Canada and Australia formalize a government-to-government arrangement for long-range Arctic surveillance radar, with BAE Systems Australia set to begin work July 1.

Canada’s existing surveillance architecture does not provide the range needed to detect emerging air and missile threats far beyond the continent’s northern approaches. Arctic Over-the-Horizon Radar is designed to extend NORAD’s early warning and threat-tracking coverage deep into the Canadian North and North Atlantic.

Canada has entered into formal arrangements with Australia and BAE Systems Australia to acquire an Over-the-Horizon Radar (OTHR) capability for the Arctic, committing $2.5 billion to procurement of the radar system.

Secretary of State (Defence Procurement) Stephen Fuhr signed a government-to-government acquisition arrangement with Australian Deputy Prime Minister and Minister for Defence Richard Marles during a ceremony in Canberra on June 22.

Canada also entered into an OTHR Rights Agreement with Australia and BAE Systems Australia and an Industrial and Technological Benefits (ITB) agreement with the company. Australia signed a separate production contract with BAE Systems Australia to deliver the Canadian system.

The agreements move Canada's Arctic Over-the-Horizon Radar (A-OTHR) program from planning into delivery. BAE Systems Australia is scheduled to begin work on July 1, 2026, with Canada targeting Initial Capability by December 2029.

Unlike conventional radar, OTHR uses high-frequency radar signals refracted through the ionosphere to detect objects beyond the curvature of the Earth. The technology can provide warning of threats thousands of kilometres away, well before they enter the coverage of conventional radar systems.

The capability is intended to improve warning against increasingly advanced air and missile threats approaching North America through the Arctic, including long-range aircraft and cruise missiles.

Canada's system will draw on technology and expertise developed through Australia's Jindalee Operational Radar Network (JORN), with BAE Systems Australia serving as the key industry partner. JORN supports Australian air and maritime surveillance, border protection, disaster relief and search-and-rescue operations.

The Canadian system is designed to detect and track airborne and maritime threats approaching Canada's northern and Arctic regions, giving the Canadian Armed Forces and NORAD more time to assess and respond.

Australia described the arrangement as the largest defence export in its history and the first international sale of its OTHR technology. The project is expected to support approximately 300 technical jobs in Australia.

The A-OTHR project includes an ITB agreement requiring BAE Systems Australia to involve Canadian industry throughout the acquisition and sustainment of the capability.

Canadian companies could participate in radar technologies, system integration, sustainment and related defence activities. Ottawa said the work is intended to build the domestic expertise needed to operate, maintain and develop the system over time.

The federal government estimates the project will contribute close to $290 million annually to Canada's GDP and support approximately 2,270 jobs per year between 2026 and 2033.

The partnership also fits the PARTNER component of Canada's Defence Industrial Strategy, which calls for Canada to work with trusted allies when domestic capacity is limited or joint development can deliver a capability faster. The strategy specifically identifies Australia as a priority Indo-Pacific defence partner.

A-OTHR is a central element of Canada's wider NORAD modernization plan, announced in 2022. In March 2025, Prime Minister Mark Carney announced that Canada planned to invest more than $6 billion in the radar program.

The $2.5 billion announced this week covers procurement of the radar system from Australia. The broader program, valued at more than $6 billion, also includes infrastructure, installation, integration and other costs. Full A-OTHR capability will eventually require four Canadian sites: two transmit sites and two receive sites.

The Defence Investment Agency is leading the Canadian procurement. Under the government-to-government model, Australia will execute and manage the production contract with BAE Systems Australia on Canada's behalf.