Series Glossary

Introduction

While procurement strategy attracts early attention, Canada’s Defence Industrial Strategy (“DIS”) also presents considerations that arise off the formal bid page. Readiness, supply chain integrity, and domestic partnerships increasingly operate as imperative gating and performance considerations throughout the defence contract lifecycle.

For counsel and industry, this shifts focus away from securing one-time deals and towards investing in long-term, durable commercial relationships.

Readiness as a Threshold Issue

The DIS emphasizes early engagement, faster security clearances, and improved navigation for industry. In practice, this makes readiness a threshold issue. Insufficient governance, policies, or records can delay eligibility or prevent participation altogether. Legal work at this stage often includes:

• Governance and compliance frameworks
• Records management and audit readiness
• Clearance and accreditation preparation
• NDA and data-handling protocols for early engagement

Importantly, this work occurs before RFPs are issued and frequently determines whether opportunities are accessible to interested clients at all.

Supporting SME Entry and Scale

A central DIS objective is expanding participation by small and medium-sized businesses. For SMEs, however, the path into defence procurement often involves unfamiliar regulatory and contractual terrain. Counsel can facilitate participation by helping clients:

• Monitor demand signals and engagement points
• Select appropriate Build, Partner, or Buy positioning
• Align IP strategies with Canadian ownership priorities while protecting scalability
• Prepare export-ready contracting and compliance strategies

This work reduces procedural friction and prevents costly course correction later on in the lifecycle.

Supply Chain Security Impacts Contracting

Supply chain assurance is no longer merely a performance concern – it increasingly shapes contractual risk allocation. The DIS highlights reliability for key inputs, driving negotiation pressure points including:

• Sourcing representations and warranties
• Audit and verification rights
• Flow-down obligations to subcontractors
• Continuity, substitution, and termination mechanisms

Legal drafting needs to account for both domestic sourcing priorities and global supply realities, balancing enforceability with operational feasibility.

Arctic and Indigenous Partnerships: Process Matters

The DIS explicitly links Arctic sovereignty and defence readiness with infrastructure investment and domestic partnerships, specifically with Indigenous rights holders and communities. These environments are duty-sensitive and necessarily process-driven.

Counsel can add value by structuring participation with integrity and by helping to enable:

• Indigenous partnership and procurement participation structures
• Durable consultation and engagement efforts and records
• Clear allocation of project risk and responsibilities

Early, respectful, and well-documented engagement reduces legal exposure while supporting long-term project viability between all partners.

From Sovereignty to Serviceability

The DIS connects geopolitical considerations (such as the Northwest Passage) to practical procurement needs. For counsel, this bridges high-level sovereignty goals with grounded legal work around sustainment, access, and long-term serviceability obligations.

The unifying theme is durability. Contracts, partnerships, and compliance structures need to be built to withstand long timelines and evolving operational demands.

How McKercher Can Assist

Across procurement, corporate, IP, Indigenous, and regulatory practices, legal work connected to the DIS increasingly centres on:

• Bid and procurement strategy under Build-Partner-Buy
• Deal and partnership structuring
• IP ownership, access, and commercialization
• Supply chain and continuity contracting
• Indigenous and Arctic partnership frameworks

While DIS implementation details continue to evolve, the strategic (and public funding) direction is clear. Early, integrated legal advice is becoming essential to navigating Canada’s defence economy under the DIS.

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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Canada’s Defence Industrial Strategy (2026): Practical Legal Considerations for Counsel and Industry Series

Part 1: Canada’s Defence Industrial Strategy: What Changes for Lawyers and Industry

Part 2: Build-Partner-Buy in Practice: Procurement, Deals, and IP Under the Defence Industrial Strategy