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Canada’s Defence Department Doubles New U.S. Tech Contracts in 2026
By Drooid · · How we work
DND’s 2026 Contracts with U.S. Tech Giants Surge
Canada’s Department of National Defence (DND) has signed new contracts worth $67.7 million with American technology firms this year, more than double the $30.3 million signed in 2025. The contracts involve Microsoft and its Canadian subsidiary, Amazon and its Canadian subsidiaries, and Google, covering IT consulting fees, software licences and equipment rentals. The majority—$52.7 million—are with Microsoft, $12.4 million with Amazon, and $2.6 million with Google.
Background: Government Procurement Promises
Prime Minister Mark Carney campaigned in the 2025 election on a “Buy Canadian” procurement strategy and pledged to cut back on contracts with U.S. tech giants while promoting a “sovereign cloud” under Canadian jurisdiction. Despite those pledges, a Toronto Star analysis reported that the federal government has awarded $7.8 billion in contracts to American companies since 2025, raising the share of all federal contracts with U.S. firms by 11 percentage points.
Contract Values and Scope
The contracts were identified through the federal procurement database, which publishes deals of $10,000 or more. While the exact portion devoted to cloud services is unclear, the Canadian Press previously noted that Ottawa spent nearly $1.3 billion on cloud services from the three U.S. firms for “mission-critical” defence applications. Amazon’s lobbying disclosures show it is seeking additional government cloud contracts, and Google’s spokesperson declined comment on specific deals but referenced its support for digital sovereignty in Canada.
Official Responses and Industry Positions
Microsoft vice-chair and president Brad Smith asserted that the company could protect digital sovereignty in Canada after announcing a $7.5 billion investment in Canadian data centres. However, Microsoft officials testified before the French Senate that they “cannot guarantee” data sovereignty if the U.S. “Cloud Act” compels access to data stored abroad. Amazon highlighted its September approval as the first cloud provider cleared for “restricted” NATO information. Google indicated it is advancing support for digital sovereignty for Canadian customers.
Concerns Over Digital Sovereignty
The Canadian Anti-Monopoly Project warned that Canada’s cloud market remains “broken” and dominated by foreign giants, raising questions about the effectiveness of a sovereign cloud strategy. Critics note the contrast between Carney’s public commitments and the rapid growth of U.S. tech contracts within the defence sector.