During the last federal election campaign, Prime Minister Mark Carney committed to reaching Canada’s NATO defence spending target of 2% of GDP, a goal that had eluded multiple prior governments. By March 2026, the government announced that it had reached this target. In addition to serving defence and security goals, the increased spending also brought an influx of investment in Canadian innovation.

As a war of words with the United States escalated into a trade war, the Carney government said it would aim to direct the bulk of this increased investment in security and defence towards Canadian firms. While procurement and large military contracts still often fall to established companies such as General Dynamics Canada or Bombardier, the startup market has caught wind of the policy shift and is already capitalizing on it.

With Ottawa’s already impressive startup scene, containing tech parks such as Kanata North, and having produced now-global giants such as Shopify, it is fitting that as the federal government seeks to strengthen Canadian security and sovereignty through domestic procurement, Ottawa’s innovators, who are just steps away from the Department of National Defence building, are in a strong position to get in on some of the action.

As technology increasingly shapes combat and security planning, Canadian startups in the Ottawa area have opportunities to capitalize on this new unlock of federal money. Indeed, in March the federal government committed over $900 million for innovative defence and dual-use technology (technology that has both a military and civilian purpose). On October 1, the government announced that H2 Analytics Inc. was receiving $800,000 in federal investment as the company seeks to expand its role in bringing modern technologies such as artificial intelligence to the forefront of defence and security training. Moreover, companies such as InPho and AVSS received well over a million dollars of federal investment.

This extends beyond just federal money; private sector groups are sensing the trend and responding by pouring their own capital into the city. In June of this year, Dominion Dynamics raised nearly $140 million in its Series A funding round, setting a Canadian record for the defence-tech sector. Calian Group announced an initiative to help funnel $100 million from various financial channels to accelerate sovereign Canadian C5ISRT capabilities, with a new Northstar Defence Lab at Area X.O serving as the first facility in a planned national network. This offers even further future opportunities for startups in this space. Ottawa’s own Defence Innovation Hub touts over 330 companies in the region; it appears this is a space that is both established and growing.

It is clear that the Canadian government is committed to expanding Canada’s domestic defence base and is supporting this goal with large amounts of capital. As the private sector also responds to this trend, it seems opportunities to receive funding for dual-use technology innovations will only increase.

With a federal defence budget that seems likely to continue to grow (as NATO spending targets have now shifted from 2% to 5% of GDP), the opportunity for companies that can support the Canadian security and defence industry, directly or indirectly, seems almost undeniable.

Furthermore, many of these companies are using new technologies such as artificial intelligence to replace, support, or integrate with current systems. The startup scene in Ottawa appears to be receiving a further cash boost as of late, and is beginning to reward innovators, engineers, and the local economy.