Ventum Capital Markets analyst Rob Goff mentioned in a Feb. 17 observe that Canada’s forthcoming Industrial Coverage Framework ought to formalize a structural shift towards protection sovereignty, home industrial capability and NATO-aligned functionality enlargement.
Whereas a lot of the spending has already been telegraphed by prior price range commitments, Goff mentioned the significance lies in codifying a “build-partner-buy” technique that prioritizes home champions and institutionalizes a long-duration capital cycle throughout procurement, coaching and simulation, ISR, border safety, satellite tv for pc infrastructure and superior manufacturing.
“The important thing takeaway is affirmation,” Goff mentioned, including that the framework reinforces structural tailwinds already embedded in choose Canadian platforms moderately than making a short-term headline commerce.
The 2025 Fall Price range allotted $81.8-billion to protection over 5 years, together with $6.6-billion for a Defence Industrial Technique. By 2035, protection spending is budgeted at 5% of GDP, implying roughly $180-billion in procurement, $290-billion in defense-related infrastructure and $125-billion in downstream financial exercise.
The federal government is concentrating on 70% of defense-related acquisitions to Canadian firms inside 10 years and goals to extend SME protection revenues by greater than $5.1-billion yearly. A listing of home “protection champions” is predicted earlier than summer time.
Towards this backdrop, Goff highlighted a number of publicly traded beneficiaries throughout the worth chain.
On Calian Group (Calian Group Inventory Quote, Chart, Information, Analysts, Financials TSX:CGY), rated “Purchase” with an $84.00 goal, Goff mentioned the corporate is “exceptionally well-positioned” given its home manufacturing, satellite tv for pc and coaching capabilities, together with well being companies publicity tied to army enrollment. The $84.00 goal displays 8.4x/7.6x 2027/28 EV/EBITDA, under military-levered friends buying and selling within the low-teens multiples.
On Trade Revenue (Trade Revenue Inventory Quote, Chart, Information, Analysts, Financials TSX:EIF), rated “Purchase” with a $110.00 goal, Goff pointed to embedded publicity by Arctic aviation and ISR capabilities by way of PAL Aerospace. He views EIF as a “structurally advantaged compounder,” buying and selling at 8.6x/7.7x 2026/27 EV/EBITDA regardless of rising sovereignty-linked demand.
On Volatus Aerospace (Volatus Aerospace Inventory Quote, Chart, Information, Analysts, Financials TSXV:FLT), rated “Purchase” with a $0.80 goal, Goff cited leverage to ISR, drone and border safety priorities, supported by Mirabel-based manufacturing and proprietary drone IP. He believes the corporate’s $150–200-million annual income potential at Mirabel is underappreciated and notes greater than $300-million in excellent NATO-related RFP publicity.
Lastly, on 5N Plus (5N Plus Inventory Quote, Chart, Information, Analysts, Financials TSX:VNP), rated “Purchase” with a $30.00 goal, Goff described the corporate as a second-order beneficiary working on the essential supplies layer of protection and satellite tv for pc provide chains. Latest U.S. Protection Manufacturing Act funding reinforces its strategic positioning in ultra-high-purity compounds utilized in area and protection functions.
In Goff’s view, the framework doesn’t introduce new danger or near-term volatility however moderately institutionalizes a multi-year protection funding cycle, strengthening the funding case for domestically anchored platforms throughout companies, ISR, aviation and superior supplies.
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