The ceremony featured a 21-gun salute, stirring music and all the other trappings of military pomp and circumstance.
Prime Minister Stephen Harper said he was looking forward to working with Lawson, whose career "has been marked by a readiness to step up to the plate and provide leadership, no matter how difficult or how unexpected the circumstances."
Lawson told the audience how he'd recently met a former chief of defence staff, Ramsey Withers, at a legacy dinner at the Royal Military College. Withers said "welcome Number 18, I'm Number six."
"I'm Number 18, and that's the number you're going to be seeing me put on the back of any sports jerseys I buy in coming years," Lawson said, amid laughter.
Lawson was named to succeed outgoing Gen. Walt Natynczyk last August. Lawson is a former fighter pilot with 37 years of air force experience, serving most recently as the deputy commander of the North American Aerospace Defense Command (NORAD) in Colorado.
Lawson, who began the day as a lieutenant-general and was promoted to general at a private event before the ceremony, said in his speech he's humbled by the great company he's joining and the challenge of his task at hand.
He called the leadership of his predecessor and former classmate Natynczyk "inspirational" and paid tribute to legacy of military service in both his family and Natynczyk's.
In his final speech before Gov. Gen. David Johnston presided over the official transfer of power, Natynczyk called the job of the new CDS "the best job in Canada."
Lawson, Natynczyk said, is a "great officer and gentleman." Later in his remarks, he told Lawson to "wear your own boots...You'll fill them real well."
Johnston thanked Lawson for answering the call to service, while paying tribute to Natynczyk's warm personality and leadership.
Harper also used his remarks at the ceremony to thank the outgoing CDS for his "deep sense of responsibility and care" for Canadian troops, and in particular for his leadership during Canada's mission in Afghanistan, "the most challenging combat mission of the Canadian armed forces since the Korean War."
"The Canadian Forces never sleep," Defence Minister Peter MacKay said. "And neither did Walt Natynczyk for four years."
MacKay said he had the highest respect for Natynczyk as a leader, with whom he had stood in "heartening times and heartbreaking times."
"The history of our country will be very kind to you," MacKay told the outgoing CDS.
Tough job ahead
In his remarks, Lawson said there was "much room for optimism" in the future of Afghanistan as Canada's mission there ends.
Later, he told reporters his challenges would fall into three broad categories: "leadership, caring and preparing" – leading military operations, caring for troops both during and after missions and making sure there is "a robust forces going ahead in the future" by ensuring the government has "the best advice on which capabilities need refurbishment and replacing."
Before being named chief of defence staff, Lawson's most public role was serving as a media spokesman during the NATO mission in Libya.
Lawson is a supporter of the Harper government's troubled F-35 fighter-jet procurement program, but he said earlier this fall he's never spoken with either Harper or MacKay about the purchase.
"Military procurement is a tough area... you can ask any of our allies," Lawson told reporters. "These are big projects and we have to make sure that we get it right."
The F-35 purchase, now handed over to a special secretariat at Public Works for investigation, is only one of several challenging procurement files on the new top general's desk.
Lawson said Monday he was "very comfortable" with the process currently underway for the fighter jet procurement.
At the same time, the defence department could face up to $2.5 billion in budget cuts by 2014-15, according to a recent report.
"We're now in a position where we have to stay within a budget that will be tighter than what we had expected," Lawson said, noting that two-thirds of his career has been spent within budgets that were very tight and the last 10 years were "a wonderful new period where we've had a chance to refurbish many of our capabilities."
"There's a range of numbers," he said, while declining to say exactly where he'll cut.
He did note that the end of two sets of combat missions does provide a "savings of sorts that comes with the decrease in operations."
In his earlier remarks, Natynczyk spoke of the military's need to "continue to invest in our folks and in our equipment."
"We need to continue our transformation," the outgoing CDS said.