Minister Mcguinty announces new $1.4 billion Investment in Canada’s 155mm munition production

Noah Note

Minister McGuinty has announced the launch of the Canadian Defence Industry Resilience program today in an effort to boost Canada’s production of critical munitions. Under this program, first announced as part of the Defence Industrial Strategy, the federal government has set out $1.4 billion to support the growth of Canada's 155mm munition production over the next four years.

Through this, both IMT Precision and General Dynamics Ordnance and Tactical Systems - Canada will receive funding to expand their respective capacity, as well as establish new facilities to strengthen Canada’s Munition Supply Chain.

Pippa Peep over at the Globe & Mail has been on top of this file today, so I will be using some of her work and further confirmation on timelines here. As always, go check OOMF out and tell the Globe & Mail how awesome she is.

Among these investments, IMT will receive up to $306.4 million to build a new facility for the production of 155mm shell casings. The location of this facility has yet to be determined. To quote: “The new facility will be ready for production in roughly 2½ years, and reach full capacity in four years. Once complete, it will be capable of producing 144,000 M795 shells a year.”

GDOTS-C is the real winner here today, though. Through this funding, they will receive $642 million to establish a new facility to manufacture 155mm shells. To quote: “By 2028, General Dynamics’ facilities should be able to process 12,744 projectiles annually. By 2029, the goal is to scale up to 12,000 a month.”

Furthermore, GDOTS-C will receive up to $355.7 million to establish a nitrocellulose production capability, as outlined in the Defence Industrial Strategy, with the goal of producing between 3,400 and 7,800 tonnes of nitrocellulose annually. They will receive up to $57.8 million to establish Canada’s first production line for M231/232 charges.

All of this is in support of the Defence Industrial Strategy, although the desire to increase shell production has been in the works since 2022 and the onset of the War in Ukraine. While the federal government made minimal investments in both capacity and study for Canadian production of 155mm shells, this represents the first large-scale investment.

Ammunition production is one of the major pillars of the Key Sovereign Capabilities set out in the Defence Industrial Strategy, and among the pillars often listed as one of the government's personal priorities in the short and medium-term.

Now to the personal thoughts… obviously, some fairly significant investments have been committed to here. For years, manufacturers have been waiting for a plan to boost Canada’s 155mm shell capacity, especially with the onset of Ukraine putting a strain on global supply.

We're late to the game by a long margin. I don't think anyone denies this. This should have been an announcement two years ago, and ideally, we would be on the next tranche of critical munitions needing investment. However, it's better late than never in this case. If not now, then it likely would never come.

Of course, at this same time, Canada is currently undergoing a significant study into the Munition Supply Program. My distaste for the program is well known to many of you; not to hold a knife to the companies involved, however, I find the program limited, outdated, and the mentalities it has archaic. That is a lot on the federal government, who sets the policies and mandate.

However, at such a critical time, one has to ask whether Canada is operating in the modern environment or if we're letting old institutions drive us. This announcement is good. It is a worthwhile investment. The establishment of a nitrocellulose production capacity is a welcomed, critical gap in our supply chain.

No mention of Fuzes, another critical investment on the docket that has long been in the works. I would have loved to see more there. Of course, this announcement is almost entirely dedicated to 155mm shells, and any other munition is left to the side for later.

I welcome General Dynamics' attempt to establish nitrocellulose production by 2029. It is a bold, monumental ask to not only begin work on such a facility but have it producing within four years. Of course, the timelines set out in the DIS were always ambitious.

Production of nitrocellulose is a rough business. It is a toxic, hazardous, and extremely volatile production line with numerous health, environmental, and safety regulations that one can't just pop down in any open space. No matter what site is selected, it is almost guaranteed to run into opposition and extreme amounts of red tape looking to put caution to its establishment.

So, I am curious to see how the federal government supports this, as well as provincial and municipal authorities. It will truly require a whole-of-government effort if there is hope of reaching the timelines desired, and even then, I would expect major opposition. My biggest hope is that there is a proper plan in place there, although I trust the current people in charge enough to give them the benefit.

Up to 7,800 tonnes per annum is actually a major capacity commitment if we're being honest, especially in the given timeline. It isn't going to change the global dynamic, but it is significant enough to push the needle and be notable among our allies. Nitrocellulose production is highly concentrated among a few key suppliers, and NATO is currently hitting a major bottleneck in production capacity.

European goals aim to produce upward of 20,000 tonnes annually by 2030, so for context, the high end here is nothing to slouch at for a country like Canada, and provides significant room for future domestic growth; something I am happy to see built in here. Excellent.

HOWEVER… This should be seen as the starting point, though, and I stress that. This should not be seen as the culmination even on the 155mm shell department. Getting up to ~150,000 shells per annum is a good step. It is a decent amount. However, for the army we want to have? When Canada has a unique position to leverage away from conflict zones? When Canada has all the tools to do more? All the things we hear time and time again, we're still at the lower end here compared to the plans of our allies.

This still puts us lower than the likes of Poland, Czechia, and many of the Nordic nations in terms of output. This is a beginning. It gives us a self-supply that keeps the Canadian Army supported. If the hope is to plug into our allies? Then I'm afraid this ain't there yet. Not these numbers.

This also isn't to speak to other desperately needed munitions across the board. This isn't talking to the production of new munitions that Canada traditionally hasn't produced. I, myself, know of several companies, like Hanwha and Kongsberg, who have reportedly explored it but have hesitation; be that no guarantee of stable orders, regulations, or the need for support.

All of which can come with an updated MSP and a properly funded critical munitions strategy. One that sets out a modern outlook on the types of munitions Canada needs to be able to produce domestically to remain credible in a conflict that constrains existing supplies.

I am once again forced to mention Australia, who, while not perfect here, have at least presented a potential blueprint for what could be done. Australia set out the Australian Guided Weapons and Explosive Ordnance (GWEO) Plan in 2024. They backed that with a whopping $21 billion in potential funding over a decade.

They established the Australian Missile Corporation and the Sovereign Missile Alliance to facilitate industry-government communications and provide a central agency to manage munitions.

They've secured a Kongsberg Partnership valued at $850 million to build a dedicated factory in Newcastle, New South Wales, for JSM and NSM. They're slowly building out GMLRS production. They launched a $500+ million SME Uplift to integrate into this new supply chain.

They're even seeing outside interest in producing munitions that they don't use, such as working with MBDA to potentially establish Mistral production. That is investment that Canadian thinkers love to speak about: to be the 'Arsenal' that produced the critical munitions our allies need, even if we don't use them.

Well, the Australians are doing it now. They're showing the pathway is possible, and it isn't perfect, and we don't have the same environments. However, it does provide us a basis; something to look at and ask why we can't, what we need to do at the minimum to secure a Canadian munition supply.

This is a commendable start. It is a good beginning. However, the follow-up needs to be more. It needs to be bigger, more expansive, and needs to carry proper backing and commitment. It needs to come with a proper strategy and a Munition Supply Program not last cared for from a time before I was born.

It needs some ruthless aggression. It needs an institution willing to take the risks and set out the proper pathway to investment and long-term growth. You want to be an arsenal? You want to be an exporter? You have to start acting like it. You need to not wait four, five years for every study and consultation to take place.

You want five percent spending? It's time to look at what everyone else is doing. It's time to turn concepts and ideas into action. We can be the arsenal. We can be the supplier of democracy. That isn't coming if we continue to treat ourselves as a junior partner in the grand schemes.

That doesn't all need to come now, but there needs to be the pathway, the light at the end of the tunnel. In an ideal world, we would already be talking now about how to take that 150,000 (okay technically it's just under, but i'm gonna round up) and make it 300,000, and then how to make that 500,000.

That's an arsenal. That's what a foundry nation does. That's the numbers that we need to become that safe supply: that partner you trust can keep you supported when everything goes to hell and your own industrial capacity takes a hit.

That's what we want, isn't it? Certainly, since I've been in this space, I have heard it repeated over and over how Canada can be that backbone, that support. Well, now we have the money. We have the mandate in the DIS...

There is broad political and national support for defence initiatives. There is, quite literally, never a better time than right now to make these moves and try to find our place in everything. Our allies are doing it. They're also moving, in many cases against us when it comes to the economic and supplier front.

If we don't do it now, then when? When would be the time? When would we have all the right things aligning together again to do so? When a global conflict breaks out? When we get desperate? We're already operating behind. We're already late to the party. Now we're playing catch-up on things that should have come two, three years ago. Sadly, there was no mandate there, no care or reason to move.

We've seen it can be done. We've seen progress made elsewhere. I'm tired of hearing it's too hard, that the rules can't be changed, that we need to be slow and take time on files we have given years to. I am tired of hearing every reason, every excuse of risk and demands. I am tired of the same grandstanding on how we could do more, and how much potential we have.

And yes, this is one area I am very passionate about because it's one of the areas we could generally punch above our weight and be a major supporter to our allies. Same thing goes to Space, which I always love talking about. It just feels like such an easy win, a place we could so easily justify our value and contribute.

Yet there's been almost nothing the last four years; not when demand was tight, not when Ukraine was begging. Hell, the AMERICANS were throwing money at IMT to increase production years ago! They were on top of things while we were clapping our hands talking about how we totally had a plan in the works, and how great we are to think about thinking about a plan.

And now we see it: the culmination of four years of effort, and I just gotta ask, what's next? Okay, this is great. Thumbs up for everyone. What's next? What's the next phase, the next production gap to tackle? Because this certainly can't be it.

I have a lot of hope in the current people in charge. They have done good in my books. They have done very good in many aspects. That's why I am giving them leeway and benefits, because it ain't on McGuinty, or Lightbound, or Fuhr. They inherited a broken system and were told to get shit rolling in less than a year of being involved, and to their credit, they have. I will always give credit to them for stepping up and legitimately caring. That's why I have faith in the plan beyond this, because I trust that they know this too, that they have similar frustrations as me in this system.

This, though, is one of the things I am looking out for. It is one of the things I wanna see action on. I wanna see them take the Munition Supply and tear it to its very foundation. I wanna see the fire in them. I wanna see them take it by the horns and live up to their claims. I wanna see the regressive reforms continue. I don't want it to stop here. I wanna see them rip it all apart.

Time will tell if that comes true. Time will tell if we can be the hammer and anvil of NATO that we so desperately hear people say we want to be. In the meantime, I do welcome these investments for what they are, and hope to see the next phase in the coming months. Hopefully...