Quebec SMEs in the Defence Market: Fool’s Trap, Holy Grail, or Something in Between? (Category: Defence)

In my view, the answer lies somewhere in between. The real question is: how can Quebec’s Small and Mid-sized Enterprises (SMEs) capture meaningful value from the defence market?

With Quebec’s battery strategy struggling to deliver good news, attention is shifting toward Canada’s federal defence spending—an impressive $82 billion over five years. Defence markets, both domestic and international, are drawing more spotlight than ever.

Source: CBC News

On December 15, 2025, La Presse featured perspectives from Bicha Ngo (Investissement Québec – IQ) and Hubert Bolduc (Investissement Québec International) on the challenges Quebec Inc. faces in gaining traction in Europe’s defence sector. One statement from Madam Ngo stood out: IQ has identified 1,200 Quebec enterprises with potential in defence.

Of these:

• 200 are already active in the sector.

• 400 are “related suppliers” (supply chain, commercialization, subcontractors).

• 600 are considered potential entrants (with potentials).

This represents a significant pool of enterprises when contrasted with the Canadian Defence Review’s Top 100 Canadian Defence Companies ranking, which provides valuable context.

• 37 companies (37%) in the Top 100 have operations in Quebec.

• 23 companies (23%) are SMEs.

• 15 companies (15%) are headquartered in Quebec (40% of Quebec’s active defence players).

• 25 companies are multinationals (RTX, Lockheed Martin, Boeing, General Dynamics, Bell Textron, Rheinmetall, Airbus/Thales, etc.).

Smaller firms at the bottom of the list report $2–4M in annual sales, the minimum needed to sustain a Quality Management System (QMS) capable of meeting defence client requirements.

How Quebec SMEs Can Gain Traction

There are no shortcuts, but here are my conclusions:

1. Do the homework. Entrepreneurs must position themselves as credible defence players. This is not a free ride.

2. Focus on Canadian, Quebec clusters. Naval and aerospace vessel programs—and their supply chains—are the most significant entry points.

3. Leverage locomotives. Large Quebec enterprises (CAE, Davie, Bombardier, CMC Electronics) should act as anchors, offering contracts and partnerships. Governments (IQ/NRCC/CIC) should incentivize SMEs to pitch their value propositions to these primes.

4. Reward SMEs, not subsidiaries. Incentives should prioritize Quebec SMEs who invest in positioning, rather than multinationals already entrenched in the market.

5. Close innovation gaps. Ontario SMEs lead in drones (Canadian UAVs), armoured vehicles (Roshel), and VR/MR simulation (Bluedrop). Quebec must identify and support its own equivalents. A great example is Base Camp Connect (Lévis), which offers secure connected communications for defence. They are not in the Review list, with revenues estimated at $4M (25+ employees).

6. Plan for long cycles. Defence development takes time—expect 3–5 years before traction materializes. Start now.

Lessons from Experience

From my own work in this sector, a few realities stand out:

• Defence customers are demanding and rarely predictable.

• They test extensively, creating opportunities for low-volume, high-margin prototypes.

• Direct contracts with defence primes (rather than integrators/distributors) allow SMEs to charge for specialized services (high-margin) and gain valuable feedback.

• Even without high-volume wins, SMEs can carve out meaningful revenue streams through prototyping while learning from cutting-edge applications.

  
  

Final Thought

The defence market will remain important for the next 25 years. It is encouraging to see IQ and others shifting their stance, no longer turning a blind eye as they once did. SMEs can be selective, but the opportunity is real—it drives the economy, and Quebec firms should engage intelligently, while staying true to their values.

More insights will follow as I continue this journey.

Feedback or ideas? Drop me a line: nicholas@aheadcurve.co

Top 100 Defence contractors in Canada 2025
RANK	COMPANY NAME	Sector
1	CAE	Aerospace Simulation & Training
2	General Dynamics Land Systems-Canada	Armoured Vehicles (land systems)
3	RTX	Aerospace & Defense
4	Davie	Naval Shipbuilding
5	Seaspan Shipyards	Naval Shipbuilding
6	L3Harris Technologies Canada	Avionics, ISR
7	General Dynamics Mission Systems-Canada	C4ISR, Cyber
8	KF Aerospace	MRO, Aerospace
9	Lockheed Martin Canada	Naval Combat Systems
10	Irving Shipbuilding	Naval Shipbuilding
11	Bell Textron Canada	Helicopters
12	Rheinmetall Canada	Land Systems vehicle, simulation, air defence
13	IMP Aerospace & Defence	MRO, Engineering
14	thyssenkrupp Marine Systems Canada	Submarines
15	PAL Aerospace	ISR Aircraft
16	Calian	Training, IT, Health, Defence simulation
17	Rolls-Royce Canada	Propulsion
18	MDA Space	Satellites, Robotics
19	The Boeing Company	Aerospace
20	Top Aces	Adversary Air Training, Electronic Warfare
21	Leonardo DRS Canada	Defense Logistics
22	Arcfield Canada	Data analysis, cyber mission assurance
23	Babcock Canada	Naval Repair & Overhaul, submarine In-Service Support
24	ADGA Group	Virtual and constructive simulation
25	Marshall Canada	Deployable Operational Infrastructure
26	DEW Engineering and Development	Composite armour systems for military vehicle
27	Airbus	Airplane
28	Thales Canada	Research and technology
29	IMT Precision	Medium- and large-caliber ammunition (25mm to 155mm)
30	Ultra Electronic Maritime Systems	Undersea warfare systems, products and solutions
31	BMT Canada	Environmental consulting and cyber mission assurance
32	M1 Composites Technology	Aircraft parts using composites
33	OSI Maritime Systems	Development and delivery of integrated bridge systems for warships
34	Roshel	Armoured vehicles (MRAPs, APCs, medical evacuation units - NATO standards)
35	Bombardier	Global and Challenger families of aircraft
36	Magellan Aerospace	Engine maintenance • Fleet management • Engineering support
37	Allen-Vanguard	RF systems for electronic countermeasures and EW solution
38	Canadian UAVs	RADAR for UAV
39	Bluedrop Training & Simulation	VR/MR rear crew training simulators
40	Zodiac Hurricane Technologies	Boat RHIB model range from 6 to over 13 meters in length
41	QinetiQ Target Systems	Advanced solutions for live fire training, weapons systems
42	Cert Center Canada (3C)	Subcontract to L3 Harris for support to RCAF
43	Weatherhaven	Mobile shelter systems
44	VARD Marine	Ship design and production technology
45	BluMetric Environmental	Consultation, design, products, and construction services
46	ITPS Canada	Trains test pilots and flight test engineers
47	Beretta Defense Technologies Canada	firearms/optics/ammunition
48	Stantec Consulting	Professional consulting services
49	Kongsberg Geospatial	Precision software for mapping
50	ATCO Frontec	Defense Logistics
51	Serco Canada	Security
52	Logistik Unicorp	Managed Clothing and Equipment Solutions
53	Bronswerk Marine	HVAC-R systems and equipment
54	Voyageur Aviation	In-service support, Engineering Services (Aviation)
55	StandardAero	MRO services and custom solutions for aviation customers
56	Genoa Design International	3D modeling and production design services for shipbuilding programs
57	RaceRocks	Training solutions
58	GE Aerospace	Manufactures and services jet engines and avionics and power systems
59	NP Aerospace	Helmet shells, explosive ordnance disposal suits, body armour (vehicle)
60	GeoSpectrum Technologies	Underwater acoustic transducers, hydrophones, sonar systems.
61	Modest Tree	Digital solutions for in-service support
62	Kognitiv Spark	Low-bandwidth, augmented reality solution
63	Kraken Robotic Systems	Subsea sensors, batteries, and robotic systems
64	Gastops	Monitoring solutions
65	AtkinsRéalis Canada	Engineering services and nuclear company
66	Rousseau Metal	Manufactures and markets steel storage systems
67	Curtiss Wright INDAL	Navies high level of engineering and manufacturing
68	Sapper Labs Group	Cyber and Intelligence Products
69	Soucy International - Defence	Composite Rubber Track design and manufacture (M113)
70	Tacteris Systems	Military planning and command and control software.
71	Nortac Defence	Short Burst Data [SBD]Messaging
72	Frequentis Canada	Solutions for Voice Communication, Situational Awareness, Command & Control
73	Saab	defence and security company
74	Adaptive Marine Solutions	Ship design services from concept to commissioning:
75	MetOcean Telematics	Advanced solutions for defence, satellite communications, and security
76	Aversan	Systems & Software Development,  Testing, HW design
77	CMC Electronics	Design and manufacture of advanced avionics
78	WSP Canada	Professional services firms
79	D-TA Systems	Electro-Magnetic Spectrum Operations applications, like: SIGINT
80	Contextere	AI-powered insight engine and Blue-Collar CoPilot. (RCAF CP140/130J)
81	Genaire	Maintenance, repair, and overhaul services to DND
82	Med-Eng	Personal Protective Equipment for Explosive Ordnance Disposal
83	Advanced Flight Controls	Lockheed Martin Helicopter Simulator • LM Fighter Jet Simulator (AFC-1)
84	Cleeve Technology	Products and services on a wide range of airframes and platforms.
85	Unisource Technology	Maintenance spares for all DND Naval Fleets, Land vehicles, Search and Rescue
86	Scepter Canada	Solutions for fuel, water and large caliber ammunition storage
87	MC Countermeasures	Electronic warfare systems used worldwide by NATO and Five Eyes customers
88	TerraSense Analytics	AI/ML software (ground station or at the edge on surveillance platforms)
89	Duke Smart Staffing Solutions	Custom staffing services, marine, aerospace, defence, and energy.
90	Virtual Marine Technology	Marine simulation and training solutions
91	Dafocom	Secure point to point network communications.
92	InnovMarine	Digital shipyard
93	Simex Defence	Procurement services, aerospace, land, and marine applications
94	TerraNova Solutions Rewired	Electronics card - circuit card debug, test (continuity, bit error, loop back, power in/out)
95	Sea Canada	Naval Defence
96	Titan Boats	Government, military and emergency response boats
97	Hudson Supplies	High-quality plastic fasteners, metal hardware, hook & loop and webbing and strong magnets.
98	Zighra	Sensors for electromagnetic spectrum dominance. Cyber/EW
99	CCX Technologies	Secure networking and multi-format data collection appliances for air, land, and sea-based platforms.
100	NyRad	Defence procurement, international offset management, and ITB policy.
Source: Canadian Defence Review- https://canadiandefencereview.com/top-defence-companies-ranking/2025-top-100-defence-companies/

23 companies operating in Quebec.

25 multinationals, Canadian subsidiaries (some operate in Quebec).

3 companies in Ontario are leading in applications.