Tendances Canada Defence Industrial Strategy: opportunities for Quebec SMEs

The rapid transformation of Canada’s defense policy between 2024 and 2025 is redefining the rules of the game for companies, particularly Quebec’s small and medium-sized enterprises (SMEs). With a massive increase in investment, a new Defence Industrial Strategy being deployed, and increased pressure from NATO allies, the defence sector is no longer the preserve of a few large historical players. Cybersecurity, artificial intelligence, data analytics, secure communications technologies, logistics, B2B e-commerce, CRM management of government contracts: these are all areas in which innovative SMEs in Quebec can position themselves right now. This article takes a look at the trends for 2024-2025, the key figures and, above all, the concrete opportunities for Quebec SMEs wishing to plug into the new Canadian defense supply chains.

1. A historic surge in defence investment in Canada

Since 2024, Canada has embarked on a profound transformation of its defense policy. The Parliamentary Budget Officer’s 2024 report already indicated that the capital spending envelope under the Strong, Secure, Engaged policy had been revised upwards, from a projected total of $163.3 billion to $214.8 billion over 20 years, an increase of around $51.5 billion. These amounts are now integrated into a broader vision with the updated Our North, Strong and Free policy and a new 20-year plan to 2043-2044.⁽¹⁾

In 2025, Canada crossed an historic threshold by reaching for the first time the NATO target of 2% of GDP devoted to defense, while committing to a gradual rise to 5% of GDP by 2035, including 3.5% for basic defense activities and 1.5% for related spending (infrastructure, resilience, cyber, etc.).⁽²⁾ For Quebec SMEs, this means sustained and predictable growth in demand over more than a decade.

The benefits are already visible in the real economy. The federal government estimates that the Canadian defense industry generated nearly $12.6 billion in GDP and some 78,000 jobs in 2023.⁽³⁾ With the new investment trajectory, employment in the sector is set to grow significantly, notably through infrastructure programs, modernization of Arctic capabilities, cybersecurity and modernization of military communications.

According to a recent analysis by the Boston Consulting Group, nearly 85% of future defense platform budgets have yet to be allocated, and around 30% of these amounts are potentially addressable by non-traditional defense companies (technology startups, digital services companies, innovative manufacturers)⁽⁴⁾ For Quebec SMEs specializing in IT, advanced manufacturing, sensors, AI or software solutions, this “white zone” of contracts represents a historic opportunity.

At the same time, Ottawa announced the launch of a new Defence Industrial Strategy supported by an initial investment of $6.6 billion over five years from 2025-2026, including $4.6 billion already earmarked for access to capital, innovation, supply chain resilience and strategic stockpiling.⁽⁵⁾ In concrete terms, this means more targeted programs, dedicated funds for SMEs, and mechanisms to accelerate their integration into national and allied supply chains.

For a Quebec SME, this dynamic goes beyond the strictly military: increased spending also favors dual-use technologies (usable in both civilian and military markets). In other words, a product designed for the mining, aeronautics, logistics or cybersecurity industries can be adapted, certified and sold on the defense market – often with higher margins and multi-year contracts.

2. Key programs and new measures for Quebec SMEs

Beyond the big announcements in figures, it’s the concrete programs that create gateways for SMEs. For Quebec companies, a number of recent programs have been particularly influential.

In December 2025, the government launched theRegional Defence Investment Initiative (RDII), a $357.7 million national program designed to accelerate the integration of Canadian companies – particularly SMEs – into domestic and international defence supply chains.⁽⁶⁾ In Quebec, Canada Economic Development for Quebec Regions (CED/CED) is managing a $64.9 million envelope over three years, specifically dedicated to building the capacity of regional SMEs and ecosystems.

According to a recent analysis of the government contracting market, SMEs already represent around 92% of companies active in the Canadian defense industry, but account for only around 40% of jobs in the sector.⁽⁷⁾ One of the implicit objectives of the RDII and the future Defence Industrial Strategy is to rebalance this situation by helping SMEs achieve critical mass (delivery capacity, compliance, certifications, digital systems), so that they capture a larger share of jobs and added value.

Budget 2025 goes even further:

• 6.6 billion over five years to strengthen the defense industrial base, including a targeted portion for research, innovation and domestic supply chains;⁽⁵⁾
• the creation of a Defence and Security Business Mobilization Program at BDC, with a budget of$1 billion by 2025-2026, to provide loans, venture capital and consulting services to SMEs wishing to contribute to Canada’s defence and security capabilities;⁽⁵⁾
• a new BOREALIS Office dedicated to research, engineering and advanced innovation, with $68.2 million over three years to connect DND, ISDE, NRC and CST with innovative companies.

For innovative Quebec SMEs, these measures reduce two long-standing obstacles: lack of access to specialized financing and the complexity of entering an ecosystem dominated by major prime contractors. With the right preparation (strategic positioning, digital maturity, compliance and certifications), an SME can now become a subcontractor, niche supplier or technology partner for a major federal program.

The announced creation of a Defence Investment Agency (DIA) to simplify and coordinate defence procurement should also shorten decision-making cycles and increase the predictability of calls for tender for industry.⁽⁵⁾ For SMEs, this means better visibility of medium-term opportunities and less fragmentation between different purchasing ministries.

In this context, the issue is no longer whether there will be contracts, but rather how to position yourself effectively. This is where digital transformation becomes strategic: strengthening your online presence, structuring a credible B2B e-commerce, implementing a CRM for sales and government relations management, and deployingartificial intelligence tools to respond faster to calls for tender and meet compliance requirements.

3. New niches and promising technological fields for Quebec SMEs

Canadian defense modernization is not just about tanks and frigates. The strongest growth is expected in areas where Quebec SMEs are already highly competitive, notably in digital technologies and advanced services.

Canadian Defence’s 2024-2025 priorities focus on :

• modernizing Arctic infrastructure and capabilities (patrols, surveillance, sensors, secure communications);⁽⁸⁾
• encrypted communications systems, secure radios, post-quantum cryptography and cybersecurity;⁽⁹⁾
• mission systems (search and rescue, command and control, intelligence and data analysis);⁽⁹⁾
• major naval and air projects, including the surface fleet, support vessels and the new generation of patrol submarines;
• dual-use infrastructures (ports, northern routes, logistics hubs, bases, housing) that combine military and civilian uses.⁽⁴⁾

For a Quebec SME, several technological niches stand out:

• Cybersecurity and modern crypto: network protection solutions, anomaly monitoring, intrusion detection, SOC services, encryption and key management tools;
• Artificial intelligence and data analytics: predictive maintenance analysis, logistics optimization, image and signal classification, decision support for operations;
• Software and secure web platforms: fleet management portals, training platforms, secure e-learning solutions, collaboration and technical documentation tools;
• B2B e-commerce and ERP/CRM integration for defense supply chains: electronic catalogs, integration with public procurement systems, automation of quotations and orders;
• Sensors and embedded systems: industrial IoT, environmental sensors for northern conditions, real-time monitoring solutions;
• Video production and immersive content: team training, digital site twins, technical video documentation, procedure simulations.

Government data also show that Quebec companies supported by economic development programs post above-average revenue growth rates (4.4% vs. 2% targeted in CED indicators)⁽¹⁰⁾ By positioning themselves early on in the defense segment, these companies can reinforce this growth trajectory thanks to longer, often multi-year contracts and highly valued export references.

To take full advantage of these niches, SMEs need a digital showcase that lives up to the standards of their institutional customers: a clear, bilingual, professional website, a solutions-oriented (not just product-oriented) information architecture, relevant case studies and SEO targeted at keywords such as “defense”, “cybersecurity”, “dual technologies”, “Nordic infrastructures”, etc.

This is also whereB2B e-commerce and automation play a key role: technical catalogs, datasheet downloads, secure customer areas, order tracking and CRM integration demonstrate the operational maturity that is essential in defense supply chains.

4. How a Quebec SME can prepare itself concretely (positioning, digital, AI)

Faced with the sheer size of these figures, it’s easy for an SME to say “that’s not for us”. Yet the very aim of the new federal measures is to integrate more small innovative companies. Here’s a concrete action plan for a Quebec SME looking to enter – or move upmarket – in the defense ecosystem.

1. Clarify your defense / security value proposition

Start by mapping your products and services: which ones can be considered dual technologies (usable in both civilian and military contexts)? For example:

• an internal cybersecurity solution can become a module for protecting military base networks;
• vehicle fleet management software can be adapted for military or humanitarian logistics;
• an online training platform can be used to train crews or technical staff.

It’s often more realistic for an SME to position itself as a niche supplier in the value chain of a major integrator (naval, aeronautical, command systems) than as a prime contractor. Hence the importance of a clear, targeted and credible message on your website.

2. Structuring your digital presence for government markets

Defense contractors systematically check the online presence of their potential partners. An aging or unclear site can be enough to disqualify you. It is therefore strategic to :

• redesign your site with an approach focused on the needs of public and industrial buyers; a specialized agency like Nuaweb can support you in this process;
• highlight your certifications (ISO, cybersecurity, quality), your institutional references and your ability to deliver at scale;
• create specific landing pages for defense markets, in French and English;
• set up clear contact and tender forms, linked to a CRM adapted to the long sales cycles typical of government markets.

3. Deploy CRM and AI tools to manage complex sales cycles

Defense sales cycles can last from 12 to 36 months, with multiple stakeholders. Without a structured tool, it’s very difficult to keep track of relationships, deadlines, technical requirements and documents. A specialized CRM, connected to your digital channels, enables you to :

• centralize contacts (ministries, integrators, partners, economic development agencies);
• monitor calls for tender, expressions of interest and letters of intent;
• automate reminders and monitoring (e.g., via AI connectors that scan for new public procurement opportunities);
• analyze data to prioritize the best opportunities.

Integrating AI and chatbot solutions can also accelerate lead qualification, automatically answer frequent questions from global partners and improve 24/7 technical support – an important asset when targeting global supply chains.

4. Connect to the right programs and networks

Finally, it is crucial to take advantage of the mechanisms funded by the Defence Industrial Strategy:

• consult the eligibility criteria for RDII in Quebec and submit a project that combines technological innovation with the potential for integration into supply chains;
• approach BDC to explore the Defence and Security Business Mobilization Program and validate your capital and consulting needs;
• take part in industry events (trade fairs, trade missions, NATO forums) to meet major customers and their subcontracting chains;
• collaborate with Quebec universities and research centers to strengthen your R&D capabilities and target calls for defense innovation projects.

This comprehensive strategy – digital, CRM, AI, financing, networking – enables a Quebec SME to move from observer to credible player in the new Defence Industrial Strategy.

Conclusion: transforming defense opportunities into growth drivers for your SME

Between 2024 and 2025, Canada has embarked on a major shift: rapidly increasing defense spending to 5% of GDP by 2035, increasing the capital expenditure envelope by more than $51 billion, creating a new Defence Industrial Strategy, launching the RDII ($357.7 million, including $64.9 million for Quebec) and setting up a billion-dollar business mobilization program at BDC. These figures are not abstract: they herald a decade of contracts, partnerships and innovations for companies that know how to position themselves.

For Quebec SMEs, the challenge is clear: prepare now, structure their digital presence, invest in the right tools (CRM, AI, B2B e-commerce), clarify their defense value proposition and connect to federal and regional programs. Dual technologies, cybersecurity, AI, web platforms and digital services will be at the heart of the defense value chain – areas in which Quebec already boasts a strong ecosystem.

Nuaweb is already supporting SMEs in this transformation: creating professional websites geared towards public procurement, integrating CRM for complex sales management, developing B2B e-commerce platforms, and deploying AI and chatbot solutions tailored to regulated industries.

Are you a Quebec SME looking to assess your potential in the defense and dual technology markets? Let’s plan your digital roadmap together, from strategy to technical implementation. Contact Nuaweb today for a free consultation and turn the new trends of the Canada Defence Industrial Strategy into a real growth lever for your company.