This week, the Government of Canada unveiled a $35-billion strategy to fortify, modernize, and expand the country’s military footprint in the Arctic.
The feds are investing heavily to reduce Canada’s reliance on the US, and this latest funding will help build core infrastructure like hubs, roads, and airports in Canada’s far north.
These commitments will pave the way for Canada’s broader Arctic defence plans, which could present big opportunities for domestic defence-tech startups. After years of neglect, a gold rush is underway in Canadian defence, and Canadian tech is angling for a cut. But the new investments represent more than just opportunity—observers consider them a necessity that sets new table stakes for monitoring and defending Canada’s resource-rich, strategically located, and increasingly sought-after frozen tundra.
The Canadian Arctic is harsh, remote, and tough to traverse. As Dominion Dynamics founder and CEO Eliot Pence told BetaKit last year, “You can’t do anything in the Arctic without infrastructure.”
While most of this money—$32 billion to be exact—is part of former Prime Minister Justin Trudeau’s 2022 commitment to updating NORAD, Pence still applauded the signal it sends, saying in a LinkedIn post that it shows the government is serious about strengthening Canada’s sovereignty.
But building this infrastructure will take time, and Canada needs to move quickly. The next step, Pence argued, is developing new technologies uniquely suited to the sprawling and sparsely populated Arctic terrain. You’ll find stories of additional federal funding commitments to support the development of this tech below.
Josh Scott
Reporter, Toronto
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BetaKit Most Ambitious returns on May 25
Amid global uncertainty, the path forward is clear: Canada’s moment to build is now.
This May, BetaKit’s marquee annual issue, telling stories of bold ambition in Canadian tech, returns with a focus on national sovereignty.
Presented in partnership with Uber, DMZ, and National Bank, the 2026 edition of BetaKit Most Ambitious will spotlight Canadian innovators strengthening the nation’s autonomy, security, and prosperity.
More federal defence commitments
- The federal government injected $900 million from the Defence Industrial Strategy into the National Research Council of Canada this week to jumpstart a drone innovation hub, launch a defence-focused stream under its Industrial Research Assistance Program, and invest in quantum.
- The Business Development Bank of Canada is expanding its Defence Platform with another $1.2 billion in funding from the federal government. Alongside previous funding, BDC claims the injection will now help it deploy up to $6 billion to emerging domestic defence companies.
Feds say TikTok can continue Canadian operations, but under new rules
Following a court challenge by TikTok, Industry minister Mélanie Joly announced on Monday that the government had revised a decision that would have forced the social media company to wind down its Canadian operations. Joly said the government negotiated with TikTok to establish “clear guardrails” for data protection and regulatory oversight.
Janet Bannister’s Staircase Ventures closes $50-million second fund
The early-stage VC firm surpassed its initial target of $40 million, despite one of the worst years for Canadian VC fundraising in nearly a decade.
Xanadu in talks with government over potential $390 million for domestic quantum manufacturing
While the deal is still subject to due diligence, Xanadu made the rare move of announcing its negotiations with the government as it prepares to go public in a $3.6-billion USD special purpose acquisition company deal that could make it the first Canadian technology business to debut on the TSX in more than four years.
Manitoba launches AI consultations as it weighs tougher privacy and youth protections
The consultations will steer several potential policy changes in Manitoba. The province’s minister of innovation and technology, Mike Moroz, said this new policy could make gathering personal information an “opt-in” consent process and set age limits for AI access.
Alan raises fresh funding as it entrenches in Canada
Just under a year after French insurance technology unicorn Alan entered Canada, it has raised 100 million euros from investors that include Shopify CEO Tobi Lütke and Wealthsimple CEO Mike Katchen.
Currently running its Canadian operations out of Toronto, Alan said it plans to expand to Montréal and continue hiring for its Canadian team.
Sounding off
- Former Peoples Group CEO John Landry argues that FinTechs and challenger banks now have a clearer path forward, if a new framework from Canada’s financial services regulator meets its stated intent.
- Two AI experts, Dr. Alejandro Adem and Dr. Arvind Gupta, argue that Canada’s structural advantages are becoming urgent strategic assets, making it a mistake to count Canada out of the AI race.
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The BetaKit Podcast — How to fix Canada’s Start-up Visa
“Speed is of the essence. This is a super dynamic marketplace. Canada is losing entrepreneurs, we’re losing the next generation of founders, and we need to do things, quick.”
More than a decade ago, Canada launched the Start-up Visa program to attract entrepreneurial talent from around the world. After years of complaints of delays, fraud, and abuse, the program was suspended while featuring a whopping 10-35 year wait time. Boris Wertz (Version One Ventures) and Lucy Hargreaves (Build Canada) join to discuss what went wrong and what a functional entrepreneurial immigration program might look like.
Feature image courtesy Mark Carney via X.