CALGARY — Canada has reached a major defence spending milestone, hitting 2% of GDP, as the federal government continues to accelerate a massive overhaul of how it buys military equipment and supports domestic industry.Canadian Secretary of State for Defence Procurement Stephen Fuhr told an audience at DEFSEC West — the Defence and Security Conference of Western Canada — on Thursday that the achievement marks a dramatic shift after years of slow growth.Fuhr said Canada was spending just 0.98% of GDP on defence a decade ago, with that figure gradually climbing to roughly 1.4% to 1.5% before surging to 2% in just eight months — a pace he described as a “massive lift.”“We should all be very proud of that. Now, moving forward in that vein, we have to get from 2% to 5% in ten years,” Fuhr said, adding the government needs to make sure it gets “good value for taxpayers” and gives the Canadian Armed Forces (CAF) “what it wants when it needs it.”However, he believes that rapid increase has exposed longstanding problems in the country’s procurement system.Fuhr said the previous system struggled to consistently deliver projects on time, with several billion in defence funding having gone unspent in multiple years due to delays..To address those shortcomings, Ottawa has launched the Defence Investment Agency (DIA), a new government body intended to streamline procurement. The agency currently operates within Public Services and Procurement Canada with delegated authority over contracts exceeding $100 million, but is expected to eventually become a standalone organization, with the overall goal being to create a faster system capable of delivering equipment to the CAF more efficiently.A key component of the overhaul involves changing how procurement decisions are made, with Fuhr stating Ottawa is tailoring “procurement pathways” — such as limited competitions and directed contracts — to accelerate timelines going forward.One example of this is Canada’s planned submarine procurement, which is expected to be the largest defence purchase in the country’s history.Fuhr revealed the government received 25 responses to an initial contractor request before narrowing the field down to the two most viable candidates, with Ottawa deciding that a limited competition between suppliers from two allied countries was the best way to move forward..Alberta eyes major role in Canada’s defence build-up amid global instability.“We have countries that we share values with, and we can work with these companies,” he said.“It becomes: how can we get the best value for Canada?”While Canada is not expected to build the submarines domestically, Fuhr said there will still be opportunities for Canadian industry — particularly with in-service support (ISS) which could account for as much as 70% of the total lifecycle value of the submarines over roughly 30 years, making it a critical area for domestic participation.“I don't want to be vendor locked to either of those companies. We all love each other now, but I want to make sure that if we need to shift later in life, we need to have IP to do that,” Fuhr said, adding he wanted to make sure Canadian industry had a “great opportunity at the ISS portion moving forward” because “that's where all the money is.”He also reiterated that with the country’s growing defence spending and procurement push creating new economic and geopolitical opportunities, the country’s international standing was currently at one of the highest points it has been in decades.“Canada’s reputational place in the world right now is probably at a high watermark we haven’t seen since the Second World War,” Fuhr said.“Everybody wants to work with Canada right now...the opportunity here is massive.”
