As global conflicts continue to drive increased defense spending worldwide, Canadian military stocks are attracting attention from investors.
How much does Canada spend on defending its borders?
The Canadian government released its defense budget for the fiscal year 2024-25, projecting total spending of C$33.8 billion (approximately US$24.6 billion). This marks an increase from the C$29.9 billion allocated in 2023-24.
From the ongoing Ukraine-Russia conflict and the Israel-Hamas attacks in Gaza, we are living in an era of battles at a scale not seen in decades.
This article aims to provide an informative and objective overview of the top five publicly listed Canadian military stocks.
The top 5 Canadian military stocks
5. Draganfly (CSE:DPRO)
Drone solutions and systems developer Draganfly (CSE:DPRO) manufactures commercial unmanned vehicle systems and software. It serves public safety, agriculture, industrial inspections, security, mapping and surveying markets.
The team recently completed training and demonstrations in Ukraine to equip people with the expertise to leverage Draganfly’s de-mining solution. After the dam destruction in Ukraine, Draganfly performed evacuation, flood management and de-mining missions in Kherson.
Draganfly is uniquely positioning to support Canada’s recent C$2 billion military aid package to Ukraine, which includes over C$220 million dedicated to drone, counter-drone, and electronic warfare capabilities. As the world’s oldest dual-use drone manufacturer with 27 years of design, engineering, and development experience—and one of a handful of Canadian manufacturers with proven solutions, Draganfly is uniquely positioned to support this critical national and international mission.
With a market cap of C$193 million, Draganfly stock (CSE:DPRO) has traded traded between C$5 to C$9 since July. So far this year, DPRO stock has risen more than 55 per cent.
As the demand for innovative drone technology continues to soar on the consumer and military fronts, investors are tracking the top players in the market.
Stories in the media covering drones have escalated after Russia’s invasion of Ukraine. Ukrainian forces have been using air and sea drones to attack and surveil the Russians with results that have surprised many.
4. Magellan Aerospace Corp. (TSX:MAL)
Magellan (TSX:MAL) is a global aerospace and defense contractor, providing various products and services to customers worldwide. With an emphasis on engineering excellence, Magellan Aerospace has become a key player in the Canadian military industry.
In its Q2 2025 financial results statement, the company recorded a 2.8 per cent increase in revenue and an 25 per cent increase in profit of C$249,793 and C$33,282, respectively.
The company also noted that though global air travel has seen signs of recovery with revenue passenger kilometres approaching pre-COVID 19 pandemic levels, its finances and operations continue to be influenced by overhanging impacts from the pandemic.
These impacts include customer build rate adjustments (and the impact on production scheduling), higher prices for goods and services, limited availability of products, disruptions to supply chains and labour shortages.
The ongoing invasion of Ukraine by Russia also continues to disrupt supply chains and cause instability in the global economy. The team admitted that the extent and potential magnitude of the economic impacts on the aerospace industry remains uncertain.
This international aerospace company boasts a market cap of C$422.0 million and spiked in value near C$20 in late June 2025, but has simmered to the C$16 range by September 2025. Magellan stock (TSX:MAL) has risen 65 per cent since the year began.
3. Kraken Robotics Inc. (TSXV:PNG)
Kraken (TSXV:PNG) is a marine technology company providing complex subsea sensors, batteries and robotic systems to clients in over 30 countries.
The Newfoundland and Labrador-based company opened a new battery production facility in Nova Scotia to meet defense sector demand. Revenue for 2024 was C$91.3 million, with 2025 guidance up to C$135 million.
Earlier this month, the company announced that it has received C$13 million in orders for synthetic aperture sonar and subsea batteries. The orders are from customers based in the United States, Norway, and Turkey and include an order for 10 SAS from one customer. The Kraken sonar and SeaPower battery systems from this order will be integrated on four different types of uncrewed underwater vehicle platforms, ranging in size from small-class to large-class. The company’s CEO said that many defense clients are moving toward Kraken sonar over sidescan because it offers significantly increased area coverage rates and consistent high resolution across the entire swath.
Kraken’s stock (TSXV:PNG) has risen over C$4 as of September 20205 and is up more than 65 per cent since the year began, with a market cap of C$1.3 billion.
2. Bombardier Inc. (TSX:BBD)
Bombardier (TSX:BBD) is a global aviation company focused on the design, manufacturing and servicing of business jets. It has approximately 5,000 aircraft in service across multinational corporations, charter and fractional ownership providers, governments and private individuals. Bombardier aircraft are also used in government and military special-mission roles across the world.
Its subsidiary, Bombardier Defense recently delivered its ninth Global aircraft to the U.S. Air Force as part of the BACN (Battlefield Airborne Communications Node) program. The aircraft, designated E-11A and nicknamed “Wi-Fi in the sky,” serves as a high-altitude communications gateway, enhancing interoperability and situational awareness for air and ground forces
Bombardier stock (TSX:BBD) has climbed 97 per cent since the year began and finished June 2025 at C$118 a share, rising to $195 by September 2025.
1. CAE Inc. (TSX:CAE)
CAE (TSX:CAE) is a leading provider of simulation and modeling technologies, as well as training services for various defense and security sectors. With a wide array of customers domestically and internationally, CAE has established a strong position within the Canadian military industry.
It its fiscal Q1 2026 financial results, CAE reported revenue of C$1.098 million vs. C$1.072 million in the year prior. The company’s chairman, Calin Rovinescu, added that CAE achieved double-digit income growth and margin expansion in defense and continued momentum in civil. CAE stated it remains on track to capitalize on the significant opportunities ahead, supported by secular demand in civil aviation and the generational reinvestment underway in defence across NATO, including Canada’s plan to more than double its spending over the next decade.
Holding a market capitalization of C$12.8 billion, CAE stock (TSX:CAE) began July 2025 trading just under $30 and hasn’t looked back. The stock is up over 7.5 per cent in the past year.
Honourable mentions
Rheinmetall Canada Inc. (OTC Pink:RNMBF) is a subsidiary of Rheinmetall Group, a renowned defense contractor specializing in vehicle systems, electronic solutions, and weapons and munitions systems. The company’s advanced technologies have made them a vital contributor to Canada’s military capabilities.
MDA Ltd. (TSX:MDA) is an international space mission partner and a robotics, satellite systems, and geointelligence business. The Brampton, Ontario-based company was recently selected to deliver enhanced space situation awareness to the Department of National Defence.
iShares U.S. Aerospace & Defense Index ETF (TSX:XAD) provides exposure to U.S. companies in the aerospace and defense industry, including companies that manufacture commercial and military aircraft, missiles, and other defense-related products.
Risks of investing in Canadian military stocks
While investing in Canadian military stocks might offer potential advantages, it is essential to acknowledge the associated risks. These risks include:
1. Government contracts: The majority of Canadian military companies rely heavily on government contracts, thus making their revenue vulnerable to changing political and defense spending priorities.
2. Regulatory environment: Defense companies operate within a highly regulated industry, necessitating compliance with rigorous standards and certifications. Non-compliance or changes in regulations could impact their operations and profitability.
3. Global political dynamics: The performance of Canadian military stocks can be influenced by geopolitical events, conflicts and government decisions. Investors must stay updated on global affairs to understand the potential impact on their investments.
Investment conclusion
Investing in the Canadian military industry can be enticing because of increased global defense spending and ongoing international conflicts. However, potential investors must conduct thorough research and carefully evaluate their risk tolerance before considering investing in any specific military stock.
Beyond that, diversification within a portfolio is crucial to minimize risk exposure. Consulting with a financial advisor or conducting independent research is recommended to make informed investment decisions.
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