OTTAWA — Ontario’s Economic Development Minister Vic Fedeli knows he has to hustle to secure job-creating developments with defence industry ties for his province — now that Ottawa is poised to move quickly on major military purchases.
With the navy looking to place a rush order for submarines and the Swedish defence firm Saab dangling the prospect of assembling fighter jets in Canada, there’s a race on to secure defence-related industrial development and the well-paid jobs that come with them.
The chief salesman for Canada’s most populous province visited the TKMS submarine manufacturing shipyard in Kiel, Germany earlier this month, and plans to head next to the Hanwha shipyard in South Korea, likely in the new year.
TKMS and Hanwha are rivals for Canada’s sub contract.
“Depending on what lands here, obviously these things will be in the billions,” Fedeli told The Canadian Press.
“We’re very pleased that the federal government is moving so quickly on the submarine contract, to have a supplier list shortened to two already. And we’re hearing, very strongly, that the decision could be made early in 2026.”
Ontario might not be the first province that comes to mind when it comes to submarines. Much of the domestic economic benefits from the sub contract are expected to come through maintenance and sustainment facilities on both coasts.
But the province is also home to Ontario Shipbuilding, formerly known as Heddle, and roughly 300 defence companies, including makers of component parts and software.
Buying military goods isn’t like shopping around for a new car. Companies bidding on large defence contracts typically are expected to invest in Canada — to secure the contracts, prepare for future orders and expand supply chains.
Governments of countries with large defence contractors also tend to get directly involved through lobbying and efforts to sweeten contract bids.
Ontario has a large aerospace industry. In facilities in Mississauga near the Pearson airport, Bombardier already assembles the Global Eye surveillance aircraft in partnership with Saab.
Fedeli travelled to Sweden in October for meetings with Saab — a lobbying push that comes as the federal government considers Saab’s pitch to assemble Gripen fighter jets in Canada.
The prospect of a domestic Saab jet plant, while far from assured, has suddenly appeared in the shop window. Ottawa is reviewing its plans to purchase a fleet of F-35 jets in response to the trade war with the U.S. — that’s a contract Saab once sought to win.
“We met with Saab in Sweden and made a case for Ontario, should the federal government decide to purchase the Gripens,” Fedeli said.
“We reminded them that we make planes, trains and automobiles here in Ontario, we make chips … and we should be taken seriously as a site for Saab to manufacture the Gripen.”
If such a project goes forward, Ontario would no doubt face stiff competition from Quebec, which accounts for the bulk of aerospace manufacturing employment in Canada.
Ottawa is preparing to open the taps wide on defence spending. Prime Minister Mark Carney has said defence spending will eventually grow to reach five per cent of Canada’s GDP — a level not seen since the 1950s and an increase of tens of billions of dollars annually.
With Canada seeking to join the ReArm Europe plan — a $1.3 trillion bid to build up the European Union’s defence industry — and Germany loosening its fiscal “debt brake” rules to pump billions into defence, Ontario smells opportunity.
“We want to be front-and-centre in decisions that are being made,” Fedeli said.
“All of this is very attractive for the kinds of Ontario companies that we have, and we want to make sure that all of these companies in Europe and around the world are familiar with the experience that Ontario already has in defence, including labs, aircraft, shipbuilding.”
Craig Stone, an expert in defence economics at Canadian Forces College, said Fedeli and his counterparts in other provinces would be looking to provide foreign companies with information about Canadian firms with which they could partner.
“There’s a space there for how much money would the provincial government put up, when you think about what we’ve done for electric vehicles and batteries, for example, where the province has put up money to encourage a company to establish facilities in the province,” he said.
Vice-Admiral Angus Topshee was in Berlin and Kiel, Germany this past week for meetings with TKMS. Secretary of State for Defence Procurement Stephen Fuhr is expected to visit the Hanwha yard in January.
Hanwha’s Global Defence CEO Michael Coulter joked in an interview earlier this year that with so many officials seeking to travel to its Geoje shipyard to see the advanced facilities where its KSS-III subs are made, the company should start up a tourism sideline.
This report by The Canadian Press was first published Nov. 27, 2025.
Kyle Duggan, The Canadian Press
