Defence Diversification
Exploring opportunities in Canada's growing defence sector
Canada’s defence and aerospace sector is expanding, creating new opportunities for local businesses that may not traditionally see themselves as part of the supply chain.
You do not need to be a defence company to get started. Manufacturers, fabricators, transportation providers, technology firms, maintenance providers, professional services firms and other suppliers may all have capabilities that align with defence, aerospace or security-related markets.
You May Be Closer Than You Think
Many businesses assume defence work is only for large aerospace or military contractors. In reality, prime contractors and government buyers often need support from small and medium-sized businesses with specialized capabilities.
Your business may be a fit if you can answer “yes” to any of the following:
- Do you manufacture, assemble, repair or maintain specialized equipment or systems?
- Do you provide technical, industrial, logistics or professional services?
- Do you serve industries such as energy, transportation, construction, aviation, manufacturing or technology?
- Do you have a product or service that could support secure, remote, harsh or mission-critical environments?
- Do you want to reduce dependence on one market by exploring new customer segments?
Growing Market for Canadian Suppliers
The Government of Canada is placing renewed focus on defence, security, sovereignty and industrial capacity. This includes investment in defence procurement, innovation, aerospace, advanced manufacturing, cybersecurity, logistics, infrastructure, and technologies that can support Canada’s military and security priorities.
Access new customers
Connect with new buyers, including government, prime contractors, large industrial customers and defence-related supply chains.
Diversify revenue
Apply your existing products, services or capabilities in new markets to reduce reliance on one sector, customer or revenue stream.
Develop partnerships
Build relationships with prime contractors, suppliers, researchers, ecosystem partners and support programs that can lead to future opportunities.
How Defence Procurement Works
Entering the defence sector can take time. Businesses often need to understand new procurement processes, buyer expectations, security requirements and partnership models. There is more than one way to enter the defence market.
1. Sell directly to government
Some opportunities are posted through federal procurement systems such as CanadaBuys. Businesses can register, search tender opportunities, monitor upcoming procurements and learn how to bid on federal contracts. CanadaBuys also points businesses to Procurement Assistance Canada seminars and support for suppliers.
2. Become a supplier to a prime contractor
Many defence contracts are led by large companies, often called prime contractors. These companies may need Canadian suppliers to help deliver products, services, components, technology or local support. For many small and medium-sized businesses, entering the supply chain of a prime contractor can be a more practical first step than bidding directly on a major government contract.
3. Participate through Industrial and Technological Benefits
Canada’s Industrial and Technological Benefits policy is designed to leverage defence and security procurement to generate economic benefits in Canada. This can create opportunities for Canadian suppliers, including small and medium-sized businesses, to connect with prime contractors and participate in defence-related supply chains.
4. Respond to innovation challenges
Programs such as Innovation for Defence Excellence and Security (IDEaS), help Canadian innovators develop solutions for defence and security challenges. IDEaS provides multiple funding mechanisms and is designed to connect Canadian innovators with Department of National Defence and Canadian Armed Forces needs
5. Build partnerships before opportunities are posted
Relationships matter in this sector. Businesses may benefit from attending industry events, joining relevant associations, connecting with economic development partners, meeting prime contractors and understanding where their capabilities fit before a formal procurement opportunity is released. CADSI, the Canadian Association of Defence and Security Industries, hosts defence industry events for SMEs, OEMs, cyber firms and other companies looking to connect with Canada’s defence community.
Annual Events:
- DEFSEC West l Calgary – March 2026
- Alberta Aviation , Aerospace and Defence Summit l Edmonton – May 2026
- CANSEC l Ottawa – May 2026
- Aerospace, Defence and Security Expo l Abbotsford – August 2026
- DEFSEC Atlantic l Halifax – October 2026
Frequently Asked Questions
Do I need to be a defence company to explore this opportunity?
No. You can enter the defence and aerospace sector by applying existing capabilities in a new market. Manufacturing, logistics, technology, construction, professional services and industrial support businesses may all have relevant offerings.
Is defence diversification only for large companies?
No. Small and medium-sized businesses can participate through direct procurement, subcontracting, innovation challenges, partnerships and supply chain opportunities. In many cases, SMEs bring specialized expertise that larger contractors need.
How long does it take to enter the defence sector?
Timelines vary. Some businesses may find near-term opportunities through services, subcontracting or smaller procurements. Others may need to spend more time building relationships, meeting requirements (certifications, etc.) or preparing for longer procurement cycles.
What is a prime contractor?
A prime contractor is a company that holds the main contract with government and is responsible for delivering a project, system or service.
Prime contractors often rely on suppliers and subcontractors to meet their Industrial and Technological Benefit (ITB) obligations. At least 15% of these contracts must directly benefit Canadian small and medium-sized businesses.
What are Industrial and Technological Benefits?
Industrial and Technological Benefits are economic commitments tied to certain defence and security procurements. They are intended to support business activity, innovation and industrial capacity in Canada. These commitments can create opportunities for Canadian suppliers.
What should I prepare before attending a defence or aerospace event?
Prepare a short value proposition that explains who you are, what you offer, what sectors you serve, what makes you credible and what type of partners or opportunities you are seeking. Bring examples of past work, certifications, capacity information and a clear explanation of how your business could support defence, aerospace or security needs.
Can Sturgeon County help me find specific contracts?
Sturgeon County can help businesses understand where to look, connect with relevant resources and prepare for market entry. Businesses are responsible for reviewing opportunities, determining fit and submitting bids or proposals.