Canada helped train nearly 400,000 Allied aircrew during the Second World War. Almost a century later, aerospace could once again become one of the country’s most strategically important industries.
The difference this time is the size of the cheque.
At the Canada Investment Summit, aerospace executives described an extraordinary defence-spending cycle developing across NATO and allied countries. Governments need new surveillance aircraft, training systems, satellites and defence technology, while aging equipment needs replacing after years of relatively restrained spending.
Canada happens to possess something that’s difficult to build overnight: an existing aerospace ecosystem.
Source: Getty Images
Global player
Montreal is already one of the world’s major aerospace hubs, alongside Seattle and Toulouse. Canada has engineers, manufacturers, suppliers and certification expertise, plus companies already selling equipment to governments around the world.
Add Ottawa’s push to rebuild domestic defence manufacturing, and suddenly aerospace looks like much more than another industrial sector.
For investors buying stocks in Canada, I think one company offers the most interesting combination of existing business strength and new defence growth. That’s Bombardier (TSX: BBD.B).
BBD
Bombardier still designs and manufactures its Challenger and Global business jets. Its growing services operation also generates recurring revenue maintaining aircraft after they’ve left the factory. Yet defence is increasingly changing the investment story.
Chief executive officer Éric Martel told the summit that Bombardier Defence has grown from roughly $250 million in annual revenue several years ago to around $1 billion last year.
Those aircraft don’t need to be designed from scratch. Bombardier can take existing Global and Challenger platforms and modify them for surveillance, communications and other special missions. One particularly large opportunity has already arrived.
Flying higher
Canada selected Saab‘s GlobalEye airborne early-warning system this year. At its centre is Bombardier’s Global 6500 aircraft, and Ottawa says at least 40 aircraft for Canada and allied customers are expected to be manufactured in Canada over the next 15 years.
That’s the kind of defence contract that can create work long after the summit banners come down. Bombardier doesn’t need investors to rely exclusively on future defence promises, however.
Its second-quarter backlog reached US$21.8 billion, up US$4.3 billion from the end of 2025. Better still, free cash flow reached US$228 million, compared with a US$164 million outflow one year earlier. A giant backlog provides visibility into future sales, while improving cash generation gives Bombardier more room to reduce debt and invest in growth.
A (obvious) growth stock
It’s one reason Bombardier looks particularly interesting among Canadian growth stocks. The company is benefiting simultaneously from wealthy customers buying business jets, growing aftermarket revenue, and governments suddenly shopping for defence aircraft.
Not many TSX companies can say that. But investors have noticed. Bombardier stock recently traded around $309 after climbing roughly 32% in 2026 alone. At around 22 times forward earnings, this isn’t the battered turnaround stock investors could scoop up a few years ago.
Bombardier also remains exposed to aerospace supply-chain problems, execution risk, and a notoriously cyclical business-jet market. That said, it trades at about 18% below its recent 52-week high around $378. That pullback interests me considerably more now that the defence opportunity is becoming clearer.
Bottom line
Canada spent decades developing an aerospace industry capable of competing globally. Governments are suddenly prepared to spend heavily on exactly the aircraft, surveillance and defence capabilities that industry can produce.
Bombardier already has the factories, aircraft, and customers. Now it may finally have the defence spending cycle to match.
