At a glance
Canada’s Defence Industrial Strategy represents an investment of over half a trillion dollars in national security and industrial capacity. But this funding isn’t reserved for traditional defence contractors. Manufacturers, technology providers, and dual-use innovators across sectors like AI, cybersecurity, advanced manufacturing, energy, and logistics may already qualify. This article breaks down where non-traditional companies fit in Canada’s expanding defence ecosystem, and how to access the funding available to them.
If the word “defence” makes you think this doesn’t apply to your business, you’re not alone, and you may be missing an opportunity.
Canada’s Defence Industrial Strategy, launched earlier this year, represents an investment of over half a trillion dollars in Canadian security, economic prosperity, and sovereignty. That’s the kind of number that grabs headlines. What gets less attention is who it’s actually meant to reach: not just traditional defence contractors, but manufacturers, technology providers, and innovators across sectors who may have never considered themselves part of the defence supply chain at all.
The dual-use opportunity hiding in plain sight
Under Canada’s new Build-Partner-Buy framework, the government has committed to prioritizing Canadian firms and Canadian manufacturing for future defence procurement: building domestically first wherever the capability and sovereign control already exist. That’s a significant shift, and it opens the door wider than most companies realize.
Many businesses already have capabilities that are directly relevant to defence and security objectives without making a single military product. AI, cybersecurity, advanced manufacturing, energy systems, and logistics technology all fall into this category. If your company works in any of these areas, the question isn’t necessarily “should we pivot to defence”, it’s whether your existing R&D and capabilities can be reframed in defence and dual-use terms to access funding you may already qualify for.
This is the core idea behind Ayming’s report, Entering the Defence Ecosystem: Government Funding Opportunities for Industrial Capacity and Technological Innovation. It’s not a sector-specific playbook for aerospace primes, it’s a framework for any company, in any industry, trying to understand the defence funding and where they might fit in a supply chain that’s rapidly expanding.
What’s changed and why it matters now
Three structural shifts are directly relevant to how non-traditional companies should approach defence funding today.
Build-Partner-Buy is reshaping procurement
Future defence procurement in areas of domestic strength and sovereign capability will typically be directed to Canadian firms as a matter of policy. That creates a real incentive for government to identify and fund capable Canadian suppliers it hasn’t worked with before, not just its existing contractor base.
Dual-use capabilities now qualify
AI, cybersecurity, advanced manufacturing, energy, and logistics companies often already have capabilities relevant to defence and security objectives, without producing a single military product. Funding eligibility hinges on how that work is framed, not on what industry a company identifies with.
Compliance readiness is the real barrier
Ownership structure, cyber maturity, certifications, and export controls are entry conditions, not formalities. For many companies, getting these in place ahead of time is what determines whether they can access funding when a window opens.
What funding actually looks like at each stage
The report breaks the funding landscape into categories that map to where a company sits in its journey toward, or within, the defence ecosystem.
- Accelerator funding: support for dual-use testing, validation, and market access as a capability moves toward deployment
- R&D tax credits: SR&ED and equivalent experimental development incentives, which are generally horizontal rather than defence-specific, meaning most companies already doing qualifying R&D can access them regardless of end market
- Demand-side instruments: procurement and common purchasing mechanisms that shape national purchasing priorities and create downstream demand for qualified suppliers
- Private capital: venture capital and private equity increasingly treating defence and security as a strategic investment category, not a niche one
- Compliance readiness: the entry conditions companies need in place before they can access any of the above, including ownership structure, cyber maturity, certifications, and export controls
That last point matters more than it might seem. Compliance readiness isn’t a formality, for many companies, it’s the actual barrier standing between them and funding they’d otherwise qualify for. Getting a head start on cyber certification or export control review can be the difference between missing a funding window and being ready when it opens.
What Build-Partner-Buy means for your planning
Canada’s Defence Industrial Strategy introduces a Build-Partner-Buy framework: future defence procurement in areas of domestic strength and sovereign capability will typically be directed to Canadian firms as a matter of policy. For companies that can demonstrate relevant capacity, even outside traditional defence manufacturing, this creates genuine new opportunity, not just a compliance requirement to navigate.
In practical terms, that means the government has an incentive to find and fund capable Canadian suppliers, including ones it hasn’t worked with before. The strategic partnerships, accelerator programs, and R&D incentives outlined in the report all exist, in part, to help identify and develop exactly those companies.
Where to start
If you’re not sure whether your company fits into this picture, a useful exercise is to ask:
- Does any part of our current R&D touch AI, cybersecurity, advanced manufacturing, materials science, or energy systems?
- Have we already invested in cyber maturity or certifications that could apply to a defence or security context?
- Could our existing product or process be described in dual-use terms, even if it was never designed with defence in mind?
If the answer to any of these is yes, it’s worth a closer look. Funding eligibility in this space is broader than most companies assume, and the cost of finding out you qualify is a lot lower than the cost of missing the window.
Download the full report
This article is drawn from Ayming’s report: Entering the Defence Ecosystem: Government Funding Opportunities for Industrial Capacity and Technological Innovation. The report gives manufacturers, technology providers, and dual-use innovators a practical framework to assess where they fit in the defence value chain and what funding could support their growth.
Ready to assess whether your company qualifies? Our Government Funding specialists are available for a consultation.
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