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Australia and Canada have signed a government-to-government agreement worth approximately $2.5 billion for the export of an advanced Over-the-Horizon Radar (OTHR) system designed to strengthen Arctic surveillance and early warning capabilities.

The deal marks the first international sale of Australia’s world-leading OTHR technology and represents the largest defense export agreement in Australian history.

The project will see Australia provide Canada with a long-range radar capability capable of detecting and tracking airborne and maritime threats thousands of kilometers away.

The agreement moves Canada’s Arctic Over-the-Horizon Radar (A-OTHR) program into the delivery phase, with work scheduled to begin on July 1, 2026. Canada aims to achieve initial operational capability by December 2029.

Expanding Surveillance in Arctic

The radar system is based on Australia’s Jindalee Operational Radar Network (JORN), a proven capability that provides wide-area surveillance at ranges of up to 3,000 kilometers.

Unlike conventional radar systems, OTHR technology uses high-frequency radio waves reflected off the ionosphere, allowing it to detect objects beyond the horizon and overcome limitations caused by the Earth’s curvature. This enables the monitoring of aircraft and ships at much greater distances than traditional radar systems.

Australia's largest ever defence export 🇦🇺 ✍️ 🇨🇦

Australia has signed a $2.5 billion agreement with Canada to export an Australian Over the Horizon Radar (OTHR) system.

The two nations' defence organisations have worked together to develop requirements for Canada’s Arctic-Over… pic.twitter.com/MAtNzhtvQ9

— Defence Australia (@DefenceAust) June 23, 2026

Once operational, the system is expected to significantly enhance Canada’s ability to monitor activity across the Arctic and North American airspace, providing earlier warning of potential threats and improving decision-making time for military and security authorities.

Canadian Secretary of State for Defense Procurement Stephen Fuhr said the project forms part of a broader effort to strengthen Arctic surveillance and communications capabilities.

“Canada is reinforcing Arctic security through the Arctic Over-the-Horizon Radar project,” Fuhr said. “This project is part of a broader effort to build an integrated Arctic surveillance and communications network that will strengthen Canada’s ability to monitor, understand, and respond to activity in the Arctic,” he added.

BAE Systems Selected as Industry Partner

BAE Systems Australia will serve as the principal industry partner for both governments and will support the development, delivery, and long-term sustainment of the radar system.

The company brings extensive experience from its involvement in Australia’s JORN program, which supports military operations, border protection, disaster response, and search-and-rescue missions.

BAE Systems Australia Chief Executive Officer Craig Lockhart said the agreement would strengthen defense cooperation while creating opportunities for industry in both countries.

“The export of Australian OTHR capability presents a significant opportunity for both Australian and Canadian industry and positions domestic firms to expand exports of high-value goods and services, particularly into allied defense and technology markets,” Lockhart said.

“Canada’s acquisition of a cutting-edge Australian OTHR system supports the strategic interests of both nations through enhanced detection and tracking of threats to North America, strengthening Five Eyes situational awareness.”

The company will also work with Canadian firms to develop domestic expertise in OTHR technology and support the growth of Canada’s defense industrial base.

Economic Benefits and Job Creation

The project is expected to generate significant economic benefits in both countries. Canadian officials estimate that between 2026 and 2033, the A-OTHR program will contribute nearly $290 million annually to the Canadian economy while supporting approximately 2,270 jobs each year.

In Australia, the initiative is expected to sustain around 300 high-value technical jobs and support the country’s advanced defense manufacturing sector.

Officials from both countries said the agreement would promote industrial growth, innovation and technological cooperation while strengthening defence-industrial ties between trusted partners.

Growing Strategic Cooperation

The agreement reflects increasing defense cooperation between Australia and Canada amid growing concerns over Arctic security and long-range threat detection.

Australia’s Department of Defense worked closely with Canada’s Department of National Defence to develop the radar requirements, while the commitment to cooperate on the program was reaffirmed by Australian Prime Minister Anthony Albanese and Canadian Prime Minister Mark Carney earlier this year.

The arrangement also establishes a framework for future joint research and development efforts aimed at advancing OTHR technology and addressing emerging security challenges.

Australian officials said collaboration on the system would support enhanced surveillance and early warning capabilities in both the Indo-Pacific and North Atlantic regions while improving interoperability between allies.

Prime Minister Anthony Albanese described the agreement as a showcase of Australian technological innovation. “Australia is a world leader in Over the Horizon Radar technology, and this agreement showcases Australian innovation,” Albanese said.

“As close friends and valued partners, Australia and Canada’s relationship is grounded in decades of operational cooperation, shared strategic interests, and deep collaboration through the Five Eyes partnership.”

Deputy Prime Minister and Defense Minister Richard Marles said the deal highlighted the strength of bilateral defense ties. “This is the biggest defense export agreement in Australia’s history, which reflects our close and long-standing friendship with Canada,” Marles said.

“In an increasingly complex strategic environment, Australia and Canada are committed to working together to grow our defense relationship and this initiative is a clear demonstration of that enduring partnership in action.”

The agreement represents the first phase of broader Australia-Canada cooperation on Arctic surveillance technology, with both governments expected to explore additional joint development opportunities in the coming years.