ONTARIO – Regional Report
Can Canada’s aerospace and defence industry meet a growing need for state-of-the-art equipment? Ontario companies say YES.
BY PETER DIEKMEYER
Experts agree that Canada must boost defence spending—and fast. The scale of what’s required became clear this fall during Prime Minister Mark Carney’s visit to Poland, a country that allocates 4.7% of its GDP to defence. “It will take us years to reach Polish levels,” Carney admitted. “But we will quadruple spending between now and the end of the decade.”
Ontario companies are eager to share in that growth. Canada’s most populous province is also home to its economic and political capitals, along with the head offices of many top defence firms and industry associations. Accounting for 36% of the country’s defence employment, Ontario combines a strong private-sector base with public-sector support for its growing regional ecosystems.
The province’s $215 million commitment to revitalize its marine sector is expected to strengthen Ontario’s role within the National Shipbuilding Strategy (NSS). In September, the Ford government also led a business mission to DSEI in London, England—an effort to help local firms boost exports and forge global partnerships.
Still, questions remain about whether Canada’s aerospace and defence industries—including Ontario’s—can scale up quickly enough to meet the surge in demand.
A recent RBC Wealth Management report examined the potential economic impact of new defence spending. Economists Cynthia Leach and Salim Zanzana cited a 2022 Statistics Canada survey showing roughly 45% of defence firms were already operating at 90% to 100% capacity. “This indicates limited slack,” they noted, adding that uncertainty persists over whether industry can ramp up production fast enough to deliver on Ottawa’s ambitions.
BEST DEFENCE STEPS UP
Heather Pilot, President of Pilot Hill and producer of the Best Defence Conference, is doing her part to ensure Ontario’s defence ecosystem is ready. The London, Ontario-based event has become a bellwether for the sector’s health—and, according to Pilot, momentum is building fast.
READ: Ontario’s Defence Industry Unites: A Conversation with Ted Kirkpatrick and Heather Pilot
“During the past three years, Best Defence has taken on an increasingly important role,” she told CDR. “Pre-bookings are coming in much earlier, and we’re hearing more participants refer to it as a ‘must-attend event.’”
Pilot points to growing Canadian Armed Forces (CAF) participation as a major draw—bringing OEMs, suppliers, procurement officials, academia, and students together under one roof.
One notable example: Commander Martin Byrne, a London native now leading the Canadian Patrol Submarine Project (CPSP), will be attending the event. His presence underscores the naval community’s heightened engagement with Best Defence.
“We’re doubling down on efforts to combine a conference and exhibit into a single event,” says Pilot. “The technology showcase is especially popular because it gives speakers a five-minute, high-impact platform. Contractors can meet nearly everyone in Ontario’s—and much of Canada’s—defence sector in one place.”
Ontario’s automotive pedigree continues to give it an edge in land systems manufacturing. Companies like General Dynamics Land Systems-Canada (GDLS-C) anchor the province’s military vehicle ecosystem, while emerging players such as Roshel are adding new momentum.
Roshel, a producer of “smart” armored military and law enforcement vehicles, operates four facilities in the province totaling some 400,000 square employing 485 people.
The company has delivered more than 1,800 Senator armored vehicles—mostly MRAP variants—to Ukraine and uses frontline feedback to refine each new batch. Hundreds of upgrades have already been implemented, tested to NATO standards.
READ: Made-in-Canada Armoured Vehicles from ROSHEL: Cover Story
CEO Roman Shimonov says more expansion is underway. Roshel is building a fifth facility to produce ballistic steel for defence applications, adding 200–300 new jobs. “We need to get equipment into the field now,” says Shimonov, who also serves on the board of the Canada-Ukraine Chamber of Commerce. “And we have a real opportunity to rebuild our domestic industrial base by prioritizing companies that pay taxes here.”
READ: Roman Shimonov, Roshel – 2025 DEFENCE EXECUTIVE OF THE YEAR
Earlier this year, Roshel demonstrated a counter-UAS prototype at CANSEC and is partnering with ST Engineering to localize a tracked, amphibious vehicle in Ontario for the Domestic Arctic Mobility Enhancement (DAME) program, which is currently in the Request for Information (RFI) stage. The company is competing for Canada’s Light Utility Vehicle (LUV) project, with plans for a nationwide in-service support network if successful.
Steve Drover, Director of Business Development at Allen-Vanguard, a counter-IED and drone technology provider based in the National Capital Region, believes that properly leveraging existing talent is crucial to building domestic defence capabilities. “There are numerous bottlenecks in Ontario’s industrial base,” he notes. “The most important is people.”
Drover cites a key underused asset: retired Canadian Armed Forces members who leave service in their 40s, often with hard-won expertise that can’t easily be replicated. “They carry priceless operational knowledge,” he says. “We grab them every time there’s a fit.”
Drover admits frustration over a recent Canadian project awarded to a U.S. firm—one Allen-Vanguard had bid on. “Had we won, we would have hired up to 15 engineers and six to eight Field Support Reps—positions typically filled by retired CAF members. We missed a real opportunity to create high-value Canadian jobs.”
The good news is that Allen-Vanguard’s new NXT systems, which offer upgraded counter-IED and counter-drone capabilities and provide commanders with enhanced situational awareness, position the company for a range of new work. “We’re encouraged by the government’s recent acknowledgment of the critical importance of investing in sovereign defence,” Drover told CDR. “If other nations can successfully invest in sovereign defence,” says Drover, “there’s no reason we can’t too.”
Ontario’s central role in the defence economy is reflected in companies like J-Squared Technologies, a provider of rugged embedded systems that facilitate high-performance computing in the defence, mining, and energy sectors.
“We maintain a production facility in Mississauga, Ontario, and recently opened up a test facility in Nova Scotia,” says Cheyane Wicks, the company’s General Manager for the military sector. “But Ottawa is where the action is. So that’s where we put our head office.” J-Squared’s employees are relatively well distributed: about 40 are in the nation’s capital, 25 in Mississauga, and 25 at the Dartmouth test facility. An additional ten maintenance, repair, and overhaul staff work in the United States.
J-Squared’s commercially available off-the-shelf (COTS), standards-based, SWAP-C optimized high-performance computing and embedded electronic systems are used for mission-critical applications in land, sea, and air defence. “We are seeing increased demand for servers, purpose-built computers, handsets, and tactical voice communications equipment,” says Wicks. “Distributive networking on ships and infrastructures such as command centers often requires shock-resistant cabinets that we can produce.”
Business, which includes recent work with the Canadian Army and a new submarine-related contract, has been good. But Wicks is not letting up. “The fact that we do all our testing internally adds considerable value because clients get products that are ready to go,” explained Wicks. “We are seeing considerable demand in markets such as Germany and South Korea. We also invest heavily in research and development on initiatives such as our Zero Voice and Data Loss (ZVDL) system.” J-Squared will be setting up a 48,000-square-foot facility during the coming years and will employ another 20 or so staff to accommodate the growth.
One way to build Canada’s defence industrial base is to turn its small businesses into big businesses. That implies freeing public-sector procurement officers so they can do their jobs. “We have had a challenging year,” said Eric Meger, CEO of Maerospace, which markets over-the-horizon High Frequency Surface Wave Radar (HFSWR) capabilities. “That included contract delays here in Canada but internationally as well.”
Maerospace employs 15 people at its National Operations Center in Ontario, which acts as a global hub. Meger has high hopes for the company’s PASE (Persistent Active Surveillance of the EEZ) system — an integrated radar equipment shelter with built-in satellite communications capabilities and back-up power.
He notes that while Maerospace’s primary market is exports, small businesses are highly dependent on domestic support. “Many Canadian companies have leveraged initial government orders to build export capabilities,” says Meger. “We have developed a range of leading Canadian-built technologies that could enable us to do that too.”
The good news is that Maerospace might get the chance. Earlier this year, Canada announced a $4 billion (CAD $6 billion) deal to purchase an Arctic over-the-horizon radar system from Australia. Meger believes that Maerospace’s PASE capability could monitor key chokepoints within Canada’s Arctic naval passages with superior consistency and accuracy, providing a perfect complement to the Australian offering.
“We are in discussions with various groups — DFO, RCMP, Coast Guard, RCN, Fisheries Canada — within the Canadian government on how to leverage and expand this valuable asset,” says Meger. “We have also expanded our international footprint through multiple efforts in Africa, the Middle East, and the Indo-Pacific.” Maerospace has made progress on two new potential deals, both of which could lead to the creation of additional jobs here in Canada.
The RBC Wealth Management report also noted that major equipment purchases will soon comprise 30% of Canada’s total defence spend—good news for RTX, one of the world’s largest defence contractors and a top-three company in CDR’s annual ranking. According to Sylvain Menard, Country Director for RTX Canada, the company offers a range of continental defence and NORAD modernization capabilities ideally suited for the Canadian market.
RTX operations include Raytheon Canada, which handles maintenance support and warehousing for Canada’s Boeing CH-47 Chinook helicopters and advanced EOIR assemblies; Collins Aerospace, which provides wideband HF communications systems and primary surveillance radars; and Pratt & Whitney Canada, associated with one of the world’s top aircraft engine producers.
RTX’s economic footprint stretches far beyond Canadian borders. The company also invests in a range of cutting-edge areas, including custom machining, advanced manufacturing, quantum computing, AI, LiDAR, Over-The-Horizon Radar, high-precision optics, and 3D display technologies.
“RTX has a long history of supporting Canada’s economy,” says Menard. “We’ve been partnering with small and medium businesses through ITB and former IRB programs for nearly a century. As programs grow more complex, collaboration between industry and government is essential to address today’s challenges.”
Defence technologies and products generate a higher-than-average economic multiplier effect, note the authors of the RBC Wealth Management sector report. Investments in intellectual property and innovation add particular value, as do those related to dual-use civilian and defence capabilities.
Joel Houde, Vice President & General Manager of General Dynamics Mission Systems–Canada (GDMS-C), highlights Ontario-designed and built anti-submarine warfare (ASW) offerings as a key example. “Our sonar systems, for which intellectual property is held here in Canada, are a key contributor to sovereign defence,” said Houde. “However, they are also making significant economic contributions through exports to allied partners in key markets like Europe, South America, and Asia.”
GDMS-C’s decision to set up its headquarters in Ottawa, housing 700 employees, positions it well to participate in the burgeoning technology ecosystem that has sprouted up around the nation’s capital.
READ: INDUSTRY PROFILE – GDMS-Canada DIGITALspine
Houde cites ASW capabilities as one of the niches in which Canada has become a world leader. “We have been working with Canadian industry partners, DRDC, and a wide range of government organizations on ASW technologies for decades,” Houde told CDR. “This ecosystem has generated acoustics processing products that are deployed on critical maritime patrol air platforms and naval vessels, as well as a deep talent pool that is as strong as any in the world.”
GDMS–C also recently opened its digital sandbox known as ‘Battle Lab’, where engineers, industry stakeholders, and Army end-users develop and deliver operationally ready C5ISR solutions.
“Perhaps most top of mind is the rising strategic importance of the Arctic,” says Houde. “With international boundaries being challenged, Canada and its allies are bracing for an increase in the volume and complexity of above- and below-surface threats. We need to expand underwater surveillance and monitoring now.”
Canada’s vast open spaces and skyways are key to the country’s renowned history of military and civilian pilot training capabilities. These include facilities ranging from NATO Flight Training in Canada (NFTC) to civilian infrastructures operated by CAE, and the International Test Pilots School (ITPS Canada), which CEO Dave Lohse calls “the world’s largest independent school for experimental flight test training.”
Operating from London International Airport, ITPS provides a range of services that are in considerable demand. These pressures are forcing the company to constantly upgrade its cutting-edge fixed- and rotary-wing aircraft fleets. “We are talking about incredibly complex and expensive pieces of equipment,” said Lohse, who took on the CEO role earlier this year following Giorgio Clementi’s transition into the executive chairman position. “Highly trained pilots can thus add considerable value relative to the associated costs.”
READ: ITPS Canada – Industry Profile
ITPS, which recently brought on Michael Mulquiney as head of UAS training and operations, has been increasingly focusing on a new niche: specialized drone operators. This is, in part, to help international air forces and civilian users address pilot shortages and to mitigate the cost of training new cadres.
“We are seeing increased demand from Canada’s allies,” said Lohse, who notes that Canada recently moved from observer to member status within NATO Flight Training (NFT) in Europe — a move that will facilitate ITPS’s business development efforts, which this year included a major presence at the London (Ontario) International Air Show.
“International players are used to looking at Canada as an option, so we are expanding,” says Lohse, who wants ITPS designated as a strategic national asset. “We are also operating at the North Bay Airport, where a NORAD base is located, and are scouting additional locations. Formal recognition of these capabilities would greatly improve our ability to generate new work.”
PELICAN AUTONOMY
Matt Lemay, CEO and Co-Founder (with David Shapiro) of Pelican Autonomy, is another strong believer in Canada’s potential to lead in Uncrewed Aircraft Systems. “I’ve been interested in drones since I was in university,” said Lemay. “Recently we noticed a gap in the intermediate 200- to 500-kilometre range category.”
Last month, Pelican Autonomy (a spinoff from Lemay.AI, a consultancy that Lemay runs) showcased four variants of an AI-powered, low-cost, fixed-wing vertical takeoff and landing UAV system. The gasoline- and electric-powered line can carry payloads from 500 grams to 15 kilograms over distances between 10 and 400 kilometres and combines modular payload flexibility with autonomous navigation.
The UAVs are designed for use in search and rescue, forest fire monitoring, and other civilian-oriented missions, as well as for defence resupply and ISR operations. “These are designed to be low-cost, to enable users to incorporate a sacrificial component into their planning,” says Lemay. “In dangerous or high-stakes situations, you’d want the operator to be able to send in 20 drones with the expectation that only 15 will return.”
Pelican Autonomy currently has eight employees working on prototypes, associated software, and preparations for large-scale production. Lemay is talking with investors to quickly scale up. “UAV operations have evolved at a breakneck pace in Ukraine, Gaza, and other locales, so demand is strong,” he told CDR. “We have designed a 100% Canadian system. Our immediate objective is to build here and license capabilities in other markets.”
JROBERTS DEFENCE
While new programs grab headlines, maintaining existing equipment remains critical. The RBC Wealth Management economists cite reports that a significant share of Canadian equipment is unserviceable. For example, this summer three of the Royal Canadian Navy’s four submarines were not seaworthy.
JRoberts Defence President, John Gagliardi, says there’s major economic value in overhauling old platforms. For example, the company recently led the overhauls of 50 engines and 40 transmissions used in Canada’s older Light Utility Vehicle Wheeled (LUVW) and Command and Reconnaissance (C&R) fleets.
The company, which employs 25 specialists at locations in North York and Etobicoke, also reinforces frames and conducts extensive logistics and machining work. “Canada’s Armed Forces have gone through an extensive period of underfunding. Over time, we discovered the many benefits of getting the most out of older vehicles.”
Gagliardi has also built expertise in producing low-volume parts. “It gets complicated because there is intellectual property issues involved,” he says. “Many manufacturers no longer produce certain parts, or they can’t supply them within acceptable time frames. Clients thus face a choice — get the parts custom made or let the vehicle rust in the parking lot.”
The good news is that business is booming. JRoberts Defence is currently looking to take on five additional staff. “We bring in vehicles from Vancouver, Atlantic Canada, and overseas,” says Gagliardi. “I have been going to CANSEC since 2007, and this year everything changed. You can feel the urgency.”
DATIFEX
Datifex, which leverages existing industrial metaverse capabilities to develop web-based software platforms for digital twins, is another defence ecosystem provider whose offerings support dual-use applications. According to CEO Chris Erickson, the Royal Canadian Navy is currently leveraging Datifex’s DigitalDockyard, its first defence solution for use at CFB Halifax and CFB Esquimalt.
Datifex’s tools optimize safety and operational readiness while also enhancing armed forces’ command, control, and training capabilities. “Maritime safety and security are crucial,” says Erickson, who has been working with Transport Canada and Port Halifax to adapt Datifex’s industrial metaverse platform for harbour management. “Our technology integrates multiple sources of real-time vessel location data — including AIS, computer vision, and radar.” The result is enhanced situational awareness in harbors, terminals, and operations centers.
Adoption of visually immersive environments has a key advantage: a positive effect on recruitment and retention. “Seasoned defence staff want to use creative new technologies,” says Erickson. “The applications give recruits the experience they’ve grown up with in immersive digital environments, like video games. They attract more recruits and encourage them to commit to military careers.”
Defence prime contractors are also starting to engage. Interaction with end users within the CAF has generated incentives for primes to partner with Datifex in Industrial and Technological Benefits investment opportunities. Maritime domain awareness opportunities are also attracting Datifex’s attention in allied markets, such as the UK, where the company has been making inroads.
WILL DEFENCE DOLLARS ACTUALLY FLOW?
Despite the optimism, Leach and Zanzana offer a familiar caution: can DND actually spend the money?
“With a 17% in-year spending boost—most of it for DND, already the largest single federal department—mobilizing funds effectively is a live issue,” they write.
Canada has a long history of deferring major procurements, a habit that may prove untenable as NATO reorients toward near-peer threats from Russia and China. For now, Ontario’s defence industry is mobilizing to seize the moment—and events like the Best Defence Conference 2025 will showcase just how ready it is when opportunity calls.
The Best Defence Conference will take place October 21–22, 2025, at RBC Place, London, Ontario.
Peter Diekmeyer is CDR’s Quebec Bureau Chief
