10 Ways Canada’s Industrial Policy Is Reshaping the Investment Landscape

Canada’s economic policy has become more active, strategic and focused on resilience. Over the past year, the federal government has responded to tariff pressure, supply-chain disruption, geopolitical uncertainty and competition for capital with a more coordinated industrial policy agenda. Statistics Canada reported foreign direct investment of $96.8 billion in 2025, the largest annual inflow since 2007. According to the federal government, Canada holds a AAA rating and the lowest net debt-to-GDP ratio in the G7, and in May 2026 was ranked the most attractive infrastructure investment market in the spring 2026 investor survey of the Global Infrastructure Investor Association.

Although the Canadian economy recorded its strongest quarterly growth in more than three years in Q2 2026, the need for resilience continues. On July 20, 2026, President Trump announced 50% tariffs on a range of Canadian goods under Section 338 of the U.S. Tariff Act of 1930. Following a three-day suspension, the tariffs took effect on August 22, 2026, and their product scope was subsequently modified effective September 15, 2026. Further import prohibitions on certain covered products took effect on September 29, 2026. Unlike the 2025 tariffs imposed under the International Emergency Economic Powers Act (which the U.S. Supreme Court held in February 2026 were not authorized by that statute), the Section 338 tariffs apply to covered goods even where they satisfy the rules of origin under the Canada-United States-Mexico Agreement. That Agreement remains in force, but at the July 1, 2026 joint review the United States declined to renew it in its current form, so it is now subject to annual reviews. Canada’s strategy is therefore increasingly shaped by the need to diversify markets, secure supply chains, accelerate major projects and reduce exposure to United States policy volatility.[1]

For foreign investors, this creates complexity and opportunity. Canada is directing investment into priority sectors such as infrastructure, critical minerals, energy, defence, advanced manufacturing, trade corridors and strategic technologies, while emphasizing Canadian content, domestic supply chains, national security and long-term industrial capacity. The recent Canada Investment Summit further showcased what Canada has to offer and that it is open to do business with its international friends.

What Is Canada Doing Differently in Its Economic Policy?

The following federal developments illustrate how Canada is reorienting its economic policy toward strategic investment, trade diversification and long-term industrial capacity.

1. Canadian Investment Super-Cycle

Canada is using business, investment and tax incentives to support an investment Super-Cycle that could last a decade or longer. More than $1 trillion across more than 300 announced projects is approved or proposed through 2035, creating successive opportunities in energy, resources, transportation infrastructure, AI and defence. The commercial opportunity is substantial, but capital providers and project sponsors should test each investment against sector priorities, available public support, approval timelines and delivery risk, in addition to standard diligence.[2]

2. Canada Strong Fund

The proposed Canada Strong Fund, described in the 2026 Spring Economic Update as Canada’s first national sovereign wealth fund, is expected to receive an initial government endowment of $25 billion over three years. It will operate as an arm’s-length Crown corporation and invest on a commercial basis in strategic Canadian projects and companies across energy, infrastructure, mining, agriculture and technology, alongside private Canadian and foreign investors. It will invest primarily through equity, on equal terms with other investors, and take only minority positions.[3]

Commentary drawing on Norway’s experience in governing resource wealth suggests that a Canadian fund’s design, not its size, will determine success. Although the Prime Minister has cited Norway’s Government Pension Fund Global as inspiration, the Canada Strong Fund departs from that model, focusing on domestic nation-building rather than foreign-asset savings. Norway’s achievement lay in capturing resource rents, separating them from politics and constraining spending so governments draw on returns rather than principal. Canada’s success will depend on its ability to adapt those governance principles to its particular economic landscape, where resource revenues are decentralized across provinces and territories and political incentives favour immediate spending. The practical lesson, as one commentator put it, is to “copy the constraints, not the branding”: disciplined deposit and withdrawal rules and independent, arm’s-length governance will be critical to foreign investors.[4]

3. Major Projects Office and the Proposed Building Canada Strong Act

In August 2025, Canada launched the Major Projects Office (the “MPO”) as a single point of contact for nation-building projects, with a mandate to streamline approvals and coordinate financing. The government is working toward reducing review timelines for major projects to a maximum of two years under a “one project, one review” approach. The MPO currently supports a growing portfolio of referred projects and transformative strategies across the transport, electricity, energy, mining and industrial sectors, including Alto High-Speed Rail, LNG Canada Phase 2, the Contrecoeur Container Terminal Project, Grays Bay Road and Port, the Taltson Hydro Expansion and the Darlington New Nuclear Project.

The Building Canada Act (the “Act”), which received royal assent in 2025, allows Cabinet to designate projects as being in the national interest based on factors including economic benefits, likelihood of successful execution, security, Indigenous interests and clean growth. Once designated, federal permitting decisions listed in the Act are deemed made in favour of the project. Proponents must still apply for required authorization, although Cabinet may exempt designated projects from requirements under the federal statutes and regulations listed in the Act. On May 12, 2026, the government released a discussion paper entitled Getting Major Projects Built in Canada, outlining further proposed measures to shorten federal approval timelines. These include completing reviews and decisions within one year, establishing a single project authority, streamlining regulatory processes and creating new federal economic zones. On September 15, 2026, the Prime Minister announced that a new Build Canada Strong Act will apply a “one project, one review, one year” standard more broadly.

While this all assists in bringing projects to market quicker, investors should engage professional assistance early, align federal, provincial, territorial and Indigenous workstreams, and build approval conditions into financing and transaction timetables.

4. $6 Billion Trade Infrastructure Strategy

To support the 20 strategic trade and defence agreements around the world that the Canadian government has signed over the past year, the federal government has launched the Trade Infrastructure Strategy.[5] Announced in November 2025 and supported by $6 billion over seven years through Budget 2025, it comprises a $5 billion Trade Diversification Corridors Fund and a $1 billion Arctic Infrastructure Fund. These funds support dual-use civilian and defence transportation projects that reinforce Canada’s sovereignty and connect Northern and Indigenous communities, with calls for proposals opening in March 2026. The Trade Diversification Corridors Fund will support projects of all scales, including digital infrastructure, to improve the efficiency of Canadian imports and exports, and over the next decade the funds could help generate $300 billion more in exports.[6]

5. Strategic Exports Office

Launched in July 2026, the Strategic Exports Office (the “SEO”) is intended to identify and coordinate major export opportunities by aligning government advocacy, policy and commercial tools. Its focus includes defence and security exports and civil strategic exports.[7] For foreign investors and strategic partners, the SEO may strengthen the case for Canadian export-oriented capacity, particularly where a project depends on government-to-government engagement, long-term offtake or access to major international contracts.

6. Build Communities Strong Fund

Launched on April 7, 2026, the Build Communities Strong Fund is expected to invest $51 billion over 10 years and $3 billion annually thereafter. It allocates $17.2 billion to provincial and territorial priorities [8], $6 billion to directly delivered community, climate-adaptation and regionally significant projects, and $27.8 billion to local infrastructure priorities. For investors, lenders and contractors, the Fund signals a sustained procurement pipeline. Opportunities will depend on local delivery models, public-sector counterparties, procurement requirements and the allocation of construction, operating and demand risk.

7. Critical Minerals as a Strategic National Security Priority

At the most recent Prospectors and Developers Association of Canada conference (“PDAC 2026”), the federal government elevated mining to a national-security priority and announced a $3.8 billion package to advance critical-minerals projects. The package includes the $1.5 billion First and Last Mile Fund (the “FLM Fund”) for upstream and midstream infrastructure and the $2 billion Canada Critical Minerals Accelerator (the “Accelerator”). For investors and lenders, the opportunity extends beyond extraction to processing and enabling infrastructure, subject to permitting, Indigenous partnerships and offtake arrangements.

These initiatives are advancing concrete projects, including: (1) In northwest British Columbia and the adjacent Yukon, the Northwest Critical Conservation Corridor combines resource development, environmental stewardship, infrastructure, Indigenous partnerships and conservation, with the Red Chris Mine Expansion referred to the MPO, and (2) Canada Nickel’s Crawford Project in Ontario’s Timmins Nickel District received federal approval under the Impact Assessment Act on July 31, 2026, subject to binding conditions and further permitting; described as one of the world’s largest nickel sulphide projects, it is designed to produce low-carbon nickel using carbon mineralization and is estimated to contribute roughly $70 billion to GDP.

The Accelerator, managed by Export Development Canada, makes strategic federal investments—including equity, loan guarantees and supply agreements—across critical mineral value chains, with its first agreement supporting the expansion of Teck’s Trail Operations in British Columbia. At PDAC 2026 the government also announced up to $165.2 million for 22 projects, including the first five FLM Fund investments, building on the 30% Critical Mineral Exploration Tax Credit introduced in 2022, while the 15% Mineral Exploration Tax Credit has been extended to March 31, 2027.[9]

8. Defence Industrial Strategy

Canada’s first Defence Industrial Strategy (the “Strategy”) allocates $6.6 billion from the federal government’s pledged $81.8 billion defence investment to place Canadian industry at the centre of military rebuilding. It emphasizes production in Canada, domestic economic benefits and sovereign control. Canada has nearly 600 defence firms, and the government projects approximately $180 billion in direct defence procurement and more than $300 billion in total public and private investment by 2035. Foreign participants should expect domestic-content and sovereign-control requirements to shape intellectual-property arrangements and supply chains.[10]

Canada’s federal agenda is reinforced by related provincial initiatives and forms part of a broader international shift toward state-backed strategic investment. At the provincial level, Ontario released a framework for its own Defence Industrial Strategy on May 28, 2026, a proposed 10-year plan to grow its defence industry and position Ontario as a trusted partner in domestic and allied defence supply chains.

9. Defence Investment Agency and “Build–Partner–Buy” Framework

Canada has established the Defence Investment Agency to consolidate military procurement, reduce duplication and provide greater certainty to the military and industry. Its mandate aligns with the “Build–Partner–Buy” framework: Build domestic capabilities where gaps exist, Partner with capable nations to co-develop and co-produce systems, and Buy systems from abroad when appropriate. Foreign bidders and investors should therefore develop credible Canadian relationships and address technology transfer and long-term support obligations at the outset.

10. Canada Investment Summit 2026

Held on September 14 and 15, 2026, the Canada Investment Summit (the “Summit”) brought together investors from nearly 30 countries managing more than $100 trillion in assets. There was nearly $500 billion in commitments to Canadian assets, including almost $100 billion from leading Canadian pension funds, insurers and institutional investors and nearly $325 billion in financing from Canadian banks.[11] The commitments span existing and new projects, financing for Canadian businesses and investment funds for continuing development. This commitment is evidence of the depth of capital available for well-structured Canadian opportunities.

For international investors, the Summit also signalled where federal capital will be concentrated: defence and critical minerals. Through the Business Development Bank of Canada, the government will deploy $700 million for Canadian defence and dual-use technologies-$500 million across specialised funds and $200 million for StrongNorth-as part of the BDC’s $6 billion Defence Platform. It also committed roughly $140 million through the Canada Growth Fund to Generation Mining’s Marathon Project in Northwestern Ontario, a fully permitted, shovel-ready copper-palladium project that strengthens North American supply chains. For foreign investors, these commitments highlight co-investment entry points, the premium on Canadian partnerships and the sectors where government support is most likely to de-risk opportunities.[12]

The Summit reinforces Canada’s position as a destination for foreign direct investment, and its AAA credit rating, lowest net debt-to-GDP ratio in the G7 and leading G7 ranking for banking stability supports that proposition. For investors, however, abundant capital does not eliminate execution risk: bankability will still depend on disciplined diligence, credible sponsors, approvals, procurement strategy, Canadian partnerships and clear allocation of construction, operating and market risk.

What Are Other Nations Doing?

Norway operates the world’s largest sovereign wealth fund, the Government Pension Fund Global. Mid-way through 2026 it held roughly US$2.3–2.4 trillion posted a record first-half 2026 profit of about US$185 billion and has generated an annualized return of 6.86% since 1998. These results illustrate the scale and long-term performance of the international model informing the Canada Strong Fund.[13]

France’s state-controlled public investment bank, Bpifrance, undertakes more than €50 billion in financing and investment activity annually. Through loans, guarantees, direct and co-investments, and export financing, it supports business growth, innovation and strategically important industries. Its deployment of public capital alongside private investment offers a useful parallel to Canada’s emerging approach under the Canada Strong Fund and the $2 billion Canada Critical Minerals Accelerator.

Germany’s state-owned promotional and development bank, KfW, provides another relevant model. Its AAA credit rating and federal guarantee allow it to raise capital at rates generally close to those available to the German government and to pass that funding advantage on through favourable lending. KfW has also acquired strategic equity interests on behalf of the federal government, including a minority stake in defence-electronics manufacturer Hensoldt. This is a potentially instructive precedent for implementing Canada’s Defence Industrial Strategy.[14]

At the European level, KfW and other major national promotional banks, including France’s CDC, Italy’s CDP, Spain’s ICO and Poland’s BGK, together with the European Investment Bank Group, provided more than €300 billion in financing in 2025. Collectively, these institutions demonstrate how public capital can mobilize private investment at scale, and it is hoped Canada’s new initiatives will yield similarly positive results.

The Canada Strong Fund’s closest institutional analogue is the United Kingdom’s National Wealth Fund, reflecting an institutional model peer economies have used to mobilize private investment at scale. Unlike Norway’s fund, the Canada Strong Fund is to be seeded from a budget in deficit, which critics argue makes it effectively debt-financed, rather than from resource-revenue surpluses and will focus on domestic investment, placing a premium on independent, professional governance and a transparent mandate.

What This Means for Foreign Investors

Canada continues to attract substantial foreign capital but is increasingly focused on investment that advances domestic capability, trade diversification, supply-chain security, infrastructure renewal, critical minerals, defence readiness, Indigenous participation and long-term resilience. Canada is actively courting this investment and has set a target to catalyse $1 trillion in total investment over five years. Taken together, the initiatives discussed above position Canada as an increasingly attractive destination for foreign investment. That said, investors should note that there are still nuances when investing in Canada that may not be typical in foreign jurisdictions, including scrutiny under the Investment Canada Act, Indigenous rights and consultation, and French language requirements. Selecting legal, tax and financial advisors familiar with Canada’s investment landscape is therefore paramount to successfully navigating these nuances and executing investments into Canada.

How Wildeboer Dellelce Can Help

As Canada’s economic policy becomes more active and sector-focused, foreign investors must assess not only market opportunity, but also transaction and financing structure, regulatory approvals, Canadian partnerships, procurement strategy, domestic-content expectations and execution risk. Wildeboer Dellelce LLP is well-positioned to assist foreign companies, investors, lenders, project sponsors and advisors navigate these issues from market entry and diligence through financing, contracting and closing.

Our lawyers advise on a broad range of cross-border business transactions, including inbound investments and acquisitions, private equity and venture capital, joint ventures and strategic partnerships, securities and corporate finance, banking and secured lending, commercial and procurement contracts, licensing arrangements, regulatory strategy and complex multijurisdictional transaction management. We work with clients to align commercial objectives with Canadian policy priorities and to identify and allocate legal, financing and execution risks early.

If you have any questions about the above or wish to request a consultation, please contact Peter Volk ([email protected]), Michael Rennie ([email protected]), or Marcus Hinkley ([email protected]). The authors gratefully acknowledge the assistance of articling students Adele Gurm and Allyson Hamilton, as well as summer student Ashley Jefferies, in preparing this update.

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[1] Reuters, “US Imposes New 50% Tariffs on Canadian Products” (20 July 2026), online: Reuters https://www.reuters.com/business/us-imposes-new-50-tariffs-canadian-products-2026-07-20/; Reuters, “Canada’s Retaliatory Tariffs Take Effect as US Trade Talks Stall” (8 September 2026), online: Reuters https://www.reuters.com/business/autos-transportation/canadas-retaliatory-tariffs-take-effect-us-trade-talks-stall-2026-09-08/

[2] Department of Finance Canada, “Government of Canada introduces new Productivity Mega Deduction to boost Canada’s advantage as the most competitive G7 country for new business investment” (15 September 2026), online: Government of Canada https://www.canada.ca/en/department-finance/news/2026/09/government-of-canada-introduces-new-productivity-mega-deduction-to-boost-canadas-advantage-as-the-most-competitive-g7-country-for-new-business-inve.html.

[3] Prime Minister of Canada, “Prime Minister Carney Announces the Canada Strong Fund—Canada’s First Sovereign Wealth Fund” (27 April 2026), online: Prime Minister of Canada https://www.pm.gc.ca/en/news/news-releases/2026/04/27/prime-minister-carney-announces-canada-strong-fund-canadas-first.

[4] Ryan Green, “What Canada Can Learn from Norway’s Sovereign Wealth Fund” (7 April 2026), McGill Journal of Economics online: McGill Journal of Economics https://www.mjemcgill.com/articles/what-canada-can-learn-from-norways-sovereign-wealth-fund.

[5] The Canadian Press, “As Carney pivots trade from U.S., here are some of Canada’s new deals,” Yahoo Finance (August 2026), online: https://ca.finance.yahoo.com/news/carney-pivots-trade-u-canadas-201653089.html.

[6] Transport Canada, “Government of Canada announces investments totalling $6 billion to strengthen Canada’s trade and transportation infrastructure” (21 November 2025), online: Government of Canada https://www.canada.ca/en/transport-canada/news/2025/11/government-of-canada-announces-investments-totalling-6-billion-to-strengthen-canadas-trade-and-transportation-infrastructure.html.

[7] Global Affairs Canada, “Canada’s Strategic Exports Office” (last modified 30 July 2026), online: Global Affairs Canada https://international.canada.ca/en/global-affairs/services/strategic-exports.

[8] Housing, Infrastructure and Communities Canada, “Build Communities Strong Fund” (last modified 13 August 2026), online: Housing, Infrastructure and Communities Canada https://housing-infrastructure.canada.ca/bcsf-fbcf/index-eng.html.

[9] Ibid.

[10] Government of Ontario, “Ontario Unveils Framework for Defence Industrial Strategy” (28 May 2026), online: Government of Ontario https://news.ontario.ca/en/release/1007513/ontario-unveils-framework-for-defence-industrial-strategy.

[11] Prime Minister of Canada, “The first Canada Investment Summit unleashes nearly $500 billion of new investment in Canada” (15 September 2026), online: Prime Minister of Canada https://www.pm.gc.ca/en/news/news-releases/2026/09/15/first-canada-investment-summit-unleashes-nearly-500-billion-new.

[12] Ibid; Department of Finance Canada, Budget 2022: A Plan to Grow Our Economy and Make Life More Affordable (Ottawa: Department of Finance Canada, 2022), online: Government of Canada https://www.budget.canada.ca/2022/report-rapport/tm-mf-en.html.

[13] Norges Bank Investment Management, “Fund Returns,” (last updated June 30, 2026), online: Norges Bank Investment Management https://www.nbim.no/en/investments/returns/.

[14] KfW, “KfW Acquires Minority Stake in Hensoldt AG on Behalf of the German Federal Government,” (Mar. 29, 2021), online: KfW KfW acquires minority stake in Hensoldt AG on behalf of the German Federal Government | KfW.