Lines of Defence: A Policy Agenda for Canada's Defence Capabilities

Key Chapter Title List

1. Executive Summary
2. Introduction
3. Pillar 1: Defense Expenditure Overview and Incremental Budget Growth
4. Pillar 2: Procurement Acceleration
5. Pillar 3: Modern Equipment and Enhanced Readiness
6. Pillar 4: Addressing Emerging Threats
7. Pillar 5: Protecting Arctic Sovereignty
8. Conclusion

Document Introduction

Against the backdrop of an increasingly severe geopolitical climate, rapidly evolving threats, and U.S. demands for allies to shoulder a greater defense burden, rebuilding Canada's defense capabilities has become a necessity to avoid strategic disadvantage. This report, authored by a policy task force convened by the Canadian NATO Association, aims to assess policy options for enhancing Canada's defense capabilities in a sustainable and efficient manner. Its core objective is to propose a systematic policy agenda to address the challenges Canada faces in areas such as defense spending, equipment modernization, procurement efficiency, emerging threats, and Arctic sovereignty.

The report's structure revolves around five key policy pillars. The first pillar provides an in-depth analysis of the current state of Canada's defense expenditure and compares it with that of NATO allies. The report notes that despite Prime Minister Mark Carney's 2025 announcement of meeting the commitment to spend 2% of GDP on defense, Canada remains one of eight NATO member states currently failing to meet this standard. This is primarily attributed to its lean personnel structure and low investment in capital-intensive projects such as infrastructure or R&D. Compared to allies who recently met the target, Canada's investment in major equipment (18.6% of defense spending in 2025) also falls short of NATO's 20% goal. Consequently, the report recommends developing a structured, actionable framework to support budget growth plans, aiming to progressively achieve the 2% and 20% targets while maintaining fiscal responsibility.

The second pillar focuses on reforming and accelerating the procurement process for the Canadian Armed Forces. The report criticizes the current system plagued by bureaucratic inefficiencies and proposes a series of reform measures. Core recommendations include consolidating procurement authority under the Minister of National Defence and implementing selective exemptions for bureaucratic layers that add costs. The reforms aim to ensure operational requirements are overseen by technical experts and that new equipment can be rapidly deployed to frontline units. These measures are seen as effective transitional solutions pending a long-term government restructuring.

The third pillar details how to allocate the expanded defense budget for optimal cost-effectiveness to enhance the core capabilities of the Canadian Armed Forces across all operational domains. Given its high proportion of operational expenditures, military funding should prioritize addressing critical capability gaps, including modernizing the submarine fleet, ammunition stockpiles, artillery systems, personnel recruitment, and base infrastructure. Significant investment in these key areas will help drive equipment spending towards the 20% target and further contribute to reaching the overall 2% of GDP spending goal. The report also suggests fostering partnerships with NATO allies and Canadian universities to enhance innovation capacity and ensure best management practices for newly acquired assets.

The fourth pillar proposes deploying technical defense solutions to enhance the Department of National Defence's ability to counter emerging, multi-faceted threats. Specific measures include bridging technological gaps through enhanced digital infrastructure, building space defense and surveillance capabilities, and strengthening civil society cooperation to counter non-traditional threats like climate change. By expanding capabilities and acquiring expertise, the Canadian Armed Forces will be able to rapidly design flexible response strategies.

The fifth pillar focuses on the ongoing debate about protecting Canada's Arctic territory from future erosion by establishing a robust military presence in the region. Proposed initiatives include establishing CFB Iqaluit in Nunavut, upgrading key Arctic ports, establishing a permanent conventional force presence, and accelerating the acquisition of air defense assets. By addressing this critical gap in continental defense, the report anticipates alleviating U.S. concerns and extending NATO's deterrence to previously unthreatened areas.

In summary, the policy recommendations in this report aim to modernize the capabilities of the Canadian Armed Forces, consolidate Canada's territorial defense, minimize inefficiencies caused by bureaucracy, and restore the valuable relationship between Canadian society and its defenders. All analysis is based on a review of official NATO data, Canadian defense policy documents, and public statements, providing a specific, coherent, and actionable policy roadmap for a professional audience.