Foreign companies buying key Canadian defence firms with no objection from feds

A Lockheed Martin office in Dartmouth, N.S. in a file photo.

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Two key Canadian defence firms have recently been purchased by foreign companies despite Prime Minister Mark Carney’s push to cut the country’s reliance on military equipment controlled by other nations.

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U.S. defence giant Lockheed Martin purchased Ultra Maritime, the Dartmouth, N.S. company founded in 1947. Ultra plays a key role in the development of sonar and other undersea warfare systems. It’s equipment is on board the Royal Canadian Navy’s Halifax-class frigates and will be installed on Canada’s new River-class warships. Lockheed Martin purchased the firm for more than $3.4 billion.

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The deal follows the purchase of a Canadian underwater drone manufacturer by an Israel firm. Elbit Systems announced that it had completed the purchase of International Submarine Engineering, an autonomous underwater vehicle company based in Port Coquitlam, B.C., the National Post reported on Oct. 29.

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Critics have raised concerns that the deals fly in the face of Carney’s initiative to ensure Canada has a domestically controlled defence industry. The prime minister, whose government is spending tens of billions of dollars on new military equipment, has repeatedly warned about Canada’s over-reliance on military equipment from foreign-owned companies. He has particularly focused on American.-owned firms in the wake of threats by U.S. President Donald Trump to economically cripple Canada and suggest it could be annexed to be the 51st state.

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The Saskatchewan-based Draganfly Inc. noted in a statement that the investment from an unnamed U.S. fund as well Unusual Machines Inc., a company linked to Trump Jr., provided no “special rights” for the Americans.

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Defence Minister David McGuinty downplayed the deal. “Look, they’re investing. What can I say?” McGuinty told journalists.

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The purchases of International Submarine Engineering, and Ultra Maritime, which had previously been sold in 2022 to a global private equity firm Advent International, appeared to have gone through without a national security review. The Department of Innovation, Science and Economic Development issued a statement that said it was aware of both transactions but could not comment specifically because of confidentiality concerns.

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Elbit’s press release said the acquisition has been completed and did not refer to any pending regulatory review. It did not provide additional comment.

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Kristen Leroux, vice president and regional executive for Lockheed Martin Canada and Latin America, noted in an email to the Ottawa Citizen that Ultra Maritime develops and builds sensor systems in Canada. “Our combined presence will anchor a foundational position in Dartmouth and the province of Nova Scotia, bringing together the incredible talent and strengths of over 1000 employees in the province and growing rapidly,” she added.