As global trade relations remain unsettled by ongoing U.S. policy shifts, Ontario’s minister of economic development says the province is sharpening its focus on defence manufacturing as a stabilizing force for the economy in 2026 and beyond.
Vic Fedeli, Ontario’s Minister of Economic Development, Job Creation and Trade, said the volatility triggered by U.S. trade decisions has pushed jurisdictions worldwide to seek stronger partnerships outside Washington’s orbit.
“Across the globe, the question is how countries can work together around the U.S.,” Fedeli said in a recent interview, describing a climate of uncertainty driven by near-daily policy signals from south of the border.
Often referred to as Ontario’s chief salesperson, Fedeli visited 20 countries over the past year to strengthen existing relationships and cultivate new ones. While international outreach will continue next year, he said the pace will slow slightly as the province works to finalize deals already in progress — with defence now a central priority.
“We need to let these relationships mature and close the deals that are pending,” Fedeli said. “But you’ll see us being far more targeted in where we go, with a clear emphasis on defence.”
The province is aiming to attract foreign defence manufacturers to set up production in Ontario, expand export opportunities for local firms, and boost domestic capacity. Fedeli pointed to Algoma Steel as a potential beneficiary of rising global defence spending, including the European Union’s $1.3-trillion ReArm Europe initiative, which is expected to drive demand for steel and infrastructure materials.
Ontario and the federal government are exploring a joint investment with Algoma to fund a second steel plate line and new I-beam production, projects Fedeli said would represent long-term additions to the company and help restore significant employment.
Algoma recently announced plans to cut about 1,000 jobs as it transitions from coal-based production to electric arc furnaces amid pressure from U.S. tariffs — a move that drew criticism given the $500 million in public funding previously provided by Ottawa and Queen’s Park. Fedeli defended the investment, saying it was critical to keeping the company afloat.
“That funding kept the company alive,” he said. “Without it, Algoma simply wouldn’t be operating today.”
Ontario is home to roughly 300 companies involved in defence manufacturing, and Fedeli signalled further provincial support announcements in the new year. One such company, Brampton-based Roshel, recently drew attention after it was revealed that U.S. Immigration and Customs Enforcement had ordered 20 of its armoured vehicles — a deal criticized by human rights groups but defended by both Premier Doug Ford and Fedeli.
Fedeli also highlighted opportunities in the critical minerals sector, with mining companies eyeing the U.S. military as a major customer. He said Ontario’s $500-million critical minerals processing fund is intended to ensure more of that value-added work happens within the province, even as companies pursue U.S. contracts.
“Our focus is on processing these minerals here and creating jobs in Ontario,” Fedeli said. “Private companies will make their own sales decisions, but our role is to build capacity and keep the economic benefits at home.”
