The Business Development Bank of Canada (BDC) has announced a new, $4-billion Defence Platform that will allow it to invest in and support Canadian defence technology companies.
The platform, announced today, includes $3.5 billion for financing and advisory services to help Canadian businesses scale up and participate in “major defence contracts and national projects focused on sovereignty.” Another $500 million will be delivered through three streams: the deep-tech, dual-use focused StrongNorth Fund, the Catalyst Innovation Fund, and indirect investments in VC funds “aligned with Canada’s defence and sovereignty priorities.”
The announcement is part of the federal government’s larger push to boost defence spending in Canada to a target of five percent of gross domestic product by 2035. In its press release, BDC explicitly encourages businesses, such as advanced manufacturing companies, to “apply their skills to defence needs.”
In a press release, BDC said the support will prioritize sectors “critical to national security,” such as manufacturing, robotics, critical minerals, quantum computing, aerospace, cybersecurity, artificial intelligence (AI), and technologies that can be used for civilian and military purposes.
In September, BDC CEO Isabelle Hudon told BetaKit that the bank was preparing to serve the country’s defence tech sector in a “more aggressive way.” As part of massive proposed defence spending, Budget 2025 allocated $1 billion to BDC to create a new Defence and Security Business Mobilization Program, which it said would provide loans, capital, and advisory services to help small and medium-sized businesses contribute to Canada’s defence and security.
According to the release, the $4-billion platform is based on a $1-billion capital injection announced in the most recent federal budget. BetaKit has reached out to BDC to clarify whether these funds are additive or included in the platform.
BDC Capital executive VP Geneviève Bouthillier wrote in an email to investors on Monday that BDC was willing to “alleviate” restrictions in fund documents to allow VCs to invest in companies that make or sell military-related products.
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Feature image courtesy BDC
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