GOVCON WEEKLY
Canadian Procurement Pulse: Your Weekly Contractor Insider
February 07-16, 2026
Defence procurement dominated the week. The Carney government dropped its long-awaited defence industrial strategy, signed onto a European weapons financing program, and inked an Arctic partnership with Denmark. Taken together, the message is clear: Canada is formalizing its pivot away from U.S. defence dependence. Meanwhile, OSIC quietly posted its first-year report card, and the numbers raise some questions.
Here's your essential briefing:
The "Build at Home" Defence Strategy: 70% Canadian Target
Source: CBC News | Date: February 15, 2026
What's Happening: The government's defence industrial strategy is set for release, with a headline target of awarding 70% of federal defence contracts to Canadian firms within a decade. It's backed by $6.6 billion carved from the broader $81.8 billion defence reinvestment plan.
Key elements:
"Build-Partner-Buy" framework makes domestic production the default for military equipment
10 sovereign industrial sectors identified: aerospace, ammunition, digital services, sensors, space-based surveillance, training/simulation, specialized vehicles, drones, and others
Equipment serviceability targets: 75% navy / 80% army / 85% air force (current rates: roughly 46-55% across branches)
125,000 new defence jobs and 50% export growth targeted by 2035
Formal strategic partnerships planned with select Canadian companies to build domestic IP ownership
What It Means For You:
The 10 sovereign sectors give you a concrete positioning list. If your capabilities align, document that now
ITB obligations on major contracts will intensify, creating subcontracting opportunities for smaller firms
The aerospace sovereignty reference is worth watching given the ongoing F-35 review
Where Canada can't build alone, partnerships with Europe, UK, and Indo-Pacific allies are the preferred path
Our Take: The ambition is real. So is the tension. As former NATO assistant secretary general Wendy Gilmour noted, this leans heavily into using defence spending as economic development, which is a longstanding Canadian tradition. The 70% target and 125,000 jobs are economic metrics. The serviceability targets are the capability metrics. Closing the gap from ~50% to 80%+ will take more than buying Canadian. That said, $6.6 billion and strong political will means this is your procurement framework for years. Position accordingly.
Data Deep Dive: What Would 70% Canadian Actually Take?
The 70% target sounds bold. Here's what the data actually looks like. Note: We use ultimate beneficial ownership (UBO) to determine if a company is owned by Canadian interests. This breakdown between Canadian and foreign represents the amount of contract value awarded to companies who appear Canadian (or not) based on UBO analysis using our Open Source Intelligence (OSINT) system.
Defence Spending by Canadian Ownership (2015-2025)
Year | Total | Canadian-Owned | Can % | Foreign-Owned | For % |
|---|---|---|---|---|---|
2015 | $7.1B | $1.5B | 21.5% | $5.6B | 78.5% |
2016 | $6.8B | $1.1B | 15.4% | $5.8B | 84.6% |
2017 | $4.0B | $1.6B | 39.3% | $2.5B | 60.7% |
2018 | $4.2B | $804.9M | 19.3% | $3.4B | 80.7% |
2019 | $7.4B | $1.7B | 22.8% | $5.7B | 77.2% |
2020 | $4.9B | $3.6B | 72.8% | $1.3B | 27.2% |
2021 | $3.4B | $1.0B | 29.8% | $2.4B | 70.2% |
2022 | $14.6B | $6.4B | 43.6% | $8.2B | 56.4% |
2023 | $12.9B | $804.2M | 6.2% | $12.1B | 93.8% |
2024 | $22.6B | $12.0B | 53.2% | $10.6B | 46.8% |
2025 | $17.1B | $8.6B | 50.6% | $8.4B | 49.4% |
Total | $105.2B | $39.1B | 37.2% | $66.1B | 62.8% |
The volatility here is extreme. Canadian-owned share swung from 72.8% (2020) to 6.2% (2023) to 53.2% (2024). A single F-35 payment or shipbuilding milestone can move the needle 20+ points in any given year. That said, the trend over the last three years is clearly heading in the right direction: 2024 and 2025 both crossed the 50% mark for the first time in the modern era.
The "Canadian" Definition Problem
Here's where the strategy could hit a wall. The government currently counts any company operating in Canada as "Canadian." By that measure, roughly 80% of defence spending already qualifies. The 70% target? Basically already met.
But by ownership, the cumulative figure is 37%. That's the gap that matters, and the strategy doesn't specify which definition it's using.
The most confusing cases sit right at the top of the vendor list:
Seaspan (Vancouver Shipyards) — $13.7B, the largest defence vendor by contract value. US-owned.
Chantier Davie — $6.4B, sold by the Davie family to UK-based interests, with David family still involved
Irving (Halifax Shipyard) — $9.3B, genuinely Canadian-owned
Two of Canada's three National Shipbuilding Strategy yards are foreign-controlled. Ships built in Canada ≠ Canadian-owned. If the strategy counts Seaspan and Davie as "Canadian," the target is easy. If it requires Canadian ownership, the math gets much harder.
Top 10 Defence Vendors
Market Concentration
38 mega-contracts (over $500M) account for 70% of all spending (~$74B). The remaining 52,000+ contracts share the other 30%.
66 vendors control 90% of total spend. Out of 2,000 vendors in the market.
Top 4 Canadian-owned firms (SkyAlyne, Irving, CAE, MDA) capture 73% of all Canadian defence dollars. Success is concentrated, not broad-based.
The Bright Spots
The trend is real. Canadian-owned share has gone from averaging roughly 20-25% through most of the 2010s to 50%+ in back-to-back years. Canadian champions are winning at scale: SkyAlyne ($11.2B), CAE ($5.4B), and MDA ($2.7B). Space procurement through the Canadian Space Agency runs at 91% Canadian-owned, anchored by MDA. That's proof that targeted industrial policy works when applied consistently.
What This Actually Means
Getting from 37% (ownership) to 70% means nearly doubling the Canadian-owned share. Getting from ~80% (operating in Canada) to 70% means the target is already met and the strategy changes nothing. The definition will determine whether this drives real structural change or just rebrands the status quo. Watch for the fine print.
Canada Joins EU Defence Procurement Program
Source: Canadian Press | Date: February 15, 2026
What's Happening: Defence Minister McGuinty signed Canada onto the EU's 150-billion euro Security Action for Europe (SAFE) program at the Munich Security Conference. Canada is the first non-European participant. Canadian companies can now partner with European firms on joint projects and access favourable financing for military equipment.
Canada's entry fee: 10 million euros (~C$16 million)
The UK's fee is several times larger
The EU calibrated fees to expected contract generation from each country
What It Means For You:
Expectations should be proportionate to that entry fee. The EU isn't expecting massive Canadian participation
The real value: partnership opportunities with European primes as Canada diversifies from U.S. supply chains
Companies manufacturing components that complement European defence platforms should be exploring this now
Our Take: This is a door-opener, not a floodgate. But doors matter when your traditional market is becoming less reliable. Build European relationships now.
Canada and Denmark Formalize Arctic Defence Partnership
Source: Government of Canada | Date: February 13, 2026
What's Happening: Canada and Denmark signed a Defence Cooperation MoU at Munich, alongside the Faroe Islands and Greenland. The agreement covers defence innovation, industrial partnerships, shared logistics, and joint training.
Builds on Denmark's inclusion in Canada's Maritime Security Partnership from last June's NATO Summit
3,000-kilometre shared maritime border between Canada and Greenland
Canada added $50M to the Danish Model for purchasing from Ukraine's defence industry, bringing total contribution to $190M
What It Means For You:
Contractors with cold-weather, northern logistics, surveillance, or maritime tech capabilities should be watching for joint procurement opportunities
Moved from framework announcement to signed agreement in under a year, suggesting real requirements behind it
Between Us: With Trump's Greenland annexation rhetoric still fresh, McGuinty's statement that "the Arctic is secure, and we will keep it that way" carries obvious weight. The politics are creating procurement urgency that wouldn't exist otherwise.
OSIC's First Year: New Powers, Fewer Checks
Source: PSPC Annual Report | Date: 2025
What's Happening: The Office of Supplier Integrity and Compliance (OSIC) wrapped its first fiscal year after replacing the old Integrity Regime on May 31, 2024. New powers include exclusions for forced labour, human trafficking, environmental violations, and the ability to act without charges or convictions.
The numbers went backwards:
Fiscal Year | Requests | Names Verified | Expedited | Enforcement |
|---|---|---|---|---|
2021-22 | 26,000 | 620,815 | 1,078 | 3 ineligible, 1 agreement |
2022-23 | 26,289 | 694,020 | 1,023 | 3 ineligible, 2 agreements |
2023-24 | 30,613 | 1,134,793 | 1,066 | 5 ineligible, 3 agreements |
2024-25 (OSIC) | 26,573 | 680,322 | 873 | 7 actions, 3 agreements |
The 2023-24 spike (likely pre-OSIC transition activity) fully corrected. Volumes are back to 2021-22 baseline.
What It Means For You:
Broader disclosure obligations: you must now provide a wider list of key individuals in your organization
Grounds for exclusion go well beyond fraud and bid-rigging
Provisional suspensions allow immediate action against high-risk suppliers
Service remains fast: 99%+ completed within four hours across all years
Our Take: Sharper tools, but the adoption question remains. OSIC spent Year One on outreach. Whether 2025-26 shows departments actually using the expanded mandate will tell us if this is a real shift or just a rebranding.
Your Procurement Action Plan
Position Against the 10 Sovereign Sectors: The defence industrial strategy gives you a concrete list. Map your capabilities against aerospace, digital services, sensors, space systems, specialized vehicles, and the other priority areas. Make that alignment explicit in proposals.
Document Canadian Ownership, Not Just Content: The "Build at Home" strategy will force a definition reckoning. Prepare documentation that covers both Canadian operations and Canadian ownership. Firms that can demonstrate genuine Canadian ownership will have an advantage if the policy tightens.
Explore European Partnerships: The SAFE program and Denmark MoU create new channels. If your products or services complement European defence platforms, start building those relationships now while the programs are still scaling up.
Update Your OSIC Compliance: The expanded disclosure requirements are in effect. Review your key individuals list and ensure you're current on the broader exclusion grounds. The Registrar can now act without waiting for charges.
Watch the F-35 Decision: The aerospace sovereignty language in the defence strategy creates policy room for alternatives to the F-35. No decisions have been announced, but contractors in the aerospace supply chain should be tracking this closely.
This week's defence data comes from the Publicus platform, where we track every federal defence contract, vendor, and ownership structure across $105 billion in spending. If you're positioning for the "Build at Home" strategy, we can show you exactly where your capabilities fit.
