Adobe Stock
Faster, defence-specific procurement and less duplicated security red tape could add $56 billion in GDP and 14,000 jobs a year by 2035, according to a new Deloitte Canada report written in consultation with the Canadian Association of Defence and Security Industries (CADSI).
Why it matters: Ottawa has a Defence Industrial Strategy, a new Defence Investment Agency (DIA) and a 5 per cent spending target. Deloitte argues that the procurement and regulatory systems meant to deliver all of it haven't kept up.
The details: The report is part of Deloitte's Smarter Regulation series. Its authors are:
Matthew Day, defence and national security sector leader
Darren Hawco, executive advisor
Caroline Cameron, director of technology and transformation
Nino Montemarano, regulatory, enterprise and financial risk
The problems: Deloitte points to three pressure points.
Overlapping security regimes. Suppliers face separate obligations under the Canadian Program for Cyber Security Certification (CPCSC), the Contract Security Program, the Controlled Goods Program, personnel screening and export controls. Canada is still working toward mutual recognition with the U.S. Cybersecurity Maturity Model Certification (CMMC).
Generic procurement. Canada still lacks a fully defence-specific procurement system. Its decentralized, multi-agency processes duplicate work that defence organizations in other countries handle under direct authority.
Weak accountability. The report cites the Procurement Ombud's findings of fragmented accountability, inconsistent ownership and poor performance information.
The recommendations:
Recognize equivalent security certifications across Canadian programs and trusted allied frameworks. Phase in requirements after contract award where suppliers don't yet touch sensitive work, and publish approval timelines.
Build a legislated, defence-specific procurement and contracting regime administered by the DIA. It would build on Bill C-31's proposed Defence and National Security Production and Procurement Act.
Create a statutory performance function that tracks capability delivery, Canadian content and exports against forecasts. Deloitte says it shouldn't become another approval layer.
Establish a sovereign capability framework that defines criteria and gives industry long-term visibility into military priorities.
Write a Defence Industrial Finance Regulation. Bill C-31 gives the DIA broad financing powers, but the rules for eligibility, approval and ownership review are still undefined.
By the numbers:
$87 billion: cumulative real GDP impact from 2026 to 2035 under current conditions, supporting about 24,000 jobs a year
$143 billion: the impact if reforms let Canada hit 5 per cent by 2033 and raise the Canadian share of procurement spending from 53 per cent to 70 per cent
37 per cent: reduction in procurement timelines Germany achieved with a similar initiative, according to the report
What they're saying: "Rearmament is first a procurement challenge then a production one," said Nicolas Todd, CADSI's vice-president of government relations and communications.
The bigger picture: The report lands as Bill C-31 moves through Parliament. That bill would consolidate procurement authorities under the DIA, raise financial thresholds and allow limited exceptions to competitive bidding.
