Front Burner - Canada’s massive military buildup: Part 2

Episode Date: July 3, 2026

The Canadian defence industry can’t grow the way Prime Minister Mark Carney is proposing by just selling domestically. That’s why another aim of the Defence Industrial Strategy is to grow Canadian defence exports by 50%. So what could happen when the world comes knocking on our defence industry’s door?This is part two of a two part documentary. Part one aired on July 2nd. For transcripts of Front Burner, please visit: https://www.cbc.ca/radio/frontburner/transcripts

I am an actor, fresh out of theater school with big dreams and an even bigger drug habit. But things are pretty good. That is until my best friend is set up on a date with David Lee Roth. Yeah, from Van Halen. If you know, you know. From CBC's personally, this is Discount Dave and the Fix. The true-ish story about how a fake rock star led me to a real trial that held up a mirror to me. And okay, let's just say that not everyone in this story is who you think they are.

Personally, discount Dave and the Fix. Available now on CBC Listen or wherever you get your podcasts. This is a CBC podcast. Hi, I'm Imogen Burchard, a producer here on Frontburner. Today, we're airing part two of our documentary on Prime Minister Mark Carney's commitment to massively expand Canada's defense and defense industry. The Prime Minister has repeatedly said that we live in a more dangerous and divided world, and that one of those dangers is that.

United States. In this crisis, we have to prepare for America's threats to our very sovereignty. They want our land, our resources, they want our water, they want our country. It's a big part of why he said we need to spend so much more on defense and why we need to spend it here at home. We will ensure as much as possible that Canadian companies, Canadian companies benefit from Canadian procurements and end to sending the... dollar after dollar south of the border to a nation that is threatening us.

Yeah, so Mark Carney made significant promises to boost defense spending for Canada for the Canadian forces. This is David Paglazzi. He's a defense reporter with the Ottawa citizen. And one of his key promises was to move away from reliance on the U.S., in particular U.S. military equipment. And so he was arguing that, you know, 70 percent of our tax, you know, dollars on defense equipment, go to American companies. And so he wants to change that, or that's what he promised he was going to do. Which is a little ironic because the U.S. played a big part in pushing us into this spending in the first place.

I've been asking them to go up to 5% for a number of years, and they're going up to 5%. And that's a big from 2%. And a lot of people didn't even pay the 2%. So I think it's got. Trump's been complaining about Canada and other NATO allies' military spending since his first term. NATO has not treated necessarily, but I think we'll work something out. We pay far too much, and they pay far too little. And as he came back into office in early 2025, musing about making Canada the 51st state,

he turned that pressure up more. And we are not treated well, as you know, by Canada. Canada is subsidized to the tune of about $200 billion a year. plus other things. They don't essentially have a military. They have a very small military. They rely on our military. It's all fine, but, you know, they got to pay for that.

When NATO allies agreed to spend 5% of their GDPs on defense last summer, NATO's Secretary-General, Margruta, gave full credit to Trump, at a summit where he also weirdly called Trump Daddy. I want to state here without President Trump, this would not have happened. With this 5%, the Europeans, and the Canadians will equalize their defense spending with the United States. So this is not about American taxpayers paying more. This is about Europeans, Canadians, paying more.

And again, this would not have happened. I'm really saying this year, and some people might criticize me. But then when I speak with them, they all say, yes, you're right. This would not have happened if you would not have been elected in 2016 and re-elected last year and back into office in January. So I want to thank you. So to hear the chief of NATO tell it, Canada, wouldn't even be doing this huge leap in military spending, if not for Trump in the United

States. But now Carney insists it's Canadians who are going to benefit from this, not Americans, not anymore. We're spending over 75 cents on every dollar of capital spend for defense goes to the United States. That's not smart. The defense industrial strategy commits to flipping this so that the share of defense contracts awarded to Canadian firms is 70%. But disentangling our military spending from the U.S. is easier said than done. Just look at the whole F-35 debacle. The purchase of these mostly American-made Lockheed Martin fighter jets has been controversial for years. There were technical problems and major cost overruns. Trudeau campaigned on scrapping the deal, but went ahead with ordering 88 of them. Then Trump starts talking about annexing Canada, and Carney comes along and orders a

review of the purchase. The pushback Carney got was intense. So there's a couple of fronts that he's he's facing. You've got the Americans extremely angry that this is going on and they have made a number of threats through the U.S. ambassador to Canada if we don't purchase the F-35. On the other front, the Air Force themselves are not happy and you've seen a leak of some material that paints the F-35 in a very positive light. And you've got all these retired generals who appear in media broadcast, many of them are connected to U.S. companies or have been connected to U.S. companies. And they've been pushing for the F-35. For now, the Carney government's review of the F-35 purchase is ongoing. You have a Canadian military leadership that is so ingrained with their U.S.

counterparts, so connected, so integrated. And Carney may want, you know, He may want to talk about buying non-American equipment, but the generals keep coming back and, you know, the Air Force, for instance, wants the F-35. You know, the Army wanted High Mars. High Mars stands for high-mobility artillery rocket systems. These are American-made long-range rocket launchers. Just this month, the Canadian government confirmed that they've bought 26 of them

directly from the U.S. government for $2.6 billion. And even when we're not buying stuff made in America, American defense companies have a huge presence here in Canada. If you look at the top 10 largest arms manufacturers in Canada, something like five out of ten of them are American owned. They're American branch plants. This is Kelsey Gallagher. He's a senior researcher at Project Plowshares,

a Peace Research Institute with a focus on disarmament and international security. This would include manufacturers such as, to General Dynamics, Lockheed Martin, L3 Harris. Back in March, defense minister David McGinty announced a $1.4 billion investment into domestic ammunition production. Some of that money went to a Canadian company based in Ingersoll, Ontario. A lot of it went to General Dynamics, Ordinance and Tactical Systems Canada, a subsidiary of an American company in Quebec. Former conservative leader Aaron O'Toole gave this announcement a failing grade. He posted on X,

this is not a sovereign solution at all. I saw him at Kansack, the giant defense industry trade show, and asked him how he thinks by Canadian should be defined. Having a wholly owned subsidiary of an American company is not enough for something to be Canadian. It has to be Canadian ideas, intellectual property, Canadian management and direction of a team here. And then, of course, employment is part of it.

So I do think this whole model of build, which is Canadian, partner, which does mean subsidiaries, I think the government responded to some of the criticisms and are really trying to get this right. I have a lot of respect for the fact that Prime Minister Carney came to Kansack.

Even my Prime Minister that I served with Prime Minister Harper didn't come. So it sends a real signal of confidence in Canadian industry. So I hope buy Canadian is not just talk. The world needs to see that Canada is buying Canadian before our

Our allies will buy Canadian. I am an actor, fresh out of theater school with big dreams and an even bigger drug habit. But things are pretty good. That is until my best friend is set up on a date with David Lee Roth. Yeah, from Van Halen. If you know, you know. From CBC's personally, this is Discount Dave in the Fix. The true-ish story about how a fake rock star led me to a real trial that held up a mirror to me.

And okay, let's just say that not everyone in this story. is who you think they are. Personally, discount Dave and the fix. Available now on CBC Listen or wherever you get your podcasts. Karnie's defense industrial strategy was only released this year, and it's working on a 10-year timeline. If its vision can be executed, it's not going to happen overnight. But there's just no way Canada's defense industry is going to grow the way Karnie wants it to by simply selling here at home. That's why another aim of the defense industrial strategy is to grow Canadian defense exports by 50%. So this increase is substantial.

You know, if realized this would be the most aggressive increase in Canadian arms exports in recent history, we've really never seen anything like this. So if we're increasing our defense exports by such a significant amount, who are we going to sell to? So as it stands right now, in most typical years, the United States is far and away the largest customer of Canadian weapon systems. Carney is big on diversifying trade and has talked about how other NATO allies, like those in the EU, are also increasing their defense budgets.

He sees opportunities to increase exports there. But in Gallagher's view, all things considered, particularly the structure of the Canadian defense industry, as well as the sort of integrated nature of the joint North American defense industrial base, it is most likely that this is. increase in arms exports by 50% if realized will drive arms exports through the path of least resistance, which is to the United States. So why is that problematic? It is problematic because we have recently seen the U.S. utilize Canadian technologies in very problematic operations. President Trump announced late today that the United States has sunk a boat after it left

Venezuela carrying drugs. For nearly a year now, U.S. President Donald Trump has been ordering airstrikes against boats in the Caribbean Sea. His administration claims they are striking terrorist drug smugglers as a matter of self-defense, but has provided no evidence. Critics have called the attacks, which have now killed over 200 people war crimes. Last September, Trump released videos from four of the strikes on Truth Social. President Trump celebrated the attack by releasing this video, which shows the moment a boat was blown up. in the southern Caribbean. 11 on board were killed.

According to Gallagher's research, a high-tech Canadian-made camera system was used to track the boats in at least two of these deadly strikes. And these operations were described as leading human rights and humanitarian monitors as instances of extrajudicial killings. Very, very serious allegations.

The MX series sensor system is made in Hamilton, Ontario by a Canadian subsidiary of L3 Harris, one of the largest defense contractors in the United States. L3 Harris told CBC that, quote, as a matter of practice, we do not comment on military missions. And Global Affairs Canada told CBC that Global Affairs Canada is aware of the U.S. operation

and is monitoring the situation. Canada is party to the UN Arms Trade Treaty, and that treaty obliges Canadian officials to not authorize arms exports if there's a substantial risk that the arms could be used in violations of human rights or international law. But because of Canada's longstanding trade and defense relationship with the U.S., the vast majority of Canada's arms transfers to the United States. There's no oversight by Canadian officials.

These are not authorized by the issuance of a permit. There's no human rights risk assessment. And therefore, they're essentially allowed to be transferred to the U.S. without any regulatory oversight. Earlier this year, the NDP attempted to pass a piece of legislation to change this, called the No More Loopholes Act. The government opposed it. Here's Foreign Affairs Minister Anita Amin. Mr. Speaker, actually, the government opposes this bill. Canada has one of the strongest export regimes in the world with human rights considerations applied to every single permit issued for military goods.

The changes proposed in this bill would decimate Canada's defense. industry, would weaken Canada's role in NATO, and would jeopardize the capabilities of our Canadian Armed Forces. This bill does not close a loophole, Mr. Speaker. It creates new vulnerabilities. It is irresponsible to propose a bill like this. Fifteen liberal MPs broke rank and voted with the NDP for the bill, and two high-profile former Liberal Cabinet ministers spoke out in favor of it, but it ultimately failed. At Kansack, everyone I talked to was eager to describe the high standards they maintain for who they do business with. And it was clear that the U.S. is still a valued customer.

There is a, it's kind of a long-term, I would say, skepticism of the defense industry in Sweden. So it has to prove itself to be ethical, to have value. Robert Husson stressed to me that ethics were, especially important to Saab. And I just wonder how Saab goes about ensuring ethics when you're in the business of fighter jets and rocket launchers, you know, like this is stuff that is lethal. So how do you find those ethics and communicate those ethics to the Swedish people and then to Canadians as well?

Sure. Well, I mean, at a basic starting point, it's hardwired written into Swedish law. We are a defense company in a country where by law, all the first, exports are banned. So every time we want to sell something to any country, we have to go to an independent regulatory body and ask for permission. And they say yes or no.

Then beyond that, I mean, as a company, there are places where, of course, we cannot and will not go. We lose out on a lot of business by simply saying, absolutely not the risk here. Not even the reality, just the risk. The risk is too high. So that's a fundamental principle for us. The sobs sell to the US?

Oh yes. Yes, we do. We have quite a large business in the US. I mean, it's difficult for all non-U.S. companies to have a significant footprint in the US because they have such a large and well-developed industry. But we are there. We are present and have been for many years. Even under this administration, which is quite belligerent and has shown a lack of of regard for international law. In terms of what you were saying about Sweden will not sell to a country where there's a risk.

I feel like there's a risk with the United States. Well, it's true that a lot of things that we took for granted have changed. But there is still a common purpose in providing defense and security for people. People and society. We take that quite secure seriously. So, yes, US is a customer. Canada is a customer, all of Europe, South America, Asia. Just this year alone, Donald Trump launched a military operation

to capture the sitting president of Venezuela. He has started a war with Iran and threatened that their whole civilization will die. He has threatened to invade Cuba, to annexed Greenland. I also talked to Roman Shimonov about his company's export standards. He's the founder and CEO of the Canadian company, Rochelle. Rochelle has become one of the... of the biggest private producers of armored vehicles in North America. They're based in Brampton. We have more companies that we would not sell to than countries that we will sell to.

We have very certain and strict policy when it comes to the way we sell the vehicles. First of all, we don't sell anything through resellers. We don't sell anything through third parties. And this to ensure that the ultimate user will be the one that we got the expert permit to. As we chatted, we were standing in front of one of Rochelle's armored vehicles. The vehicle behind me is the senator, and this senator is a... The CEO explained to me how they could be kidded out with guns. Yes, all vehicles are designed to carry up to 30mm weapon system. So the weapon system can be controlled remotely,

so the person doesn't need to stand behind the machine gun, but a person can sit in the protected capsule and to control the joystick. And then sitting in the protected... So I asked him about a headline I'd seen at the end of last year, about the $10 million ice had earmarked for an order of 20 of Rochelle's senator vehicles, as ICE detentions were surging and about a month before ICE officers shot and killed two people in Minnesota. Is this the vehicle that ICE bought? Ice didn't buy our vehicles. We sold vehicles to the U.S. government.

We are working closely with the U.S. government. Critics' concerns with exports to the U.S. go beyond how the U.S. might choose to use any of this equipment. there's also the matter of who they might pass it on to. Canada's failure to regulate its arms exports to the United States does not just raise red flags for how they could be used in U.S. operations, but it also raises red flags for how these arms exports could reach third parties through the United States. Due to Israel's consistent failure to observe international humanitarian law through its conduct of hostilities, Canada paused new export authorizations to Israel in January 2024.

This is nuanced. It does not include permits that were previously approved, for instance. It also doesn't include permits for the transfer of defensive goods that could be used in something like the Iron Dome. But all said that Canada, generally speaking, has stopped the authorization of new arms exports to Israel. This, however, does not, has not influenced Canada's indirect transfer of weapon systems to Israel, namely through the United States. A good example of this would be the F-35 Joint Strike Fighter, right? So the F-35 is produced by Lockheed Martin in the United States. It is a fifth-generation dual fighter bomber jet, and there is, according to Canadian officials,

something like $3 million worth of Canadian technology in each of the United States. aircraft. Israel is part of the small collection of countries that have procured this aircraft, and Israel has used it through its bombardment of Gaza. We know this because Israeli officials, Israeli generals have actually been very forthcoming about this. But again, all of these aircraft include some level of Canadian components that have been filtered onto Israel through the United States due to Canada's failure to regulate these transfers. clear, it's not like Canada's building the whole fighter jet. It's just some parts that are manufactured here. That all said, despite how small or big these manufacturers are, these aircraft do pose a significant

risk to violating international humanitarian law, right? So there is sometimes a perception that a component or a piece of a wingtip or something like that is not as dangerous as a rifle. And perhaps that that could be true in certain circumstances. But it should be sad that an F-35 cannot conduct an airstrike in Gaza without its constituent components. The U.S. is the number one recipient of Canadian arms exports. Number two is the Kingdom of Saudi Arabia. So in 2024, the value of Canadian arms exports to Saudi Arabia, sat at about $1.3 billion.

The vast majority of these being light armored vehicles or L-AVs tied to a 2014 contract, the largest arms contract in Canadian history. Last year, in 2025, that number was lower, closer to 404 million, because that 2014 contract is starting to wind down. Saudi Arabia has one of the worst human rights records in the world. This is an authoritarian monarchy that not only brutalizes its own citizens, but also fails to observe its obligations under international humanitarian law and its conduct of hostilities. These light armored vehicles or labs are really light in name only.

And this is a major, major weapon system. This is an armored vehicle that does not really look like a vehicle that you would see on the road, but more a main battle tank. These vehicles can be used to transport small units of troops, and they can come with a series of armaments. So, you know, they could be, for instance, for command and control, they might not have a main weapon system, or they could have large caliber weapon systems that could, for instance, shoot through a house.

Carney wrapped his speech at Kansack with this line. Canada will be defined not only by the strength of our values, but also the value of our strength. Thanks to you. Thank you very much. Merci, bo. It's a line he's been using a lot. In a more fractured and darker world, our leadership will not just be defined by the strength of our values, but also the value of our strength. because this is a key point. I think it's fair to ask,

as we seek to expand our arms exports by so much, will those values be tested? And as the government seeks to create 125,000 new jobs in the defense sector, what will those jobs be tethered to? Will it become harder to say no to a deal that comes into conflict with those values, or to back out of a deal if those values are threatened?

If we want, say, jobs at the new munitions factories to be long-term, stable jobs? What kind of demand are we counting on to support the continued supply? This is a massive undertaking. And the underlying current to this is this kind of moving into a defense economy. And the problem with that is to be a defense economy, you need, I mean, this is the way the Americans work, is you need to use your product and you use your product. and you use your product in a war.

So the reason why Canada originally started exporting weapons to Saudi Arabia is because the General Dynamics Plan, it was GM at the time in London, the orders for the U.S. Army and CAF had dried up. And so they were kind of scrambling to find some customer to keep the production lines open and Saudi Arabia showed up. And this was back in the 90s. And that relationship has persisted. And now we've transferred thousands of labs to Saudi Arabia.

So, yeah, I mean, hitching your wagon to arms exports as a mean to keep your domestic industry buoyant can have long-term, very problematic side effects. The massive deal struck with Saudi Arabia in 2014 was not without controversy. When Justin Trudeau's liberals took over from the conservatives the following year, they were pressed by human rights advocates to cancel it. That pressure only increased as a Saudi-led coalition battled in Yemen, killing thousands of civilians, and after the 2018 murder of the journalist Jamal Khashoggi at the Saudi consulate in Turkey. In response to that pressure, Justin Trudeau said he was looking for a way out of the deal. But breaking the contract would have meant the potential for billions of dollars of penalties, and the lab manufacturer in London, Ontario, warned it would have a significant negative impact on our highly skilled

employees, our supply chain across Canada, and the Canadian defense sector, more broadly. In April 2020, the government of Canada published the findings of its review of export permits to the kingdom. It stated that, quote, Canadian exports of military goods and technology contribute to regional peace and security. Later that year, a UN panel accused Canada of helping to fuel the conflict in Yemen. The exports continue. That's all for today. Front burner was produced this week by Joytha Shenggupta, Matthew Amha, Kevin Sexton, Kieran, Kieran Kieran, Kirsten DeJager. Our YouTube producer is John Lee. Our music is by Joseph Chavison. Our senior producers are Elaine Chow and me, Imogen Burchard. Our executive producer is Nick

McKay Blokos. Jamie will be back next week. Thanks so much for listening. For more CBC podcasts, go to cbc.ca.ca slash podcasts.