Canada domestic aerospace and defense industrial expansion

Canada is implementing strategic initiatives to increase economic self-sufficiency and reduce reliance on foreign suppliers in the aerospace and defense sectors.

In the space sector, the federal government has committed CAD $305 million through the ‘Launch the North’ program to support domestic companies such as Canada Rocket Company, NordSpace, and Reaction Dynamics. In May 2026, these companies received initial installments of CAD $8.3 million each. This effort includes a CAD $200 million investment in a Canadian-owned spaceport and is supported by the Canadian Space Launch Act to regulate rocket activities within national airspace. Recent milestones include NordSpace unveiling an orbital-class engine and Maritime Launch conducting a successful hypersonic suborbital test in Nova Scotia, with both aiming for orbital flight within approximately one year.

Simultaneously, the government has introduced a defense industrial strategy earmarking $60 billion over five years to bolster domestic military supply chains. This move, aimed at addressing strained relations with the United States—highlighted by tariff escalations and pressure from U.S. President Donald Trump to meet NATO expectations—seeks to support industries ranging from garment manufacturing to the development of autonomous robots and Arctic sensors.

Furthering this sovereign capability, the government launched a $50 million procurement plan to increase the number of drones deployed by the Canadian Armed Forces by approximately ten times. Saskatoon-based Draganfly was selected to supply the Astiia UAS for surveillance. This follows Canada reaching NATO’s 2-percent spending target. Meanwhile, the CANUC alliance, a group of fourteen companies, is advocating for public procurement to prioritize domestically designed systems to maintain control over intellectual property and manufacturing.