Introduction
The North American Aerospace Defense Command (NORAD) – the U.S. and Canada’s joint defense partnership for missile defense and aerospace control – is currently winding its way along two paths:
- U.S.-Canada bilateral relations have markedly deteriorated over the past two years.
- NORAD is quietly seeking to upgrade relevant technical infrastructure for the adoption of increasingly pervasive interfaces that fuse data and alerts for human personnel, comparable in some ways to the Maven Smart System.
Although one may be tempted to suggest these two trends are reinforcing one another (every author likes a good hook!), they are proceeding along separate if parallel pathways.
The aim here is to assess the health of NORAD as it moves along these two paths. A major takeaway is that NORAD’s health and longevity depend on more than either side’s willingness to invest in its modernization, and that these two trends – simultaneously indicating gloomy and sunny days ahead – make this defense partnership perhaps more precarious than funding alone would indicate.
NORAD Modernization
In August 2021, then-U.S. Secretary of Defense Lloyd Austin and then-Minister of National Defense of Canada Harjit Sajjan announced in a joint statement that both countries planned to “modernize, improve, and better integrate the capabilities required for NORAD…” The initial outlines of the NORAD modernization plan included replacing the command’s main sensors with new systems, located in all relevant domains, capable of detecting threats as small as a cruise missile or uncrewed drone.
In February 2023, in the wake of a Chinese high-altitude surveillance balloon being monitored by NORAD over Canadian and American territory, Secretary Austin and then-Canadian defense minister Anita Anand affirmed the two countries’ commitment to NORAD modernization. The Biden administration attributed the detection of the balloon to improved coverage of territorial airspace, likely indirectly referencing the NORAD modernization efforts underway at the time. NORAD has identified other (non-threatening) balloons over continental U.S. territory including Utah and Colorado, since the 2023 identification.
Funding for NORAD is consistent with modernization aims. Topline funding is increasing by both the U.S. and Canada, with funding disproportionately tilted towards the American side. In some of the latest U.S. budget documents, support for NORAD through the U.S. Air Force can be identified across at least three RDT&E funding lines and at least five procurement funding lines. If one totals all explicit, NORAD-specific projects across these lines, the service is requesting at least $145.7 million for FY27. Relevant programs do not, to be sure, exclusively fund NORAD activities, though the extensive nature of the command means that bleed-over across efforts can be identified year-over-year, shifting from constituent effort to effort. If one totals all funding lines, then, the service is requesting $341.4 million for FY27 alone.
Canadian NORAD investment targets have been made public, as well. In March 2026, Canadian Prime Minister Mark Carney put forward a $32 billion defense infrastructure upgrade plan for Canada’s Arctic and Northern region. The planned investments are to be folded into NORAD modernization across four locations: Yellowknife, Inuvik, Iqaluit, and Deployed Operating Base 5 Wing Goose Bay. The planned investment would be made via the NORAD Northern Basing Infrastructure (NNBI) program. These upgrades include areas such as airfield improvements, new and/or repurposed hangars, multi-purpose facilities, and information technology (IT), among others.
The Geopolitical Path
Shortly before his inauguration in January 2025, then-U.S. President-elect Trump began suggesting that the United States impose new tariffs on its two nearest neighbors, Canada to the North, Mexico to the South. These remarks sometimes came with suggestions that Canada in particular become the 51st American state. Upon the initiation of a U.S.-Canada trade war in March 2025, then-Canadian Prime Minister Justin Trudeau made clear the displeasure with the new American tariffs on Canadian imports to the U.S. Shortly after the inauguration of current Canadian Prime Minister Mark Carney that same month, he stated: “The old relationship we had with the United States based on deepening integration of our economies and tight security and military cooperation is over.”
Later, in January 2026, U.S. Ambassador to Canada Pete Hoekstra suggested that a Canadian withdrawal from the country’s planned F-35 purchase would negatively impact NORAD (requiring that both states use “interchangeable” fighter aircraft). Then, in May 2026, the U.S. Department of Defense (DoD) paused participation on the U.S.-Canada Permanent Joint Board on Defense (PJBD), remarking that Canada had failed “to make credible progress on its defense commitments.”
Often times, public statements made by heads of state suggesting a sharp break in the character of bilateral or multilateral relations are just that – statements that are costly in their own right, but made to prevent the further deterioration of relations, such that security or other cooperation can continue in the background. And, to this point, PM Carney emphasized Canada’s role as a partner in NORAD alongside a defense spending proposal in June 2025.
That said, there is reason to suspect that – although the investments being made in NORAD modernization by both sides of the defense partnership are real and ongoing – the risk to this partnership abruptly entering its death throes is increasing. A fragile stability, of sorts.
In each of the instances above, the Canadian government has engaged in a rhetorical balancing act between Canadian dependencies on the U.S. defense industry and economy, on the one hand, and a clear desire to broaden its security and economic partnerships, on the other hand. Indeed, PM Carney’s rhetoric typically fits within this space, emphasizing in February of this year the “Buy Canadian” acquisition component of the country’s then-new Defense Industrial Strategy. Per the balancing act, NORAD was again noted to be a “fundamental” partnership in the same breath. Moreover, in response to the DoD’s PJBD pause in May 2026, Carney noted that the Canadian government, though interested in diversifying its defense cooperation abroad, nevertheless plans to invest tens of billions of dollars into NORAD modernization. Still, the DoD’s pause likely stings Canadian political and defense leaders all the same. As of writing, a Canadian government webpage on NORAD (published well prior to the pause) lists the PJBD as one of “four main defence agreements” between itself and the U.S.
The two countries are, also, involved in an ongoing trade war, with negotiations having collapsed over the weekend, despite prior indications that progress was being made.
Things frequently look permanent until they are not. NORAD, amid all this, may be no exception, and the deterioration of the bilateral U.S.-Canadian relationship puts it on a new path amid modernization.
Although a fracturing of the U.S.-Canada defense partnership would have substantial and wide-ranging effects on relevant supply chains, the ironic effect could be an increase in national aerospace defense spending by each side, as infrastructure would require overhauls and new acquisitions to fill gaps in surveillance coverage. Moreover, the same effect – an increase in funding by both states – may result as well from a continuation of NORAD should either side desire more autonomy in the process, particularly Canada, given the imbalance in capabilities and the evident wariness of its Southern neighbor’s long-term commitment to cooperation. NORAD and U.S. Northern Command (NORTHCOM) Gen. Gregory Guillot indicated as much in April 2025, adopting a less cautious rhetorical balancing act of his own.
The Computing Revolution Path
As the bilateral U.S.-Canada relationship changes, trends in a broader computing revolution are finding their way into NORAD modernization.
The U.S. Air Force conspicuously added a new RDT&E funding line in its FY27 budget request: NORAD & USNORTHCOM (N&NC) Experimentation (PE#0604060F). The purpose of the program – part of a broader DoD effort – is in part to modernize existing data centers such that the deployment of artificial intelligence (AI) capabilities for streamlining the execution of time-sensitive tasks (including drafting operation plans, summarizing intelligence, and integrating cross-domain data) can get underway. USAF requested $39.2 million for this new effort for FY27.
Most intriguing is the following excerpt from the aims of this new effort, per a USAF justification book:
For example, this capability provides analysts with instant access to AI driven dashboards and alerts to fuse sensor feeds, logistics, and mission plans to rapidly enhance border monitoring, illicit trafficking detection, and domain awareness which significantly reduces analytic workloads, accelerates operational planning, and drives decision superiority in direct support of Homeland Defense (HD) and the Unified Command Plan (UCP).
These aims – most strikingly the desire to provide NORAD and NORTHCOM analysts with “AI driven dashboards” – are consistent with U.S. and international defense-wide efforts to expand access to interfaces that streamline and consolidate command-and-control functions capable of being instantiated within software. This most prominently includes the U.S. DoD’s Maven Smart System (MSS) and NATO’s own variant of MSS, both developed by American contractor Palantir.
Should these aims proceed, this requested funding would broaden the opportunities available to a diverse set of contractors, particularly insofar as data center upgrades are concerned, in this way serving as the infrastructure necessary to build and rollout interfaces that consolidate data and applications from a range of sources. This will create demand for a number of critical inputs throughout the relevant supply chains whose production is, as of writing, highly strained due to commercial AI infrastructure buildouts. That the applications in question for NORAD are time-sensitive indicates that these data centers must be upgraded for reliable inference at scale.
Outlook
The two trends identified here are almost certain to continue. The U.S.-Canada bilateral relationship appears unlikely to return to its status quo ante in the foreseeable future, although there are limits to how far either can stray from the relationship – and defense partnerships like NORAD – without inducing severe costs. The burdens in that respect tilt more heavily towards Canada. The computing revolution currently underway in numerous defense organizations, for its part, is likewise set to shape ongoing NORAD modernization efforts, most prominently via USAF’s apparent aim of transferring lessons from the Pentagon’s adoption and use of the Maven Smart System to NORAD analysts and the infrastructure this requires for time-sensitive tasks.
There are defense initiatives for which funding levels alone are not particularly informative as to their health and longevity. NORAD is possibly one such initiative. If one looks only at funding, the partnership could be characterized as quite healthy and robust indeed. However, broader geopolitical disputes are not to be discounted, and the health of this partnership depends on more than the willingness of either side to invest money in its modernization.
Vincent Carchidi has a background in defense and policy analysis, specializing in critical and emerging technologies. He is currently a Defense Industry Analyst with Forecast International. He also maintains a background in cognitive science, with an interest in artificial intelligence.
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