Federal government commits $2B to London defence sector, securing thousands of jobs

London, Ont. is going to benefit from a federal investment into the defence sector. CTV’s Gerry Dewan explains.

The federal government has announced a significant, multi-billion-dollar investment in General Dynamics Land Systems-Canada (GDLS-Canada), a move poised to inject substantial economic stability and high-paying jobs into London and across the nation.

Prime Minister Mark Carney revealed the funding at a news conference Thursday, telling those gathered, “Our government will invest nearly $2 billion over four years to build and deliver 190 armored combat support vehicles.”

The government reports the acquisition will expand Canada’s fleet from 360 to 550 vehicles, ensuring the Canadian Armed Forces (CAF) are equipped for evolving global demands. The new ACSVs are designed to keep soldiers protected and mobile in the most demanding environments, featuring advanced armour to counter threats such as mines and enemy fire.

This funding designates GDLS-Canada as the first strategic partner under the newly established Defence Industrial Strategy’s framework. This initiative aims to create a robust pathway for Canadian companies to collaborate closely with the government, fostering sovereign defence capabilities. The investment aligns with Canada’s commitment to reaching NATO’s 2 per cent defence spending target and strengthens its partnerships with allies in an increasingly complex global landscape.

The economic ripple effect of this investment is expected to be profound. Prime Minister Carney stated the partnership will create or sustain over 6,000 high-paying jobs annually across Canada for the next eight years.

Locally, it will support approximately 1,700 jobs at the General Dynamics’ London operation.

GDLS UNIFOR Plant Chair Jeff Skinner welcomed the news, noting its importance for younger workers, “We have so many young members now that worry about just getting into this workforce and how long they’d be able to sustain it. But this news keeping around for another eight years, it’ll just be a bridge to the next contract.”

Mayor Josh Morgan echoed this sentiment, highlighting the stability it brings to a region that has faced manufacturing challenges and high unemployment.

“Just under 200 vehicles. And every single one of them is going to be made right here in London. This is long term, good paying, secure jobs in our city,” Morgan stated.

Kapil Lakhotia, CEO of the London Economic Development Corporation (LEDC), emphasized GDLS-Canada’s significant economic footprint.

“There’s well over 40 companies in London alone that rely on this supply chain,” Lakhotia noted, adding that the LEDC hopes this will attract more defence and aerospace business to the region.

The contract will leverage more than 600 Canadian suppliers in over 100 communities, supporting industries from steel production to advanced engineering and component manufacturing.

The federal government anticipates that this investment will provide GDLS-Canada with the long-term certainty needed for further growth.

With approximately 80 per cent of production slated for export, the partnership is expected to open new opportunities in a “more dangerous world,” according to Carney.

This, combined with Canada’s deepening ties with NATO and participation in European defence procurement, is designed to enhance GDLS-Canada’s global competitiveness.

The government’s broader strategy includes the establishment of the Defence Investment Agency to streamline procurement and cut red tape, supporting the Defence Industrial Strategy which aims to position Canadian industry to capitalize on significant future defence procurement and investment opportunities.

The government says the Industrial and Technological Benefits Policy is designed ensure that these contracts generate further opportunities for Canadian businesses, including small and medium-sized enterprises, in research, development, and training.