Canada is spending more on defence than it has in decades, and for manufacturers outside the sector, the shift is creating demand at every tier of the supply chain. Capturing any of it requires understanding which qualifications open doors, how the policy mechanisms work, and where a precision fabrication shop belongs in a supply chain built around prime contractors and systems integrators.
What Changed, and When
On February 17, 2026, the federal government released Canada’s first-ever Defence Industrial Strategy, titled “Security, Sovereignty, Prosperity.” Ottawa’s intent is to build a domestic defence industry and avoid depending on foreign procurement to equip the Canadian Armed Forces.
Budget 2025 committed $81.8 billion over five years for rebuilding and rearming the Canadian Armed Forces. Canada reached the NATO 2% GDP benchmark for defence spending in 2025-26 and has committed to 3.5% of GDP in core defence spending by 2035.
The Build–Partner–Buy strategy is organized around prioritizing Canadian suppliers, collaborating with allies, and purchasing off-the-shelf as a last resort. The target is to award 70% of defence acquisitions to Canadian firms by 2035, up substantially from the current baseline. Reaching that figure requires a domestic supply chain far deeper than the one Canada has today, which means qualified fabricators at Tier 3 and, depending on the program, Tier 2.
How Prime Contractors Are Required to Source Canadian
The mechanism creating structured demand for smaller Canadian manufacturers is the Industrial and Technological Benefits (ITB) Policy, administered by Innovation, Science and Economic Development Canada.
Any company awarded a defence contract over $100 million is contractually required to undertake Canadian business activity equal to the full contract value. Prime contractors must submit a Value Proposition, a scored and weighted bid element committing to Canadian supplier development, research and development, exports, and skills development. Canadian sourcing decisions made at the prime level determine whether the prime wins the contract.
The 2026 ITB updates introduced a tiered credit multiplier system designed to reward primes for investing in Canada’s defence industrial base. Strategic investments in facilities, research and development, and Canadian-owned intellectual property attract the highest credits. Primes subcontracting directly with Canadian small and medium-sized enterprises (SMEs) earn credit on those transactions, and long-term, innovation-related engagements with Canadian SMEs attract significantly more credit. The policy is structured so building sustained supplier relationships with smaller Canadian shops is more valuable to a prime’s ITB obligations than one-off purchasing.
Canada’s defence industrial base is primarily made up of SMEs. Every prime contractor bidding on a major contract needs qualified Canadian sub-tier suppliers to satisfy their Value Proposition commitments, and fabricators who already hold the right certifications are positioned to fill that role.
Where Metal Fabricators Fit
Defence procurement runs on a tiered structure. Tier 1 is the prime contractor, the company responsible for the final system or platform. Tier 2 supplies sub-assemblies and key components. Tier 3 covers raw material processing, specialty fabrication, and precision forming.
Fabricators typically enter at Tier 3, supplying structural components, formed assemblies, specialty bends, and precision sub-systems. Tier 2 opportunities exist depending on the program and contract requirements. Work at these tiers requires precision, certification, and a documented quality trail from order to delivery.
The important qualifications at Tier 2 and Tier 3 overlap almost entirely with what established industrial fabricators already carry:
- ISO 9001:2015 for quality management
- CWB CSA W47.1 for fusion welding certification
- COR certification for safety
- Engineering review capability and traceable quality control documentation
Beyond those foundational requirements, additional compliance layers apply depending on the contract and program. Controlled Goods registration is required when accessing controlled military goods or technical data, and Canada’s Canadian Program for Cyber Security Certification (CPCSC) is becoming a baseline requirement for defence suppliers, with Level 1 available as of 2026.
The Defence Industrial Strategy explicitly identifies Specialized Manufacturing as one of ten sovereign capability areas the government is prioritizing. Precision metal fabrication, structural forming, and component manufacturing fall squarely within it. The same certifications, documentation standards, and consequence of failure governing work in mining and oil and gas are exactly what defence procurement requires at sub-tier.
The Capabilities That Transfer
Atlas’s role in the defence supply chain is primarily at Tier 3. Structural components, formed assemblies, specialty bends, and fabricated sub-systems are where we fit. Prime contractors need certified quality, in-house engineering review, and repeatable precision from a Canadian shop at those tiers.
We’ve been building components that operate under extreme load, in confined environments, with zero margin for field correction since 1974. Our raisebore drilling support work shows how we handled modular fabrication for an eight-metre underground raise. Components were engineered to absorb two million pounds of drilling force and assembled correctly on the first attempt.
Energy sector work for clients including SaskPower and Cameco applies the same discipline. Boiler tube bends, pulveriser housings, and wear liners for power generation and processing facilities require precise geometry and a documented quality trail from order to delivery.
Atlas holds ISO 9001:2015, CWB CSA W47.1, and COR certification, and has completed Designated Organization Screening (DOS) through the Government of Canada’s Contract Security Program, with personnel security screening in place. For Tier 3 fabrication work, those credentials cover the core entry requirements for federal defence contracts.
Making the Case in Kielce and Halifax: MSPO and DefSec Atlantic 2026
Atlas’s move into defence is ongoing. We’re part of the Canadian delegation at the upcoming International Defence Industry Exhibition (MSPO) in Kielce, Poland, the largest defence trade fair in Central and Eastern Europe.
Canada is the Lead Nation at MSPO 2026, represented through its largest-ever defence trade mission. The focus from Canada’s side is co-production, integrated supply chains, and long-term defence-industrial partnerships with Poland and other NATO allies.
Our participation grew out of discussions with Saskatchewan Trade and Export Partnership (STEP), and we were accepted based on our manufacturing capabilities. Atlas will be at Canada Pavilion, booth 7-D32.
MSPO puts our team in front of international defence manufacturers, procurement professionals, and prime contractors from across the globe. The capabilities Atlas brings to Kielce were built across five decades of demanding industrial work.
We’re also heading to DefSec Atlantic in Halifax, Nova Scotia in October. DefSec Atlantic brings together defence procurement teams, prime contractors, and Canadian industry professionals in a format built around direct business to business introductions. Where MSPO opens doors internationally, DefSec Atlantic brings the conversation closer to home.
The Window Is Open Now
Canada’s defence industrial expansion is creating structured, policy-backed demand for qualified Canadian manufacturers at every tier of the supply chain. The Build–Partner–Buy strategy, ITB credit structure, and sovereign capability designations highlight how prime contractors need qualified Canadian sub-tier suppliers, and policy framework rewards primes for developing those relationships.
For shops that have spent years building precision components for mining, oil and gas, and heavy construction, certification requirements for Tier 2 and Tier 3 defence work are likely already met. Building relationships with primes, procurement teams, and international partners takes longer. MSPO and DefSec Atlantic are part of how Atlas is actively building defence sector relationships.
If your supply chain has room for a certified Canadian fabrication partner, reach out to our team directly.