This is Queen Street Analytics' weekly digest of regulatory developments, legislative discussions and other government-related news concerning Canada's national defence, cybersecurity, weapons systems, military commitments, and Canadian Armed Forces (CAF), Royal Canadian Navy (RCN) and Royal Canadian Air Force (RCAF). Once a week, we break down the most important updates in this space in under five minutes.

Want to track GR news in industries related to Defence? Don't miss this week's updates in ICT & Cybersecurity and Foreign Affairs. Also consider subscribing to our Defense - Washington edition covering critical GR news south of the border.

Dates: 2026-02-22 to 2026-02-28

📋 In This Week's Newsletter

• 🇨🇦 Federal Government News
• 🗺️ Provincial Government News
• 💬 Government Consultations
• 📚 What We're Reading This Week

Federal Government News

Canada Launches Defence Industrial Strategy with Major Investment in Technology

On February 26, Minister Evan Solomon announced nearly $7 million in federal funding for Creative Destruction Lab (CDL) in Toronto, supporting the Defence Industrial Strategy (DIS). As part of the DIS, the funding will help CDL operate a defence-focused accelerator program to advance domestic dual-use and defence technology ventures. The Regional Defence Investment Initiative (RDII), delivered by Canada's regional development agencies, aims to integrate more Canadian businesses into defence supply chains, expand innovation capacity, and facilitate technology commercialization for future Armed Forces requirements. The program is set up to assist participating ventures in aligning with defence customer needs, navigating government procurement, and accessing real-world testing and acquisition pathways. The broader Defence Industrial Strategy intends to boost production incentives in Canada, fortify the domestic supply chain, and create high-skill jobs, while aligning with ongoing government aims to increase defence spending.

Sources: www.canada.ca

Ottawa Announces Major Housing Expansion for Military Personnel

On February 24 in Ottawa, Minister of National Defence David J. McGuinty revealed the next phase of Canada's military housing program. The initiative targets the construction of approximately 7,500 new residential housing units across 25 Canadian Forces Housing Agency (CFHA) locations, with focused growth in Valcartier, Petawawa, Edmonton, Kingston, and Gagetown. Defence Construction Canada has issued an advanced procurement notice for projects estimated at $3.74 billion, targeting construction, engineering, and manufacturing sectors. The CFHA is collaborating with Build Canada Homes to deploy modular and prefabricated methods using Canadian materials. This expansion is projected to sustain domestic supply chains and generate extensive employment in skilled trades and related fields, while also working towards Indigenous procurement and employment benchmarks.

Sources: www.canada.ca

Canada Renews Operation UNIFIER, Increases Military Aid to Ukraine

On the fourth anniversary of Russia’s invasion of Ukraine, Minister David J. McGuinty confirmed the extension of Operation UNIFIER to 2029 and a $2 billion allocation in military assistance for the 2026-27 fiscal year. The new funding builds upon ongoing military, economic, and humanitarian support. Under the renewed mandate, the Canadian Armed Forces (CAF) will increase personnel assignments for training and capacity-building missions in support of the Ukrainian Armed Forces. Canada will also supply over 400 armoured vehicles—66 Light Armoured Vehicle 6s (General Dynamics) and 383 Senator Armoured Vehicles (Roshel)—and commit an additional $20 million to the Ukraine Energy Support Fund for infrastructure repairs. Further sanctions target 21 individuals, 53 entities, 100 ships, and aspects of the Russian energy and AI-drones sectors, including reducing the Russian crude oil price cap to $44.10/barrel.

Sources: www.canada.ca

Royal Canadian Navy Receives Third Naval Large Tug; Expansion Underway

On February 27, Minister Lena Metlege Diab, on behalf of Defence Minister McGuinty, commemorated the Royal Canadian Navy (RCN) acceptance of CFAV Canso, the third Naval Large Tug, at CFB Halifax. The vessel—built at Ocean Industries Inc., Îsle-aux-Coudres, Quebec—completes a 1,000 nautical mile transfer for East Coast deployment. The RCN now prepares for two more tugs, with CFAV Stella Maris arriving in November 2026 and two additional units under a $81 million contract amendment. This project will ultimately provide three tugs per coast and sustain up to 60 jobs at the shipyard. Upon full delivery, the tugs will support fleet modernization alongside current procurement of Arctic and Offshore Patrol Ships, AOR vessels, and River-class destroyers.

Sources: www.canada.ca

Canada and Republic of Korea Strengthen Defence and Security Cooperation

On February 25, Ministers Anita Anand (Foreign Affairs) and David J. McGuinty (National Defence) hosted Korean counterparts in Ottawa for the second 2+2 Foreign and Defence Ministerial. Both countries agreed to update the Comprehensive Strategic Partnership Action Plan, launch a Security and Defence Cooperation Partnership (SDCP) Action Plan, and sign an accord on Protection of Military and Defence Classified Information. Upcoming negotiations target improvements in interoperability and legal frameworks for joint activities. Canada and Korea will also initiate the first Cyber Policy Consultations in March 2026 and set up a Canada-Korea Space Security Dialogue. These agreements open avenues for deeper cooperation on technology transfer, industrial partnerships, and security initiatives in the Indo-Pacific.

Sources: www.canada.ca

FedNor Supports Northern Ontario Businesses Entering Defence Sector

Parliamentary Secretary Pauline Rochefort announced $472,859 in non-repayable federal support through FedNor for Northern Ontario on February 23. The City of North Bay will use these funds for a multi-year pilot to help regional businesses diversify into the defence sector by providing expertise in certification, bid preparation, and industry engagement. The initiative includes organizing the Northern Ontario Road to Defence (NORD) conference and coordinating delegations at major defence events. This effort aligns with the federal Buy Canadian plan and the new Defence Industrial Strategy's goal of increasing domestic participation in defence supply chains.

Sources: www.canada.ca

Defence Procurement to Focus on Vendor Performance Management System

On February 17, the Office of the Procurement Ombud convened the Procurement Solutions Forum in Ottawa to discuss the development of a government-wide Vendor Performance Management (VPM) system. Senior officials examined best practices from municipal and regional procurement leaders, citing enhanced accountability and contract outcomes through consistent performance tracking. The absence of such a system at the federal level has limited the government’s capacity to manage suppliers. The OPO will use these insights as the government considers national implementation to modernize defence and broader federal procurement processes.

Sources: www.canada.ca

Ottawa Announces Acceptance of Third Naval Large Tug: Media Advisory

On February 27, Minister Lena Metlege Diab, on behalf of Defence Minister McGuinty, scheduled an event at CFB Halifax for public acceptance of Canada’s third Naval Large Tug. Media registration was solicited in advance. The announcement provided updates on the Naval Large Tug project, which supports the Royal Canadian Navy’s growing harbour support and coastal tow requirements.

Sources: www.canada.ca

Minister Olszewski to Announce Federal AI Support for Alberta Defence Innovation

On February 27, Minister Eleanor Olszewski will announce new federal funding in Medicine Hat, Alberta, to assist Landing Zones Canada Inc. in commercializing products with artificial intelligence applications for the aerospace and defence market. The support, facilitated through PrairiesCan, aims to accelerate the adoption of AI technologies and bolster the competitiveness of Alberta-based defence suppliers. The event is scheduled for March 2, 2026.

Sources: www.canada.ca

Anniversary Statement on 35 Years Since End of Gulf War

On February 28, Ministers Jill McKnight (Veterans Affairs and Associate Minister of National Defence) and David J. McGuinty (National Defence) issued a statement recognizing the 35th anniversary of the Gulf War’s end. They outlined Canada’s role in the 1990-91 coalition and ongoing provisions for Gulf War veterans, including new recognition of Gulf War Illness under disability benefits.

Sources: www.canada.ca

StatsCan: Machinery and Equipment Price Index and Weekly Aircraft Movements Released

Statistics Canada updated the Machinery and Equipment Price Index for December 2025, providing ongoing data for capital investment planning (released February 26), and published weekly aircraft movement figures for February 7–13, 2026, supplying insight into current aviation market activity.

Sources: www.statcan.gc.ca, www.statcan.gc.ca

Provincial Government News

Nova Scotia 2026-27 Budget Targets Defence, Cybersecurity, and Advanced Manufacturing

The province's 2026-27 budget allocates new funding to expand the Innovation Rebate Program—covering the defence sector—and establishes a $33.8 million cyber security enhancement plan including a dedicated Cyber Security Office.

Sources: news.novascotia.ca

B.C. Proposes $400 Million Strategic Investment Fund with Focus on Defence Sector

British Columbia introduced a bill to create a $400 million Strategic Investment Fund allowing for loans, equity, and revenue-sharing with private sector projects. The fund is intended to attract federal defence dollars and support shipbuilding, forestry, and advanced manufacturing.

Sources: news.gov.bc.ca

Quebec Announces International Defence and Aerospace Trade Missions

Quebec’s Brussels delegation announced participation in several international aerospace and defence events, including BEDEX in March, CANSEC in May, and Eurosatory in June 2026, with sector contacts available for business engagement.

Sources: www.quebec.ca

Government Consultations

Consultation: Amending Firearms Licences Regulations on Protection Orders

Public Safety Canada is consulting on proposed amendments to Firearms Licences Regulations regarding protection orders, with feedback open until March 4, 2026, focusing on expanding the definition to include peace bonds.

Sources: www.canada.ca

What We're Reading This Week

• What’s a Canadian firm under defence industrial strategy? It’s complicated: Coverage of how Canadian identity is determined in the context of defence strategy.
• Carney's defence industrial strategy is a huge step forward, but there are vulnerabilities that must be patched up: Analysis of gaps and strengths in Canada's new approach.
• Justin Ling: For four years, Ukraine has held back a wannabe emperor while innovating on defence. Canada should take notes: Column on Ukraine's battlefield innovation against Russia.
• Let’s just buy the F-35s and not cut off our nose to spite our face: Opinion on Canada’s fighter jet procurement decisions.
• This Canadian defence contractor is ready for takeoff: Editor's note on a Canadian defence contractor's growth.
• CCC, Curtiss-Wright win 4-year contract to supply helicopter landing system to U.S. Navy: Details of a Canadian-controlled contract with the U.S. Navy.
• As Canada looks to home for defence procurement, Windsor sees an opportunity: Report on manufacturing opportunities linked to defence procurement.
• Canada's defence companies battle for billions in historic military build-up: Feature on Canadian companies competing in new defence spending.
• Canada's defence announcement a new opportunity for Windsor manufacturers: Insights on the Windsor region’s manufacturing pivot.
• Four years after full-scale Ukraine invasion, Canada faces tough choices on defence: Reporting on Canadian policy decisions post-Ukraine invasion.

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