Canada’s military spending is accelerating.
Ottawa is investing over $63 billion in defence in 2025–2026 alone, supporting 81,000 jobs nationwide. Over the next decade, the federal government has said it plans to “unleash” $500 billion as Canada works to meet NATO targets. Most of this spend is allocated to the purchase or sustainment of equipment across all domains: air, sea, and land.
This unprecedented spending is reinforced by the federal government’s new Defence Industrial Strategy and its “Build-Partner-Buy” framework, which aims to place Canadian suppliers at the front of the procurement line. Combined with targeted investments in key defence companies across the country, including in Quebec, the result is a significant economic opportunity for the domestic industry.
The scale of that opportunity, however, can be daunting, particularly for small and medium enterprises (SMEs) seeking to enter the defence market.
“Every company in the country should basically have a defence strategy,” Finance Minister François-Philippe Champagne remarked last year.
That’s well understood. Organizations are already responding to this spending pipeline. Yet, establishing a sustainable domestic supply chain, one that can scale quickly while meaningfully including local players, as the government intends, is no small task.
Meeting the task of expanding market capacity amid historic levels of investment hinges on one critical factor: collaboration. Why? Because as demand surges, the defence market increasingly depends on a broader industrial landscape that extends well beyond large organizations.
In this context, firms like AtkinsRéalis play a pivotal integrator role, connecting capabilities across the broader defence ecosystem.
As a Canadian-founded and headquartered engineering services and nuclear company with 9,000 people in the country, we’re one of Defence Construction Canada’s top suppliers. We’ve also worked on some of the world’s largest defence programs. That gives us a unique view as to how infrastructure, innovation, and local Canadian content can intersect.
From this perspective, we know that establishing a foothold in defence is guided by three core notions, especially for small and medium Canadian enterprises, who make up 92% of firms and 40% of jobs in Canada’s defence sector.
1. Working in defence is vastly different to other industries.
The defence market is a highly regulated industry, with projects requiring rigorous compliance processes and elevated security standards.
For SMEs, especially those new to defence, this makes partnering essential. Working with organizations that have certified facilities, experienced personnel, and the appropriate security clearances enables smaller firms to participate in classified projects while navigating complex procurement requirements and public sector expectations.
2. Canada’s defence industry will become increasingly accessible to smaller players with the right partners.
Capacity constraints arising from projects being delivered in parallel mean that major defence initiatives can no longer be carried out by a limited number of players.
What is already emerging is a broad mobilization of Canada’s defence industrial base, bringing together suppliers of all sizes. For smaller companies operating in the right niches and aligning with the right partners, this presents a tangible opportunity to enter, and compete within, the defence market.
In doing so, Canada’s defence industrial base will be broadened, advancing a central objective of government policy and increasing long-term delivery capacity.
3. Local and Indigenous expertise is critical.
A detailed understanding of local and Indigenous realities is a determining success factor. This expertise does not need to be developed exclusively through defence projects.
AtkinsRéalis, for example, draws on more than 30 years of trusted relationships in northern Quebec with local Indigenous communities, which have made it possible to deliver high-impact infrastructure like schools, hospitals, roads, community centres and airports. These partnerships directly inform our thinking on Canada’s Arctic defence programs and the ways in which such projects can be developed in close collaboration with Indigenous partners.
The takeaway is clear: Canada is not in for a long bidding war between large and small firms on defence work. Rather, it is entering an era in which companies of all sizes, alongside the communities they operate in, work together as partners, combining complementary strengths and delivering at scale.