155mm projectile production line. Photo: Dori Whipple / DVIDS. Public Domain.

Canada Invests $1.4 Billion in Domestic 155 mm and Nitrocellulose Production to Reduce Foreign Dependency

The Canadian government has awarded four contribution agreements totalling approximately CAD $1.4 billion to General Dynamics Ordnance and Tactical Systems (GD-OTS) Quebec and IMT Precision to establish sovereign manufacturing capacity for nitrocellulose propellant, 155 mm High-Explosive (HE) projectiles, and M231/M232 propellant charges. The programme represents the largest single ammunition production investment in Canadian history and addresses a critical gap in Five Eyes and NATO energetics supply chains.

Contract Awards and Facility Programme

On 8 April 2026, Canadian Minister of National Defence Joël Lightbound confirmed the award of four contribution agreements designed to reconstitute domestic ammunition manufacturing capability that has been absent from Canadian industry for decades. General Dynamics Ordnance and Tactical Systems — Quebec (GD-OTS) received three of the four awards, all centred on its Valleyfield and Le Gardeur facilities in Quebec province. The fourth went to IMT Precision at Ingersoll, Ontario.

The largest single award — up to CAD $642 million — funds the construction of a 155 mm High-Explosive projectile loading, assembly, and packing facility at Le Gardeur. This will produce complete 155 mm HE rounds, addressing what Canadian defence officials have described as a ‘single point of failure’ in the national ammunition supply chain. The second award of CAD $355.7 million establishes Canada’s first dedicated nitrocellulose manufacturing plant at Valleyfield — a facility that will produce the foundational propellant ingredient for virtually all conventional artillery and small-arms ammunition. A third award of up to CAD $57.9 million covers M231/M232 propellant charge loading and assembly at Valleyfield, completing the 155 mm ammunition production chain from raw energetics through to assembled charges.

IMT Precision’s CAD $305.4 million contract at Ingersoll covers the manufacturing of empty metal shell casings for 155 mm projectiles. This metalwork phase sits upstream of the Le Gardeur loading facility, creating a two-site production pipeline that separates inert component fabrication from energetics handling — a configuration consistent with standard ammunition factory safety architectures where explosive and inert operations are separated by distance and process barriers.

Energetics Supply Chain and NATO Interoperability Implications

The nitrocellulose facility at Valleyfield is the most strategically significant element of this package from a Weapons, Ordnance, Munitions and Explosives (WOME) perspective. Nitrocellulose (NC) is the base propellant ingredient for single-base, double-base, and triple-base gun propellants used across the entire spectrum of conventional ammunition — from 5.56 mm small-arms cartridges through to 155 mm artillery charges and naval gun munitions. Global NC production capacity has been a recognised bottleneck since the onset of large-scale ammunition consumption in Ukraine, with the US Holston Army Ammunition Plant and a small number of European facilities carrying disproportionate production loads.

Canada’s entry into NC production adds a new node to the Five Eyes and NATO energetics network that has been dominated by the United States, the United Kingdom (via the planned SDR energetics factories), and a handful of European producers. For ammunition safety practitioners, the construction of a greenfield NC facility raises standard regulatory considerations under the Canadian Explosives Act and associated regulations, paralleling the UK’s approach under DSA 03.OME (which replaced the withdrawn JSP 482) and the EU’s COMAH framework. NC manufacturing involves handling of nitrogen dioxide, mixed acids, and stabilised nitrocellulose in various grades — all requiring Hazard Division (HD) 1.1 or 1.3 classification depending on form and moisture content, and corresponding Quantity Distance (QD) separations under AASTP-1.

The M231 and M232 propellant charges produced at Valleyfield are NATO-standard modular artillery charges used with 155 mm weapon systems including the M777 howitzer and self-propelled guns such as the PzH 2000 and K9 Thunder. Canada’s domestic production of these charges eliminates dependence on US supply for a critical expendable item and contributes to NATO’s broader stockpile resilience objective. Minister Lightbound’s statement referenced Canada’s commitment to reach 5% of GDP on defence by 2035 — a figure that, if achieved, would represent one of the most aggressive defence spending trajectories among NATO nations and would require sustained ammunition procurement at levels far exceeding current Canadian Armed Forces consumption rates.

The combined programme is expected to create over 356 direct jobs during the construction phase, with additional indirect employment across the Canadian defence industrial base. For WOME professionals monitoring allied ammunition capacity, the Canadian investment fits within a broader pattern of Five Eyes and NATO nations rebuilding sovereign energetics and ammunition production capability that was largely dismantled during the post-Cold War ‘peace dividend’ era. Alongside France’s €8.5 billion munitions package, the UK’s £1.5 billion energetics programme, and Germany’s Rheinmetall expansion at Unterlüß, Canada’s $1.4 billion investment contributes to what is now the largest coordinated Western ammunition production expansion since the 1950s.