Key Insights• The Canadian precision-guided munition (PGM) market is undergoing a historic transformation driven by a generational defence spending surge. Canada has committed to increasing defence spending to 2% of GDP in 2025-2026, raising to 5% by 2035 a dramatic shift that is reshaping the country's precision-strike capabilities and munitions procurement priorities.• The Canadian government announced $81.8 billion over five years to rebuild, rearm, and reinvest in the Canadian Armed Forces, including over $9 billion in 2025-2026 alone. This represents the largest generational investment in Canada's defence in modern history.• Canada is rapidly acquiring long-range precision strike capabilities for the first time. The government finalized a deal in January 2026 to purchase 26 M142 HIMARS launchers from the U.S. for approximately $1.9 billion, marking the first time Canadian Armed Forces will possess superior long-range precision strike capabilities.• Canada is simultaneously pursuing a two-pronged strategy, acquiring cutting edge U.S. origin PGMs while investing CAD 1.4 billion in domestic ammunition production capacity to reduce dependency on foreign suppliers with $9.5 billion over 20 years committed to establishing new artillery ammunition production.• The Canadian defence industry is poised for significant growth, with the Defence Industrial Strategy targeting 125,000 new high-paying careers and 70% of defence acquisitions awarded to Canadian firms by 2035.Market Outlook• According to the research report, "Canada Precision-Guided Munition Market Outlook, 2031," published by Actual Market Research, the Canada Precision-Guided Munition Market is anticipated to grow at more than 6.34% CAGR from 2026 to 2031.• Canada's PGM market is being driven by a fundamental realignment of defence priorities. The core mission of the Canadian Armed Forces is to detect, deter, and defend against threats to Canada and North America, especially in the Arctic, while strengthening its ability to address threats in key regions including the Euro-Atlantic and the Indo-Pacific. This expanding strategic footprint is creating sustained demand for precision-strike capabilities across air, land, and sea domains.• The Royal Canadian Navy is modernizing its precision munitions portfolio.

The navy successfully test-fired the new Mark 54 lightweight anti-submarine torpedo in February 2026 a major milestone in warship modernization. Canada sought to acquire 425 of these next-generation torpedo kits from the U.S. at roughly $1.2 million apiece, converting Cold War-era Mark 46 torpedoes into modern Mark 54 configuration with enhanced guidance systems.• The Army's Long-range Precision Strike Land project valued at $1.8 billion will provide HIMARS launchers paired with long-range munitions capable of precisely engaging targets at distances exceeding 300 kilometres, "revolutionizing how the Canadian Army conducts operations". • Loitering munitions and autonomous weapons are emerging as growth segments, with the Canadian government actively pursuing counter-drone and long-range precision strike capabilities and investing in autonomous weapons market development.Policies & Regulatory Landscape • The Canadian government launched the Defence Investment Agency in October 2025, housed within Public Services and Procurement Canada, with greater autonomy and robust contracting authorities to accelerate the purchase of equipment, services, and munitions. The agency's first phase focuses on standing up the organization and advancing high-priority defence procurements.• The 2025 budget introduced a formal "Buy Canadian" policy for federal procurement, dedicating CAD 98.2 million over five years to prioritize Canadian materials, services, and technologies. This policy shift is designed to ensure more military capabilities are procured from Canadian supply chains.• The Export Control List was amended in March 2025 to control the export or transfer of arms, ammunition, and munitions of war to ensure they are not made available to destinations where their use might be detrimental to Canada's security. Private Member's Bill C-233 also seeks to amend the Export and Import Permits Act to more fully align with the Arms Trade Treaty.• Canada signed a Canada-Japan Equipment and Technology Transfer Agreement in January 2026, establishing a framework for joint research and development and transfer of defence-related intellectual property. The Canada-ROK Security and Defence Co-operation Partnership, launched in October 2025, sets out a roadmap for maritime and cyber collaboration. PGM Procurement & Industry Impact• The HIMARS acquisition represents a transformative capability for the Canadian Army.

The U.S. State Department approved the potential $1.75 billion sale in October 2025, and Canada finalized the deal in January 2026 for approximately $1.9 billion. The package includes 132 M31A2 GMLRS Unitary pods, 132 M30A2 GMLRS Alternative Warhead pods, 32 M403 Extended Range GMLRS AW pods, 32 M404 ER GMLRS Unitary pods, and 64 M57 ATACMS pods—all equipped with Insensitive Munitions Propulsion Systems for increased safety and reliability.• The HIMARS launchers are expected to be delivered starting in 2029. Lockheed Martin serves as the principal contractor, and to fulfil Industrial and Technological Benefits obligations, Lockheed Martin Missiles and Fire Control will invest in Canadian industry.• The December 2025 $2.68 billion precision bomb sale to Canada covers a broad array of precision-guided and general-purpose munitions along with support systems. The precision munitions align seamlessly with Canada's incoming F-35 fighter fleet, enabling precise air-to-ground operations using modern guided munitions.• The Royal Canadian Navy is modernizing its anti-submarine warfare capabilities through the Mark 54 torpedo program. The torpedo was successfully fired from HMCS Regina in February 2026 the first Canadian frigate to deploy the U.S. made weapon developed by Raytheon.

The torpedo kits convert existing Cold War-era Mark 46 torpedoes into the modern Mark 54 configuration with enhanced guidance systems and improved counter countermeasures. The weapons will outfit Halifax-class frigates, CP-140 Aurora aircraft, and CH-148 Cyclone helicopters. Industry News • Lockheed Martin is the principal contractor for the HIMARS program, with the $1.9 billion deal covering 26 launchers and a deep magazine of precision munitions. Lockheed Martin will invest in Canadian industry to fulfil Industrial and Technological Benefits obligations. Lockheed Martin also manufactures the F-35A fighters Canada is acquiring to replace its CF-18 fleet.• Raytheon developed the Mark 54 lightweight torpedo in conjunction with the U.S. Navy and began producing the weapon in 2004. Canada acquired 425 torpedo kits to convert its existing arsenal into the modern Mark 54 configuration.• General Dynamics Ordnance and Tactical Systems is among the key defence contractors supporting Canada's munitions requirements, with Canada spending several billion dollars on air strike weapons and other defence systems from the U.S. defence industrial base.Segment AnalysisCanada Precision-Guided Munition Market By Product Type• Loitering munitions represent an emerging product category supported by advancements in autonomous navigation, sensors, and lightweight electronics.

Manufacturing generally requires 6 to 15 months, while product storage life ranges from 8 to 15 years. Preventive maintenance is commonly scheduled every 2 years, with electronic subsystem replacement typically occurring after 6 to 8 years.• Interceptor missiles require complex manufacturing processes and extensive subsystem validation before deployment. Production timelines generally range from 24 to 36 months, while storage life extends between 15 and 30 years. Depot-level inspections are typically conducted every 3 to 5 years, and comprehensive refurbishment programs are generally implemented after 15 years.• Torpedoes continue to benefit from ongoing improvements in propulsion technologies, underwater guidance systems, and component reliability. Manufacturing lead times generally range from 18 to 30 months, while storage life extends from 15 to 25 years. Scheduled overhaul programs are commonly performed every 4 to 6 years, with battery replacement intervals ranging between 5 and 8 years. Canada Precision-Guided Munition Market By Subsystem• Guidance and navigation systems represent one of the most technologically advanced subsystems within precision-guided munitions.

Manufacturing lead times generally range from 8 to 18 months, while subsystem service life extends between 10 and 20 years. Preventive maintenance cycles are commonly scheduled every 2 to 4 years, supported by periodic software and firmware updates.• Target acquisition systems integrate advanced electro-optical, infrared, and sensor technologies to support accurate target identification. Production cycles generally range from 6 to 15 months, while subsystem operational life extends from 10 to 18 years. Calibration and inspection activities are commonly conducted every 2 to 3 years, with environmental qualification testing exceeding 1,000 hours.• Propulsion systems provide the required energy and maneuverability while maintaining long-term reliability throughout the product lifecycle. Manufacturing generally requires 12 to 24 months, with storage life ranging from 10 to 20 years. Major maintenance inspections are typically scheduled every 3 to 5 years, while refurbishment programs occur after 10 to 15 years. Canada Precision-Guided Munition Market By Launch Platform• Airborne platforms continue to account for a major share of precision-guided munition integration due to compatibility with multiple aircraft categories.

Platform integration programs generally require 12 to 24 months, while certification activities extend from 6 to 12 months. Scheduled maintenance cycles are commonly performed every 12 to 24 months, with platform modernization occurring after 10 to 15 years.• Land-based launch platforms support a broad range of precision-guided munition systems through mobile and fixed deployment configurations. Integration timelines generally range from 10 to 20 months, while preventive maintenance is scheduled every 12 to 36 months. Lifecycle modernization programs are commonly undertaken after 10 to 15 years of service.• Naval platforms continue to integrate precision-guided munitions with advanced combat management and launch systems for enhanced operational flexibility. Platform integration generally requires 18 to 30 months, while lifecycle support typically extends beyond 20 years. Scheduled maintenance activities are commonly performed every 18 to 36 months, accompanied by periodic electronic system upgrades.Considered in this report• Historic Year: 2020• Base year: 2025• Estimated year: 2026• Forecast year: 2031Aspects covered in this report• Precision-Guided Munition Market with its value and forecast along with its segments• Various drivers and challenges• On-going trends and developments• Top profiled companies• Strategic recommendationBy Product Type• Tactical Missiles• Guided Rockets and Artillery Shells• Guided Bombs (PGMs/Smart Bombs)• Loitering Munitions• Interceptor Missiles• Torpedoes• Hypersonic MissilesBy Subsystem• Guided and Navigation Systems• Target Acquisition Systems• Propulsion Systems• Warheads• Power Supply SystemsBy Launch Platform• Airborne• Land-based• Naval• Unmanned Systems.