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World of Software > News > Defining Canada’s threat landscape: Resetting for a new reality
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Defining Canada’s threat landscape: Resetting for a new reality

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Last updated: 2025/08/01 at 9:48 AM
News Room Published 1 August 2025
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August 1, 2025 • 9:00 am ET


Defining Canada’s threat landscape: Resetting for a new reality

By
Peter Engelke, Ginger Matchett, and Samantha Wong

Bottom lines up front

  • Canada’s defense industry, allies, and analysts agree: Canada needs an annual whole-of-government national security strategy.
  • The growing number of disruptions and emergencies related to climate change call for a Canadian disaster-response agency, to prevent the Canadian military from being spread too thin.
  • The Arctic should be the priority for Canadian defense, with efforts in other regions supporting this overarching focus.

Table of contents

Introduction

Canada’s threat landscape is rapidly evolving. To address this new reality, Canada is reframing its strategies and shifting its defense policy priorities and security footing to be nimble and adept within these regional and global contexts. As a reflection of this reality, in April 2024, Canada’s Department of National Defense (DND) and Canadian Armed Forces (CAF) released Our North, Strong and Free: A Renewed Vision for Canada’s Defence, emphasizing three main global trends of significance for Canada: geopolitics, climate change, and emerging technology. Though Canada faces challenges beyond the scale of its geographic size, population, economy, and military footprint, it must maximize its opportunities to assert its comparative advantage in an increasingly competitive world.

Over 2024 and 2025, the ’s Scowcroft Center for Strategy and Security, in partnership with the DND Mobilizing Insights in Defence and Security (MINDS) program, hosted three virtual workshops with government officials, academic experts, and participants from the public and private sectors of Canada, the United States, and Europe. The insights gathered from these conversations helped inform this report, which assesses how these three critical arenas—geopolitics, climate change, and technological development—create challenges and opportunities for Canada’s national security.

A Canadian Navy CH-124 Sea King helicopter sits on the flight deck of the frigate HMCS Toronto after landing while patrolling over Frobisher Bay in the Canadian Arctic August 19, 2009. The Toronto is a multi-role patrol frigate. REUTERS/Andy Clark.

Geopolitics

Geopolitics is a significant driver of change in Canada’s threat landscape, especially for the DND and CAF. Geopolitics is a central element across the varied challenges facing Canada, whether those posed by authoritarian regimes, through increased tensions in the Arctic, and within Canada’s evolving role in the transatlantic and Indo-Pacific regions. Authoritarian powers such as Russia and China promote values that directly undermine Canada’s commitment to upholding a stable and peaceful international order, the rule of law, and democracy worldwide, making it critical for the DND and CAF to be equipped to address these emerging geopolitical threats.

One of Canada’s biggest geopolitical challenges arises from strategic vulnerabilities in the Arctic, given that 40 percent of Canada’s territory and more than 70 percent of its coastline is in that region. The Arctic also holds significant strategic value due to its vast reserves of critical minerals and resources, including “13 percent of the world’s undiscovered oil and 30 percent of the world’s untapped natural gas.” As climate change accelerates ice-cap melting, Arctic shipping routes are becoming increasingly accessible and navigable, particularly the Northwest Passage that hugs the North American Arctic coastline.

A changing Arctic creates new pathways for geopolitical competition, as authoritarian adversaries such as Russia and China have demonstrated an increased interest in extending their presence and influence in the region. Russia, the world’s largest Arctic state with key strategic military capabilities located in the Kola Peninsula, is threatened by the NATO accession of Finland and Sweden—two countries that historically maintained strategic nonalignment with military alliances during the Cold War. In turn, Russia has sought to strengthen its Arctic presence by allying with other “potential Arctic stakeholders” including other BRICS countries. Critically, Russia has deepened its collaboration with China on a series of joint projects in the region. This collaboration includes a joint military exercise in the fall of 2024, during which Russian and Chinese forces carried out coordinated patrols in the Arctic region, as well as joint coast guard patrols extending into the Bering Sea. Additionally, military aircraft from both countries were detected by the North American Aerospace Defense Command (NORAD) after entering Alaska’s Air Defense Identification Zone.

Although China is not an Arctic state, its 2018 Arctic white paper identifies China as a “near-Arctic state,” clarifying its long-term ambition to become a polar great power by 2030. China is developing a “Polar Silk Road” that enables it to both access Arctic resources, including critical minerals, oil, and gas, and support dual-use research conducted in its two permanent research stations and elsewhere in the Arctic region. In December 2024, China introduced a “polar-ready” cargo ship that is “capable of transporting a wide range of cargo, including offshore oil shield, wind and nuclear power equipment, as well as large vessel steel structures of sections.” Weighing 58,000 tons, the ship has been likened by Chinese bloggers to the size of an aircraft carrier.

Russia’s and China’s growing ambitions in the Arctic present escalating challenges to Canada’s interests in the region, including the possibility of eventual territorial disputes that could threaten Canadian sovereignty and national security. Though DND/CAF have indicated that there are no “immediate threats to the Arctic,” it nonetheless is crucial for them to allocate adequate resources to ensure the sustainability of their defense operations while enhancing Arctic domain awareness in response to emerging challenges in the region.

In addition to the Arctic, Russia and China also pose significant threats to Canada’s interests in the transatlantic and Indo-Pacific regions. As a founding member of NATO that has long benefited from the alliance’s security guarantees, Canada’s defense priorities have historically been closely aligned with those of the Alliance. While Canada continues to uphold its NATO commitments—including through military, humanitarian, and financial support to Ukraine—workshop participants emphasized the need for the CAF to adjust resources from the transatlantic to the Indo-Pacific theater (in addition to the aforementioned Arctic region), where China’s growing influence poses an increasing geopolitical threat. Canada considers itself a “Pacific nation,” with the Indo-Pacific region representing its second-largest export market and encompassing six of its thirteen top trading partners. China’s emergence as a strategic threat is further strengthened by its increased collaboration with Russia. Just prior to Russia’s full-scale invasion of Ukraine, Moscow committed to extensive cooperation with Beijing in the form of a “no limits” partnership consisting of advanced military technology transfer and substantial economic support.

This evolving geostrategic situation requires the DND/CAF to carefully balance its resources across the transatlantic and Indo-Pacific theaters, given the growing collaboration between Russia and China, in targeting Canada’s defense priorities. The CAF has committed additional resources to the region, including maintaining a continuous submarine presence. Currently, HMCS Ville de Québec is set to join the United Kingdom’s Carrier Strike Group deployment in the Indo-Pacific, and the Royal Canadian Navy has been participating in freedom of navigation movements alongside allied countries in the Taiwan Strait. Moreover, Indo-Pacific nations have expressed increased interest in developing defense partnerships with Canada, agreements that have the potential to boost the DND and CAF’s regional presence. In May 2025, South Korea’s Hanwha Ocean and Hyundai Heavy Industries visited Ottawa and pitched a plan valued at C$20 billion (US$14.57 billion) for submarines and armored vehicles. In the same visit, Hanwha Aerospace proposed a C$1 billion deal to supply DND/CAF with mobile howitzers and rocket-propelled artilleries. This highlights significant opportunities for the DND/CAF to collaborate with like-minded Indo-Pacific partners to enhance Canada’s posture and capacity to deter security threats in the region. Workshop participants specifically identified joining the AUKUS partnership as a significant security benefit to Canada by enhancing the DND/CAF’s Indo-Pacific posture.

In the workshop focused on geopolitics, experts emphasized how China presents a complex and multifaceted challenge that extends beyond traditional defense concerns. China’s economic and trade power, its technological capabilities, and the large Chinese diaspora in Canada all contribute to China’s multifaceted presence. Given this issue, a major challenge for Canada that stood out among workshop participants is the shortage of China experts within the DND and CAF. Although fostering the next generation of China experts requires significant time and investment, doing so is essential to ensure that world-class China assessments are included in broader strategic considerations that include alignment of domestic and foreign policy approaches toward China. While much of the current focus on China surrounds trending topics such as artificial intelligence and critical minerals, it is crucial for the DND/CAF to also deepen its understanding of China’s internal politics and how these dynamics shape its defense posture. These insights could inform DND/CAF’s strategic response to security threats.

In addition to the DND/CAF’s engagements in other regions, it is important to consider the US position in Canada’s security context. The United States and Canada have numerous shared strategic interests, including in addressing authoritarian adversaries, and have collaborated across many bilateral defense initiatives such as NORAD, which plays a critical role in protecting the countries’ respective airspaces. Canada has played an important role in modernizing outdated NORAD tracking systems and there is talk amongst experts on potentially increasing Canada’s contributions to North America’s missile-interceptor defense capabilities. Workshop participants emphasized the need to reaffirm Canada’s commitments to NORAD by investing more money in upgrading NORAD equipment.

However, the bilateral relationship has been tested by recent disagreements centered on tariffs and trade, given the importance of the trading relationship between the two countries (totaling around $1 trillion annually). During a March 2025 trip to Washington, Canadian Prime Minister Mark Carney announced his intention to reduce Canada’s reliance on US military equipment, including a reconsideration of a previous commitment to purchase F-35 fighter jets. A Canadian exit from the F-35 agreement would signify considerable change in the current US-Canadian defense procurement process, which is established by the Defense Production Sharing Agreement—a unique and long-standing bilateral agreement that seeks to integrate US and Canadian military collaboration to align both countries’ defense industrial bases for shared defense needs.

An ongoing concern regarding Canada’s relationship with the United States and other transatlantic NATO partners is its continued shortfall in meeting NATO’s 2 percent spending guideline (i.e., the expectation for each NATO member state to allocate at least 2 percent of gross domestic product to defense spending). Currently, Canada allocates approximately 1.4 percent of its GDP on defense. Initially, Carney pledged that Ottawa would reach the 2 percent threshold by 2030 through increased investments in rearmament, Arctic infrastructure resilience, submarine procurement for enhanced underwater capabilities, and increased shipbuilding initiatives. Most recently, NATO member states agreed to increase their defense spending to 5 percent of GDP. Canada also signed a deal with the European Union for Canadian companies to participate in ReArm Europe.

However, workshop participants underscored the importance of establishing a more credible and consistent defense-spending track record to demonstrate Canada’s renewed strategic commitment to its transatlantic allies. While Carney’s new pledge to reach the 2 percent defense-spending target within the year is an improvement, it is not sufficient in today’s threat environment—particularly as other NATO allies like Belgium and Denmark have already met the 2 percent GDP benchmark more quickly and Canada has previously shown a lack of commitment to reaching the target. Canada must promptly meet this 2 percent target (and ultimately the new 5 percent pledge) to dispel previous assumptions about Canada’s commitment to the Alliance. If Canada fails to meet the target numbers quickly and robustly, this will undermine the CAF’s capacity to effectively collaborate with Canada’s traditional allies on critical security issues including the war in Ukraine.

Firefighters tackle a wildfire near the town of La Ronge, Saskatchewan July 5, 2015 REUTERS/Saskatchewan Ministry of Government Relations/Handout via Reuters.

Climate change

Canada is the world’s second-largest country by land mass, with a coastline of 151,019 miles and nearly 40 percent of its geography considered Arctic. Climate change is increasingly impacting Canadian national security, with melting ice and rising sea levels, as well as extreme climate disruptions threatening the country’s population, infrastructure, and natural resources. Canada’s defense, economic, and technology ecosystems face vulnerabilities from climatic disruptions that the DND and CAF must address for the changing security landscape of the future.

The Arctic is experiencing a major transformation, becoming one of Canada’s most strategically challenging threats to manage. To surveil and exercise the defense and security of the Arctic region, CAF stations around 500 full-time military personnel alongside 1,800 Canadian Rangers year-round through operations like NANOOK. Their presence is tasked not only for military safety and security threats, like understanding operational challenges of the environment, developing unique skill sets, and evaluating equipment for extreme weather conditions, but to respond effectively to climate emergencies through Operation LENTUS. With no national emergency or disaster management authority in Canada, the CAF is frequently deployed for relief missions to protect populations around the country alongside local, provincial emergency-management responders. With climate change worsening, the frequency, duration, and intensity of CAF deployments throughout the region are increasing.

The Arctic’s higher than average global temperatures are melting ice and raising sea levels faster than in other regions around the world. This difference, known as Arctic amplification, is creating glacier retreat, ice thinning, coastal erosion, and permafrost thawing, which damage the Indigenous communities, roads, houses, water supplies, industry pipelines, and waste disposal structures in northern Canada. These effects have serious implications for the CAF, placing competing demands and priorities on its resources and training. The CAF’s bandwidth is limited and requires decisions about which capabilities it will use for various missions. Waterways that flood local communities pose regional disruption, and the increasing Russian and Chinese maritime and aerial presence threatens how the CAF operates in the Arctic. With forces dividing their time and equipment between disaster response and critical defense training to defend Canada of threats in the deteriorating global security environment, CAF readiness is at risk of being overburdened and underfunded. Deploying CAF is expensive, and these funds are decreasing the amount available in the operational DND budget, creating concerns over maintenance and readiness. Additionally, the CAF equipment utilized for national disaster response is not what is appropriate for helicopter evacuation operations, for example, because it is designed for warfighting.

The effects of climate change and demand for CAF assistance are not limited to the Arctic and melting ice. Extreme climate disruptions including drought and heat have severely affected provinces across the country, as a surge in wildfires affects Saskatchewan, Manitoba, British Columbia, Alberta, and Ontario. Rising fire risk has demanded that CAF provide evacuation support across the provinces, particularly in sparsely populated rural regions home to Indigenous communities. Rising frequency and expanding areas of impact have strained CAF’s ability to provide timely emergency response.

Lead satellite controller Michael Arsenault works at the offices of Telesat, a Canadian satellite communications company, in Ottawa, Ontario, Canada March 24, 2021. Picture taken March 24, 2021. REUTERS/Blair Gable.

Emerging technology

Emerging technologies are important pieces within Canada’s national security landscape. Canada possesses operational niche strengths across several key technological areas, including nuclear energy, space, and artificial intelligence. Although Russia and China currently dominate the global uranium supply chain, Canada possesses the world’s largest high-grade uranium supply deposits and has significant potential to leverage its uranium production to advance its civilian nuclear industry in emerging innovations. This potential is reinforced by current innovative initiatives, such as the construction of small modular reactors in Ontario. In the space sector, Canadian companies like Telesat have developed satellite constellations that rival major players such as SpaceX’s Starlink and Amazon’s Kuiper, offering competitive services with a smaller environmental impact. Furthermore, with 3 percent of the world’s top-tier AI researchers and the G7 leader in AI-related scholarly outputs per capita, Canada is well-positioned to emerge as a global leader in AI. Ultimately, investment and procurement in these and other emerging technologies are crucial to Canadian national security.

However, Canada faces numerous challenges in this space, particularly within the defense procurement system, that hinder the DND and CAF abilities to effectively develop, acquire, and use advanced technologies. Workshop participants highlighted the fragmented aspects of Canada’s defense procurement process, which has no centralized authority to coordinate efforts and lacks transparency. Participants also highlighted the scale issue within the defense procurement process. While Defense Research and Development Canada and other departments are investing in Canadian start-ups to boost the country’s defense industrial base, these efforts are insufficient to sustain the companies’ operational costs throughout long procurement processes. As there is also limited domestic investment from the civilian sector, many tech start-ups simply do not have enough capital to remain operational. Instead, they prioritize commercial ventures, which are typically more profitable and accessible, over the highly competitive defense industry.

Alternatively, Canadian defense start-ups often pursue opportunities in foreign defense markets, which are often more lucrative and viable for sustaining operations. Some emerging technology companies initially founded to advance Canadian defense priorities had to shift toward commercialization and secured contracts in other regions, such as the Nordic region, for an extended period before having an opportunity for domestic Canadian defense contracts. This reflects a common trend among Canadian tech start-ups, where they are forced to procure investment abroad to remain operational, despite their potential value to national defense. Experts in the workshop emphasized the need for the DND and CAF to support investment in these domestic defense start-ups and prioritize dual-use companies, which can develop critical defense operational capabilities, while also generating commercial returns that can support the company’s long-term viability.

Technology start-ups also can be supported through shortening defense procurement cycles and reducing the burden on companies to fully develop their technology before seeking investment. In the workshop, US defense experts noted the success of the US Department of Defense’s program providing grants to start-ups in the ideation phrase, allowing these companies to test their technologies and foster innovation without the immediate pressure of securing capital. This model is particularly relevant for Canadian start-ups that often face funding constraints and thus are discouraged from pursuing defense innovation in an uncertain domestic market where capital is not guaranteed. Moreover, by providing early-stage grants, start-ups are more likely to agree to licensing their technology exclusively for the DND and CAF, bolstering Canada’s defense capabilities. Current programs such as NATO’s Defence Innovation Accelerator for the North Atlantic (DIANA) help accelerate the defense procurement process. However, workshop participants believe that these programs do not have enough investment capital to fully service Canada’s vast technological talent and, moreover, are not adequately advertised to start-ups.

The Canadian government has begun to address reforms needed to bridge the well documented “valley of death” for defense procurement. Representatives in the workshop noted the whole-of-government effort outlined in the Defence Procurement Reform of 2025 as progress toward addressing these issues, but other experts argued that there needs to be further collaboration among government agencies, the defense industry, and civilian companies. Strengthening these relationships could involve the DND and CAF partnering with civilian firms and academia to provide a secure environment for testing experimental technologies using real data and providing shared secure facilities for civilian firms. Within the defense industry, the Canadian government can encourage bigger defense contractors to engage and work with innovative Canadian start-ups, elevating smaller emerging technological firms. Enhancing collaboration across all sectors of Canada’s defense apparatus would allow the DND and CAF to more effectively identify up-and-coming technologies that best suit Canada’s defense needs and ensure they fully capitalize on the most advanced innovations available.

Workshop participants also highlighted the importance of personnel and talent. While Canada has skilled tech experts, it experiences a brain drain as many are drawn to higher paying commercial opportunities in the United States or elsewhere. The DND and CAF could capitalize on dual-hatted uniformed members who work in commercial industries, provided there is no conflict of interest, to drive defense technological innovations, as they are well suited to understanding commercial and defense needs. Furthermore, the DND and CAF could recruit and retrain veterans who can also provide the operational expertise and specialized technological knowledge needed to innovate emerging defense technologies. Ultimately, a culture shift is needed to rekindle innovation in the Canadian talent pool to include a stronger commitment to advancing domestic defense capabilities. Encouraging Canadian technological experts to apply their expertise toward national defense and motivating domestic investors to support domestic defense companies would better enable the DND and CAF to attract, develop, and retain Canada’s skilled workforce.

In addition to looking inward to strengthen Canada’s emerging defense ecosystem, Canada should also work closely with its allies to mutually reinforce each other’s operational strengths. Workshop participants stressed that Canada has a small population and GDP in proportion to its large landmass, making it difficult to fully capitalize on its defense potential. The recent agreement at the Canada-EU summit, allowing Canadian companies to take part in the EU’s $1.25 trillion ReArm Europe program, highlights the strong interest from foreign governments in partnering with Canada’s defense sector. Canada should build on this momentum by pursuing similar partnerships with like-minded allies and encouraging investment in domestic defense companies to boost homegrown innovation and continue to build up the domestic emerging dual-use technology ecosystem.

Conclusion

Canada’s role as a middle power is actively evolving due to geopolitical and climate changes. The DND and CAF need to adopt new strategies to address the changing threat landscape to better achieve their respective missions. There is a clear strategic need to leverage and invest in Canada’s comparative advantage in emerging technologies and deepen partnerships with allies to address these issues and further its defense leadership in important regions such as the Arctic, which is pivotal to Canada’s security. Here are some recommendations drawn from the three workshops and desk research to support the DND and CAF’s mission.

Canada’s Prime Minister Stephen Harper stands on the front deck of the HMCS Kingston as a Coast Guard helicopter passes by on Eclipse Sound near the Arctic community of Pond Inlet, Nunavut August 24, 2014. REUTERS/Chris Wattie.

Recommendations for the DND/CAF

1. Canada should develop an annual whole-of-government national security strategy to clearly communicate its security priorities to allies and the international community, and to provide a unified framework for governmental departments and private industries to align their efforts.

The Canadian administration’s grand strategy is currently driven by fragmented reports and mission statements that, together, inform its broader defense posture. The Department of National Defence is primarily guided by its latest strategy, Our North, Strong, and Free, but Canada currently lacks a unified, whole-of-government strategy which communicates national defense priorities to both allies and adversaries. While the DND acknowledges the importance of maintaining a regular strategy, the latest Canadian strategy provides for an update every four years—which is inadequate given how much can shift in the geopolitical, environmental, and technological landscapes within a single year. By publicly articulating a yearly coherent national security strategy, the Canadian government can transparently signal its defense intentions to the international community and be more responsive to the ever-evolving threat landscape. This step would enable allies and partners to align more effectively with Canada on shared objectives and deter adversaries by clearly defining boundaries Canada is committed to upholding.

2. Due to the High North’s vital role in defending Canadian national security, the Arctic should be the priority for both the DND and the CAF, with defense efforts in other regions supporting this overarching focus.

Given the growing geopolitical and climate considerations of the region, a Canadian national security strategy should clearly articulate the Arctic region as Canada’s top defense priority, particularly since securing the High North has become essential to Canadian domestic security. A cohesive, whole-of-government national security strategy centered on the Arctic would not only safeguard Canada’s High North interests but also bolster its position in other key regions, particularly the transatlantic and Indo-Pacific theatres. As both Russia and China have shown strategic interest in the Arctic that poses challenges to Canadian security, prioritizing this region and formulating a strong defense strategy would enable Canada to enhance its independent influence and engagement globally.

3. The Canadian military establishment must maintain its relationship with the Pentagon while also working to diversify its partnerships for defense needs such as military-equipment procurement.

The United States will always be Canada’s closest ally due to its shared border, common values, mutual threats, and long-standing defense cooperation. This close working relationship must be maintained. Canada can achieve this by prioritizing NORAD modernization and enhancing its defense capabilities, including the development of interceptors to support US efforts in safeguarding the North American continent and the shared border. However, the DND and CAF should also actively support Canada’s efforts to diversify its defense partnerships by engaging with like-minded allies, particularly those with comparable defense and industrial capabilities, such as Japan, South Korea, and Sweden. These countries align well with Canada’s role as a middle power focused on strategic stability. Strengthening ties with Nordic and Arctic NATO members is essential, as they share similar Arctic interests and are likely to pursue comparable defense technologies tailored to the High North. Canada can advance this goal by investing in initiatives like NATO’s DIANA in collaboration with other like-minded partners, such as AUKUS, to more effectively promote joint defense innovation and interoperability. Moreover, Canada can draw valuable lessons from the experiences of smaller states in rapidly and efficiently increasing their defense spending, particularly from how Denmark and Belgium were able to meet NATO’s defense budget targets within a short time frame. Likewise, Canada can emulate Finland’s experience in expanding naval and shipbuilding capacity in a cost-effective manner.

4. The Canadian government should create a national disaster management and response body similar to the original purpose and structure of the US Federal Emergency Management Agency (FEMA) to limit the extent to which CAF forces are deployed to manage Canada’s increasing climate disruptions.

Damaging effects of climate change will only increase in the future. The Canadian government must recognize the country’s increasing vulnerability to climate change and its fragmented system of disaster response that relies on provincial leadership. The government needs to proactively build a national force with adequate equipment designed for disaster response and resilience dedicated to managing climate emergencies without relying on CAF personnel and resources. This FEMA-like force should be managed by Public Safety Canada—and reinforced with coordination efforts for information sharing and joint training exercises with the DND and CAF.

5. The DND and CAF should prioritize investment in scalable, climate-resilient infrastructure in the Arctic and North, ensuring that funds associated with Our North, Strong and Free are directed to designing airstrips, logistics facilities, and equipment prepared for flooding and increased adversary activity.

Climate change is the most pressing and proximate threat both to Canadian security in the Arctic and to the communities there. Expanding the amount of CAF architecture/presence requires consideration of the region’s evolving threats of higher sea levels and new opportunities for foreign adversaries to covertly or overtly operate in the Canadian Arctic.

6. The DND and CAF must continue to maintain their partnerships with Indigenous communities to improve Arctic navigation and operational skills in line with the Arctic and Northern Policy Framework.

Cooperation with Indigenous groups supports understanding of the evolving northern environment and infrastructure affected by climate change. The CAF should establish new operations (like NANOOK) focused not only on defense to assert its presence and sovereignty in the North, but strategizing for increasing climate disruption. The CAF should also integrate Indigenous expertise into the new Northern Operational Support Hub locations to improve surveillance, resilience, and responsiveness across the Arctic.

7. The DND and CAF should work with the Defence Research and Development Canada (DRDC) to prioritize domestic investment and commit to reaching the 5 percent defense spending goal by collaborating closely with Canadian industry and academia. This approach would strengthen Canada’s defense capabilities and contribute more meaningfully to Canada’s alliances by offering capabilities that are valuable to its partners.

The DND and CAF should accelerate progress toward meeting the new NATO defense spending target of 5 percent. A key part of this effort involves strengthening collaboration with Canadian industry and academia to drive innovation in emerging technologies critical to national defense. To that end, the DND and CAF should work closely with DRDC to further invest in initiatives, such as NATO’s DIANA, which help to accelerate the development of emerging dual-use technologies and develop secure dual-use shared facilities to foster innovation in high-level, dual-use applications. Such efforts can help shorten procurement cycles, reduce reliance on foreign funding for companies to remain operational, and stimulate dual-use innovation. Leveraging and recruiting the right talent is also essential for the DND and CAF, such as engaging military reservists with commercial-sector experience, recruiting veterans with operational expertise into transitioning back into defense-related industries, and working closely with Indigenous rightsholders on climate and environmental technologies. By prioritizing domestic innovation and talent recruitment in emerging defense technology, Canada can move more quickly toward the original 2 percent NATO defense spending target and the new 5 percent target while also sending a credible signal to allies of its commitment to shared defense goals.

8. The DND and CAF need to work with other government agencies to target investments in niche operational capabilities that play to Canada’s advantage.

The DND and CAF also should collaborate with other government agencies to strategically direct investments toward operational capabilities that align with Canada’s unique strengths. Given Canada’s small population and dispersed infrastructure in comparison with its vast geography (unlike larger nations such as the United States or China), it cannot pursue defense capacity building across all areas equally. Instead, Canada should focus on its existing operational advantages in specialized sectors such as space, nuclear technology, and artificial intelligence. By prioritizing and enhancing these niche strategic defense capabilities, the DND and CAF can position Canada as a global leader in these fields. This approach would allow Canada to contribute high-value capabilities to allied partnerships, such as AUKUS, and encourage deeper collaboration by offering Canada’s specialized logistical assets and comparative advantages.

About the authors

Peter Engelke is a senior fellow with the ’s Scowcroft Center for Strategy and Security as well as a nonresident senior fellow with its Global Energy Center.

Ginger Matchett is a program assistant with the GeoStrategy Initiative in the ’s Scowcroft Center for Strategy and Security.

Samantha Wong is an assistant director with the ’s Global China Hub.

Learn More

Acknowledgements

The would like to thank its partner, The Department of National Defence’s Mobilizing Insights in Defence and Security (MINDS) program, for supporting the Council’s work on this publication.

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Image: The Canadian Coast Guard icebreaker Henry Larsen is pictured in Allen Bay in Resolute, Nunavut August 25, 2010. REUTERS/Chris Wattie

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