Framework for theOntario DefenceIndustrial Strategy

May 29, 2026

Global Need for Action

The illegal Russian invasion of Ukraine, China’s growing use of economic coercion, ongoing conflicts in the Middle East and evolving transatlantic security dynamics have contributed to a more complex and uncertain global environment.

Over the coming years, Canada, along with its NATO allies, will invest trillions in national security projects and priorities. With Canada’s membership in the Security Action For Europe (SAFE) initiative, a key pillar of Readiness 2030, Canadian companies will be allowed to bid on large-scale defence projects that will be supported by loans to EU member states of up to $244 billion.

As part of federal Budget 2025, Canada announced it will invest $81 billion over five years to support its defence commitments,including reaching NATO’s 5 per cent of GDP spending target by 2035. Under the terms of the new NATO Defence Investment Pledge, governments are permitted to invest 1.5 per cent of their 5 per cent commitment into infrastructure projects, such as cyber defence, supply chain resilience, military base construction, logistics and defence innovation that would have spillover benefits for Ontario’s broader economy. The remaining 3.5 per cent, equivalent to approximately $150 billion annually, would go toward core defence spending, including equipment, personnel and munitions.*

This global shift presents a generational opportunity to drive industrial development, capture high-value jobs and strengthen Ontario’s role as a trusted, secure partner in domestic and allied defence supply chains.

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