Ottawa wants Canadian medium-lift rockets, and Budget 2026 confirms that as a formal goal, with National Defence to manage dedicated launch and test facilities. The plan is part of a defence industrial package of up to $2.7 billion over five years drawn from money previously announced.
Finance Minister François-Philippe Champagne’s budget, tabled Thursday, would expand the Department of National Defence (DND) Launch the North program from its first light-lift to medium-lift launch vehicles and “a national rocket propulsion ecosystem.” Companies would get “competitive, milestone-based support” to mature propulsion systems, vehicle designs and launch technologies, Chapter 5 of the budget says. This makes sense. If Canada is going to support sovereign launch capability, propulsion systems are where the biggest lift is, pun intended.
Where the money comes from
Launch is one of seven priorities the budget lists under the Defence Industrial Strategy. The others include quantum computing, munitions materials, drone research hubs and an extension of BOREALIS, the defence research bureau created in last year’s budget. The government proposes to “direct up to $2.7 billion over five years” to the whole group “from previously announced funding,” and did not provide any numbers for any single item.
Defence Minister David McGuinty has said the small rockets now in development are only a first step. “They’re where we start; they’re not where we stop,” he told Space Canada’s SpaceBound conference in October, SpaceQ reported.
Launch money so far
Last year’s budget gave DND $182.6 million over three years to establish a sovereign launch capability. The department then opened a $105 million challenge through its Innovation for Defence Excellence and Security (IDEaS) program.
In March it picked NordSpace, Canada Rocket Company and Reaction Dynamics for $8.3 million each, toward a small rocket that can reach orbit on four days’ notice by 2028. The budget lists that selection among the strategy’s early results.
DND has also committed money to places to launch from. It signed a 10-year, $200 million lease for a dedicated pad at Maritime Launch Services’ Spaceport Nova Scotia, near Canso, N.S.
In October, the department added a $20 million standby agreement with NordSpace at its Atlantic Spaceport Complex in St. Lawrence, N.L. A map in the budget marks Atlantic Canada for “a dedicated facility for sovereign Canadian launches.”
Industry has been moving the same way. Reaction Dynamics unveiled Borealis, a six-tonne rocket targeted for 2031, at SpaceBound, and NordSpace and Canada Rocket Company have both pitched larger rockets. Reaction Dynamics says SpaceX’s planned wind-down of its Falcon 9 rocket means Canada will need a medium-lift option of its own.
The CSA’s one mention
The Canadian Space Agency (CSA) is mentioned once in the budget, as one of the seven defence priorities. Its Space Technology Development Program, which funds companies to develop space hardware, would help “firms scale up development and capacity for launch in space missions.” The budget doesn’t say how much of the $2.7 billion the program would get, or whether that would add to its current funding. It does credit the program with a return of “over 3 to 1.”
The defence picture
Core defence is set at $451 billion over five years on a cash basis, rising to more than $700 billion once security-related spending such as Arctic infrastructure is added, as Canada works toward NATO’s 2035 target. The budget puts figures on only a few programs within that, such as drones, but nothing specific to space.
Beyond launch and the CSA program, the defence chapter mentions space twice: “space surveillance” expertise in British Columbia, on a regional map, and “weapons in orbit,” listed among the threats driving drone spending.
For space, this was a thin budget. However, a lot happened leading up to it. The first Launch the North awards, launch pad deals in Nova Scotia and Newfoundland and Labrador, a Defence Industrial Strategy and consultations on a new Canadian space act. Medium-lift was always coming, and now it’s in a budget. Next come the details. Worth watching is what happens to the Space Technology Development Program, and how Alex MacDonald, the new CSA president, shapes the agency and its budget requests from here.