- Canada is boosting defense spending with a focus on technologies that serve both military and environmental goals, such as autonomous systems and low-emission fuels
- Canadian startups and public companies like CAE, MDA, and Kraken Robotics are developing dual-use innovations that support national security and sustainability
- NATO’s DIANA initiative is helping Canadian firms scale deep tech solutions that address climate resilience and defense needs
- Investors are increasingly drawn to dual-use technologies for their potential to reduce geopolitical risk while supporting Canada’s green transition
As global tensions rise and climate imperatives intensify, Canadian investors are increasingly drawn to dual-use technologies—innovations that serve both defense and civilian sustainability goals.
This convergence is reshaping the investment landscape, offering opportunities that align national security with environmental stewardship.
The dual mandate: Security and sustainability
Canada’s defense sector is undergoing a transformation. With a projected increase in defense spending to 2 per cent of GDP in 2025–26, the federal government is investing over C$9 billion to modernize the Canadian Armed Forces (CAF), enhance infrastructure, and support innovation. A significant portion of this funding is earmarked for equipment modernization, including low-emission propulsion systems, autonomous vehicles, and cybersecurity platforms—technologies that also have civilian applications.
This dual-use approach is not just a policy shift; it’s a strategic investment in Canada’s industrial and innovation base. For example, Reaction Dynamics, a Longueuil-based aerospace firm, is developing eco-friendly rocket engines and has partnered with Maritime Launch Services to deploy satellites from Nova Scotia by 2028. Similarly, Tactiql, an Ottawa startup founded by a CAF veteran, is building secure data platforms for military intelligence that could also serve civilian emergency response systems.
This article is a journalistic opinion piece which has been written based on independent research. It is intended to inform investors and should not be taken as a recommendation or financial advice.
NATO DIANA: A catalyst for Canadian innovation
Canada’s integration into NATO’s Defence Innovation Accelerator for the North Atlantic (DIANA) has further accelerated this trend. With a regional office in Halifax and multiple Canadian startups selected for DIANA’s 2025 cohort—including Quantropi, Flosonics Medical, and Qidni Labs—Canada is positioning itself as a leader in deep tech innovation.
DIANA provides funding, mentorship, and access to NATO’s test centres, enabling Canadian firms to scale technologies that address both security threats and climate resilience. This includes areas like quantum encryption, health monitoring, and critical infrastructure protection.
Investment opportunities in Canadian dual-use stocks
Several publicly traded Canadian companies are already capitalizing on this convergence:
- CAE Inc. (TSX:CAE): Specializes in simulation and training technologies for defense and healthcare. Its platforms support both military readiness and civilian emergency response.
- MDA Ltd. (TSX:MDA): A leader in space-based surveillance and robotics, MDA’s technologies are used in both defense and environmental monitoring.
- Kraken Robotics (TSXV:PNG): Develops underwater sensors and autonomous systems for naval and oceanographic applications.
- Roshel Smart Armored Vehicles: Builds modular vehicles used by both military and law enforcement, with increasing interest in electric and hybrid models.
Venture capital and ecosystem support
Canada’s IDEaS program and organizations like the Council of Canadian Innovators (CCI) are actively supporting dual-use startups through funding and commercialization support. Venture capital firms such as BDC and ONE9 are also stepping up, recognizing the long-term value of technologies that serve both defense and climate goals.
Why It matters for investors
Investing in dual-use technologies offers a hedge against geopolitical instability while supporting Canada’s climate commitments. These innovations reduce resource dependence, enhance resilience, and create exportable IP that can serve allied nations.
For Canadian investors, this is more than a trend—it’s a strategic pivot. As defense and decarbonisation become intertwined, the companies at this intersection are poised to deliver both returns and impact.
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