Canada’s Defence, Security and Resilience Push Enters New Phase

Defence, economic security and critical infrastructure are increasingly connected priorities for Canada, and meeting the needs ahead will require collaboration across government, industry leaders and investors. Canada is seeking ways to mobilize private capital to support long-term growth across the country.   

That was the focus of the 2026 BMO & IIF Defence Finance Forum in Toronto, which brought together senior leaders from government, finance, technology and industry, at a point in time when BMO is expanding its focus on the industry. 

At the Forum, Carrie Cook, Global Head of Investment and Corporate Banking, BMO Capital Markets led a panel that explored how to mobilize private capital through innovative financing structures, public-private partnerships, risk-sharing mechanisms and blended finance approaches.  

The conversation around defence spending has changed dramatically. It’s no longer just about traditional defence but includes themes such as resilience, economic security and critical infrastructure, explained Cook.   

BMO economists projected Canada’s commitment to spend 5% of GDP on defence and security-related priorities is estimated to generate around $150 billion in annual economic impact by 2035. Private capital has an important funding role, said Cook.  

Reaching that target requires government and private capital to work in lockstep, said Doug Guzman, Chief Executive Officer at the Defence Investment Agency. “It’s finding the places in the system where we can turn to our friends and present them with the proposition of making the price,” he said.  

Large, complex infrastructure projects are an opportunity for investors and experienced operators. Much of that expenditure will go to AI-related infrastructure, railways, airport and electricity needed to run military bases properly, for example, one panelist said, adding that the need for capital was great.   

“The amount of capital needed is incredible,” he said. “Never in my career have I seen such an opportunity.”  

Stable demand, efficient approvals and strong execution will be essential to turning opportunity into investable projects.   

At the Forum, panelists honed in on the long-term nature of some projects and the capabilities and skill set Canada should invest in to further the country’s goals.  

That means addressing that building sovereign defence capability requires not only assets like submarines and aircrafts but the skilled workforce to operate and maintain them, critical minerals for essential aerospace projects and predictable procurement maps.  

When it comes to procurement, several barriers to domestic processing capabilities for critical minerals exist, said the panelists. Those included: high price volatility in mineral markets, lengthy permitting and development phases and issues around coordination of extraction, processing and guaranteed demand.  

Ensuring procurement certainty was a defining theme at the event, with panelists noting it was crucial to delivering on Canada’s strategy.  

Other important factors that panelists agreed will determine future success will be publicly funded projects that allow for complete exits to private market participants, developing Canadian companies that are major global exporters of world-class solutions and directing more defence spending flows to within Canada.  

While industry leaders have been encouraged by Canada’s defence industrial strategy, a commitment to increase spending and the pace of new initiatives, such as the Canadian Patrol Submarine Program or the Airborne Early Warning and Control project, they would still like to see more certainty.  

“As a corporation, we look at where we put capital, where we’re going to generate the highest return and there’s an element of risk that goes into that assessment,” noted a representative from one of the companies in attendance. “So, the more certainty that government agencies can deliver – the speed at which they can move – that’s critical for us.”   

It was clear from all that the new frontier in the industry is clarity on all fronts.  

Also on the agenda was a discussion around control and resilience over technology. Panelists argued for the need to ensure there are no disruption to services, that data centre capacity is scalable and that barriers to early-stage companies are removed.  

Canada needs more operational control over data access and to ensure systems are available even during geopolitical disruptions – something companies and the government are working towards.   

The country also requires greater control and panelists said they would like to see governments ease the process for early-stage companies providing solutions. These companies too often navigate complex approval and funding processes.  

Canada needs to be thinking about our partnerships and what makes sense for us to develop here domestically, said the panelists.   

General Wayne Eyre, former Canadian Chief of Defence Staff, left a lasting impression at the Forum, discussing not only the next steps for Canada but the importance of creating a culture of challenge, disparate backgrounds and avoiding groupthink.  

“Cognitive diversity, which comes from different experience, different upbringings, different ways of looking at the world, will give you a richer menu of solutions when we face real complex challenges from a strategic perspective,” he said.  

That cognitive diversity and tapestry of solutions will be crucial to executing Canada’s new defence strategy and moving toward a more resilient country.