Canada’s expanding defence ambitions are drawing attention from some of the biggest names in finance. On October 19, BMO announced it would join forces with the Washington-based Institute of International Finance to bring banking, government and industry leaders together for a major defence-financing discussion in Toronto.
The October 22 gathering comes as Ottawa seeks billions in new investment to strengthen Canadian manufacturing, cybersecurity, critical infrastructure and military capabilities.
The announcement is significant, although it does not represent a new lending agreement or a dedicated investment fund. Instead, it reflects a growing effort to connect private capital with Canada’s defence priorities.
With the federal government planning an unprecedented expansion of defence-related investment, the challenge is increasingly about finding financing that can turn government ambitions into new factories, technologies and Canadian jobs.
BMO and Washington-Based Institute Plan Major Toronto Defence Forum
BMO and the Institute of International Finance announced on October 19 that they will jointly host a Defence Finance Forum on October 22, 2026. The event will take place at First Canadian Place in downtown Toronto, bringing together senior representatives from banking, government, technology and industry. According to BMO, the objective is to explore how private investment can strengthen Canada’s defence, security and resilience sectors. Discussions will cover everything from industrial expansion and infrastructure development to advanced technology and financial regulations.
The gathering will include Doug Guzman, chief executive officer of Canada’s Defence Investment Agency, and retired general Wayne Eyre, a former chief of the defence staff. Participating organizations include Brookfield Asset Management, CAE, BCE, Cohere and Telesat, alongside financial institutions and defence-related groups. Their involvement demonstrates how national security increasingly intersects with industries beyond traditional military manufacturing. However, BMO has not announced a specific financing commitment arising from the forum. The immediate objective is to bring together organizations capable of turning investment proposals into practical projects.
Washington-Based Institute Brings Global Financial Connections
The Institute of International Finance is headquartered in Washington, D.C., but operates as an international financial-industry association rather than an American government agency. According to BMO, the organization represents approximately 400 members across more than 60 countries. Its work includes financial research, regulatory policy, risk management and cooperation between financial institutions and governments. Those connections give the institute access to banking leaders familiar with financing complex infrastructure, industrial and technology projects around the world.
The partnership with BMO is particularly relevant because defence financing involves challenges that ordinary commercial lending does not always address. Projects may require security clearances, specialized equipment, government approvals and years of development before generating revenue. Investors need confidence that financing arrangements can withstand procurement delays and changing security requirements. By bringing international financial expertise into the Canadian discussion, the institute could help identify investment structures that address these risks. Still, its involvement should not be mistaken for a promise to provide funding. The October announcement concerns collaboration on a forum, not an investment agreement between the two organizations.
Canadian Defence Companies Face Significant Financing Challenges
Growing government defence budgets do not automatically make financing easier for smaller businesses. A June 2026 study by the Business Development Bank of Canada found that 52% of defence-related small and medium-sized businesses seeking financing expected difficulty obtaining it. Among more defence-intensive companies planning to borrow or raise capital, 74% were seeking at least C$1 million. The figures demonstrate why access to financing has become an important issue as Canada’s defence sector prepares for expansion.
Many companies face unusual financial pressures. A manufacturer developing specialized aircraft components may need expensive equipment, skilled workers and extensive testing before securing a government contract. Software businesses can face similar challenges when developing secure communications or military applications. BDC identified lengthy procurement processes, uncertain cash flow and concentrated customer bases as obstacles to securing financing. Traditional lenders can be reluctant to accept those risks without reliable contracts or guarantees. Improving access to working capital, equity investment and longer-term financing could help promising Canadian companies expand production rather than abandon opportunities they cannot afford to pursue.
Ottawa’s Defence Strategy Creates Hundreds of Billions in Potential Investment
BMO’s initiative comes alongside one of Canada’s most ambitious defence-industrial expansions in decades. In February 2026, Prime Minister Mark Carney’s government introduced a Defence Industrial Strategy identifying approximately C$180 billion in defence procurement opportunities and C$290 billion in defence-related capital investment opportunities over ten years. The strategy seeks to strengthen domestic production, reduce dependence on foreign suppliers and provide Canadian businesses with a more predictable market for military equipment and related technologies.
The government’s approach follows a framework called Build–Partner–Buy. Canada intends to prioritize domestic manufacturing where practical, cooperate with allies when Canadian capabilities are insufficient and purchase internationally when necessary. Ottawa also aims to increase the share of defence acquisitions awarded to Canadian companies to 70%. The Defence Investment Agency, led by Doug Guzman, is intended to accelerate procurement and improve coordination between government and industry. On October 6, legislation was introduced to establish the agency as a Crown corporation. These initiatives could create opportunities for manufacturers, investors and technology developers, although projected spending and policy targets should not be confused with finalized contracts or guaranteed business revenue.
Canada’s Defence Industry Already Generates C$17.3 Billion in Revenue
Canada’s defence industry already represents a significant part of the national economy. According to the federal government’s State of Canada’s Defence Industry 2026 report, companies generated approximately C$17.3 billion in revenue during 2024, based on the latest available industry data. Defence exports approached C$8 billion, while direct industry employment stood at roughly 37,700 jobs. When supplier activity and employment supported through associated consumer spending are included, the industry’s total employment contribution reached approximately 81,800 positions.
The sector also contributed C$11.1 billion to Canadian gross domestic product in 2024, including direct, indirect and induced economic activity. Smaller businesses account for a substantial portion of the industry’s structure, with companies employing fewer than 500 people representing more than 90% of firms. However, larger companies still generate most sector revenue and exports. That creates a challenge for emerging businesses seeking to move beyond research and development into larger manufacturing contracts. Better financing could help smaller companies expand their facilities, hire skilled employees and compete internationally. For workers in aerospace, engineering, shipbuilding and advanced manufacturing, the outcome could affect employment opportunities well beyond traditional military bases.
BMO Has Already Announced a C$70 Billion Canadian Investment Plan
The defence-financing forum follows another major announcement from BMO. On September 11, the bank said it intended to mobilize up to C$70 billion in new capital over the next ten years to support industries considered important to Canada’s economic security and resilience. Defence and security are included, alongside electricity infrastructure, transportation, energy, mining, critical minerals and artificial intelligence computing. The initiative reflects the bank’s interest in financing major sectors tied to Canada’s long-term competitiveness and economic independence.
However, the C$70 billion figure covers all the identified sectors and should not be interpreted as money exclusively reserved for defence projects. BMO said capital could be mobilized through commercial financing, debt markets and public equity fundraising. Those mechanisms differ from simply lending the entire amount directly to businesses. The bank also joined the development group for a proposed multinational Defence, Security and Resilience Bank in February 2026. Together, these announcements show a growing focus on security-related investment. The outstanding question is how much capital ultimately reaches Canadian companies and which projects can secure financing on commercially workable terms.
Proposed International Defence Bank Could Expand Access to Capital
Canada is also helping develop a proposed international financial institution known as the Defence, Security and Resilience Bank. The initiative aims to provide longer-term, lower-cost financing for defence-related projects across participating allied countries. In March 2026, Canada hosted negotiations involving representatives from 18 countries. Participants agreed on founding articles in April, while Canada and eight other countries announced their support for advancing the institution in July. Canada was selected as the location for its future headquarters.
The proposed institution could eventually offer loans and financial guarantees that make commercial lenders more comfortable supporting defence manufacturers and infrastructure developers. Such guarantees could be particularly valuable for smaller companies that possess promising technology but struggle to satisfy conventional lending requirements. BMO joined the Defence, Security and Resilience Bank Development Group earlier this year, although that initiative is separate from its collaboration with the Institute of International Finance. Participating governments have expressed an ambition to make the multinational bank operational as early as 2027. Until the necessary approvals and operating arrangements are completed, however, its potential financing benefits remain proposals rather than services companies can already access.
Artificial Intelligence, Cybersecurity and Space Are Emerging Priorities
The October 22 forum will also examine how financing can support emerging technologies associated with national security. BMO identified artificial intelligence, cybersecurity, digital infrastructure and sovereign space capabilities among the planned discussion topics. Organizations such as Cohere, BCE and Telesat are listed among participants, reflecting the increasing importance of software, communications and satellite infrastructure in defence planning. These technologies often have civilian and military applications, creating potential commercial opportunities beyond traditional government procurement.
Cybersecurity is particularly important because defence suppliers must protect sensitive information and technology. In April 2026, Canada introduced the first level of its Canadian Program for Cyber Security Certification, establishing initial security requirements for selected defence contracts. The first level includes 13 security controls, with additional certification requirements being introduced progressively. These standards can improve security but may also add costs for smaller suppliers. The Canadian Centre for Cyber Security has warned that critical infrastructure and digital supply chains face increasingly sophisticated threats, including state-sponsored activity. Financing therefore needs to support not only product development but also the secure systems, specialized employees and regulatory compliance necessary to deliver dependable technology.
Critical Minerals and Infrastructure Could Attract New Investment
Canada’s defence-financing ambitions extend into industries that do not always appear directly connected to military spending. Critical minerals, transportation systems, electricity infrastructure and domestic manufacturing capacity are essential to producing advanced equipment and maintaining secure supply chains. BMO’s forum specifically identifies critical minerals, defence training and sovereign space infrastructure as potential investment priorities. These sectors could benefit from cooperation between public agencies, commercial banks and institutional investors.
The federal government has already introduced measures intended to strengthen related industries. In March 2026, Ottawa announced more than C$3.6 billion in critical-minerals programs and investments, including a C$1.5 billion First and Last Mile Fund designed to improve infrastructure serving mining regions. The government also announced C$200 million for core infrastructure supporting a Canadian-owned spaceport. Such projects illustrate how defence investment can intersect with broader economic development. A new processing facility may require roads, electricity, engineers and transportation services, creating opportunities for multiple businesses. However, mineral prices, permitting requirements, construction costs and uncertain commercial demand remain important risks that financing arrangements must address.
October 22 Forum Will Test Whether Financial Interest Becomes Action
BMO’s collaboration with the Institute of International Finance represents an important step in connecting financial institutions with Canada’s expanding defence sector, but its ultimate impact remains uncertain. The October 22 forum is designed for discussions under the Chatham House Rule, allowing participants to use information shared without identifying the individuals or organizations responsible for specific remarks. That arrangement can encourage candid discussion about investment risks, security requirements and government policies. It also means a complete public account of the conversations may not become available.
The real measure of success will come after the event. Canadian manufacturers need financing that supports production, not simply expressions of interest. Investors require credible contracts, dependable government policies and realistic expectations about returns. Ottawa must demonstrate that its ambitious procurement strategy can move projects forward efficiently. If these pieces come together, private capital could help create manufacturing jobs, strengthen supply chains and commercialize Canadian technology. For now, the BMO–IIF initiative remains a forum rather than a confirmed financing deal. Its significance will depend on whether discussions eventually translate into actual investment and stronger Canadian defence capabilities.
