Ottawa tech leaders react to ‘watershed’ federal budget

November 7, 2025

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Ottawa’s technology and defence sectors are among those responding with cautious optimism to the federal government’s 2025 budget. Items such as investments in defence, artificial intelligence and quantum computing are welcome, but the need for clear pathways to turn commitments into contracts remains, according to people OBJ spoke with this week. The budget allocates $30 billion over five years to defence and security. That includes $6 billion for a new defence industrial strategy, $925 million for sovereign AI computing capacity and $334 million to quantum technology. These numbers are a great start, according to Ottawa’s tech community.

Reba Molotsi, Invest Ottawa

Reba Molotsi is the business development strategist for defence and security at Invest Ottawa. She called the budget a “watershed moment” for the sector. “This will position the Ottawa ecosystem in a good space,” said Molotsi, noting the region has more than 330 defence and security companies. “Defence today is not just about tanks and ships. It’s about cybersecurity, artificial intelligence, semiconductors, sensory systems and advanced materials.” Molotsi said the 2025 budget represents the most significant industrial policy shift in decades. She highlighted Ottawa as being uniquely positioned to capitalize on the boost in defence spending with its concentration of defence headquarters, government, industry, policy-makers and research institutions. Molotsi cited Quebec's Municipal Affairs Minister Genevieve Guilbault’s comment at an Ottawa Board of Trade breakfast: “The proof will not be in handouts, but in bills of sale.”

Sem Ponnambalam, Xahive

Sem Ponnambalam, president and co-founder of Xahive, a Canadian cybersecurity company specializing in post-quantum cryptography, said the budget demonstrates a strategic shift toward national digital security. “The federal commitment for quantum computing and related research marks a pivotal step towards quantum readiness,” said Ponnambalam. “This investment must include accelerated adoption of post-quantum cryptography to ensure long-term protection of sensitive data, especially for defence.” The budget increases the Scientific Research and Experimental Development tax incentive annual expenditure limit from $4.5 million to $6 million. Ponnambalam sees this as a great step forward for the tech industry. “It is amazing compared to what I’ve seen in past budgets,” she said. “Definitely headed in the right direction.”

Mike Nelson, Tacticql

Mike Nelson, founder of defence-tech startup Tactiql, warned that clear pathways from prototype to procurement are still missing. “Programs under Innovation, Science and Economic Development Canada, including Innovative Solutions Canada and the Industrial Research Assistance Program, as well as the SR&ED tax incentive, are vital tools,” Nelson explained. “Yet for these investments to create maximum value, the government must ensure clear, agile pathways for startups to scale.” Nelson said details on how smaller firms will access contracts and partner with larger prime contractors remain unclear. “Canada’s best and brightest innovators are ready to deliver,” he said. “What’s needed now is clarity, coordination and speed.”

Stirling Coulter-Hayward, Gander Social

Stirling Coulter-Hayward, co-founder of Canada’s much-anticipated privacy-first social media platform Gander Social, said the sovereign AI investment needs to extend to social infrastructure. “For a platform like Gander, the next logical investment is sovereign digital cloud,” Coulter-Hayward said. “We need data privacy and moderation systems that are exclusively Canadian and respect our laws.” The budget announces a strategy to support early growth-stage companies backed by $750 million in funding, but Coulter-Hayward said programs need to be genuinely accessible. “Right now there are a lot of structural barriers,” he explained. “We need holistic, public-interest strategies that treat trusted, Canadian-owned alternatives as a critical part of the tech ecosystem, not just an afterthought.”

Jason Flick

Ottawa serial entrepreneur and investor Jason Flick emphasized the budget’s broader focus on Canadian capabilities. “In these uncertain times, we need to invest in ourselves,” Flick said. “Canada’s greatest strength lies in our world-class resources and our people. The federal budget is our chance to back that strength by investing in skills, innovation and industries that will secure our long-term prosperity.”