At a glance
Explore how IT and software firms can leverage dual-use innovation, federal defence programs, and SR&ED tax credits to unlock $1B in new defence funding and accelerate growth.
Are you building software, developing advanced technology, modernizing production lines, or solving complex engineering problems? If so, there’s a good chance your innovation already touches the defence sector and right now, the Canadian government is actively investing $1 billion in innovation funding for companies like yours.
The federal government committing $1 billion to the new Defence and Security Business Mobilization Program. The message is clear, Canada wants to strengthen domestic defence supply chains, and that includes IT, software, AI, automation, advanced materials, and digital infrastructure providers.
Defence funding is no longer limited to shipbuilders or armored vehicles. It’s increasingly designed for the innovators behind the systems, data, and technologies that make modern defence possible.
At Ayming, we work closely with technology-driven businesses to help them identify where their innovation aligns with defence priorities, often in ways they did not initially expect.
Defence innovation is broader than you think
When people think of defence, they often picture weapons or heavy manufacturing. But today’s defence ecosystem is deeply interconnected with commercial industries.
Through our work with defence-sector clients, one thing is clear, innovation is the cornerstone of growth, and it spans far beyond traditional defence manufacturing.
Canadian companies are actively innovating in:
- Artificial intelligence and software systems that enhance decision-making, surveillance, logistics, and communications
- Develop software solutions to detect cyber-security threats in real-time
- Advanced materials and new metals designed to improve durability, protection, and resilience
- Automation, remote-controlled, and autonomous technologies that allow operations from thousands of kilometres away, along with advanced defence simulation technologies
- Product redesigns that improve safety and usability, including equipment adapted to better protect female personnel
Many of these innovations are developed by companies that also serve telecommunications, automotive, industrial tech, or enterprise software markets. If even a portion of your revenue or R&D supports defence-related applications, you may already qualify for funding.
This is where Ayming helps companies connect the dots between what they are already building and the funding programs designed to support it.
Dual-use technology means dual opportunity
A common misconception is that defence funding only applies if 100% of your business is defence-focused. In reality, dual-use technologies are highly valued. If your product or process serves both commercial and defence markets, even partially, that defence-linked activity can unlock access to:
- Government grants or loans
- SR&ED tax credit
- Refundable investment tax credits
Companies supplying components, software, or systems to the defence sector, even indirectly, may qualify based on the percentage of sales tied to defence applications, not their entire business.
Yet many companies miss out simply because they don’t identify themselves as “defence.”
Federal budget spotlight: $1 Billion for defence SMEs
The latest federal budget introduced the Defence and Security Business Mobilization Program, a $1 billion BDC-backed initiative offering loans, venture capital, and advisory services.
The objective is to help SMEs scale production, commercialize technologies, and strengthen Canada’s defence supply chains.
This program is designed to support businesses that are modernizing operations, investing in innovation, or preparing for export growth. Particularly those contributing to Canada’s defence readiness.
For IT and software companies, this is a clear signal, defence funding is no longer just about hardware. It’s about capability, resilience, and innovation.
Pairing funding programs to support innovation and growth
Defence-related innovation is often best financed through a combination of funding mechanisms, rather than a single program.
For many businesses, this means pairing:
- Strategic Research Fund (SRF) and Regional Technology & Innovation (RTRI) grants to support modernization, scale-up, commercialization, and export readiness
- Clean Technology Investment Tax Credit to support investments in eligible clean energy and decarbonization equipment used in modernized production environments
- Other federal and provincial Investment Tax Credits that reduce capital costs tied to equipment, manufacturing upgrades, and strategic growth initiatives
- SR&ED tax credit to recover costs tied to experimental development, software engineering, cyber-security, autonomous systems, advanced simulation technologies, and other qualifying R&D activities
- Quebec-specific tax incentives, including the IP Box regime (which provides preferential tax treatment on eligible intellectual property income) and the E-Business Tax Credit supporting the development and integration of information technology solutions
When aligned properly, these programs can help finance the technologies, systems, and capabilities that enable long-term growth within defence supply chains, without forcing businesses to change what they do best.
At Ayming, we help Canadian technology companies secure the right mix of funding, tax credits, and financing to support innovation projects from start to finish.
Ayming Expert,
Moin Chowdhury
