Good morning! This is Queen Street Analytics' weekly roundup of regulatory developments, legislative discussions, political announcements and other government-related news concerning Canada's national defence, cybersecurity, border security, weapons systems, military commitments, and the Canadian Armed Forces (CAF), Royal Canadian Navy (RCN) and Royal Canadian Air Force (RCAF). Every Monday, we break down the most important updates in this space in under five minutes.

Want to track GR news in industries related to Defence? Don’t miss this week’s updates in ICT & Cybersecurity.

Dates: 2025-12-14 to 2025-12-20

📋 In This Week's Newsletter

• 🇨🇦 Canadian Federal Government News
• 🗺️ Canadian Provincial Government News
• 📚 What We're Reading This Week

Canadian Federal Government News

Government of Canada Implements Buy Canadian Policy in Strategic Procurement

On December 16, 2025, Minister Joël Lightbound announced the full implementation of the Buy Canadian Policy, a sweeping change in federal procurement that now prioritizes Canadian suppliers and content in major federal contracts exceeding $25 million. This policy applies to strategic procurement across all federal departments and agencies, as well as federal grants and contributions, and is set to expand to contracts valued at $5 million and above by spring 2026. Under these rules, procurements must feature significant Canadian content in manufacturing, research, and development, and large construction or defence projects now require Canadian-produced steel, aluminum, and wood where supply is available. The initiative aims to direct federal purchasing power toward supporting domestic industries by mandating that materials be manufactured or processed in Canada rather than simply sold by Canadian firms. The policy is accompanied by parallel measures, including the Small and Medium Business Procurement Program and the Policy on Reciprocal Procurement, rolling out in 2026. This marks a significant shift in procurement strategies for defence and infrastructure sectors, changing bid evaluations and supply chain considerations.

Sources: www.canada.ca

Bombardier Awarded $753 Million Contract to Deliver New Multi-Role Aircraft for RCAF

Secretary of State Stephen Fuhr announced the awarding of a $753 million contract to Bombardier for six Global 6500 aircraft, which will replace the Challenger fleet in Canadian military service. The aircraft will support emergency medical evacuations, disaster response, diplomatic missions, and senior government transport. The contract covers aircrew and maintenance training and aircraft modification for military duties, with delivery expected to begin in 2027. By choosing a Canadian-built platform, the government aims to support local manufacturing and skilled employment, with the Defence Investment Agency leading an accelerated procurement process. The initiative spans Bombardier facilities in Quebec and Ontario and integrates the company's national supply chain, directly and indirectly supporting hundreds of jobs across the industry.

Sources: www.canada.ca

Canada Commits Additional $50 Million to Ukraine Drone Capability Coalition

On December 16, 2025, Minister David J. McGuinty announced Canada will contribute an additional $50 million to the Drone Capability Coalition (DCC) for Ukraine at the 32nd Ukraine Defense Contact Group meeting. This supplements Canada’s $37 million previously earmarked and comes alongside more than $296 million in Canadian optical and infrared targeting systems supplied since 2022. Deliveries of surplus CAF equipment, including AIM-7 and AIM-9 motors, are scheduled for early 2026. Separately, Canada is contributing $200 million to a U.S.-sourced NATO capability package supporting Ukraine’s identified air defence and ammunition needs. These defence assistance packages link Canadian military suppliers with allied operations and increase the flow of complex defence components into multinational frameworks.

Sources: www.canada.ca

Minister Solomon Launches Canadian Quantum Champions Program Supporting Defence Innovation

Minister Evan Solomon announced Phase 1 of the Canadian Quantum Champions Program (CQCP), investing up to $92 million as part of a $334.3 million five-year quantum science strategy backed by Budget 2025. The government signed funding agreements with four Canadian firms—Anyon Systems, Nord Quantique, Photonic, and Xanadu Quantum Technologies—each eligible for up to $23 million to accelerate industrial quantum computing with clear security and defence applications in cryptography, advanced materials, and signal analysis. The National Research Council will oversee the program’s technological benchmarking. The CQCP’s launch links directly to the forthcoming Defence Industrial Strategy, positioning quantum computing for future national defence integration.

Sources: www.canada.ca

Government of Canada Supports Expansion of Defence-Linked Manufacturing in Southwestern Ontario

On December 16, 2025, the government announced over $5 million in repayable investment through FedDev Ontario for three manufacturers: Hydra Dyne Technology Inc. (hydraulic components for defence/aerospace), Future Transfer Co. Inc. (Ontario-based supply chain/logistics), and Melnik Resources (custom metal fabrication). Hydra Dyne is allocated $2 million for advanced automation to expand defence component manufacturing capacity, reinforcing the local supply network for heavy equipment. Future Transfer receives $2.5 million to enhance logistics infrastructure and reduce reliance on imported materials, while Melnik Resources is set to modernize production for metals-based defence and other industry clients. These investments support increased efficiency, advanced technology adoption, and regional supply resilience.

Sources: www.canada.ca

Defence Investment Agency Secretary Fuhr Embarks on Partnerships Mission to Norway and Germany

Secretary of State (Defence Procurement) Stephen Fuhr began an official visit to Norway and Germany from December 15 to 19, 2025 to strengthen bilateral and defence industrial partnerships. Meetings include senior government and military officials, the heads of both navies, and site visits with Kongsberg Defence & Aerospace, Rheinmetall, Nammo, and others. This mission includes engagement on innovation strategies, early industry involvement in procurement processes, and international supply chain integration, all reinforced by the mandate of Canada’s new Defence Investment Agency.

Sources: www.canada.ca

HMCS Max Bernays Returns after Historic Arctic and Indo-Pacific Naval Deployment

HMCS Max Bernays arrived in Esquimalt on December 19, 2025, after a four-month deployment under Operations LATITUDE, HORIZON, and NEON spanning the Western Arctic and Indo-Pacific. The ship navigated to a record latitude of 81° North—an unprecedented milestone for a Royal Canadian Navy vessel—while conducting joint exercises with the U.S. military to advance continental defence and domain awareness in the Arctic. Deployment highlights include maritime patrols to enforce UN sanctions on North Korea and participation in multinational exercises such as SAMA SAMA 25 and ANNUALEX 25. The mission validated the operational flexibility of Harry DeWolf-class Arctic and Offshore Patrol Vessels in diverse global theatres.

Sources: www.canada.ca

HMCS St. John’s Completes Five-Month NATO Deployment in Mediterranean and North Atlantic

On December 20, 2025, HMCS St. John’s returned to Halifax following a five-month tour with NATO forces in the Mediterranean Sea and North Atlantic under Operation REASSURANCE. The deployment included patrols and exercises with Standing NATO Maritime Groups 1 and 2 and engagement in partnership events with Allies. The vessel also took part in commemorative activities in Belgium and France, marking Canada’s continued involvement in NATO deterrence operations and multinational naval readiness.

Sources: www.canada.ca

Minister Champagne Conducts Trade and Defence Engagements with Key European Partners

Minister François-Philippe Champagne concluded a European visit that included defence industry dialogues in France, the UK, and Germany. Activities featured the launch of the Haut-Conseil des Affaires Canada–France for bilateral business, meetings with defence industry leaders regarding AI and data processing investments, and discussions with UK and German officials on strategic investments related to supply chains and technological innovation. On the sidelines, ChapsVision, a European data and AI company, announced plans to establish a Montreal base, with potential job creation in Canada. The visit also involved roundtables with Canadian bond investors and policy stakeholders.

Sources: www.canada.ca

StatsCan 2024 Annual Manufacturing Survey: Sector Revenue Down 0.9% to $931.2 Billion

Statistics Canada released data showing total manufacturing revenue in 2024 decreased by 0.9%, totalling $931.2 billion. The decline reflects aggregate conditions across all manufacturing, including defence, aerospace, and critical supply-chain industries.

Sources: www.statcan.gc.ca

Weekly Aircraft Movement Data Available for Late 2025

Data covering aircraft itinerant movements for the week of November 29 to December 5, 2025, has been published by Statistics Canada, providing an updated snapshot for aviation and aerospace industry stakeholders assessing operational and fleet activity trends nationwide.

Sources: www.statcan.gc.ca

Canadian Provincial Government News

Ontario Announces Support for Toronto Bid to Host Defence, Security and Resilience Bank

On December 17, 2025, Ontario launched its official bid for Toronto to serve as the headquarters of the proposed multilateral Defence, Security and Resilience Bank, expected to generate 3,500 skilled jobs and support defence innovation.

Sources: news.ontario.ca

Quebec Signs New Roadmap for Economic and Aerospace Cooperation with Bordeaux Region

Quebec’s delegation signed a cooperation roadmap with the Nouvelle-Aquitaine region, focusing on economic collaboration, aerospace research, and professional drone sector partnerships involving local businesses and research institutions.

Sources: www.quebec.ca

What We're Reading This Week

• Building military aircraft in Canada would create more than 12,000 jobs, Saab tells Ottawa: Industry analysis suggests significant employment potential from Canadian-based military aircraft production.
• BDC introduces platform to provide $4B to boost Canada's defence and security ecosystem: BDC launches new funding platform to support domestic defence sector growth.
• U.S. Senate passes $901-billion defence bill, demands Hegseth provide boat strike video: U.S. lawmakers approve major defence budget and call for increased transparency on military incidents.
• Canada provides $50-million to buy drones and drone parts for Ukraine: Details on recent government support to Ukraine’s drone program.
• Federal Contracts Now Demand Quantum Resilience as Data Harvest Accelerates: New requirements for quantum-resistant solutions in federal government contracts come to the fore.
• China, Russia pulling ahead of NATO in Arctic drone capabilities: report: Comparative study says China and Russia have outpaced NATO on Arctic drone deployments.
• New FedNor funding aims to help northern Ontario companies get into national defence supply chain: Ontario firms receive funds to expand their role in the federal defence supply chain.
• One-on-one with Defence Minister Anita Anand: Minister Anand discusses recent defence challenges and procurement priorities.
• The Breakdown | Europe invests in defence: Segment covers European defence spending trends and partnerships.
• The Breakdown | Europe invests in defence: Additional briefing on Europe's continued ramp-up of defence investments and implications for Canadian suppliers.

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