Strategic Partnership Framework

Canada’s Defence Industrial Strategy (DIS) sets a long term vision for strengthening the defence industrial base by growing sovereign capabilities, encouraging innovation, nurturing talent, and deepening industry partnerships.

Strategic Partnerships are a tool that the Government of Canada can use to work with select trusted Canadian companies to deliver critical sovereign capabilities for the Canadian Armed Forces (CAF), by leveraging Canada’s defence industrial ecosystem. Strategic Partnerships allow the Government to have ongoing, two-way dialogue with industry to share operational challenges and priorities, while better understanding Canadian capabilities and leveraging industry expertise, innovation, and insights to develop effective and comprehensive solutions. Strategic Partnerships are not the only avenue for companies to work with the Government to advance sovereign capability development.

The Strategic Partnership Framework (the “Framework”) outlines how federal organizations may identify opportunities, engage with industry, and evaluate companies for potential designation as a Strategic Partner. It provides guiding principles for identifying and selecting future Strategic Partners, pathways for engagement with those Partners, and general expectations for both government and companies. The Framework supports the Build–Partner–Buy model by helping strengthen Canada’s ability to build sovereign capabilities with domestic industry, and complements existing government policies, including the Industrial and Technological Benefits Policy and the Buy Canadian Policy. The Framework is a guiding document that explains how Strategic Partnerships may be used as needed, in response to evolving defence and security needs, and how they fit within Canada’s broader defence, industrial, and economic landscape. Strategic Partnerships are voluntary arrangements that are intended to be mutually beneficial, recognizing both Canada’s objectives and the interests of partnering companies.

Identification of Strategic Partners

Identification of a Strategic Partner serves as a clear signal from the Government that a company has been identified as a “trusted partner” with whom the Government will work with closely to enhance Canada’s sovereign capabilities. Strategic Partnerships enable Canada to address identified defence and security needs, including CAF capability gaps, and opportunities for Canada to make meaningful contributions to allied capabilities.

Strategic Partnerships should be used selectively and transparently, alongside existing federal policies and tools, to help build or maintain sovereign capabilities. They may be used where the desired industrial and security outcomes (such as investment in Canadian controlled intellectual property [IP], specialized advanced manufacturing, or interoperability with trusted allies) require an explicit and sustained signal from the Government. Additional factors may be considered as appropriate.

Federal organizations may engage with industry in different ways depending on the nature of a project, the capability, or the industrial opportunity. Pathways through which companies could be identified by the Government include proactive identification or use of formal processes, where appropriate.

The Defence Investment Agency (DIA), in collaboration with Innovation, Science and Economic Development Canada (ISED) and the Department of National Defence (DND), will be responsible for identifying potential strategic partnership opportunities and Strategic Partners. Proposals brought forward for discussion at a Deputy Minister-level committee comprised of all three federal organizations will be informed by industrial, economic, defence, and procurement considerations. Deputy Minister-level officials will review proposals, share information, and provide advice to their respective Ministers on how Strategic Partnerships can be advanced through their portfolios. Deputy Minister-level officials may seek input from organizations outside the Committee, as needed.

The Secretary of State (Defence Procurement) is ultimately responsible for approving the designation, modification, and termination of Strategic Partnerships. These decisions will be informed by input and advice from the Minister of National Defence and the Minister of Industry and their respective organizations.

Guiding Principles for Selecting Strategic Partners

Expectations of Strategic Partners

Companies designated as Strategic Partners will be expected to demonstrate certain commitments to Canada. These qualities and commitments will vary depending on the federal initiative and specific circumstances, but may include:

• transparent ownership, governance, decision-making structures and continuous disclosure of accounting, cost verification, financial practices and legal liabilities relevant to Canadian operations;
• substantive decision-making authority located in Canada, including authority over operations, capabilities, and export decisions;
• engage with the Government of Canada in good faith, including through respectful and transparent engagement, timely and accurate information sharing, and early identification of issues in support of agreed objectives and commitments;
• a credible plan to maintain and grow operations in Canada, including investment in Canadian based R&D, engineering and IP development and exploitation aligned with the identified sovereign capability objective,
• ensure that all necessary national security expectations are met (e.g., appropriate personnel and facility security clearances) working in collaboration with government;
• delivery of capabilities, milestones, or outputs on budget and on schedule, while ensuring optimal value for money;
• maximize the use of Canadian-produced inputs (e.g., steel, aluminum, and critical minerals, wood) or trusted allied sources when domestic supply is unavailable, where feasible;
• maximize the integration of Canadian companies in supply chains, including SMEs, in order to promote their growth and scale-up - both in Canada and abroad;
• collaborate with the dual-use and defence ecosystem, including academic institutions or research organizations, where relevant;
• contribute to the development and retention of skilled Canadian workers, including training, upskilling, and early‑career opportunities (including hiring students and working with under-represented groups);
• participate in performance monitoring or review processes tied to the objectives of the Strategic Partnership.

Expectations of the Government of Canada

Federal organizations may use a range of tools and initiatives when working with Strategic Partners, depending on their mandates, authorities, and government priorities. Where appropriate and subject to existing authorities and approvals, the Government may opt to:

• enable the development and delivery of sovereign capabilities through a range of approaches, including early engagement with the CAF, co-development activities, and support for the Strategic Partner through mechanisms such as funding for R&D and demonstration, capital investment (including secure facilities and required security clearances), scale-up, and, in specific circumstances, directed or accelerated procurement;
• where appropriate, provide forward looking information on capability priorities, broader capability planning considerations, and anticipated evolution of CAF requirements, to support informed investment, co development, and long term planning;
• be an anchor customer and/or the first buyer for the Strategic Partner’s identified capability;
• provide clear direction and outline expectations to the Strategic Partners including on objectives and targets for building up Canada’s defence industrial base;
• enable the Strategic Partner to deliver capabilities efficiently by accelerating administrative processes (e.g., security clearances, facility accreditations, expedited access to federal testing or evaluation infrastructure);
• support exports and deeper integration with allies and like-minded markets, including through export promotion, interoperability, market access, trade and export supports, and, where appropriate, participation in joint procurement and multilateral capability development initiatives with allies;
• regular and meaningful engagement with the Strategic Partner to identify opportunities to work together to advance Canada’s sovereignty.

Implementation and Accountability

Following the Government of Canada’s decision to designate a company as a Strategic Partner, the Government of Canada and the Strategic Partner will conclude a Memorandum of Understanding to outline the responsibilities of each participant to that arrangement.

Strategic Partnerships are not intended to be open ended. Designation as a Strategic Partner should be time limited and subject to formal review every five years, or sooner should the Government opt to do so. Reviews may assess progress against agreed objectives, such as investment milestones, capability development, workforce outcomes, domestic content, and, where relevant, export performance. Based on these reviews, Strategic Partnerships may be continued, expanded or terminated to ensure alignment with government priorities and evolving circumstances.

To support the application and oversight of Strategic Partnerships, the DIA will serve as the central coordinating body, working in close collaboration with the DND and ISED. In this role, DIA will coordinate interdepartmental analysis, documentation, and governance. Final decisions on the status of partnerships are the responsibility of the Secretary of State (Defence Procurement) with input from the Ministers of Defence and Industry and their respective organizations. These decisions and any associated commitments, including financial commitments, will be made in accordance with established government legislation, authorities, and approval processes.

The Framework may be reviewed periodically to reflect evolving priorities, needs, and lessons learned.

Contact us

Questions related to the Strategic Partnership Framework may be sent to engagement@dia-aid.gc.ca.

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Annex A: Definitions

• Build-Partner-Buy: the Government of Canada’s approach to defence capability development, as described in the Defence Industrial Strategy.
• Buy Canadian Policy: Government of Canada policies and measures intended to support the use of Canadian suppliers and domestic industrial capacity, where appropriate.
• Canadian company: means an enterprise that has a place of business in Canada where it conducts activities on a permanent basis that is clearly identified by name and accessible during normal business hours; or, a joint venture where each member of the joint venture has a place of business in Canada where it conducts activities on a permanent basis that is clearly identified by name and accessible during normal business hours; and
  • is registered and files taxes in Canada (e.g., GST/HST, corporate income tax);
  • maintains a registered address in Canada and employs personnel and/or conducts day-to-day business activities in Canada; and
  • will not subcontract work to non-Canadian suppliers or individuals located outside Canada, in a manner that results in minimal value-added activities being performed within Canada.

  In assessing whether a company meets this definition, consideration may be given to the location of key assets, IP development, demonstrated history of exporting from Canada, and long term investment in Canada.

• Defence Industrial Strategy: a national strategy that sets out the Government of Canada’s long‑term vision for building a robust Canadian defence industry that provides technological and operational advantage to the Canadian Armed Forces and its security partners in their mission to defend Canada, and maximizes growth, job creation and economic benefits for all Canadians.
• Designate / Designation: a decision by the Government of Canada to identify a Canadian companies as a Strategic Partners under this Framework.
• Industrial and Technological Benefits Policy: the Government of Canada policy that ensures major defence procurements generate economic benefits and industrial development in Canada.
• Memorandum of Understanding (MOU): a non‑binding document used to outline the objectives, roles, and responsibilities associated with a Strategic Partnership. An MOU does not, on its own, create contractual rights or obligations.
• Review: a periodic assessment of a Strategic Partnership to evaluate performance, continued alignment with objectives, and ongoing relevance in light of Canada’s evolving defence and security needs.
• Strategic Partner: a Canadian company designated by the Government of Canada to participate in a Strategic Partnership for the purpose of advancing identified defence and security capability objectives.
• Strategic Partnership: a voluntary arrangement through which the Government of Canada works more closely with a Canadian company to advance specific defence and security capability objectives.
• Sovereign capability: capabilities without which Canada cannot defend its sovereignty or meet its allied commitments.

Annex B: Canadian Content in Canadian Procurements by Sovereign Capability

Drawing from Canada’s procurement history, this annex provides short summaries of industry characteristics, including Canadian content, across the sovereign capability areas identified in Canada’s Defence Industrial Strategy. This information is based on Industrial and Technological Benefits (ITB) Policy administrative data (active ITB obligations awarded between 2014 and 2025), Statistics Canada’s Canadian Defence, Aerospace, Marine and Cybersecurity Industries Survey (2014–2022), and Statistics Canada’s Input-Output multipliers (2022).

Aerospace

Aerospace procurement shows around 40–45 per cent Canadian Content, with significant final assembly and systems integration performed in Canada. In‑service support activities remain largely domestic. The sector has a high export share and moderate STEM and R&D intensity.

Ammunition

Canada’s ammunition procurement shows high Canadian Content, around 65 per cent, reflecting a stable manufacturing footprint in Canada. The sector has grown strongly in recent years and maintains moderate participation in STEM intensive and export oriented activities.

Digital Systems

Canada’s digital systems procurement display very high Canadian Content, at nearly 90 per cent, with SME participation markedly higher than in most other areas. The industry has seen rapid growth, supported by high STEM intensity, sustained R&D activity, and substantial export activity.

Sensors

Canada’s sensor-related procurements typically include over 60 per cent Canadian Content, supported by a mix of domestic primes and SMEs. The sector shows strong revenue growth, high STEM intensity, sustained R&D activity, and consistent export performance.

Space

Canada’s space procurement includes around 60 per cent Canadian Content, though much of this capability resides in larger Canadian firms rather than SMEs. While revenue growth has seen a decline in recent years, STEM and R&D activity remain strong, and export performance is high.

Specialized Manufacturing

Canada’s land vehicle procurement includes around 45 per cent Canadian Content, with domestic manufacturing supported by both Canadian and multinational firms. While revenue growth has seen a decline in recent years, export performance is strong, and STEM and R&D activity remain steady.

Specialized Manufacturing – Surface Ships & Marine Systems

Canada’s procurement of marine platforms has Canadian Content estimated around 40 per cent, In service support is predominantly conducted in Canada, with Canadian Content exceeding 80 per cent. The sector shows very strong revenue growth, alongside consistent STEM engagement, low R&D intensity, and limited export activity.

Uncrewed & Autonomous Systems (UAS)

Canada’s UAS procurement includes around 30 per cent Canadian content, reflecting reliance on foreign-built platforms in this emerging field. The sector has seen very strong revenue growth, with high STEM intensity, high R&D intensity, and very high export activity.

Training & Simulation

Canada’s training and simulation for in‑service support in the air domain shows high Canadian Content at nearly 80 per cent. The sector continues to experience strong revenue growth, with high STEM intensity, moderate R&D intensity, and moderate export activity.

In Service Support (Naval)

Naval in service support shows over 80 per cent Canadian Content, with most sustainment activity delivered domestically. The sector has experienced strong revenue growth alongside moderate STEM intensity, low R&D intensity, and limited export activity.

In Service Support (Land)

Land in service support shows approximately 50 per cent Canadian Content. The sector has seen a notable decline in revenue over recent years, but maintains moderate STEM intensity. Data for R&D intensity and export activity is not available in this category.

In Service Support (Air)

Air in service support shows approximately 60 per cent Canadian Content, reflecting a notable volume of domestic sustainment work. The sector has experienced steady revenue growth, with moderate STEM intensity, low R&D intensity, and moderate export activity