Ottawa narrows $4.9B vehicle competition

Public Services and Procurement Canada cancelled the second phase of Canada’s long-running light utility vehicle competition and said it will move to a narrower invitation process for domestic firms, according to a notice obtained by CBC News. The change affects a military procurement program the Department of National Defence has said could be worth up to C$4.9 billion. The previous process had identified six qualified suppliers, including two U.S. companies. The new approach would limit the next step to a smaller group of Canadian bidders. ### Which procurement did Ottawa change? The Light Utility Vehicle project was launched to replace aging army vehicles, including Afghanistan-era Mercedes G-Wagons and other light trucks and sport utility vehicles now in service. Canadian Army Today reported in December 2025 that the broader project had been split into two streams after delays and budget pressure: a commercial off-the-shelf stream and a militarized stream for protected, air-transportable vehicles. (cbc.ca) The militarized portion is the part now being narrowed. CBC reported that the Prime Minister’s Office said Ottawa intends to “immediately limit the tender to two Canadian defence industry suppliers” for 1,600 to 2,100 vehicles and 400 to 500 light utility trailers. ### Who was in the competition before this change? Six suppliers had qualified under the earlier invitation-to-qualify process, according to the reopened tender notice and Canadian Army Today. (canadianarmytoday.com) CBC identified the six as AM General, Oshkosh Defence, Armatec Survivability Group, GM Defense Canada, Roshel and Terradyne Armoured Vehicles. The two U.S. companies were AM General and Oshkosh Defence. (cbc.ca) A MERX posting for the reopened qualification process said Public Services and Procurement Canada had issued an invitation to qualify that “resulted in the qualification of 6 Suppliers.” The notice also said the process was not yet a request for proposals and did not commit Canada to a contract or expenditure. ### What exactly did the government say? (cbc.ca) CBC reported that a federal notice issued late Friday said Ottawa intended to “transition to an updated procurement approach.” The same report said the government cancelled the invitation for interested companies to qualify for bidding under the Light Utility Vehicle program. The Prime Minister’s Office referred to the revised plan in a statement released at the end of the NATO summit in Ankara, Turkey, according to CBC. (merx.com) That statement said the government would limit the tender to two Canadian defence industry suppliers, though CBC said it was not clear which companies would be chosen. ### Why are foreign firms being pushed aside now? (cbc.ca) CanadaBuys says the federal government has introduced a “Buy Canadian Policy” that prioritizes Canadian suppliers, materials and innovation in procurement. Public Services and Procurement Canada is the federal government’s central purchasing agent. CBC reported in February that Canada’s new defence industrial strategy aims to award 70% of federal defence contracts to Canadian firms within a decade. (cbc.ca) That strategy, backed by C$6.6 billion, was presented as a plan to reduce reliance on foreign suppliers and expand domestic defence production. ### What happens next in the vehicle program? (canadabuys.canada.ca) The next formal step is a direct invitation to two Canadian defence suppliers for the militarized vehicle requirement, according to the Prime Minister’s Office statement cited by CBC. The requirement covers 1,600 to 2,100 vehicles and 400 to 500 trailers. The original invitation-to-qualify notice on MERX remains posted with a closing date of Oct. 14, 2026, but the notice says Canada may cancel the process at any stage and that the original ITQ would remain open until the review-and-refinement phase is completed. (cbc.ca) Ottawa has not publicly identified which two Canadian suppliers will receive the next invitation. (merx.com) (cbc.ca)