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On May 28, 2026, the Government of Ontario unveiled the framework for its first-ever Ontario Defence Industrial Strategy, a proposed 10-year strategy intended to grow the province’s defence industry and position Ontario companies and workers as pillars of Canada’s defence landscape.1 The first provincial strategy of its kind in the defence sector, the framework comes as Canada and its allies prepare to make significant investments in defence, national security and infrastructure.2
Canadian context: A new era of defence spending
The unveiling of Ontario’s provincial strategy comes as Canada has renewed its focus on defence readiness and industrial capacity through Our North, Strong and Free, which announced investments of CA$8.1 billion over five years, and CA$73 billion over 20 years in defence spending.3
Canada’s 2025 Federal Budget further committed to investing CA$81 billion in defence over the next five years in order to meet its defence commitments, including toward NATO’s 5% of GDP spending target by 2035.4 Ontario’s new framework seeks to capitalize on the federal government’s defence investment by framing itself as the most attractive bidder for all future defence projects, and establishing itself as the focal point of Canada’s defence industry.
Ontario goes all-in on defence
In practical terms, this new framework is an industrial growth plan: it aims to help companies in Ontario participate actively in national defence, increase their production and capture both short and long term economic benefits arising from increased federal and allied defence spending. The strategy is designed to proactively position Ontario as a key contributor to Canada’s defence readiness by:
- Expanding the province’s industrial capacity and defence manufacturing;
- Strengthening supply chains;
- Stimulating job creation and education opportunities in defence-related fields;
- Accelerating responsible resource development;
- Bidding on emerging federal opportunities in the defence industry.5
The new framework centres its objectives around four pillars:
- Pillar I - Strengthen the industrial base: This pillar seeks to ensure that Ontario defence firms are ready to take advantage of increased federal and allied spending in the defence industry.
- Pillar II - Own tomorrow’s frontier: Ontario aims to position itself as the province where future industries and technologies are built, scaled and brought to market to ensure that it maintains a competitive edge in the defence industry.
- Pillar III - Expand export reach: This pillar establishes the province’s intention to be the supplier of choice for the federal government and its allies for defence and dual-use technology and equipment.
- Pillar IV - Build an integrated supply chain: Ontario strives to capitalize on the province’s critical minerals and advanced manufacturing, through resilient defence supply chains.6
Ontario is well positioned to assume a leading role in the national defence ecosystem. The province currently boasts more than 300 defence firms employing more than 13,000 workers throughout the province, and Ontario’s defence sector represents approximately 35% of Canada’s national defence activity by employment, with 43,000 new jobs in the defence industry forecasted in Ontario by 2035.7 The provincial government estimates that by meeting the ambitious objectives outlined in its new Defence Industrial Strategy, the province will generate an additional CA$6 billion to its provincial GDP, and more than CA$400 million in annual provincial tax revenue.8
Why the strategy matters
Ontario is moving early into a defence-industrial policy space that is likely to become increasingly competitive as federal and allied spending increases. With Canada’s membership in the Security Action for Europe (SAFE) initiative, Canadian companies will have the opportunity to bid on large-scale defence projects that will be supported by loans from EU member states.9 The timing is also significant because Canada was recently selected as the host country for the future Defence, Security and Resilience Bank, a proposed multilateral institution that will provide long-term, low-cost financing for defence, security and resilience initiatives across supply chains in all NATO countries.10 Toronto, Montreal, Ottawa and Vancouver have all put themselves forward as possible host cities.11
Looking forward: Ontario is not alone
Other provinces are also positioning themselves to capture defence-related opportunities resulting from the federal government’s ambitious defence investment plans.12
In Québec, the provincial government has taken steps to support defence production through the Caisse de dépôt and Investissement Québec, and federal investments are helping Québec small and medium-sized enterprises (SMEs) integrate into national and international defence supply chains.13
In British Columbia, new Regional Defence Investment Initiatives have been released to support businesses working in defence and dual-use production, supply chains, artificial intelligence, quantum technology and cybersecurity.14
Ontario’s next challenge will be the implementation of its Defence Industrial Strategy.15 In the coming weeks and months, Ontario plans to consult municipalities, industry, academia and other key stakeholders of the strategy in order to receive feedback. The provincial government plans to pursue domestic and international trade and export missions, identify partnerships with global defence companies, and launch the full Ontario Defence Industrial Strategy by the end of 2026.16
Conclusion
Ontario’s framework marks a significant step in the province’s effort to capture the economic opportunities created by Canada’s federal increase in defence investment.
As provinces and cities compete for a piece of the defence pie, such as allied supply chain opportunities, or to be the future headquarters of the Defence, Security and Resilience Bank, Ontario is positioning itself as a defence finance, manufacturing and innovation hub.
The upcoming consultations will further inform how Ontario’s provincial defence-industrial strategy develops alongside federal defence procurement and investment initiatives.17
Dentons will continue to monitor developments as Ontario moves from this initial framework to full strategy.
For more information on Ontario’s new Defence Industrial Strategy and related defence measures, please do not hesitate to contact the authors of this article, Dominique Babin (Montréal), partner, Lampros Stougiannos (Ottawa), partner, or Anoosh Loertscher (Montréal), senior associate.
The authors would like to thank Shaina Willison, law student, for her contributions to this insight.
Footnotes
1. Ontario, Office of the Premier and Ministry of Economic Development, Job Creation and Trade, News Release, “Ontario Unveils Framework for Defence Industrial Strategy,” (May 28, 2026), online: Ontario Unveils Framework for Defence Industrial Strategy ; The Government of Ontario, Framework for the Ontario Defence Industrial Strategy (Toronto: Government of Ontario, May 28, 2026), online: Framework for the Ontario Defence Industrial Strategy↩
2. Prime Minister of Canada, News Release, “Prime Minister Carney announces major new defence partnership as part of new initiatives to transform Canadian defence procurement,” (May 27, 2026), online: Prime Minister Carney announces major new defence partnership as part of new initiatives to transform Canadian defence procurement ; The Government of Ontario, Framework for the Ontario Defence Industrial Strategy (Toronto: Government of Ontario, May 28, 2026), online: Framework for the Ontario Defence Industrial Strategy↩
3. Prime Minister of Canada, News Release, “Our North, Strong and Free: A Renewed Vision for Canada's Defence,” (April 8, 2024), online: Our North, Strong and Free: A Renewed Vision for Canada’s Defence↩
4. The Government of Ontario, Framework for the Ontario Defence Industrial Strategy (Toronto: Government of Ontario, May 28, 2026), online: Framework for the Ontario Defence Industrial Strategy ↩
5. Ontario, Office of the Premier and Ministry of Economic Development, Job Creation and Trade, News Release, “Ontario Unveils Framework for Defence Industrial Strategy,” (May 28, 2026), online: Ontario Unveils Framework for Defence Industrial Strategy↩
6. The Government of Ontario, Framework for the Ontario Defence Industrial Strategy (Toronto: Government of Ontario, May 28, 2026), online: Framework for the Ontario Defence Industrial Strategy↩
7. Ontario, Office of the Premier and Ministry of Economic Development, Job Creation and Trade, News Release, “Ontario Unveils Framework for Defence Industrial Strategy,” (May 28, 2026), online: Ontario Unveils Framework for Defence Industrial Strategy ; Ibid.↩
8. The Government of Ontario, Framework for the Ontario Defence Industrial Strategy (Toronto: Government of Ontario, May 28, 2026), online: Framework for the Ontario Defence Industrial Strategy ; John Marchesan, “Ford government unveils framework to grow defence industry over next decade,” Toronto City News (May 28, 2026), online: : Ford government unveils framework to grow defence industry over next decade↩
9. The Government of Ontario, Framework for the Ontario Defence Industrial Strategy (Toronto: Government of Ontario, May 28, 2026), online: Framework for the Ontario Defence Industrial Strategy↩
10. CBC News, “Canada selected to headquarter new multinational defence bank, sources say,” (April 29, 2026), online: Canada selected to headquarter new multinational defence bank, sources say↩
11. Ibid.↩
12. See e.g.: Peter Diekmeyer, “Quebec - Canadian Defence - Regional Report,” Canadian Defence Review (February 4 2026), online: Quebec - Canadian Defence Companies - Regional Report ; Government of British Columbia, Introduction ; The Canadian Defence Review, “Canada Invests $4.5M in Companies Working with Quebec SMEs,” (April 13 2026), online: Canada invests $4.5M in Quebec Defence SMEs ; Government of Canada, “Regional Defence Investment Initiative in British Columbia,” online: Regional Defence Investment Initiative in British Columbia ; CBC News, “ Quebec is taking a new approach and making defence spending a top priority,” (October 2025) online (video): Why Quebec is taking a new approach and making defence spending a top priority↩
13. Peter Diekmeyer, “Quebec - Canadian Defence - Regional Report,” Canadian Defence Review (February 4 2026), online: Quebec - Canadian Defence Companies - Regional Report↩
14. Government of Canada, “Regional Defence Investment Initiative in British Columbia,” online: Regional Defence Investment Initiative in British Columbia↩
15. The Government of Ontario, Framework for the Ontario Defence Industrial Strategy (Toronto: Government of Ontario, May 28, 2026), online: Framework for the Ontario Defence Industrial Strategy↩
16. Ibid. ; Ontario, Office of the Premier and Ministry of Economic Development, Job Creation and Trade, News Release, “Ontario Unveils Framework for Defence Industrial Strategy,” (May 28, 2026), online: Ontario Unveils Framework for Defence Industrial Strategy↩
17. Ontario, Office of the Premier and Ministry of Economic Development, Job Creation and Trade, News Release, “Ontario Unveils Framework for Defence Industrial Strategy,” (May 28, 2026), online: Ontario Unveils Framework for Defence Industrial Strategy; The Government of Ontario, Framework for the Ontario Defence Industrial Strategy (Toronto: Government of Ontario, May 28, 2026), online: Framework for the Ontario Defence Industrial Strategy↩
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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. Specific Questions relating to this article should be addressed directly to the author.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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