Canada ready to further distance itself from U.S. on military procurement

Canada ready to further distance itself from U.S. on military procurement

Trade war has strengthened resolve to boost military co-operation with Europe, Asia

The flareup in the Canada-U.S. tariff war has not only strengthened Ottawa’s resolve to boost military co-operation with Europe and Asia — it's also hurting prospects of major military purchases from the United States.

In an interview, the head of the Defence Investment Agency says the Canadian public would have no appetite for sole-source military contracts to American firms.

"That's just me reading the room," said Stephen Fuhr, secretary of state for defence procurement. "I think that would be a very difficult thing to do, especially after this last week. I think that people would not be happy about that."

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Canada's retaliatory tariff response announced this week did not directly target the defence sector. However, Fuhr's comments suggest a growing reluctance toward potential acquisitions of U.S. military hardware.

He added that Canada must not act as though relations will simply return to normal after U.S. President Donald Trump leaves office in January 2029.

While Canada has pledged tens of billions of dollars in additional defence spending over the coming years, it wants to put an end to the era during which 70 per cent of those funds flowed south of the border.

"We are in a situation that we didn't provoke, we’re in a position that we don’t deserve," Fuhr said. "We're on the receiving end of this change, and it's our job to look for new opportunities and pivot as fast as we can to meet the moment, and never put ourselves back in this position again."

Canada 'carefully considering' its options

Fuhr still describes the United States as a key defence ally, but insists that Canada has learned the perils of "putting all our eggs in one basket." Above all, he wants Canada to become increasingly self-reliant in terms of military production, or to forge new strategic alliances.

"So working with others who want to work with us and add value to what we're doing, I think we're carefully considering that a lot more. Again, not to diminish the relationship with our traditional partner, but things are different now, and it's been very clear that the relationship that we had will be different moving forward," Fuhr said.

Justin Massie, a military affairs expert at l'Université du Québec à Montréal, said Canada has no choice but to adjust its defence policy to align with the new American reality.

"The United States wants the burden of defending its allies to rest squarely on the shoulders of its allies," Massie said. "They are tired of calling on American taxpayers to fund the defence of Europe and Canada."

Richard Shimooka, a senior fellow at the Macdonald-Laurier Institute, says Canada will still need to find a way to keep working with the United States on continental defence, even as the country’s defence budget is heading to more than two per cent of GDP.

"Canadians don’t understand you can’t do this alone. We could have a 10 per cent defence budget and it wouldn’t be enough," he said.

Fuhr did not single out any specific military project that might be delayed or stalled by the trade dispute.

Nevertheless, major military helicopter procurements currently in the works could be impacted, including a potential sole-source purchase of American-made Black Hawks, which are widely considered the preferred option for Canada’s special forces.

Furthermore, the results of a review of the planned purchase of 88 F-35 fighter jets, manufactured by U.S. defense giant Lockheed Martin, have yet to be disclosed, and Prime Minister Mark Carney has given no indication of his intentions.

Canada has placed a firm order for 16 F-35s and has begun paying for critical equipment for 14 additional aircraft, but there is currently no indication of how many fighters will ultimately be purchased beyond that initial count.

Ottawa's mixed fleet of F-35s and Gripens could total more than 100 aircraft, sources say

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Meanwhile, Canada remains interested in acquiring a second fleet of Gripen fighter jets, manufactured by Swedish firm Saab.

Ottawa is also in negotiations with Saab to procure GlobalEye radar aircraft, developed in partnership with Canadian manufacturer Bombardier, despite a lobbying campaign in favour of Boeing's E-7 Wedgetail.

'Thrilled' with $2.3B Telesat contract

Fuhr added that he was "thrilled" with the recent $2.3-billion contract awarded to Telesat for Arctic military satellite communications. The project reduces Canada's reliance on Elon Musk’s Starlink network, operated by U.S.-based SpaceX.

Fuhr said the federal government plans to continue doing business with Canadian subsidiaries of foreign contractors.

"We consider those folks in the tent," he said. "They employ hundreds and hundreds of Canadians, they pay taxes in Canada, they have their headquarters in Canada, they do engineering in Canada, they retain IP in Canada — all that really matters."

However, he pointed to growing discussions about the need to move away from strict U.S. controls over key military technology, which fall under the International Traffic in Arms Regulations (ITAR) framework.

"Is there a world in which we can operate with less ITAR restrictions? I think there is," Fuhr said, citing expanded co-operation with partners across Europe, Asia and Oceania.

"Nobody can do it all on their own like the U.S. can. Let's get real about this. But collectively we certainly can, and I think people are trying to move in that direction."

Daniel Leblanc is a reporter with more than 20 years experience in investigative journalism and federal politics. He is a past winner of the Michener Award, the Charles Lynch Award and three National Newspaper Awards.