The Government of Canada is putting up nearly $358 million to strengthen the country’s defence supply chain through its new Regional Defence Investment Initiative (RDII).
Eligible businesses include companies with dual-use products and services, as well as firms pivoting to supplying defence.
Canada’s Minister of AI and Digital Innovation Evan Solomon shared the news today from Toronto’s Downsview Aerospace Innovation and Research hub. He said the RDII envelope will finance Canadian companies to support innovative projects and their integration into domestic and international defence supply chains.
Federal RDII funding is expected to come in the form of loans or repayable contributions and will be directly deployed by Canada’s seven regional development agencies (RDAs), including FedDev Ontario, ACOA, and PacifiCan. Solomon said eligible businesses can now apply for funding through the program, including companies with dual-use products and services, as well as firms pivoting to supplying defence.
The United States trade war has spurred Canada to fortify the country’s sovereign and military capabilities. Efforts to do so are already underway, and Canada is on pace this year to spend two percent of its gross domestic product (GDP) on defence, hitting NATO’s target as part of a big jump after years of relative underinvestment in the sector.
Earlier this year, Prime Minister Mark Carney promised that the country would hike its defence spending to more than five percent of its GDP by 2035.
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Carney’s first budget earmarked nearly $82 billion over five years to help the country get there and “rebuild, rearm, and reinvest” in the Canadian Armed Forces. That figure includes almost $7 billion to build Canada’s defence industrial base under the forthcoming Defence Industrial Strategy.
Matthew Lombardi of defence newsletter The Icebreaker joined The BetaKit Podcast in September to unpack Canada’s suddenly exploding defence sector. He found a cluster of almost 500 Canadian companies building critical technologies—technologies like quantum, logistics and telecommunications, or aerospace, for example—that have a ‘dual use’ in the defence sector.
Last month, Dominion Dynamics founder and CEO Elliot Pence told BetaKit that he sees this ramp-up as a “generational opportunity” for Canadian entrepreneurs.
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Feature image courtesy Josh Scott for BetaKit.