Key Takeaways
- Canada’s defence procurement process is currently designed for accountability and “best value,” not speed, leading to prolonged cycles that hurt industry readiness.
- The Defence Industrial Strategy (DIS) seeks to shift the focus toward faster, scalable execution while still maintaining governance and value‑for‑money principles.
- Small and medium enterprises (SMEs) are especially vulnerable under the long procurement timeline, often failing to cross the “valley of death” due to capital constraints and unclear pathways.
- A core element of the DIS is the “build, partner, buy” framework, which helps the government decide early whether to develop domestic capabilities, collaborate with allies, or purchase off‑the‑shelf solutions.
- Early and sustained government‑industry engagement reduces risk, limits rework, and enables innovation to move beyond the prototype stage into deployable capability.
- Strengthening Canada’s northern flank and Arctic sovereignty depends on the ability to deliver integrated solutions at pace and scale, making timely procurement critical.
- Successful implementation of the DIS requires aligned cooperation between government and defence firms; coordination lowers friction, builds confidence, and sustains momentum.
Overview of the KPMG Summit Discussion
At KPMG’s National Interest & Defence Summit held on April 8, 2026, in Ottawa’s National Arts Centre, Dan Doran—Executive Director and National Lead for Defence and Security at KPMG Canada—presented the defence findings from the firm’s National Interest & Defence Study. The summit aimed to share study results with government and industry leaders and gather feedback to refine its conclusions. Doran emphasized that while Canada’s current procurement system functions as designed, its heavy governance structures prioritize accountability and best value at the expense of timely delivery, a mismatch with today’s security environment.
Current Procurement Design and Its Limitations
Doran explained that the existing defence procurement model is intentionally built around layered stewardship, rigorous compliance, and demonstrations of “best value for money.” These mechanisms ensure transparency and fairness but inevitably slow down the acquisition timeline. He noted that the system is not broken; rather, it is delivering exactly what it was engineered to do—providing high oversight and fiscal prudence. However, in an era of rising global volatility, the lack of speed has become a strategic liability for the Canadian Armed Forces and the defence industry.
Impact on Small and Medium Enterprises
A particular pain point highlighted by Doran is the adverse effect of prolonged procurement cycles on Small and Medium Enterprises (SMEs). He described the “valley of death” as the phase where SMEs, lacking deep financial reserves, struggle to survive while waiting for contract awards or milestone payments. The combination of long lead times, heavy compliance burdens, and unclear procurement pathways disproportionately harms these firms, potentially driving them out of the defence market and reducing the diversity of innovative suppliers available to the government.
The “Build, Partner, Buy” Framework
To address these delays, the Defence Industrial Strategy introduces a structured “build, partner, buy” approach. This framework obliges the government to make early, explicit decisions about whether a capability should be developed domestically (built), pursued through allied partnerships (partnered), or acquired as an off‑the‑shelf product (bought). By clarifying the acquisition pathway at the outset, the DIS aims to reduce ambiguity, streamline planning, and accelerate the transition from concept to fielded capability.
Importance of Early Government‑Industry Engagement
Doran stressed that early and meaningful engagement between government and industry is a linchpin of the DIS. When firms are consulted before requirements become fixed, they can align their research and development efforts with upcoming needs, reducing the likelihood of costly redesigns later. Conversely, delayed engagement often leaves innovation stranded at the prototype stage, as companies hesitate to invest without clear demand signals. Early dialogue also builds trust, which Doran identified as a critical factor for lowering risk and improving outcomes.
Translating DIS Intent into Predictable Pathways
While the DIS clearly signals a governmental intent to “buy Canadian” and bolster the domestic industrial base, Doran cautioned that intent must be converted into concrete, predictable procurement pathways. Industry leaders repeatedly emphasized the need for stability—knowing when and how contracts will be awarded enables firms to make informed capital investments and workforce plans. Predictability, therefore, hinges on consistent, transparent processes that mirror the early‑engagement principles outlined in the strategy.
Arctic Sovereignty and the Need for Speed
Stressing the strategic urgency, Doran linked timely procurement to Canada’s northern flank and Arctic sovereignty. He argued that exercising sovereignty in the Arctic depends on the ability to deploy, sustain, and reinforce capabilities reliably across vast distances and extreme conditions. Success in this environment requires integrated solutions delivered at pace and scale, factoring in the unique logistical and coordination challenges of northern operations. Delays in procurement directly undermine the country’s capacity to assert and defend its Arctic interests.
Coordination as the Keystone of Success
In closing, Doran underscored that the ultimate effectiveness of the DIS rests on the alignment of government and defence companies. When both parties work in sync, bureaucratic friction diminishes, confidence grows, and the strategy gains momentum. Conversely, misalignment or poor coordination can cause even well‑designed initiatives to stall, wasting the potential benefits of the DIS. He urged stakeholders to cultivate a collaborative culture grounded in trust, clear communication, and shared objectives to ensure that Canada’s defence procurement evolves to meet contemporary security demands.