Dollars To Defence: Federal Funding For Dual-Use And Defence Technologies

For Canadian Small and Medium-sized enterprises (SMEs), accessing research and development funding is often a challenge. As part of Canada’s Defence Industrial Strategy (DIS) and its generational reinvestment in the Canadian Armed Forces, the Government of Canada is committing significant funding for research, development, and innovation to strengthen the national defence sector, bolster domestic supply chains, and increase collaboration with provinces, territories, Indigenous rights-holders and communities.

In this bulletin, we highlight selected federal and NATO programs intended to support Canadian companies, including start‑up and growth‑stage companies, developing dual‑use technologies (i.e., technologies with both civilian and defence applications) and defence technologies.

Federal Initiatives

1. Defence Industry Assist Initiative [DIS - Pillar III]

The National Research Council of Canada Industrial Research Assistance Program (NRC IRAP) Defence Industry Assist (DI Assist) initiative.

• Providing approximately $241 million over five years to support innovative Canadian SMEs developing defence and dual‑use technologies.

• Offering advisory services and funding to advance projects aligned with national defence priorities through NRC IRAP’s network of industrial technology advisors.

• High-potential SMEs receive technical and financial support to accelerate made-in-Canada solutions for Canadian Armed Forces capabilities and broader economic growth.

More information on Minister Mélanie Joly’s announcement can be found here.

More information on NRC IRAP’s DI Assist and eligibility can be found here.

2. Innovation for Defence Excellence and Security Program [DIS - Pillar III]

The Innovation for Defence Excellence and Security (IDEaS) program.

• Over $1 billion allocated over 20 years to address specific capability needs within the Department of National Defence.

• Targeted funding to advance defence‑focused technologies, strengthen defence readiness, stimulate economic activity, and expand Canada’s innovation ecosystem.

More information on the IDEaS program can be found here.

More information on the Defence Innovation Secure Hubs and eligibility can be found here.

3. Business Development Bank of Canada (BDC) – Defence Platform [DIS - Pillar III]

Business Development Bank of Canada (BDC) Defence Platform. 

• Providing up to $6 billion in funding over a multi-year period with $3.5 billion in financing and advisory support to help SMEs scale production and strengthen competitiveness and $500 million in investment capital through the StrongNorth Fund (deep‑tech, dual‑use applications) and the Catalyst Innovation Fund (early‑stage innovation).

• Priority areas include manufacturing, critical minerals, robotics, quantum technologies, aerospace, artificial intelligence, cybersecurity, and other dual‑use technologies.

More information on BDC’s announcement on the Defence Platform can be found here.

More information on the StrongNorth Fund and Catalyst Innovation Fund can be found here.

4. Regional Defence Investment Initiatives [DIS - Pillar III]

The Regional Defence Investment Initiative (RDII).

• Providing $357.7 million over three years through Canada's Regional Development Agencies beginning in 2025-2026, to strengthen defence capabilities, support regional economic development, and integrate businesses into domestic and international defence supply chains.

• Funding provided primarily as zero-interest loans to SMEs seeking to scale, meet industry standards, and pursue procurement opportunities, including for dual-use technologies, for eligible activities between April 1, 2025 and March 31, 2028.

• More information on each Regional Development Agency’s RDII can be found here: ACOA | CED-Q | CanNor | FedNor | FedDev Ontario | PacifiCan | PrairiesCan

5. Strategic Response Fund (SRF) [DIS - Pillar IV]

The Innovation, Science and Economic Development (ISED) Strategic Response Fund (SRF).

• Supporting large-scale, transformative projects strengthening economic resilience, supply chains, and jobs in key sectors such as steel, aluminum, automotive, forest products, artificial intelligence, and advanced technologies. Current priorities include clean technologies, critical minerals and industrial transformation.

More information on the Strategic Response Fund and eligibility can be found here.

6. Arctic Infrastructure Fund [DIS - Pillar V]

The Arctic Infrastructure Fund (AIF).

• Providing $1 billion to support critical dual-use transportation infrastructure across the Canadian Arctic, enhancing defence readiness, connectivity, supporting economic development, and advancing Indigenous reconciliation; funding may be repayable or non-repayable depending on project type.

More information on the Arctic Infrastructure Fund and eligibility can be found here.

NATO Initiatives

1. NATO Defence Innovation Accelerator for the North Atlantic (DIANA)

The Defence Innovation Accelerator for the North Atlantic (DIANA).

• Providing grant funding, test centre access, mentorship, and investor networks to innovators in NATO member states to advance emerging and disruptive dual-use technologies, with selected participants eligible to receive up to €400,000 to support research, development, and demonstration activities.

• Focusing on technology domains including AI, autonomy, quantum, biotechnology and human enhancement, energy and power systems, advanced materials, advanced manufacturing, and aerospace. The next Challenge Call is expected in 2026.

More information about DIANA and eligibility can be found here.

Our overview of Canada’s Defence Industrial Strategy can be found here.

More information on Fasken's overview of Canada’s Defence Industrial Strategy, including its “Build–Partner–Buy” approach to defence and dual-use procurement, can be found here.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.