Canada Announces Major Military Modernization Plan

Canada is significantly boosting its defense capabilities to address rising global threats, particularly in the Arctic. On April 8th, Ottawa unveiled its plan to budget $73+ billion over 20 years, increasing its defense spending to 1.76% of GDP (closer to NATO’s 2% target).

Key areas of focus include:

• Modernizing its helicopter fleet: Canada will prioritize upgrading its aging Bell 412s and CH-146s to increase its fleet’s capability, endurance, and speed. Canada has not selected a replacement. However, we expect several vendors across NATO and partner nations (E.g., UH-1Y Venom, upgraded V-289 Valor) to compete. And we expect Canada will seek a co-production deal with selected vendors.
• Investing in unmanned aerial vehicles (UAVs) and airborne command and control (C2) aircraft:Canada has identified a need to advance its ability to gather actionable intelligence and conduct operations through use of unmanned systems and enhanced airborne C2.

While timelines remain unclear, this investment demonstrates Canada’s commitment to catching up on years of delayed modernization and signals its renewed focus on safeguarding its territory and upholding its responsibilities within NATO.

BCE’s global defense team is closely following Canada’s modernization efforts, particularly as our clients prioritize international captures to realize growth.