Canada is set to make a historic investment in its military, not seen since the Korean war. Just last month, Prime Minister Mark Carney announced that Canada will meet the 2 percent target by the end of the current fiscal year, totalling over $9 billion. If achieved, this would mark a significant increase from the current level of roughly 1.3 percent of GDP. This renewed commitment to defence spending reflects not only growing international pressures, such as Canada's NATO obligations, but also recognition of the domestic economic opportunities that could accompany such investment. As government procurement expands to include new technologies, equipment, and infrastructure, Canadian businesses across sectors, from advanced manufacturing to cybersecurity, are likely to see increased demand and opportunities for growth.

The key question is: who will benefit from this? Canada’s defence sector encompasses air and space systems, land, and marine operations. According to Statistics Canada, in 2022, it generated $14.3 billion in revenue from 586 firms. Approximately 408 of those firms were Canadian-owned, collectively accounting for half of the industry’s total sales.
Why is this important to our region? Because Ontario is home to strong manufacturing bases that support areas like combat vehicle production, munitions, and aircraft fabrication and maintenance. In 2022, 54% of total supply chain expenditures across the defence industry were directed to domestic sources.

The Ontario government has also weighed in on investing in Ontario’s defence manufacturing sector, particularly by strengthening its shipbuilding capacity. This will help to support and align with Canada’s National Defence Strategy by providing accessible options for procuring ships domestically. A first-of-its-kind program in Ontario will offer shipbuilders access to non-repayable grants covering up to 50% of eligible costs for projects that enhance the shipbuilding industry’s competitiveness. Ontario is positioning itself to support the shipbuilding sector and contribute to Canada’s defence-building strategy.
While this announcement of federal spending is still in its early stages, and the rollout of government procurement remains to be seen, we can expect a more strategic, Canadian-focused approach that emphasizes “Made in Canada” solutions.

Furthermore, with a significant announcement like this, we can expect the Government of Canada to commit to its goal of doubling defence spending. However, the true test will be whether the government follows through. Canada has consistently been underspending to meet the existing 2% NATO  defence requirement.
Within the province, building on previous investments in the shipbuilding sector, Ontario is positioning its industries to help support Canada’s defence spending commitments. This focus includes bolstering Ontario’s own domestically sourced critical minerals, which are essential to the defence industry. In addition, Ontario is investing $50 million into an Ontario-based venture capital fund focused on technologies that support national defence and related fields such as AI and cybersecurity.
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More spending means more production, but what does this mean for our manufacturing sector? There is little detail, but Canada has generally outlined their plan. For example, $1 billion(accrual basis) has been allocated to expand and enhance military capabilities with a focus on Canadian suppliers. An additional $2.1 billion (reported on both a cash and accrual basis) will be used to strengthen the federal government’s relationship with the defence industry and support the development of a Defence Industrial Strategy (DIS). These measures aim to address immediate barriers, such as delays and gaps in the industry’s ability to equip the Canadian Armed Forces. Recognizing that Canada cannot meet all military needs alone, this strategy also includes plans to deepen our industrial partnerships and expand our military capabilities.

While the news of Canada’s effort is fairly new, we can only wait and see what will come of this. Canada’s effort to bolster defence will not only protect our national security but also indirectly sustain the continued prosperity and safety of the communities our businesses call home. This move will bring renewed opportunity to manufacturers and technology builders eager to contribute to our national defence.
 
 

This week in Voice of Business, we’re highlighting the Ontario Chamber of Commerce’s new two-part report on Advancing Economic Reconciliation Through Equity, Economic Inclusion, and Growth.

Part 1, “Establishing Equity in Education & Employment for Indigenous Peoples” focuses on how the business community can help create real opportunities for Indigenous Peoples. Part 2, “Finance & Capital” looks at how the financial sector can help guide reconciliation through inclusive programming design and Indigenous perspectives.
Indigenous populations are growing at twice the rate of non-Indigenous Canadians, and studies show they are nine times more likely to start a business. This presents an opportunity to support a community that has long faced systemic barriers.

The reports offer practical guidance for businesses, educational institutions, and financial organizations on how to advance economic reconciliation. They emphasize the importance of creating opportunities for Indigenous Peoples through inclusive education, employment, and access to capital. Both reports share resources for employers and institutions that can help to foster inclusive employment through various Indigenous organizations such as the Ontario Federation of Indigenous Friendships Centres. Attending Indigenous community events can also help to build and develop relationships with potential Indigenous job seekers, here are some notable organizations with events: CCIB Conference & Events, First Nations Major Projects Coalition, Indigenomics, Ontario First  Nations Economic Development Conference, and  Indigenous Prosperity Forum. Leveraging these organizations can help your business or institution support your Indigenous employees.

A key focus is ensuring that programs and services reflect the realities facing Indigenous workers, entrepreneurs, and business owners. This includes rethinking job requirements, fostering inclusive workplaces, and reshaping financial programs to improve access to capital. These lived realities are evident— for example, as of 2015, 15% of Indigenous individuals were unbanked, compared to just 2% of the general population. Educational gaps also remain. The proportion of First Nations (10.4%), Inuit (7.6%), and Métis (18.8%) individuals with a university degree is significantly lower than that of non-Indigenous Canadians, with approximately 37% holding a university degree. Rethinking job requirements that prioritize degrees and reshaping financial programs to support Indigenous entrepreneurs and job seekers is crucial to bridging these gaps. These efforts will help unlock the potential of a growing population eager to contribute to Ontario’s economy through both employment and entrepreneurship.
Part 1, “Establishing Equity in Education & Employment for Indigenous Peoples”, highlights the importance of:

• Adapting job requirements to use a skills-based assessment approach as potential employees from diverse backgrounds who have all the necessary skills but may not have the typical education requirements.
• Creating inclusive workplaces to tackle discrimination by fostering learning and education on the legacy of residential schools and the legacy of colonialism within Canada.
• Offering remote work to overcome geographic challenges as more than 60% of First Nations reserves are located in remote or very remote areas in Ontario.
• Incorporating Indigenous perspectives into business practices such as including Indigenous leadership in roles that require recognizing and changing policies, procedures or governance that may impact Indigenous employees. In fact, research from the McKinsey Institute demonstrated that diverse companies are 27 per cent more likely to outperform other companies. Further highlighting how incorporating diverse perspectives can propel your businesses competitiveness as well.

In addition to creating inclusive workplaces and modernizing job requirements, Part II “Finance and Capital”, highlights three main themes to advance economic reconciliation through the financial sector:

1. Building Trust and Relationships
Creating meaningful relationships with Indigenous communities is key to restoring trust in financial institutions. This can include:

• Training staff to build cultural awareness and understanding of Canada’s colonial history.
• Hiring Indigenous employees to bring lived experience into the workplace.
• Supporting long-term prosperity through Indigenous Trusts, equity investments, and community-led decision-making.

By taking these steps, businesses and financial institutions can ensure their programs and services meet the needs of Indigenous clients.

2. Tailoring Financial Programs
Financial programs for Indigenous Peoples should be designed in consultation with Indigenous Peoples and communities to ensure access to the capital needed to start or grow businesses. This includes reshaping lending and risk criteria to reflect the realities of Indigenous entrepreneurs, who may not have the same credit history or cash flow patterns as others.

3. Building Partnerships
Partnering with Indigenous Financial Institutions (IFIs) is essential. IFIs were created to provide capital for Indigenous entrepreneurs often overlooked by mainstream lenders. Financial institutions can work with IFIs and use Indigenous loan guarantee models to help make financing more accessible, especially in rural and remote communities. These Indigenous loan guarantee models are critical to leverage as they are financed through the federal or the provincial government which can eliminate the risk for lending institutions.
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Together, “Establishing Equity in Education & Employment for Indigenous Peoples” and “Finance & Capital” offer a roadmap for businesses, educational institutions, and financial organizations to take meaningful steps toward reconciliation. These reports highlight both sides of the opportunity: helping businesses and educational institutions create inclusive environments, while also supporting Indigenous entrepreneurs and business owners. This is about providing a leg up where it’s needed, unlocking the talent, innovation, and leadership Indigenous Peoples bring to the table.
 

Just last week, we hosted a roundtable with the Brazil-Canada Chamber of Commerce (BCCC), featuring, Peter Hawkins, Co-Chair of BCCC and Marcelo Sarkis, Past BCCC President.

The event included virtual greetings from Alexander De Lima (Embassy of Brazil in Ottawa) and Igor Brandão (APEX Brasil). At the close, Marcelo and Peter announced the launch of a new BCCC Peterborough Chapter!

During the roundtable we gathered crucial insights into the Brazilian Market. Some of the important things to know are:

• Economic Synergies with Brazil: Opportunities in advanced manufacturing, aerospace, agriculture, cleantech, tourism, biotech, and more. 
• Canada-Brazil Trade Ties: A strong history rooted in post-secondary collaboration and aerospace.
• Government Support: Funding available through BDC and EDC to support export growth.
• Trade Missions: Opportunities to connect with Brazilian states based on sector interest.
• Connection Tips: Understand cultural differences and leverage bilingual contacts to build strong partnerships.

If you would like to learn more on a diverse range of opportunities within Brazil and how you can capitalize on business partnership in Brazil, click on the links below to access the following presentations: 

• Industry's of demand and opportunities for collaboration between Brazil and Canada
• International Trade: Obstacles & Opportunities
• History of Brazil and Canada's Dynamic Trade Relationship