FedDev Ontario Announces Nearly $200 Million in New Funding to Strengthen Canada’s Defence Sector!
The Federal Economic Development Agency for Southern Ontario, FedDev Ontario, has announced a significant expansion of funding support for Canada’s defence manufacturing and innovation ecosystem, marking a major boost for businesses operating in southern Ontario. The announcement was made late last year at the Downsview Aerospace Innovation and Research hub in Toronto by Evan Solomon, Minister of Artificial Intelligence and Digital Innovation and the minister responsible for FedDev Ontario. The move underscores the federal government’s intent to deepen Canada’s defence industrial base while improving the global competitiveness of domestic companies.
At the centre of the announcement is the opening of the Regional Defence Investment Initiative (RDII) in southern Ontario. RDII is a nationwide programme valued at $357.7 million and delivered through Canada’s regional development agencies. Its objective is to accelerate the integration of Canadian businesses and regional ecosystems into both domestic and international defence supply chains, while simultaneously strengthening industrial capacity and driving innovation. The initiative is designed to support companies that already provide defence-related solutions, as well as firms with dual-use technologies or those looking to pivot their operations to serve defence applications.
As part of this national initiative, FedDev Ontario has been allocated $94.7 million specifically for southern Ontario. This funding is expected to support a wide range of activities, including scaling advanced manufacturing capabilities, commercialising innovative technologies, and enabling companies to meet stringent defence-sector requirements. The focus on dual-use products is particularly significant, as it allows advanced technologies developed for civilian markets—such as AI, advanced materials, robotics, and digital systems—to be adapted for defence and security applications.
In addition to its RDII allocation, FedDev Ontario has announced that it will commit a further $106 million from existing resources to defence-related initiatives in the region. This brings the agency’s total planned defence support in southern Ontario to nearly $200 million. The combined funding reflects a recognition of the strategic importance of the region, which hosts a dense concentration of defence manufacturers, aerospace firms, technology developers, and research institutions with deep expertise and established supply chain linkages.
Southern Ontario has long been a hub for defence-related manufacturing and innovation, supported by a strong base of skilled talent, advanced research infrastructure, and close proximity to major U.S. and global markets. The additional funding is expected to help companies modernise production, invest in innovation, and strengthen their ability to participate in complex, high-value defence programmes. It also aims to improve resilience within defence supply chains at a time when geopolitical uncertainty and global disruptions are increasing the need for secure, domestic industrial capabilities.
Commenting on the initiative, Evan Solomon highlighted the region’s role as a powerhouse for defence innovation and manufacturing. He emphasised that RDII is intended to unlock new opportunities for Canadian businesses to scale their technologies, integrate into global defence supply chains, and contribute meaningfully to Canada’s national security objectives. By combining targeted investment with regional strengths, the programme seeks to ensure that Canadian companies are not only suppliers, but also innovators shaping the future of defence technologies.
Through RDII and its additional funding commitments, FedDev Ontario is positioning southern Ontario as a critical pillar of Canada’s defence strategy. The initiative is expected to drive long-term economic growth, enhance innovation capacity, and reinforce Canada’s ability to deliver advanced, secure, and globally competitive defence solutions.
