QUEBEC – Canadian Defence COMPANIES
REGIONAL REPORT
The Legault administration is going all-in to help Quebec’s defence firms seize their share of the coming jump in federal defence spending
BY PETER DIEKMEYER
Quebec voters have expressed dissatisfaction amid ongoing economic challenges and sluggish job growth in the province. As the 2026 election approaches, Francois Legault, leader of the Coalition Avenir Québec party—which has recently trailed the separatist Parti Québecois in polls—has taken an unprecedented step for a Quebec Premier by actively engaging with the province’s defence sector.
This fall, the Quebec government asked the Caisse de Dépôt, a public pension fund manager, and Investissement Québec, a government economic development arm, to support military production activities. The move provides a strong signal to banks headquartered in the province and aligns with efforts by Quebec contractors to grab a share of the tens of billions of dollars in spending that the Carney government has committed to defence during coming years.
The seemingly rapid shift took many aback. “The Quebec public has traditionally been pacifist regarding international conflicts,” says Mélanie Lussier, President and General Manager of Aéro Montréal, who has been helping to mobilize local manufacturers’ and employers’ groups to better represent the province’s interests in defence matters. “We are happy to see the government move so fast.”
A 2024 survey conducted by Investissement Québec indicated that approximately 470 Quebec-based companies reported being active in the defence industry or related supply chains. The government agency conducted the same exercise this year and 1,200 companies reported being either currently active or expressing interest in entering the sector. Another recent poll conducted by the Fédération des Chambres du Commerce du Québec suggests that as many as 60 percent of the province’s businesses are now interested in doing aerospace and defence related work.
The newly founded Coalition Québécoise pour la Défence et Sécurité (Quebec Defence and Security Coalition) reflects the Quebec public’s increased openness towards the sector amidst near universal distaste for a bellicose Trump Administration which has alluded to making Canada a 51st U.S. state. International hot points such as the Ukraine conflict and a Chinese weather balloon which drifted over Canadian airspace in 2023 also raised eyebrows.
“We want to maximize local economic benefits by reforming procurement and better aligning federal defence related industrial policies with Quebec’s areas of excellence,” says Lussier. “Our province has enormous talent. We want to put it to good use.”
The timing of the launch could not have been better. Lussier has been a big booster of Quebec defence and security issues from her perch at Aéro Montréal. However, the province has long lacked a sector interest group like those that have sprung up in other Canadian regions.
L3Harris MAS, which provides in-service support to Canada’s F-18 fighter jets inevitably tops lists of Quebec defence centers of excellence slated to prosper during the coming years. Its Mirabel-based aircraft in-service and fleet management support facilities employ about two thirds of the division’s 1,000 highly skilled personnel. These service seven major Royal Canadian Air Force fleets.
Ugo Paniconi, the division’s General Manager says that L3Harris MAS can handle a lot more. “We were selected as a strategic depot and sustainment partner to do work on Canada’s incoming F-35 fighters,” said Paniconi. “However Lockheed Martin has more than 1,200 F-35s in operation around the world. There’s no reason we could not handle considerably more related maintenance here.”
The newly formed Quebec Defence and Security Coalition’s efforts to modernize Canada’s Industrial and Technological Benefits (ITB) Policy to ensure funds are fully invested in Canada’s defence sector could provide support for L3Harris MAS during coming years.
Canada has only partially committed to the F-35 program due in part to a range of U.S. export and intellectual property restrictions that prevent such aircraft from being fully serviced outside the United States. Pushback from groups such as the Coalition to encourage the United States government and Lockheed Martin to accept Canada as a full and equal partner could lead to more work for L3Harris MAS.
L3Harris MAS also recently disclosed it will perform fleet maintenance on MHI RJ Aviation Group’s CRJ700 and CRJ900 series aircraft at its Quebec facility and that it is offering an advanced, fifth-generation compatible Airborne Early Warning and Control (AEW&C) solution based on a Bombardier Global 6500 business jet. Panocini is also awaiting news related to a proposal L3Harris MAS submitted regarding in-service-support work on Canada’s long-term Strategic Tanker Transport Capability fleet.
“Aerospace is expected to create thousands of jobs during the coming years,” said Paniconi. Because L3Harris MAS can service all sorts of aircraft, the company maintains a neutral approach to hardware procurement issues. “We thus are glad to see the Quebec government take an interest in the sector.”
Montreal-headquartered CAE is another aerospace player that the Quebec government will be promoting due to the vast potential of its integrated training solutions offerings as western defence forces and airliners re-equip capital stock. France Hébert, Division President of Defence & Security, Canada and Global Operations Lead, describes CAE as Canada’s largest publicly traded defence company, with 13,000 employees at over 240 sites in more than 40 countries. “We generate $4.7 billion dollars in revenue,” says Hébert who prides herself on the firm’s international presence. “A majority of that comes from outside of Canada.”
Earlier this year CAE, which manages NATO Flying Training in Canada, was chosen to co-develop the Future Fighter Lead-in Training (FFLIT) program to prepare pilots to fly Canada’s future fighter jets. CAE also continues to ramp up activities for the Future Aircrew Training (FAcT) program through its partnership in SkyAlyne (a joint venture with KF Aerospace). This fall CAE signed a subcontract with Lockheed Martin Canada to begin implementing a River-class destroyer training program, a move that will significantly broaden its capabilities on the naval front.
Over the years Canadian defence sector stakeholders have become understandably leery of politicians’ penchants for high-profile signing ceremonies. This is because much of the work needed to push these forward takes place in the back channels of understaffed public procurement offices where even the best projects can get bogged down.
Hébert has thus emerged as a big proponent of Canada’s new Defence Investment Agency which is expected to help resource and streamline procurement. “We support the provincial and federal government’s visions of advancing synergies between civil and military sectors,” says Hébert, putting on her public relations hat. “We are building a stronger, more competitive Quebec and a Canada that is ready to meet the challenges of tomorrow.”
Bombardier has been taking a leadership role in what many other Quebec aerospace providers are trying to emulate: porting its civilian capabilities toward defence applications. According to Mena Saad, the company’s director of defence programs, during the past year Bombardier Defense has logged key wins that reflect growing international trust in Quebec’s aerospace and defence related capabilities. Bombardier’s aircraft including the Global 6500 (which was recently selected to supply Korea’s Airborne Early Warning system), the Global 7500 aircraft (which was recently delivered to armasuisse for head of state transport), and the (recently certified) Global 8000 are seeing surging demand as platforms to conduct specialized defence operations.
Bombardier Defense has been building its footprint in the U.S., Australia and is well-positioned to fill capability gaps in Europe. A prime example is the Persistent German Airborne Surveillance System (PEGASUS) program, through which Bombardier Defense is preparing a Global series aircraft for next-generation SIGINT missions with the German Armed Forces.
Innovation has been key. “Canada must expand the scope of its defence programs to support large-scale demonstrators and deeper integration between civilian and military sectors to fully reach its potential,” Saad told CDR. “Bombardier is ready and willing to be a proactive partner in that effort.” In May, Bombardier established a “Bombardier Innovation and Design Centre” that will supply easy access to multidisciplinary resources, and enable experimentation, development, testing, and rapid iteration of new ideas.
“The Centre provides an opportunity to foster collaboration between industry, academia, and government,” says Saad, noting that more than 10,000 of Bombardier’s 12,200 highly skilled employees are in Quebec. “This is essential to unlocking new capabilities and driving economic diversification. The challenge lies in ensuring that government policy and funding mechanisms are aligned with the scale and ambition of what Canadian industry can deliver.”
Top Aces, a global leader in contracted adversary air (ADAIR) and joint terminal attack controller (JTAC) training, is another Quebec aerospace and defence player that is seeing growing demand. According to James Manning, a former Royal Canadian Air Force (RCAF) pilot, Top Aces’ advanced adversary solutions (which are available across three core fleets) continue to garner considerable interest from Canadian and international customers.
Manning is one of many former RCAF fighter pilots who continue to provide air combat readiness training post-retirement. In May, Top Aces, which grew from a small Canadian startup to a global operation with over 600 employees, many of them former air force pilots, celebrated its 25th anniversary.
“The fielding of advanced 4th Generation and 5th Generation fighter fleets has increased the requirement for affordable adversary air support with advanced capabilities,” Manning told CDR, noting that Top Aces boasts “the largest fleet of commercially operated fighter aircraft in active service,” and that it is the only commercial owner/operator of F-16 fighter jets. “New and emerging technologies that foster collaborative combat training are of particular interest.”
Manning cites Top Aces’ proprietary, open architecture Advanced Aggressor Mission System (AAMS) which enables the rapid integration of sensors, weapons simulation, Live-Virtual-Constructive (LVC), and other advanced capabilities on its platforms as a key value add. Other priorities during coming months will be pitching Top Aces’ capabilities to contribute adversary air training related to Canada’s future F-35 fighter pilots, its Future Fighter initiative and its Operational Training Infrastructure Enterprise Modernization (OTIEM) initiative to upgrade and transform air combat training environments like the Cold Lake Air Weapons Range (CLAWR).
The Trump Administration’s termination of trade negotiations with Canada in October following an anti-tariff ad campaign ran in the United States by the Ontario government (which Trump officials liken to election interference by a foreign power) has created opportunities for rival trade partners.
“We recently completed an industry day during which we demonstrated a range of capabilities that align perfectly with Canadian operational requirements,” says Louis Girardin, CEO at Safran Electronics & Defense Canada. “Canada can do business with us.” The subsidiary of the French multinational giant recently set up the Montreal-based hub that will host an aerospace center of excellence that will include 20 PhDs on its research team.
Girardin’s mandate is to help broaden sales of Safran’s aircraft engines, parts, equipment and other offerings. These align with Safran’s Quebec made civilian aerospace landing gear, cabin interior, and other production and maintenance capabilities which it currently markets to clients ranging from Boeing to Airbus and Bombardier.
“Defence is a growing segment of Safran’s business,” says Girardin, who notes that 20,000 of the company’s 100,000-person global workforce now work in the sector. “We see tremendous partnership opportunities here in Canada in areas ranging from optronics, to drones, to submarines.”
Canada is one of the few countries to which Safran entrusts research and development work, a move that has paid off over time. For example, Safran leveraged Canadian based AI and navigation research to develop its Skytracker counter-UAS defence system which protected Paris during the 2024 Summer Olympics. “We employ nearly 2,000 people in Canada however our defence capabilities are not well known,” said Girardin. “So, building name recognition is a key priority.” Girardin cites Gerry Champagne, the company’s Vice President of Business Development, a former one-star general who joined the company this year as a “walking business card” that is playing a key role in the process.
Lorenzo Marandola has been navigating shifts in the defence market since he founded M1 Composites, an aerospace parts supplier, in 2012. “Demand picked up around the time the Carney Administration took office,” says Marandola. “Many promises were made. We need to make sure they are put into action.”
M1 Composites, which specializes in composites, sheet metal parts, radomes, nacelles and flight control surfaces, faces similar challenges and opportunities as other Canadian small and medium sized defence contractors. A key concern is a federal government procurement bureaucracy that appears to protect incumbents at the expense of innovation. For example, contractors can’t bid on many federal programs unless they have security clearances. However, contractors can only apply for a security clearance if they already have a mandate.
Marandola highlights the disproportionate costs that small businesses absorb when hiring new employees or installing cyber systems in an increasingly security conscious world. “The system is incentivized to accumulate bureaucracy and overhead,” Marandola told CDR. “This drives smaller businesses out and often leaves Canadian procurement officers with single sources of supply. The result is increased costs, few alternatives if quality drops, and little incentive to innovate.”
The Carney government recently announced an upcoming Defence Industrial Policy that includes a new Defence Investment Agency to reform procurement, a whole-of-government approach to defence spending, and the goal of strengthening Canada’s domestic defence industry and supply chains. Marandola and other Canadian small business owners are hoping that the document includes a revised Industrial and Technological Benefits strategy that fully leverages their capabilities.
He cites small businesses’ ability to buttress aerospace and defence sector Demand Satisfaction Rates (DSR) related to the frequency a supplier has spare parts in stock, and how fast they can get parts that are not in stock. “Small businesses are quick and agile,” says Marandola, who works with clients ranging from Boeing to Airbus, and Bombardier and is currently expanding M1 Composites’ U.S. sales. “We can adjust production lines faster and more effectively for short-run or custom-made parts and do so economically.”
Cambli, which customizes commercial truck chassis into high-security armored vehicles that can be used in cash-in-transit (CIT), law enforcement and security applications is another Quebec-based business that has potential to help grow Canada’s defence industrial base.
According to Benoit Lemay, the Saint-Jean-sur-Richelieu based facility’s Vice President and General Manager, its 175 skilled manufacturing workers can upgrade Ford F-550s, Kenworth T-370s and other standard trucks as required with options ranging from ballistic protection to reinforced structures, advanced communication systems, vision enhancements, and interior layouts tailored to maximize crew safety and operational efficiency. These skills are all easily ported to defence applications which the company currently performs under sub-contract for companies ranging from Rheinmetall Canada to DEW Engineering.
Lemay cites recent Urgent Operational Requirements (UOR) for Soldier Portable Air Defense Systems (SPADS) and Counter Unmanned Aerial Systems in Latvia, as mandates that small businesses like Cambli can better meet than larger primes. “We weren’t a defence company three years ago,” says Lemay. “But we had all the expertise. Now we are putting it into action.”
Cambli’s shift towards defence production is not without its challenges. These range from a need to intensify training, shift production lines, and to acquire a range of clearances and certifications. “Québec’s defence potential is strong,” says Lemay who is adamant about the path Canada needs to follow going forward. “We need procurement systems that recognize the agility of SMEs like Cambli, not just the primes.’’
Base Camp Connect recently announced a landmark agreement with the Canadian Armed Forces (CAF) that raises the purchase ceiling on its existing standing contract to $100 million and extends its duration until 2030. “Everybody wins,” says Jean-Philippe Grondin, Base Camp Connect’s CEO. “The move provides the CAF with greater flexibility and long-term planning capabilities and ensures that Base Camp Connect can continue delivering innovative, reliable solutions that keep operations connected, anywhere, anytime.”
Base Camp Connect has completed installations of more than 200 emergency, disaster response, and other systems for DND. Lessons learned in the Ukraine conflict where pervasive killer drones forced redeployment of mass attack formations into smaller more mobile teams further increased demand for interoperable voice and data communication kits that connect disparate systems for teams that operate in remote areas.
“The CAF is shifting towards disbursed command posts that generate less heat and RF signals,” says Grondin. “Our systems help by ensuring connectivity where it matters most. They are designed to be fast to deploy, easy to use, and reliable in the most extreme conditions.”
Base Camp Connect, which employs numerous CAF reservists, has hired 15 people during the past year in Quebec and the UK to help manage the company’s growth. Many are tasked for work in Europe, particularly with end users in French policing systems. The company is also working in Poland, and with the French Army to determine operational requirements. “It often takes 4-5 years to become part of a program,” says Grondin. “Armed Forces must be certain about the quality of the systems they buy so there is a lot of testing. This makes it tough on small businesses that must navigate substantial uncertainty until final deals are inked.”
ULTRA INTELLIGENCE & COMMUNICATIONS
The increasing complexity of deployments involving large numbers of small groups in highly specialized missions is also vastly increasing demand for data and information throughout military chains of command says Amanda Rudolf, Vice President of Marketing and Communications at Ultra Intelligence & Communications (Ultra I&C) which boasts “generations of experience” fielding defence related tactical communications, command and control, and cyber security technologies. Ultra I&C’s design and development site in the Town of Mount Royal, which employs 200 professionals, faces increased pressure due to growing demands. The site mainly supplies radios for battalions and above, largely serving U.S. clients.
During the past five years the company has morphed into an innovation hub that is focused on continuous improvements and upgrades to its existing offerings. A recently launched partnership with ETS (École de Technologie Supérieure) provides access to 40 dedicated researchers who are helping to predict and develop solutions for future needs.
“We completely reinvented Ultra I&C’s product line,” says Rudolf noting the importance of connecting soldiers, decision makers and drones. “That includes massive reductions in product size, weight, and costs and introductions of technologies such as High Throughput Mesh.”
These efforts have paid off. The U.S. Army recently awarded Ultra I&C a contract that will enable soldiers to test and train on its Archer troposcatter system to enhance network resiliency by adding an additional form of secure communications. The Archer’s key value-add is its ability to deliver high-throughput beyond-line-of-sight communications beyond 200 kilometers without relying on satellites or ground-based infrastructure.
“We continue to push hard in export markets,” says Rudolph pointing to recent contracts awards with NATO and in Poland. “But our upgraded product lines position us well to also be a cornerstone of Canada’s emerging Arctic strategy, so domestic demand could play an increasing role during coming years.”
Canada’s growing defence needs are breathing life into a range of industries amidst Quebec’s turbulent economy. SysNergie, which designs and builds battery modules and energy storage systems for high power high-density applications, is a prime example. Felix-Antoine LeBel, President of SysNergie, which he co-founded with a couple of friends, got his start in the industry when he and some buddies built an electric motorcycle when they were in university.
The company quickly pivoted to defence research after the newly elected Trump Administration signaled disfavor for the electric vehicle industry and what it regards as unfair Chinese trade practices. “We saw an opportunity right away,” says LeBel. “You can’t do advanced research for military, robotics, and medical applications in an adversary nation. So, we decided to do it here in Quebec. We want to be a “skunkworks of batteries.”
The Canadian Coast Guard (CCG), which needed a submersible battery for use in navigation buoys quickly became a franchise client. An initial funding win from partner Innovation, Science and Economic Development Canada (ISED) led to a design, a testing phase using 30 prototypes, and now full production at a new 6,000 square foot facility in Quebec City.
The alignment of the CCG with DND could lead to increased funding and possible new work down the line for SysNergie for rugged applications ranging from unmanned vehicles that can operate in the extreme cold to microgrids, and solar batteries.
Francois Legault, like many public officials, talks a lot. However, tangible initiatives such as Investissement Quebec’s recent commitment of $3.3 million—part of a broader $19.6 million expansion for Thales Canada’s Montreal-based soldier vehicle and optronics facility—demonstrate meaningful progress. This project is anticipated to create positions for 38 skilled professionals specializing in the manufacture of infrared imagers used in targeting, driver vision, and enhancement cameras.
In November the Legault government took another step by distributing (through Radio-Canada) a list of the nine projects that it will be promoting at the federal level that Bombardier Defence, Davie Shipbuilding, General Dynamics, L3Harris, and Héroux-Devtek will be bidding on.
At first this glace such actions appear modest. However, the Quebec government’s new openness will almost certainly lead the companies affected and other global aerospace and defence leaders to consider further investments in the province down the road.
Peter Diekmeyer is CDR’s Quebec Bureau Chief
