Part 1 | Canada’s Defence Industrial Strategy: What Changes for Lawyers and Industry
August 13, 2026
Series Glossary
Introduction
The release of Canada’s Defence Industrial Strategy (“DIS”) on February 17, 2026, marked an important shift in how our nation’s defence capabilities are planned, procured, and sustained. The DIS is an industrial and economic strategy that impacts the legal landscape for defence procurements and for businesses operating in defence, defence-adjacent, or dual-use sectors.
For counsel and industry, the DIS extends beyond a mere policy announcement. This is a practical shift in how defence work will be accessed, evaluated, and governed over the next decade in Canada.
Industrial and Legal Strategy
The DIS connects national security objectives with economic resilience. It aims to improve defence readiness while simultaneously strengthening Canadian industrial capacity, domestic supply chains, intellectual property ownership, and export potential.
These objectives are no longer just abstract policy goals. They will be materially present in procurement design, bid evaluation criteria, contract terms, and post-award obligations. Counsel’s legal advice can shape whether a company can successfully access these defence opportunities, not just how risk is allocated once an award is already granted or a contract is signed.
Five Integrated Pillars
The DIS is implemented through five integrated pillars:
- Renewing relationships with industry
- Procuring strategically through a Build-Partner-Buy framework
- Supporting innovation, SMEs, IP, exports, and workforce development
- Securing supply chains
- Strengthening domestic partnerships, including in the North/Arctic and with Indigenous rights holders
These pillars function together. Decisions made under one pillar (e.g., procurement pathway selection) carry consequences across others (e.g., IP ownership, supply chain commitments, and partnership structures).
Build-Partner-Buy: The New Focus
One of the most significant changes introduced by the DIS is the explicit adoption of a Build-Partner-Buy procurement strategy:
- Build in Canada first,
- Partner where necessary, and
- Buy with conditions tied to domestic industry and sovereign control.
This signals that pathway selection will increasingly influence bid competitiveness, contract design, and long-term sustainment expectations. For counsel and industry alike, this moves strategy away from a price-focused analysis and towards early positioning, deal structure, and value narratives aligned with Canadian capabilities.
The Defence Investment Agency
The DIS designates the Defence Investment Agency (“DIA”) as a centralized coordinating body for defence procurement and industrial participation. While the DIA is intended to accelerate procurement and provide clearer engagement pathways for industry, much of its governance structure and operational details remain in development.
Counsel and industry should treat DIS targets as directional signals that shape evaluation and negotiation rather than definitive rules imposed by the DIA.
Ten-Year Targets
The DIS sets ambitious ten-year targets ranging from fleet serviceability and R&D investment to Canadian participation in defence acquisitions. For lawyers and industry, these targets are best understood as policy drivers that influence procurement design, contractual obligations, and performance monitoring.
These targets help explain why procurement, IP ownership, sustainment, and supply chain assurances are likely to receive heightened attention (and also scrutiny) going forward.
Why Legal Advice Starts Earlier
Perhaps the most important takeaway from the release of the DIS is timing. Under this new strategy, many decisive legal issues arise before formal procurement processes even begin:
- Governance and compliance readiness
- Security clearances and facility accreditation
- IP posture and commercialization strategy
- Deal structure and partnering choices
For those engaging with defence or dual-use work, early legal positioning increasingly determines eligibility and competitiveness long before bids are submitted.
Learn more in Part 2 of this blog post series where we examine how the Build-Partner-Buy framework impacts bids, contracts, and IP negotiations.
This post is for information purposes only and should not be taken as legal opinions on any specific facts or circumstances. Counsel should be consulted concerning your own situation and any specific legal questions you may have. Please contact a lawyer to discuss your specific circumstances.
About the Author(s)
Jordyn M. Nachtegaele is an associate lawyer in the McKercher LLP Saskatoon office with experience in entrepreneurship who maintains a general corporate commercial practice.
Joseph A. Gill is a partner in the McKercher LLP Saskatoon office. He is the Prairie's go-to technology and startup lawyer, having assisted hundreds of Prairie startups from formation and beyond. He works with founders throughout the startup life cycle through growth, scale, and exit. Joe was named a 2025 Lexpert Rising Star - Leading Lawyer Under 40 in Canada. This prestigious national award recognizes exceptional young lawyers who demonstrate leadership, innovation, and community impact.
About McKercher LLP
For 100 years, McKercher LLP has grown deep roots across Saskatchewan, serving the community from offices in Saskatoon and Regina. As one of the province’s largest and most established full-service law firms, we proudly follow a client-first philosophy as we provide legal services and real solutions for the people who rely on us.
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Part 3: Readiness, Supply Chains, and Domestic Partnerships: Managing Beyond the Bid
