Calian Group CEO Patrick Houston says the “opportunity set is significantly larger” for Canada’s defence industry than at any time in recent history thanks to the federal government’s pledge to boost defence spending from two per cent of the country’s GDP today to five per cent by 2035.
Canadian firms will need to work together if the country wants to build a stronger domestic defence sector, the head of one of Ottawa’s largest defence-tech companies says.
Calian Group CEO Patrick Houston says the “opportunity set is significantly larger” for Canada’s defence industry than at any time in recent history thanks to the federal government’s pledge to boost defence spending from two per cent of the country’s GDP today to five per cent by 2035.
Prime Minister Mark Carney’s Liberals also want to ensure a lot more of that spending stays within the country. The feds have introduced measures such as the $6.6-billion Defence Industrial Strategy, a multi-year plan to lessen Canada’s dependence on foreign-made products, and established a new organization called the Defence Investment Agency aimed at streamlining procurement and speeding up major projects.
That could mean billions of dollars in new contracts for Canadian defence-tech enterprises of all sizes. And that, Houston says, changes the competitive dynamics of the industry.
“I think in the past, the budgets were small, the opportunities were limited, so everybody was fighting over those opportunities,” he told OBJ in an interview on Friday. “And if anyone's competitive, it's people in defence. So you had everyone kind of elbowing trying to get those limited opportunities.”
Now, with the DIA and other initiatives, the rules of the game are changing, Houston suggested.
“We don't necessarily have to be trying to kill each other for each one of these (contracts), but rather how do we work together to capture more of (the defence spending pie) and keep more of it in Canada, I think is the real challenge,” he said. “So this is a new muscle.”
Houston’s firm appears to be embracing the new spirit of co-operation.
In the first three months of 2026, Calian inked major partnerships with two other Canadian firms, Ottawa’s ADGA Group and Quebec-based Tessellate Robotics, to develop new products such as training simulations and autonomous navigation systems for the Canadian Armed Forces.
Houston says more collaborations with other homegrown companies are in the pipeline.
“Calian's been trying to lean in … and show that we are thinking that way,” he said. “I'm hoping that there's more co-operation, there's more putting Canadian solutions together and then the government buying those solutions.
“I think if (the feds) start to buy things like that and say, ‘This is what we like,’ I think you'll see more of it. So I think we need the government to reward the companies who do this with business. And I think that'll be the impetus for the (companies) that are reluctant to do that to get on this kind of new thinking.”
'There will be some starts and stops'
Calian isn’t the only tech company with an outsized presence in the National Capital Region to notice the competitive paradigm is shifting when it comes to defence procurement.
At the Mayor’s Breakfast event Thursday morning at City Hall, Nokia Canada president Jeffrey Maddox told the audience “it’s going to take a village” for the country to capitalize on its potential to be a world leader in defence technology.
Houston agreed, but he said strengthening domestic capacity to the point where more Canadian firms can compete head-to-head with the best companies from the U.S., Europe, Asia and elsewhere won’t happen overnight.
“I think what you'll see is there'll be some starts and stops, because I think what you'll see is where we are today, (the feds) do have to buy stuff that's non-Canadian,” he explained. “Just the position we are in, some of the (expertise) doesn't exist yet, and it takes a long time to build this up.”
Calian’s home base of Ottawa is seemingly well-positioned to play a leading role in growing Canada’s defence ecosystem.
According to city officials, there are more than 300 defence-tech companies in the National Capital Region, and Ottawa and Gatineau recently launched a task force aimed at unlocking up to $3 billion in new investment and economic activity in the local sector.
Ottawa Mayor Mark Sutcliffe and local business leaders are also backing the region’s bid to host a proposed multinational defence investment bank, in part to help offset the economic impact of federal public service job cuts.
The federal government announced last month that the Defence, Security and Resilience Bank, which it said is designed to provide “long-term, low-cost financing for defence, security, and resilience initiatives,” will be headquartered in Canada. Houston says that’s a “positive” for the country’s defence sector.
“A lot of the business they're going to be doing out of this bank is going to be for NATO countries,” he noted. “Hopefully that would bring delegates here, people here to Canada to events and things like that, and it shows Canada as a prime (defence) partner.”
The bank would be a feather in the National Capital Region’s cap if it is selected as host, Houston said. But Ottawa is facing stiff competition from other cities, including Toronto and Montreal.
“I think for Ottawa, it'd be a lot of jobs,” he said. “That would be great. I think it would attract a different type of executive and people to do these types of jobs, which I think would also be great. But I think it's a positive for Canada wherever it lands. I think Ottawa is a logical place for it, but I also see how all the other cities (might say) why does Ottawa get all this stuff, right? So I'm glad I'm not making the decision.”
The government’s willingness to host the DSRB and launch initiatives such as the Defence Investment Agency signal it is prepared to do more than just pay lip service to protecting Canada’s borders, Houston added.
“We've had trouble in the past kind of sticking to (our) commitments on defence,” he said. “We do it and then we lose the momentum, and then it takes decades to get it back. That's really tough. That's why this industry is not as strong as it should be.
“You need to keep at it. And I think these are indicators that we're taking this seriously.”
Houston made his remarks a day after Calian reported record revenues for the second quarter.
The firm posted revenues of $229 million for the three-month period ending March 31, an 18 per cent increase from a year earlier.
Calian’s net profit was $6.7 million, or 58 cents per diluted share, compared with $300,000, or two cents per diluted share, in the second quarter of 2025.
The record results come a few months after Calian retooled its corporate structure, consolidating four business lines into two in a bid to become more efficient as it pursued opportunities in defence, space and other fast-growing market segments.
Houston said the decision to double down on defence is already paying dividends. Of the $321 million in new contracts Calian signed in the second quarter, more than $200 million went to customers in the defence space.
“Towards the end of the government year-end (on March 31), we saw projects we'd been talking to them about for years, and now they're finally saying, ‘Hey, we've got the budget. Let's do these,’” Houston said. “And there was a motivation to get it done last (fiscal) year. So that was great to see. The budgets are there, there's momentum and permission to go and push on those.” 
