Building Canada’s Defence: The Insider’s Guide for Contractors

Canada’s defence sector is experiencing a generational shift in investment, and the private sector is taking notice. With the Government of Canada announcing it achieved NATO’s 2% of GDP defence-spending benchmark for the first time in fiscal year 2025–2026, and committing to reach the alliance’s new 5% target by 2035, contractors and consultants across the country are positioning to capture a share of what will be an unprecedented volume of defence-related construction and infrastructure work.

In June 2026 the Office of the Procurement Ombud released Turning Complexity into Capability: Canada’s Defence Procurement System for Major Projects (OPO Report), designed to unravel the complexity of Canada’s defence procurement system for major projects, examining the system’s pressing challenges, and identify opportunities to strength defence procurement outcomes move forward. Below we discuss the findings of the OPO Report and flag key considerations for future defence construction contractors.

The Gateway: Defence Construction Canada

Defence Construction Canada (DCC) is a federal Crown corporation created in 1951. It is the primary contracting authority for defence infrastructure in Canada. The organization sits between the Department of National Defence (DND) and the private sector firms it relies upon to carry out the work.

DCC operates within a broader multi-departmental procurement system that also involves Public Services and Procurement Canada (PSPC), the new Defence Investment Agency (DIA) (more on that below), Innovation, Science and Economic Development Canada (ISED), and the Treasury Board. Understanding where DCC fits and where decisions are made is a meaningful competitive advantage for firms that want to win work and sustain long-term relationships in the defence sector.

DCC awards large volume contracts and regularly publishes the recent awards on its website. Since June 2026, DCC has awarded over 130 contracts worth over $102 million across Canada, 37 of which are located in Ontario.[1]

The Bigger Picture: A System in Transition

Canada’s defence procurement system has historically been described as complex, slow, and fragmented with accountability and decision-making spread across several departments. The OPO Report found that defence project takes an average of 16 years to move through the full procurement pipeline, with a range of approximately 7 to 28 years depending on complexity.

For the OPO, change is long past due. The Government of Canada established the Defence Investment Agency (DIA) in October 2025 to consolidate and accelerate major defence procurements, reduce duplication, and bring centralized expertise to planning and execution. The 2026 Defence Industrial Strategy (DIS) followed, introducing the “Build-Partner-Buy” framework explicitly designed to prioritize Canadian firms. The Strategy sets a target of raising the share of defence contracts awarded to Canadian firms to 70% over the next decade and generating up to 125,000 new jobs by 2035.

For contractors, the message is clear: this is the most favourable policy environment for Canadian defence suppliers in a generation. But the preference for Canadian firms is not automatic, and contractors need to be ready, registered, and positioned well before an opportunity reaches a formal solicitation.

The one requirement that catches firms off guard: security clearances

The bidding process for DCC contracts is not unlike typical construction bidding processes in Canada, with one notable exception. Of all the requirements in defence construction procurement, security clearances most consistently catch firms off guard. Some defence construction projects require firms and their personnel to hold government security clearances before they can access relevant facilities or information, which requires sponsorship from DCC.

This means you need to identify target projects early, begin the clearance process in parallel with your business development work, and treat clearance timelines as a hard constraint in your project and bid planning. Starting late is one of the most common reasons otherwise-qualified firms miss an opportunity entirely.

Watch the emerging landscape

The defence construction pipeline is growing, and firms that invest now in positioning, relationships, and capability will be better placed when opportunities materialize. However, one of the OPO Report’s most pointed findings was that Canada lacks a transparent, publicly accessible procurement pipeline giving industry long-term visibility into planned acquisitions and construction requirements. The DIS commits to publishing such a pipeline, but details on ownership, scope, and update frequency remain to be clarified. In the meantime, DCC publishes contract activity on its website, and organizations like Canadian Association of Defence and Security Industries (CADSI) host events where upcoming requirements are often signaled well in advance of formal solicitations.

What this means for your firm

The firms that will capture the most value from Canada’s defence spending surge are those that move beyond the transactional and think strategically. Firms that register early, build the right relationships, and invest in performance and clearance readiness will be the ones that convert Canada’s historic defence investment into long-term, sustainable work. Those that wait for an RFP to arrive before preparing will find themselves competing from behind.

If you would like to discuss how to position your firm on security clearances, procurement strategy, bid preparation, or industry relationships, contact Dylan Dilks at Beale & Co for a confidential consultation. We advise contractors, consultants, and suppliers navigating defence construction procurement across Canada.

[1] dccmft.dcc-cdc.gc.ca/?u=contracts_public&p=public&path=/Recently_Awarded_Contracts.pdf (Recently Award Contracts are regularly updated by DCC).