Mission ready.

Getting procurement right starts with understanding what you want to accomplish and the pitfalls you want to avoid. From there, you can build a strategy focused on achieving identified outcomes.

In the case of Canada’s defence transformation, the importance of this step can’t be understated. That’s because the objectives the federal government has identified are incredibly diverse—from renewing the Canadian Armed Forces, building critical defence infrastructure, and creating sovereign defence supply chains to growing the economy, creating jobs, and spurring innovation in sectors like aerospace and advanced manufacturing.

Documenting these key objectives, measurable outcomes, and realistic targets for achieving them over the short, medium, and long term is critical for crafting an actionable defence procurement strategy and for reinventing defence procurement to facilitate desired outcomes. For example, one of the government’s priorities is the procurement of products that are made in Canada. To build towards this goal, a short-term objective might be prioritizing which products should be made in Canada—such as advanced electronics, AI and cyber defence technologies, and quantum encrypted technologies.

Similarly, in the case of strategically important products, prioritizing procurement of near-sovereign products—products available from countries considered trusted allies—can help reduce risk in the short term. In tandem, the government can develop programs that create pathways towards achieving made-in-Canada solutions over the long term.

Given Canada’s ambitious objectives, we don’t want to get mired in the minutia when it comes to rethinking and reinventing procurement activities. The Canadian Armed Forces and related defence organizations procure a significant amount of goods—from uniforms and office supplies to submarines and aircraft. Procurement activities for specific products need to be efficient, fit-for-purpose, and aligned with identified priorities.

Segmentation is critical for creating efficient procurement processes. As a start, this could mean segmenting product categories based on whether they are transactional or high volume (e.g. uniforms, office supplies, laptops) or strategic (e.g. advanced technologies, ships, aircraft).

In the case of transactional products that are readily available, there are many ways that Canada can simplify and streamline procurement processes while retaining appropriate governance. For example, creating and providing a list of approved vendors—including domestic vendors where available—to facilitate timely procurement, using technology to automate procurement activities, or providing self-service capabilities to reduce procurement barriers and accelerate time to value.

By simplifying, streamlining, and automating the procurement of transactional products, resources can be redirected toward developing high-impact strategies for procuring strategically important products. These might include mission critical items that keep our armed forces ready for action, infrastructure that provides data sovereignty, and solutions in areas where Canada wants to build a strategic advantage—such as AI and quantum computing.

Accelerating the procurement of strategically important products will take embracing agile procurement approaches based on specific product needs and desired outcomes. Triaging products based on criticality, complexity, and existing domestic market capabilities will help prioritize procurement activities over the short, medium, and long term to meet projected demand. Working with industry from the beginning on strategically important products can help build trust, foster collaboration, and encourage the level of investment required to build domestic manufacturing capabilities and sovereign supply chains.

Technology is a key enabler of efficiency. In the case of procurement, it can standardize, streamline, and automate labour-intensive day-to-day processes and workflows, such as product requisitions, purchase orders, and approvals.

But technology can be used for more than automating routine tasks. Innovative technologies and future-forward tools—like agentic AI—can make procurement smarter, faster, and more transparent. Potential areas where innovative solutions could help with defence procurement include:

• Establishing, managing, and monitoring vendor contracts and commitments
• Managing the tendering process and ensuring appropriate controls
• Providing in-depth analytics for demand planning and forecasting
• Enabling transparency across the end-to-end procurement process
• Standardizing compliance activities and reporting

While technology can significantly enhance procurement processes, it’s only an enabler. To be most effective, procurement processes need to change too. Before moving ahead with new technologies, it’s important to consider where and how the technology can be used to enhance and accelerate activities, enable transparency and accountability, and drive process improvements over time. Also consider how processes need to change so that new technologies can be used to the fullest without significantly raising risks.

Canada has an ambitious agenda—not only for rapidly modernizing our armed forces and defence infrastructure, but also for building and strengthening our private sector industrial base to accelerate the development and availability of home-grown defence solutions and capabilities.

It’s an enormous undertaking. And success will require a wide range of industry-building activities, from improving access to capital and encouraging innovators and small businesses to target the sector to fostering the development of dual-use technologies and supporting industrial manufacturers looking to pivot to the defence space.

Creating pathways to support the evolution of different types of industry participants—from emerging defence-tech startups to large-scale manufacturers—is essential for rapidly spurring innovation and industry development.

There’s much Canada can learn from what’s worked in other jurisdictions when it comes to creating specialized pathways for innovation. In the US, for example, the Defense Advanced Research Products Agency (DARPA) has overseen numerous defence-focused innovations from proof of concept through to implementation and commercialization over the last sixty years. DARPA uses a diversity of activities to drive transformative breakthroughs in the defence sector. It also engages with participants from across the defence ecosystem, including individual academics and researchers, industry players, and government organizations.

To extend and accelerate value from innovation programs, Canada also needs to look at how best to integrate with and build on activities we’re already involved in, such as NATO’s Defence Innovation Accelerator for the North Atlantic (DIANA)—which is focused primarily on incubating dual-use innovations in the deep technologies space.

There’s no one-size-fits-all approach when it comes to creating innovation pathways. Canada needs to develop a range of complementary programs that consider where innovators and companies are starting from and where they want to be in the future. This includes startup incubators and accelerator programs that help bring ideas from concept to commercialization and programs that bring participants from different experiences and sectors together to codevelop innovative defence solutions that span industry boundaries.

Given the government’s desire to drive defence innovation and rapidly grow a robust defence industrial base in Canada, one critical pathway that needs to be addressed is the procurement of early-stage proof-of-concept technologies. Creating pathways that support companies through early-stage development can break down barriers, spur collaborative innovation that allows Canada to become the first world buyer of specific solutions, and provide companies with capital to conduct critical R&D. For example, this might include investing capital in lieu of VC funding—or in parallel to it—or providing prepayments aimed at staged development of solutions.

The federal government can’t go it alone when it comes to accelerating our national defence transformation. It needs the private sector to be an active contributor—to invest in Canada’s defence ecosystem, to help drive innovation, to build domestic manufacturing facilities, and to establish and build sovereign and near-sovereign supply chains.

Working together at the speed required is going to take a significant amount of commitment, collaboration, and trust—from both sides. The government’s started off on the right foot by showing commitment: allocating $81.8 billion to the defence sector in the 2025 federal budget, creating a Defence Investment Agency to streamline procurement and drive earlier engagement with industry, and developing a new Defence Industrial Strategy. It also announced a new Regional Defence Investment Initiative (RDII) aimed at growing the defence ecosystem regionally across Canada and spurring innovation, investment, and job creation.

The government is also strengthening relationships with allies to foster collaborative defence outcomes and help Canadian defence companies grow and scale beyond Canada’s borders. In December 2025, it negotiated participation in the European Union’s Security Action for Europe (SAFE) program—a $243 billion military procurement fund—the first non-EU member nation to do so. Given the significant focus on defence investment in the EU, participation will be a significant door opener for Canadian companies looking to build, scale, and export defence products and solutions.

But positive intentions need to quickly evolve into trusted, collaborative relationships. This means working with both industry and community partners—like provincial and municipal governments, Indigenous communities, and academic institutions—to frankly discuss existing roadblocks and barriers and what needs to be done to tear them down to quickly ramp up Canada’s defence industrial base and spur economic development.

As a starting point, the government needs to actively engage with the private sector as it moves forward with reinventing its procurement processes and creating pathways to develop domestic capabilities so that solutions make sense for all parties involved. By making the private sector an ally in the mission to accelerate Canada’s national defence transformation, the government can foster an environment where rapid change is possible.