Australia Secures Record $2.5 Billion Defence Export Deal with Canada
Deputy Prime Minister Richard Marles has hailed a landmark $2.5 billion agreement with Canada for Australian-developed Over the Horizon Radar technology, describing it as the largest defence export in Australia’s history and a major step forward in the strategic relationship between the two Commonwealth nations.
The agreement, signed in Canberra alongside Canadian Secretary of State for Defence Procurement Stephen Fuhr and Defence Industry Minister Pat Conroy, will see Canada acquire Australia’s world-leading Over the Horizon Radar (OTHR) capability for use in Arctic surveillance and continental defence.
Marles said the deal represented a historic moment not only for Australia’s defence industry but also for the broader Australia–Canada relationship.
“This is a $2.5 billion deal and it is far and away the largest defence export that we have ever done,” Marles said.
Australian Technology Heads to the Arctic
The radar system, originally developed under the Hawke Government in partnership with BAE Systems Australia, forms the backbone of Australia’s long-range northern surveillance network. The technology is regarded as among the most advanced long-range radar systems in the world and is capable of detecting air and maritime activity thousands of kilometres away.
Canada plans to use the system to strengthen surveillance across its vast Arctic territories, enhancing its ability to detect and track potential threats while reinforcing its northern sovereignty.
According to Canadian officials, the project is expected to support approximately 2,300 jobs annually in Canada over the next five years and contribute nearly $290 million annually to Canada’s economy. Meanwhile, the Australian Government estimates the deal will support around 1,000 direct and indirect jobs in Australia.
Beyond a Sale: A Long-Term Strategic Partnership
While the headline figure is significant, Marles emphasised that the deal’s long-term importance extends beyond the initial contract.
Under the agreement, Australia and Canada will become partners in the future development of Over the Horizon Radar technology, with Canada expected to invest hundreds of millions of dollars into ongoing research and development.
That collaboration is expected to enhance future capabilities for both nations while deepening industrial and technological ties between the two countries.
The announcement builds on commitments made during Canadian Prime Minister Mark Carney’s visit to Australia earlier this year, where the two governments agreed to strengthen cooperation across defence, intelligence, critical minerals, artificial intelligence and advanced technologies.
Defence Cooperation Expands
The radar deal comes amid a broader expansion of defence cooperation between Australia and Canada.
Marles confirmed negotiations are progressing on a Status of Forces Agreement (SOFA), which would allow Australian and Canadian military personnel to operate more seamlessly in each other’s countries and participate more readily in joint exercises and training activities.
“This really speaks to the fact that, as old friends, we are developing a new strategic relationship,” Marles said.
Secretary Fuhr echoed that sentiment, describing Australia as one of Canada’s most trusted international partners at a time of increasing geopolitical uncertainty.
“As the world adjusts to its new strategic and economic realities, I can’t think of a stronger partner to work with than Australia,” he said.
Defence Exports Become a Major Focus
Defence Industry Minister Pat Conroy used the announcement to highlight the Government’s push to expand Australian defence exports globally.
Conroy noted that the Canada radar agreement follows Australia’s billion-dollar Boxer combat reconnaissance vehicle export deal with Germany and argued that Australia is increasingly establishing itself as a supplier of advanced military technology to trusted allies.
The Minister also pointed to the newly established Australian Defence Strategic Sales Office, designed to help Australian companies market defence technologies overseas with coordinated government support.
For Canberra, the agreement represents more than a major export success. It signals Australia’s growing role as a defence technology partner within the Five Eyes intelligence community and among like-minded democracies seeking to strengthen their sovereign capabilities in an increasingly uncertain strategic environment.
Strategic Significance
The deal arrives at a time when Western nations are reassessing defence procurement, supply chains and strategic partnerships amid heightened global tensions.
While both Marles and Fuhr reaffirmed the importance of their respective alliances with the United States, both also stressed the need to strengthen partnerships with trusted allies and diversify strategic cooperation.
For Australia, the agreement demonstrates that advanced defence technologies developed domestically can compete successfully on the world stage. For Canada, it provides access to a proven capability tailored to the unique surveillance challenges of the Arctic.
For both countries, the agreement marks a significant evolution in a relationship that has traditionally been strong politically and culturally but is now acquiring a deeper strategic and defence dimension.
Watch the full press conference below.