National bank eyes national defence spending

Defence spending, exporting and business succession planning to keep companies Canadian-owned topped the agenda Thursday when the BDC’s leader visited Winnipeg.

Isabelle Hudon, chief executive of the Business Development Bank of Canada, addressed entrepreneurs during a Winnipeg Chamber of Commerce event at the Winnipeg Art Gallery.

The national bank is looking to invest in companies producing “dual-use” products, Hudon said, meaning goods used both for national security and by civilians.

Ensuring Canada’s small and medium businesses are part of value chains on large contracts, like submarine creation, is also a priority, Hudon told a reporter post-speech.

“We will start by better understanding what military in Canada needs to solve for and what they need to buy,” Hudon said.

Efforts have already started, she said: the BDC has been talking “every day” with Canada’s defence sector since U.S. President Donald Trump was elected for a second time in 2024.

Further details on security-focused spending should be announced in the coming weeks, Hudon said. Ottawa’s new budget is set for release on Nov. 4.

Already, the federal government has said it would increase defence spending to two per cent of the nation’s gross domestic product. Trump has, in the recent past, called for Canada to become the 51st state.

Manitoba businesses are eyeing increased defence spending as “a real opportunity,” said Loren Remillard, Winnipeg Chamber of Commerce president.

Peerless Garments has a history of making military uniforms. Manitoba’s aerospace sector is the third largest in Canada, Winnipeg Economic Development & Tourism advertises.

“Once we really start to peel back the layers of defence procurement, we’re going to start to see there’s a lot of companies in Manitoba that are already playing in this space but could play in this space in a much bigger role,” Remillard said.

The chamber has booked the Canadian Armed Forces chief of the defence staff to speak at a March 11 event.

The BDC, meanwhile, is urging its clients to reduce reliance on exporting to any one country — including the United States, which remains a key trading partner, Hudon said.

Advisers within the bank encourage exporting to several regions, including interprovincially, and avoiding reliance on a single sector, Hudon added.

In a pre-budget speech on Wednesday, Prime Minister Carney said he’s set a goal to double Canada’s non-U.S. exports over the next decade.

Trade infrastructure within Manitoba and Canada must be improved for exporting, Remillard said. He highlighted tight port capacity and labour disruptions at rail and air lines. And despite past government announcements of reducing interprovincial trade barriers, Remillard has noticed little change among chamber members.

“I haven’t heard anyone celebrate that it’s markedly different,” he said. “We just have to start thinking Canadian and less protectionist within our own communities.”

The BDC released its first State of Entrepreneurship report earlier this week. Just 11 per cent of Prairie businesses plan to expand to other provinces, findings from the report’s summertime survey reveal.

A total of 318 Prairie entrepreneurs, including 43 from Manitoba, were surveyed for the 45-page report.

“I think it signifies that we still have challenges and barriers in terms of interprovincial trade,” Remillard said of the findings.

The report also spotlights a wave of businesses nearing a changeover: more than 140,000 companies nationally are expected to change hands by 2030.

“(This) will require many new entrepreneurs to step up to the plate,” Hudon told the crowd Thursday. “Not only to keep them alive and kicking — but we need to keep the ownership Canadian.”

Business acquisitions and new leadership entering the market can help curb company closures and foreign ownership, Hudon said.

Generally, community needs to do a “better job” of creating entrepreneurs, Remillard added later.

Roughly half as many Canadians are launching businesses as 20 years ago, a 2023 study by BDC and the University of Montreal found.

Christian Mueller sat in the crowd during Hudon’s talk. He’s watched clients of his moving company undergo major spikes and dips in American business over the past half year.

“Stuff that (Hudon) is saying is stuff we’ve been talking about — just making sure that you’re looking at diversifying your customer base, different industries,” said Mueller, who manages Quick Transfer. “Examining your business from every angle, I think, is super important right now.”

gabrielle.piche@winnipegfreepress.com