By Kevin Budning and Lilit Klein

April 1, 2026

The Canadian government recently released its first Defence Industrial Strategy (DIS). The strategy is anchored by a “Build–Partner–Buy” framework, designed to strengthen Canada’s strategic autonomy, expand its defence industrial base, and meet its defence investment commitments over the next decade.

While the DIS offers a much-needed roadmap for Canada’s defence industry, little attention has been paid to the single prerequisite needed for its success: people.

Without skilled scientists and engineers to design sovereign capabilities, trades workers to build, and Canadian Armed Forces (CAF) members to operate them, the strategy risks falling short of its full potential. Realizing its ambition will ultimately depend on whether Canada can develop the human capital needed to meet the moment.

Recruitment and retention in the CAF must be the immediate priority. Low wages, high attrition rates, long delays before training, cultural challenges, and outdated equipment have created a personnel crisis in both the Regular and Reserve Forces.

According to a recent report by the Auditor General of Canada, the CAF received 192,000 applications between 2022 and 2025, of which only 15,000 were enlisted. Despite a recent surge in the number of recruits, the CAF is still far from where it needs to be to assert operational readiness, a gap that will only widen as it signals intent to expand the Reserve Force to 400,000 – nearly 10 times its current size at 44,482.

The government, however, is on the right track to mitigate this deficit. Expanding recruitment criteria to include highly-skilled immigrants; creating cultural and diversity initiatives; improving career opportunities; and raising pay are some of the many recent measures imposed that signal a serious commitment to addressing the issue. But the recent uptick in recruitment should not be taken for granted, as some experts suggest, it may be driven primarily by heightened Canada–U.S. tensions and broader geopolitical instability.

Canada needs to think outside the box when aiming to recruit the next generation of service members. This includes standing up public literacy and recruitment campaigns at a younger age, re-engaging former members, and creating programs offering private-sector-competitive pay to attract highly skilled professionals, including computer and data-scientists, to work on exquisite military technologies. Recruiting these individuals, however, is only half the challenge; retaining them requires ensuring they feel satisfied and valued over the long term.

The second challenge Canada faces is a shortage of highly skilled engineers, scientists, and technicians needed to fulfill the “Build” component of the DIS. According to research from the Conference Board of Canada (now Signal 49 Research), there is shortage of 64,000 skilled workers in technical occupations across the country. These numbers are particularly worrisome given that the DIS proposes to create 125,000 “high-quality jobs” and expand defence exports by 50% over the next decade.

Despite the shortfalls, Canada has the foundations to succeed. With world-class universities, strong engineering programs, and the most educated population in the world, the capacity to innovate and expand our defence industrial base already exists. What is missing is focus and scale.

One solution the DIS proposes is the newly announced Science and Research Defence Advisory Council, which will bring together universities and federal partners ­— including the Bureau of Research, Engineering and Advanced Leadership in Innovation and Science, or BOREALIS — to strengthen research collaboration and integrate higher education into national defence innovation pipelines.

Shutterstock

BOREALIS will coordinate and accelerate defence research and establish a national network of Defence Innovation Secure Hubs. Yet at just $68.2 million over three years, its funding falls short of the DIS’s broader ambitions. Moreover, by limiting participation to security-cleared researchers, the Hubs threaten to sideline international faculty and those lacking clearance.

Compounding this challenge, recent restrictions on international students risk creating a serious funding gap for universities that rely on international tuition, diminishing the very talent pipeline the DIS depends on. While existing STEM workers may still qualify for admission to Canada via the recently announced Express Entry Categories, Canada must consider adopting similar, if not more robust, exemptions for students working in critical science, engineering, and technology disciplines — a move easily justified on national security grounds.

Equally important, the government should prioritize creating high-paying, stable jobs to address the persistent brain drain that has plagued Canada’s defence and technology sectors for decades. With the increased difficulty of converting temporary study permits to permanent residency permits, many of those we invested in are forced to leave. Others cross the border for higher salaries and more compelling opportunities in the U.S. defence ecosystem.

Finally, Canada cannot build an industrial base without physical labour. According to a recent RBC report, 700,000 skilled tradespeople are expected to retire by 2028, and roughly one quarter of the existing workforce is aged 55 and older.

Addressing this challenge will need to move beyond repurposing existing industries and infrastructure (e.g., the auto sector), even if it remains a pragmatic first step. The government must credibly signal long-term confidence that defence production is a sustained national priority; expand specialized training pipelines to upskill workers; provide targeted funding for firms to retool production capacity; introduce national security exemptions to attract specialized foreign trades workers; and implement incentive mechanisms to compete with persistent labour shortages in other sectors.

Even if Canada succeeds in scaling physical labour capacity, sustaining it over the long term will require regional investment and planning. The government should designate strategic manufacturing hubs around existing defence infrastructure — such as Halifax and Victoria for submarines; route non-water dependent capabilities such as aerospace components, electronics, and vehicle manufacturing to lower-cost regions; and ensure that defence jobs are secure, well-paying, and accessible to working families.

Anchoring industrial capability in communities where workers can afford to live will be essential to building a successful defence industrial base.

Ultimately, Canada cannot build sovereign capabilities or a credible defence ecosystem without the people to deliver them. This requires a strong and well-trained CAF, a pipeline of engineers and scientists to design advanced systems and position Canadian firms globally, and the manufacturing communities necessary to produce at scale.

Without all three, the DIS risks becoming a well-written plan without the capacity to execute — a failure Canada simply cannot afford.

Dr. Kevin Budning is the Director of Scientific Research at the Conference of Defence Associations (CDA) Institute.

Dr. Lilit Klein is the Editor, Research & Publications at the CDA Institute.