Canada News
The missed opportunities of public procurement
Yet, when the time came for full-scale implementation, the Government of Canada chose instead to hand the baton to an offshore consortium. (File Photo: Matt Quinn/Unsplash)
In March, the federal government announced a $6-billion contract to acquire an Arctic over-the-horizon radar (A-OTHR) system from a consortium in Australia. Actors in Canada’s homegrown defense and tech sectors were left wondering if that decision was grounded in rigorous due diligence.
While the dollar figure is significant, the real issue runs deeper than the price tag.
The real bottom line is about yet another lost opportunity to invest in Canadian innovation.
Since 2011, Canadian firms like D-TA Systems, recognized leaders in radar and electronic defence systems, have received government support to develop world-class over-the-horizon radar systems. Those investments paid off.
D-TA System’s technology is in use in the Canadian Arctic and has been deployed by major global defense contractors working with the U.S. air force.
Yet, when the time came for full-scale implementation, the Government of Canada chose instead to hand the baton to an offshore consortium.
Not an isolated case
As global investment in domestic manufacturing and reshoring hits record highs, Canada’s policy stands in stark contrast.
Billions of dollars in public funding are flowing offshore — subsidizing foreign labour, strengthening non-Canadian intellectual property portfolios and raising questions of value for money.
At a time when economic nationalism and the issue of supply-chain risk have risen to the top of the agenda, this approach risks putting Canada at a long-term strategic disadvantage.
Rethinking Canadian procurement
A robust procurement strategy creates domestic capabilities, fosters intellectual property ownership and supports long-term economic value.
G7 nations have long embedded domestic content requirements in core technology in major procurements, using them as a lever to grow national champions. These countries align funding, procurement and policy in a coherent strategy.
Canada, meanwhile, continues to assemble fragmented policies that prioritize quick fixes over systemic growth.
Michael Wernick, former clerk of the Privy Council and Jarislowsky Chair in Public Sector Management at the University of Ottawa, has noted: “Government procurement has always been asked to carry a heavy load of policy objectives, including driving sectoral industrial policies, redressing regional economic disparities, encouraging startups, greening government operations and fostering the growth of businesses by a range of equity seeking groups. Trump is forcing us to rethink these priorities with a greater weight to Canadian autonomy and to find a way to procure faster.”
This approach has repeatedly produced the same costly snag in the IT sector. It happens when commercial “off-the-shelf” systems are purchased and then customized and modified to meet requirements.
The result is ballooning costs and repeated project failures.
New solutions for a chronic issue
What is needed is a principle-based procurement framework that emphasizes life-cycle costs, technical excellence and domestic intellectual-property development.
As Jack Mintz, one of Canada’s leading economists, observed: “Almost a tenth of research spending is spending on defense and aerospace. We do poorly at commercialization of R&D in part because the federal government fails to put some priority on local innovation that could be just as good as foreign supply.”
He’s right. These aren’t new issues. They’re just becoming more expensive — and more urgent.
Dipak Roy, founder of D-TA Systems, described the recent $6-billion procurement for an Arctic radar system being awarded to an Australian consortium as akin to wearing flip-flops in a blizzard.
Saving our textile industry starts with a resolve to Buy Canadian
Do away with the maze of government procurement
Indigenizing procurement policies must move beyond token gestures
To counter Trump’s tariff threats, we need to make ‘Buy Canada’ count
This is more than a bad deal — it’s a systemic failure that contributes to reducing world-class Canadian firms to subcontractors in sectors they helped pioneer. If this continues, Canada risks cementing its role as a junior partner in the global high-tech economy.
To be clear, the Government of Canada does have sound due diligence policies — especially within the Treasury Board.
But as long as critical decisions are made without business or technical expertise at the table, we’ll keep spending public money while foregoing the opportunity to fulsomely develop our own domestic industries.
In short, the issue is not the size of our bureaucracy — it’s about having the right experts who can perform due diligence, assess value for money and offer ministers reliable, constructive advice.
The world is transforming as AI continues to transform the landscape, global supply chains remain volatile, and new tariffs and other geopolitical pressures grow.
The new government has a prime opportunity to drive real reform. That means rethinking procurement from the ground up — not as a bureaucratic process but as an engine of national strategy. One that grows jobs, builds intellectual property, strengthens industry and supports Canada’s place in the global economy.
This article first appeared on Policy Options and is republished here under a Creative Commons license.
