Canada and Australia have concluded a A$2.5 billion (C$2.5 billion) agreement for Ottawa to acquire an over-the-horizon radar system from BAE Systems Australia, with the first phase of delivery scheduled to commence on 1 July 2026. The system, modelled on Australia’s Jindalee Operational Radar Network, will be installed at two transmission and two reception sites near Barrie and Kawartha Lakes in southern Ontario, and is expected to begin operations in December 2029, reaching full capability by 2043. The deal constitutes Australia’s most valuable defence export, surpassing a 2024 sale of Boxer vehicles to Germany, and is projected to support approximately 300 technical jobs in Australia and an annual average of 2,300 jobs in Canada over the next five years.

Canadian Secretary of State for Defence Procurement Stephen Fuhr, speaking in Canberra alongside Australian Defence Minister Richard Marles, described the accord as a milestone that adds a “very significant strategic dimension” to bilateral relations. Australian Prime Minister Anthony Albanese said the sale lays the foundation for deeper defence industry collaboration. Both governments frame the project as a response to the need for persistent surveillance of Canada’s Arctic region, which represents roughly 40 per cent of the country’s landmass. According to Canadian officials, the radar will form part of an integrated Arctic surveillance and communications network designed to detect air and maritime threats and provide early warning across the North.

Viewed from Washington, the choice of Australian technology over comparable US systems signals a deliberate diversification of Canada’s defence supply chains under Prime Minister Mark Carney. US officials have separately expressed impatience with Ottawa’s protracted review of its F-35 fighter procurement, with only 30 of a planned 88 jets under contract. The radar agreement coincides with a broader Canadian reorientation outlined in a 37-page Arctic strategy document released in late 2025, which explicitly cites growing threats from Russia and China in the region. NATO, of which Canada is a member, has been increasing its military presence and infrastructure in the Arctic, and Canadian Defence Minister David McGuinty has called the Arctic the country’s “next major priority” after meeting the NATO defence spending benchmark of 2 per cent of GDP.

The signed agreement covers only the first of two planned radars; a second polar over-the-horizon radar (P-OTHR) is intended for deployment deeper inside the Canadian Arctic Archipelago. The overall programme, budgeted at more than C$6 billion, is a key component of the NORAD modernisation plan announced in 2022, which carries an estimated cost of C$38.6 billion over 20 years. While the Ontario site selection has drawn petitions from local landowners, the Defence Ministry has stated that location requirements are inflexible and were chosen after assessing hundreds of options. During his visit, Secretary Fuhr also inspected Australia’s Ghost Bat uncrewed aerial vehicle, with Canadian interest in collaborative combat aircraft noted as a potential next avenue for bilateral defence industrial cooperation.