A Global Opportunity: Why Canada Matters

ALTERNATIVE PERSPECTIVES | DEFENCE IN FOCUS • August 5, 2026

Key Takeaways

• Canada offers earlier‑cycle exposure within a global defence realignment, creating potential for value creation as policy commitments translate into procurement and industrial activity.
• The investment case is supported by an existing industrial base, strong dual‑use capabilities and deep technical talent, positioning Canada to participate as allied defence ecosystems expand.
• For investors, Canada represents a differentiated point of entry into the global defence theme, particularly through private companies and venture-backed platforms, given the country’s limited number of scaled public-market defence champions.

The defence opportunity is increasingly global in scope, though it is not developing uniformly across markets. In some countries, higher spending, industrial mobilization and investor attention are already well reflected in public markets. Canada stands apart; the strategic case is strengthening, the industrial base is already in place and market recognition has not yet advanced to the same degree. With fewer scaled public-market defence platforms, the Canadian angle is more closely tied to private companies, dual-use technologies and emerging capabilities. For investors, that makes private capital a central access point to the theme, offering exposure to businesses that can benefit as policy commitments translate into procurement, partnerships and commercial scale.

The Global Landscape

The scale of the broader defence landscape is difficult to ignore. In 2025, global military spending reached US$2.9 trillion, amounting to 2.5 percent of global gross domestic product (GDP) and marking the 11^th consecutive year of growth. The five largest spenders, the United States, China, Russia, Germany and India, accounted for 58 percent of global military expenditure, while spending by members of the North Atlantic Treaty Organization (NATO) totaled US$1.6 trillion, or 55 percent of the global total.¹

Those headline figures point not only to the size of the market, but also to a broader realignment, as governments respond to a more demanding security environment by increasing spending, expanding industrial capacity and putting greater emphasis on domestic and allied capability. That process is not equally advanced across markets. In 2025, 23 of 32 NATO members spent at least 2 percent of their GDP on their militaries, while Canada spent US$37.5 billion, or 1.6 percent of its GDP.¹ The shift is structural rather than cyclical, driven by geopolitical realignment, allied commitments and industrial policy that will take years to fully work through into procurement, capability and commercial outcomes.

In that context, Canada is earlier in the cycle. It is part of the same broader defence realignment, but the spending path, industrial response and commercial recognition are less advanced than some larger countries.

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¹Stockholm International Peace Research Institute (SIPRI), Trends in World Military Expenditure, April 2026, https://www.sipri.org/sites/default/files/2026-04/2604_milex_2025.pdf