FedDev Ontario Opens $90 Million Regional Defence Investment Initiative (RDII) 

The defence sector is evolving rapidly, and southern Ontario businesses now have a major opportunity to grow with it. Canada is taking a significant step to strengthen its defence industrial base. With rising global security demands and expanding NATO commitments, domestic suppliers are under pressure to innovate, scale, and build more resilient supply chains.  

FedDev Ontario’s Regional Defence Investment Initiative (RDII) is an over $90 million program designed to help southern Ontario businesses expand their capabilities, adopt advanced technologies, and position themselves for defence-sector opportunities at home and abroad. 

RDII is one of the most comprehensive funding initiatives the federal government has launched for the defence sector in recent years. It supports for-profit businesses, co-operatives, and Indigenous-owned companies, and it may also support not-for-profit organizations that help grow industrial capacity in defence markets.  

“Canada is a nation of builders. The Canadian workers who define our defence industrial sector are delivering the modern capabilities the Canadian Armed Forces and our allies need. The Regional Defence Investment Initiative will strengthen Canada’s economic resiliency and assert our sovereignty. Investing in our defence industrial capacity across Quebec and every region of our country is how we build Canada Strong.” 
– Mélanie Joly, Minister of Industry and Minister responsible for the Economic Development Agency of Canada for the Regions of Quebec 

Total Canadian Funding Overview 

The RDII program represents a national investment of roughly $357.7 million delivered through Canada’s regional development agencies, with FedDev Ontario administering more than $90 million of this total for southern Ontario businesses.  

Similar funding streams are being deployed through economic development agencies across the country, including PrairiesCan, PacifiCan, and Canada Economic Development for Quebec Regions (CED). Each agency is supporting companies within its region to scale production, adopt advanced technologies, and strengthen Canada’s overall defence industrial base. This coordinated national approach reflects the federal government’s commitment to modernizing defence supply chains, building domestic capacity, and helping Canadian firms compete globally. 

For companies already operating in defence supply chains, or those ready to pivot into them, timing and strategic planning will be key. 

 

Funding Snapshot: Regional Defence Investment Initiative (RDII) 

RDII provides high-impact financial support to help southern Ontario businesses scale their defence-related capabilities. 

Program Objectives 

• Integrate businesses into domestic and international defence supply chains 
• Enhance industrial and innovation capacity in southern Ontario 
• Strengthen Canada’s defence industrial base 
• Support regional economic development aligned with Canada’s defence and security priorities 
• Ensure all supported activities align with NATO’s spending targets 

Funding Amount 

• $125,000 to $10 million in repayable contributions 
• Up to 75% of eligible project costs 
• Eligible costs may be retroactive to April 1, 2025 

Eligible Applicants 

• For-profit businesses, co-operatives, and Indigenous businesses (First Nations, Métis, Inuit) 
• Located or expanding in southern Ontario 
• Minimum of five full-time employees 
• Incorporated/registered for at least three years 
• Demonstrated demand or opportunity in defence supply chains, including dual-use technologies 
• Not-for-profit organizations may be eligible case-by-case if supporting defence-sector capacity development 

Eligible Sectors 

Businesses operating in or targeting the following defence-aligned sectors may qualify: 

• Artificial intelligence, cybersecurity, and quantum technologies 
• Space technologies 
• Sensors and detection systems 
• Aerospace and shipbuilding/naval industries 
• Land and armoured vehicle manufacturing 
• Uncrewed and autonomous systems 
• Training and simulation technologies 
• Munitions and personnel protection equipment 
• Critical minerals and metals essential to defence manufacturing 

Eligible Projects 

Projects should support industry expansion, innovation, or supply chain readiness, such as: 

• Acquisition of advanced manufacturing equipment 
• Facility expansion or modernization 
• Technology adoption and process innovation 
• Commercialization of defence-relevant products 
• Productivity improvements to meet defence procurement requirements 
• Scaling operations to supply defence primes or Tier 1 suppliers 

Timeline 

• Priority consideration: Apply by January 21, 2026, for projects with costs starting before March 31, 2026. 
• Projects beginning April 1, 2026 or later: Applications are accepted until funding is committed. 
• Costs may be retroactive to April 1, 2025. 
• All projects must conclude by March 31, 2029. 

Why RDII Matters for Southern Ontario Businesses 

Southern Ontario has one of Canada’s most diverse and innovation-driven industrial ecosystems. Many manufacturers, technology developers, and specialized suppliers already have the capabilities needed to operate in defence supply chains but face limitations in capacity, compliance, or equipment readiness. RDII helps businesses close these gaps. 

The defence market demands high reliability, advanced engineering, and specialized certifications. For many small and medium-sized enterprises (SMEs), meeting these requirements requires significant upfront investment, whether it’s robotics and automation, cybersecure IT systems, facility upgrades, or new prototype development. RDII provides the financial leverage businesses need to implement these changes at scale. 

The initiative also targets sectors essential to national resilience. From artificial intelligence and quantum technologies to advanced materials and autonomous systems, RDII supports areas of strategic importance, as Canada works to strengthen its sovereign capabilities. The program encourages companies to position themselves for contracts aligned with NATO priorities, including supply chain security, training technologies, munitions production, and emerging defence platforms. 

For businesses operating outside traditional defence markets, RDII offers a pathway to diversify their revenue by entering a stable, high-growth industry. Dual-use technologies (such as sensors, cybersecurity tools, or advanced simulations) often qualify when they demonstrate clear defence relevance. 

How RDII Fits into the Larger Government Funding Landscape 

RDII complements several other federal programs designed to advance defence innovation or commercialization, though many operate on a challenge basis or within narrower funding windows. 

IDEaS Program: Innovation for Defence Excellence and Security 

• Supports R&D and prototype development through rotating challenges  
• Status: Periodic intakes; not always open 

Innovative Solutions Canada (ISC) Challenge Stream 

• Helps firms test late-stage prototypes directly with government departments 
• Status: Challenge-based 

Strategic Response Fund (SRF) 

• Provides large-scale funding for technology development and industrial expansion, including aerospace and defence 
• Status: Ongoing but highly competitive 

RDII fills the gap for SMEs ready to commercialize products, scale operations, or integrate into supply chains (especially those not yet suited for SRF-level funding or challenge-specific programs). 

How Ryan Helps Businesses Maximize RDII Funding Opportunities 

The Regional Defence Investment Initiative (RDII) is a multiyear opportunity, but the strongest advantage goes to businesses that move early. Priority will be given to applicants applying before January 21, 2026, and retroactive project costs open the door for investments already underway. To stand out, applicants must present a clear strategic case, a detailed project plan, credible financial forecasts, and strong alignment with defence supply chain demands. 

Our Ryan Canadian Government Funding team specializes in guiding businesses through this process. We help companies validate eligibility, scope projects, identify eligible costs, strengthen applications with market insights, and prepare competitive submissions that reflect FedDev’s evaluation criteria. Our support can be especially valuable for organizations entering defence supply chains for the first time or navigating complex dual-use technology applications. 

If you’re preparing to expand, modernize, or shift into defence markets, our team can help you take full advantage of RDII. Connect with us to get started on your application and move forward with confidence.