By the last afternoon of DEFSEC Atlantic 2026, the mood at the Halifax Convention Centre was close to giddy.

A record 3,300 people had passed through the hall, more than triple previous years. Delegates described a scramble from pavilion to pavilion in a manner that one organizer likened to a rodeo. Some in the industry have taken to calling the moment Canada’s defence gold rush.

Peter MacKay, who led the Department of National Defence for six years under Stephen Harper, used the conference’s closing keynote to temper that enthusiasm with a warning drawn from experience.

“Many are waiting to see the gold,” he said.

His central argument was simple, and pointed squarely at the system he once ran. The challenge facing Canada’s defence renewal, he said, is not finding money. It is spending it.

“I can tell you from the very privileged vantage point I held that the problem was not having the money; it was spending the money,” MacKay said. “It was the ability to push major amounts of capital through a complicated bureaucratic maze in Ottawa.”

That scenario, he said, “still exists in my estimation, despite the best-laid plans.”

MacKay opened his critique with Canada’s headline achievement: reaching NATO’s two per cent of GDP target.

“Achieving two per cent of GDP in spending is a monumental achievement, but it was done with a little bit of creative counting,” he said. “Moving assets from Transport Canada and the Coast Guard into the Department of National Defence is really just moving numbers, and sometimes equipment. It’s not improving capabilities, which is what NATO envisioned.”

The charge has a factual basis. Ottawa moved the Canadian Coast Guard under the Department of National Defence, with the integration expected to help Canada meet its NATO target because more of the coast guard’s budget can be counted as defence spending. 

Before the move, DND’s chief financial officer, Jonathan Moor, said about 60 per cent of the coast guard was already included in NATO’s definition of defence expenditure, and that the department would look to increase that share. NATO rules allow coast guards to be counted, but only if they are tactically trained, equipped like military forces, able to operate under military command and deployable abroad in support of military operations. 

The harder climb is still ahead. Getting to 3.5 and then five per cent of GDP, MacKay said, means roughly tripling DND’s budget to something in the range of $165 billion a year, “more than health and social services across the country.” NATO’s five per cent target runs to 2035, though MacKay suggested a far tighter timeline in his remarks.

The only way to pay for that, he argued, is to grow the economy to match the ambition: get resources to market and generate more GDP. He acknowledged what that asks of ordinary Canadians “trying to get your kids to school, make a budget, fill your fridge or pay for medicine,” and noted that public support for rebuilding the forces has nonetheless stayed high.

MacKay was careful to credit what is working. Infrastructure spending, he said, is moving faster than he has ever seen: where personnel train, where they live, where equipment is housed. Recruitment numbers are rising incrementally, and some retention problems have been addressed.

“And yet this is the pitfall,” he said. “The commitment and delivery of equipment, not houses, not hangars, is moving at nearly the same pace I experienced 15 or 20 years ago. Announcements take minutes. Achieving deployable military assets takes years, and in some cases decades.”

His example was the fighter jet. The program that became Canada’s F-35 purchase began in the 1990s, he noted, and has spanned five governments. “Some would argue that by the time we take delivery of a full fleet, drones will have almost completely replaced fighter aircraft.”

He welcomed the new Defence Investment Agency and its designation as a Crown corporation as “great efforts,” but warned that new structures alone won’t fix the problem. “If we are dealing with the same degree of bureaucracy and malaise and confusion, and quite frankly the pace of perpetual elections, this is going to be one of the biggest hurdles to overcome.”

MacKay’s sharpest moment of self-criticism came on the Arctic.

“We, as a government, 15 years ago, committed to a deepwater refuelling station for the brand-new ships being built on both coasts,” he said. “I stand before you ashamed to say that deepwater refuelling station is still not built.”

He was referring to the Nanisivik Naval Facility on northern Baffin Island. Harper and then-defence minister Gordon O’Connor announced the station in August 2007, with an original plan to begin construction in 2010 and finish by 2015. Nearly two decades later, the roughly $114.6-million facility no longer has an estimated completion date.

DND has said its jetty would need to be completely replaced and heat added to its fuel tanks before it could operate, and critics have noted it sits outside the Northwest Passage and can refuel ships for only about a month each year.

That a project from his own government’s era sits unfinished made his broader point more pointed: the procurement problem is not a partisan one, and it is not new.

MacKay framed the stakes in terms of morale as much as capability. Members of the forces and the civilians who support them still have plenty of questions, he said, and he heard them in the hall throughout the conference.

“We so want to believe this is true,” he said. “But the clock is ticking, and I truly fear that the cynicism I know has existed for decades within the forces can return in an instant without successes.”

He drew on Afghanistan, when casualties made the cost of slow procurement immediate. Canadian troops deployed in jeeps “with the blast protection of a Volkswagen Rabbit,” he recalled, when what they needed was heavy armour, long-range guns and body armour. The urgency then was driven by losses in theatre. The urgency now, he argued, is driven by a threat environment that has caught up with Canada’s own territory.

On the Arctic, MacKay said Russia is recapitalizing bases and installing missiles, hangars and runways in the region, and that its plans are “nefarious.” Without the war in Ukraine absorbing its resources, he said, Russia would have “a much bigger, more menacing effect” in the North.

On the United States, MacKay chose his words deliberately. “I prefer the word ‘fractured’ to ‘ruptured,’” he said. “Fractures can heal, but it will take time, and there’s reputational harm that has to be overcome.”

He pushed back on the idea that Europe can quickly replace the American market. The EU is enticing, he said, but Canada sends less than six per cent of its exports there despite a free trade agreement, while roughly 70 per cent of its business remains with the U.S. On security, he said, Canada and the United States “remain in lockstep,” with Canadians embedded alongside American forces even as the politics between Ottawa and Washington remain strained.

For all his warnings, MacKay pointed to one shift he considers genuine. A year or two ago, he said, a defence firm pitching a Canadian bank or the Business Development Bank of Canada would have been met “with blank eyes.” That has changed.

“That’s changed, and it’s real,” he said. “But it’s only real if the money is in the account and the contract is signed.”

He also highlighted Atlantic Canada’s place in the build-out. The region holds about 40 per cent of the Canadian Forces’ equipment, he said, and Nova Scotia, with three per cent of the national population, accounts for close to 20 per cent of personnel. He cited drone manufacturing, shipbuilding at Irving’s Halifax yard, and satellite and launch capability as signs the region is positioned to benefit, alongside new entities such as COVE and NATO DIANA.

“We are closest to the fight,” he said, “which means closest to the threat, which means closest to the opportunity.”

MacKay closed with a comparison meant to sting. Ukrainian forces, he said, are capturing Russian drones, reverse-engineering them with 3D printers and putting them back into the fight in six days.

“At the current pace,” he said, “it would take us six years to do what they’re doing.”

He ended on an optimistic note, describing “this incredible muscle that is now starting to move in sync” and expressing confidence that Canada will “navigate these choppy waters of procurement.” 

But the message that will likely stay with the industry audience was the one he delivered from the department’s former chair: the money has been announced. Whether the system can move it in time is a different question.