The federal government is entering a new era of defence spending and inviting institutional investors to join in, according to Patrick Shea, co-head of the national private equity group and partner at McCarthy Tétrault.

Last November, the federal budget allocated $55.9 billion to the Department of National Defence between 2025 and 2030. Similarly, the budget allocated $81.8 billion over five years as part of a reinvestment in the Canadian Armed Forces.

“Effectively, there’s a broader set of opportunities for the largest investors, including our big pension funds,” says Shea.

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Canadian Prime Minister Mark Carney intends to increase defence spending to five per cent of gross domestic product by 2035. The scale of the market and a long-term vision along with reputational risk potentially being mitigated by the........

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