Inside a Toronto garment factory, the physical reality of Canada’s drive to diminish its reliance on American military suppliers is on clear display. Hunched over sewing machines, workers rapidly stitch together pieces of camouflage-patterned fabric and Velcro strips. In an adjoining room, staff trim loose threads and inspect finished helmet covers destined for the Canadian armed forces.
The factory is producing equipment for Wuxly, a luxury parka maker that forms part of a flurry of Canadian companies expanding into defense contracting. As military spending surges, other firms are developing remote sensors for the vast Arctic region, constructing resupply drones, and building autonomous robots. This expansion across the defense sector reflects Canadian Prime Minister Mark Carney’s pledge to strengthen economic self-sufficiency amid strained relations with Washington, including a fresh escalation this week marked by new rounds of tariffs.
Canadian startups and established firms, alongside companies in Europe, stand to benefit from tens of billions of dollars in extra defense funding. This spending is driven partly by pressure from U.S. President Donald Trump to contribute more to NATO.
Although Canada's investment remains small compared with the Pentagon’s budget, the strategy aims to boost domestic defense capabilities rather than rely solely on American contractors. A defense industrial strategy released earlier this year by Carney represents a generational shift for Canada, a country that invented modern peacekeeping and had long been content to remain in the shadow of its southern neighbor on defense matters. The plan earmarks an additional $60 billion in funding over the next five years, with the government promising support for domestic businesses trying to enter defense and security supply chains.
Currently, Canada spends about $36 billion to $43 billion annually on national defense. "The scale of investment that is involved is quite significant by Canadian standards, certainly in peacetime," said Philippe Lagassé, a professor at Carleton University specializing in defense policy. The defense surge is "quite evident at all the events we’re at.
Every defense show (is) sold out. Lots of new companies and (other) industries coming into the (defense) industry, getting involved," said Wuxly founder and CEO James Yurichuk. Wuxly’s helmet covers allow soldiers to attach call sign patches or gear such as lights, cameras and beacons.
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