported, the projects that slip usually make one of these mistakes:
- Treating security as a fit-out item. Secure zones, alarm systems and server rooms drive layout, walls, ceilings and mechanical systems. Designing them in late means redesign. Bring the security requirements into the design brief.
- Starting clearances too late. A Facility Security Clearance takes six months or more, and each secret-cleared worker can take months. If production needs cleared staff on day one, the clearance plan has to start with the design.
- Ignoring long-lead equipment. Specialized machinery, transformers and switchgear can take longer to arrive than the building takes to build. Procure them early and track them in the master schedule.
- Underestimating commissioning and accreditation. A building isn’t ready when construction ends. Equipment validation, physical and IT security inspections and licence approvals all follow, and each one can hold up production.
- Not linking the schedule to the contract. Production start dates promised to a prime or to DND need to trace back to a realistic, logic-linked facility schedule, with risk allowances you can defend.
The bottom line
The Defence Industrial Strategy creates a real opening for Canadian manufacturers, and the plants that win work will be the ones ready on time. Plan security, controlled goods, licensing and benefits into the facility from the first sketch, start clearances early and run the build on an integrated schedule. That’s how a plant expansion becomes a defence capability instead of a delay.
Benjamin R. Consulting provides owner-side project management, scheduling and cost control for capital projects, including defence work. Book a 30-minute call to plan your facility.
Sources: Prime Minister of Canada, Defence Industrial Strategy launch (February 17, 2026); Canada’s Defence Industrial Strategy; ISED and CADSI, State of Canada’s Defence Industry 2026; ISED and CADSI, State of Canada’s Defence Industry 2024; National Defence, $1.4 billion for domestic ammunition production (March 2026); ISED, ITB Policy; PSPC, Controlled Goods Program registration; PSPC, Controlled Goods security plan template; PSPC, Organization security screening; PSPC, Work site security requirements; PSPC, Personnel screening processing times; NRCan, Division 1 Factory Licence guidelines (2025); CSA Group, CSA Z434:26; DND, CDIR Program eligibility; DND, Departmental Plan 2026-27 transfer payment programs; NRC, new defence programs (March 2026); FedDev Ontario, Defence Industrial Strategy (February 2026). This article is general information, not legal or financial advice.