BDC Signals Greater Openness to Defence-Focused Venture Investing

The Business Development Bank of Canada (“BDC”) has indicated it may ease restrictions that have historically limited venture capital funds it backs from investing in defence-related technologies, signalling a potential shift in how public capital supports Canada’s defence innovation ecosystem.

This shift aligns with the federal government’s expanding focus on defence modernization and domestic capability-building. Canada has committed to significantly increasing defence spending over the coming decade, alongside targeted initiatives to strengthen the defence industrial base and reduce reliance on foreign suppliers. Within this context, BDC’s openness to defence-related venture investments positions the institution as a more active participant in enabling private capital to support dual-use and defence technologies.

Ultimately, BDC’s evolving stance reflects a broader recalibration of how Canada approaches defence innovation and risk. As geopolitical pressures intensify and advanced technologies become central to national security, the alignment of public financing institutions with venture capital markets may play a critical role in shaping the country’s long-term defence and innovation capacity.

Author: Josephine Hu, 2025-2026 Articling Student-At-Law

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