Carney bans U.S. bidders, then awards $2B defence contract to an American supplier
Days after defending a ban on U.S. bidders for a $4.9 billion vehicle contract, Ottawa announced a $2 billion deal with an American supplier.
Prime Minister Mark Carney has handed a nearly $2 billion military vehicle deal to the Canadian subsidiary of a U.S. defence giant despite pledging to prioritize domestic suppliers and end Canada’s military dependence on the United States.
Carney announced Thursday a strategic partnership with General Dynamics Land Systems-Canada (GDLS-Canada) to build 190 additional Armoured Combat Support Vehicles (ACSVs) over the next four years.
Speaking in London, Ont., Carney said the deal would ensure Canada’s Armed Forces receive the equipment they need while strengthening its industrial base.
“Through this new partnership, GDLS-Canada will design, build, deliver, and sustain the next generation of armoured combat vehicles here in Canada,” he told reporters.
The purchase will expand Canada’s ACSV fleet from 360 to 550 vehicles. Ottawa says the vehicles will be designed, built and assembled at GDLS-Canada’s London, Ont., plant using Canadian materials and suppliers, supporting more than 6,000 jobs annually through a supply chain spanning more than 600 Canadian companies.
When asked whether the jobs were new, Carney said workers would “get certainty” but provided no figures.
The announcement comes just days after the Carney government defended excluding U.S. manufacturers from bidding on a separate $4.9 billion contract for 1,600 light utility vehicles.
Defence Procurement Secretary of State Stephen Fuhr said Ottawa deliberately narrowed that competition to Canadian companies, leaving American firms AM General and Oshkosh Defense out of the running.
“If we can do it in Canada, I would suggest that we do it in Canada,” Fuhr told the Toronto Star. “Canada has unbelievable capability that’s gone largely ignored.”
Fuhr also suggested Ottawa could eventually replace U.S. software company Palantir with Canadian alternatives as part of the government’s “Build at Home” defence strategy.
Since taking office, Carney has repeatedly argued Canada must reduce its military dependence on the United States by directing more procurement toward domestic industry.
His government has pledged to meet NATO’s two per cent defence spending target, increase Canadian defence exports by 50 per cent and create 125,000 jobs through its new Defence Industrial Strategy.
The latest contract, however, raises questions about that message.
Although the vehicles will be manufactured in Ontario, GDLS-Canada is wholly owned by Virginia-based General Dynamics, one of the world’s largest U.S. defence contractors.
The announcement also designates GDLS-Canada as the first official “Strategic Partner” under Ottawa’s new Defence Industrial Strategy, giving the company a long-term framework to deliver, modernize and sustain Canada’s wheeled armoured vehicle fleet.
The government says the framework will streamline procurement and deepen partnerships with companies that invest in Canadian research, supply chains and workers.
The ACSV fleet is built on the Light Armoured Vehicle 6.0 platform and includes eight variants, including ambulances, command posts, engineer vehicles and maintenance vehicles.
The vehicles are already deployed with Canada’s NATO mission in Latvia under Operation REASSURANCE. Canada has also donated 89 ACSVs to Ukraine and pledged another 35 vehicles at the 2026 NATO Summit as part of more than $8.5 billion in military aid.
The General Dynamics deal is the latest in a string of major defence procurements under Carney.
Earlier this year, Ottawa selected Sweden’s Saab for up to 10 GlobalEye surveillance aircraft, saying the project will support 3,000 Canadian jobs with one-third of the aircraft built in Canada.
The government has also announced plans to purchase up to 12 submarines from Germany’s ThyssenKrupp Marine Systems (TKMS), a project expected to exceed $100 billion including long-term maintenance. TKMS estimates the contract could contribute $86 billion to Canada’s economy and generate more than 654,000 job-years over its lifetime.
While Ottawa insists it is rebuilding Canada’s defence industrial base, Thursday’s announcement highlights that one of its largest procurement deals is ultimately flowing to the U.S.-owned defence contractor, even as the government tells other departments to buy Canadian wherever possible.
The deal has raised accusations of hypocrisy because GDLS-Canada is owned by Virginia-based General Dynamics, despite Carney’s pledge to buy Canadian and reduce reliance on U.S. suppliers.
Ottawa says it is not abandoning American firms, citing recent multibillion-dollar deals with Lockheed Martin and Boeing. Fuhr said the goal is simply to keep more defence spending and jobs in Canada.