Canada ramps up defense industry in urgent move
Canadian military personnel (Photo: Getty Images)
Canada is strengthening support for its defense industry by involving a state-owned bank to provide financing and investment in security sector companies, reports Bloomberg.
The Canadian government plans to use the Business Development Bank to offer loans and venture capital to defense-related enterprises.
The decision is included in the new federal budget and is seen as a tool to expand the national manufacturing base and support technology companies.
New defense allocations
According to Prime Minister Mark Carney’s budget proposal, Canada plans to spend around CAD 82 billion (approximately USD 58 billion) over the next five years to modernize its armed forces.
Funding is allocated for raising military salaries, improving cybersecurity, and replenishing stocks of ammunition, drones, and armored vehicles.
Support for national manufacturers
The defense industry strategy includes CAD 6.6 billion for implementation.
These funds will be used to develop domestic supply chains so that more military contracts are fulfilled by Canadian companies. This approach is also intended to offset losses suffered by steel and aluminum producers due to US tariffs.
Investments in technology and partnerships
The Business Development Bank of Canada will receive CAD 1 billion to launch a lending and investment program for companies operating in the defense and security sectors.
An additional CAD 1 billion is allocated for the commercialization of dual-use technologies - both civilian and military.
Furthermore, CAD 6.2 billion is earmarked for developing defense partnerships, including expanding military aid to Ukraine.
Canada abandoned a previously planned transfer of refurbished armored personnel carriers to Ukraine and terminated a contract with Armatec Survivability in Dorchester, which had received 25 decommissioned vehicles from the Ministry of Defense nearly two years ago for repair and eventual transfer.
Additionally, the European Union is close to making a political decision on the use of frozen Russian assets. At the same time, the UK and Canada have confirmed their readiness to act in coordination with European partners for the coordinated deployment of these funds.
