The Ontario government used the CANSEC defence exposition to unveil the framework for its first-ever Ontario Defence Industrial Strategy (ODIS). The 10-year plan aims to scale the province’s military manufacturing sector, with a significant emphasis on advanced manufacturing, aerospace, and the dual-use technologies that underpin modern space defence.
With Canada and NATO allies projected to invest trillions in national security projects over the coming years, the province’s strategy is designed to capture a larger share of Canada’s expected $150 billion annual core defence spending by 2035. However, the implementation of this strategy holds direct, specific implications for Ontario’s established space and aerospace clusters.
The space and aerospace angle
According to the newly released ODIS framework document, Ontario’s defence sector currently comprises roughly 300 companies that generate $5 billion in annual revenue. The province notes that these firms directly employ 13,000 workers, meaning Ontario currently accounts for 35 percent of Canada’s national defence activity by employment. Under the new strategy, the province plans to transition these existing capabilities toward higher-value, high-tech defence contracts, specifically targeting areas essential to space operations and domain awareness.
The strategy document explicitly lists space systems—specifically noting “low Earth orbit satellites”—as a core component of Ontario’s current “defence advantage.” Rather than focusing solely on traditional military hardware, the strategy outlines a push into what the province terms “tomorrow’s frontier.” For Ontario’s space sector, this translates into targeted industrial support for several critical technology verticals:
- Space Domain Awareness and Computing: The framework prioritizes the commercialization and scaling of “hard tech” in hubs like Waterloo, specifically targeting artificial intelligence and quantum computing. In a space defence context, these dual-use technologies are increasingly vital for processing orbital tracking data and managing satellite constellations.
- Securing Space Assets: Cybersecurity is explicitly highlighted as a core focus area, particularly in the Ottawa tech hub. With the Canadian Armed Forces (CAF) expanding its reliance on satellite communications (SATCOM) and Earth observation data, protecting ground stations and orbital links from electronic warfare and cyber disruption has become a procurement priority.
- Upstream Supply Chain Resilience: Space hardware requires highly specialized materials; the strategy emphasizes Ontario’s lead in mining and processing critical minerals like high-grade nickel, copper, and platinum group elements, which are vital for aerospace systems and super alloys. The province aims to leverage its $500 million Critical Minerals Processing Fund to secure this upstream supply chain.
Capitalizing on allied space spending
A key driver behind the provincial strategy is the shifting geopolitical environment, which has forced Western allies to de-risk their supply chains and invest heavily in resilient aerospace architectures.
The framework notes that by scaling local industrial capacity, Ontario firms will be positioned to bid on large-scale allied projects, including the Security Action For Europe (SAFE) initiative, which provides up to $244 billion in loans to EU member states for defence procurements. To facilitate this, Ontario has dedicated $50 million in funding through Venture Ontario to support early-stage defence start-ups, including those transitioning from R&D to commercial sales.
“As Canada and our allies respond to increasing global uncertainty by making record investments in defence and security, Ontario has the world-class workers, manufacturers and critical resources to help protect ourselves and our allies,” Premier Doug Ford stated during the announcement in Ottawa.
The strategy also aims to leverage Ontario’s post-secondary pipeline to address skilled labor shortages in high-tech aerospace engineering and software development. The document notes that Ontario produced more than 94,000 STEM graduates in the 2024-25 academic year, which it views as a foundational enabler for securing complex aerospace contracts.
Next steps
The 14-page document (PDF) released at CANSEC serves as an initial framework. The Ministry of Economic Development, Job Creation and Trade, alongside the newly appointed Ontario Military Defence Representative (OMDR), will spend the coming months consulting with industry stakeholders, academia, and municipal space hubs to refine the policy.
The finalized Ontario Defence Industrial Strategy is scheduled for a formal launch by the end of 2026.