With Canadian involvement in Afghanistan, Diemaco and the Canadian Forces have developed improvements to the C7A1 to better suit the operational situations at hand. The result, the C7A2, has a four-point telescoping stock unit similar to that of the C8 carbine and a 3-rail TRI-AD I mount on the front sight triangle. The selector lever, magazine release, and charging handle latch are ambidextrous. Also, the C7A2 is issued with green colour furniture as standard. These weapons are often seen with a similar plethora of accessories as their American counterparts given the overall commonalities of the system and the rail mounts. The C7A2 is also issued with the C79A2 ELCAN optical gunsight with 3.4× magnification but with a uniform green rubber armored coating, but some soldiers who are issued it have either been issued or have purchased sights like the EOTech holographic weapons sight and the Trijicon ACOG. Within an eight man section, six soldiers will normally carry a C7A2, the section commander and second in command, two grenadiers and two riflemen, with only the machine gunners carrying a C9A2 LMG. The C7A2 is considered a "mid-life" upgrade for the C7 family. The addition of the TRI-AD rail mount has made it easier for soldiers to attach accessories such as laser designators and tac lights.
In Project Reality, the C7A2 remains as the main rifle of Canadian Forces, being issued to all riflemen. It performs almost identical to their American AR-15 variants, with the replacement of the burst mode in exchange for a fully-automatic firing mode. With version 1.2, the Dutch Army uses the earlier C7A1 variant as their standard rifle.
- Used by Canadian Forces
- C79 Optics
- EOtech Holographic Sight
- Iron Sights
- M203A1 Grenade Launcher
- Used by Dutch Forces
- C79 Optics
- Aimpoint Red Dot Sight
- Fixed Iron Sights
- AG-36 Grenade Launcher
- The EOtech holographic sights are not issued by the Canadian military, but are actually brought by individual soldiers with their own money. Similarily, ACOG 4x scopes can also be found on C7A2 rifles in use by Canadian servicemen.
- The C7A1 uses black furniture instead of the green one uses by the Canadian Forces, it also uses polymer magazines and the M16A2 fixed stock.
- When equip the iron sights, the C7A2 uses a back-up iron sight instead of the removable carrying handle used by the U.S. Forces, and the C7A1 becomes the early C7 rifle with the fixed M16A1-style carrying handle.