Canada’s defence spending is lastly beginning to catch as much as that of its NATO friends. After a number of years of underfunding and underinvesting, Ottawa is lastly pledging billions of {dollars} to deliver its army and defence capabilities as much as snuff.
From superior aerospace techniques to mission-critical manufacturing and cybersecurity, this spending increase may translate into years of contract wins and rising earnings. Listed below are three Canadian shares that look particularly well-positioned to learn as defence spending ramps up.
A high Canadian defence inventory
If I needed to speculate on this rising development, Calian Group (TSX:CGY) can be one of many first firms to take a look at. It has a decades-long relationship with the Canadian army, offering healthcare, coaching, cybersecurity, and communication/satcom providers.
Over 50% of its revenues come from defence providers. Given the constructive funding surroundings, Calian is more likely to develop that phase each organically and by acquisition.
Calian simply reported first-quarter 2026 outcomes. Revenues have been up properly at 12% to $208 million, adjusted earnings earlier than curiosity, tax, depreciation, and amortization (EBITDA) rose 28% to $23 million, and it added $171 million to its backlog. It sits with a $1.4 billion backlog, or 1.75 years of income potential.
Even with the replenish 7% after earnings, its valuation will not be demanding proper now. There may very well be upside if it could hit its double-digit development goal in 2026.
A high Canadian house inventory
MDA House (TSX:MDA) is one other inventory set to surge from Canada’s rising defence program. MDA is a number one supplier of satellites, house parts, and geo-intelligence.
Regardless of a significant misplaced contract in 2025, the corporate nonetheless has a considerable $4 billion backlog. It continues to make attention-grabbing contract bulletins with a number of home and army functions (together with with the U.S. army).
The actual fact is, there usually are not many firms which have MDA’s experience and capabilities. House is predicted to be a brand new defence frontier, forcing many militaries to spend money on defending their communication and geo-intelligence networks.
MDA trades at a considerable low cost to barely worthwhile house firms in america. Nevertheless, MDA is worthwhile and money generative. When you don’t thoughts a risky inventory, MDA may very well be an amazing defence wager at present.
A necessary providers supplier with defence functions
Change Revenue Company (TSX:EIF) is one other inventory positioned on the proper place on the proper time. It’s a main participant supplier of air providers to Canada’s north. Its flights are important to those northern communities. Its providers are sometimes backed by predictable authorities contracts.
It additionally supplies complicated, specialised air surveillance techniques. This features a main intelligence, surveillance, and reconnaissance software program system. It has a few huge potential contracts within the pipeline. If it wins them, Change may see a pleasant increase to its 2026 outlook.
Change can be a frontrunner in environmental entry options. With Canada beginning to decide to a number of main nation-building tasks, Change may see even additional demand (it’s already close to max capability).
Its inventory is up 87% previously 12 months. Its valuation has almost doubled. But, if it could hit or exceed its present double-digit development targets in 2026, there may definitely be extra upside for the inventory.