Bank of Montreal (BMO) chief executive officer Darryl White has called on the federal government to enhance its support for defence companies by improving access to capital, as the bank expands its involvement in the sector. Speaking on Wednesday in Toronto at a conference focused on defence finance, White emphasized the need for additional government measures to facilitate lending to small and medium-sized enterprises within the defence industry.
Canada’s largest banks, including BMO, have increased efforts to invest in and provide financing to defence firms, which historically have struggled to secure the funds necessary for growth and scaling. The federal government’s recent initiatives, such as expedited procurement timelines and the Business Development Bank of Canada’s multibillion-dollar investments in defence businesses, have encouraged institutions like BMO to take on greater risks in this space.
Despite these developments, White highlighted ongoing challenges, particularly around the uncertainties in procurement schedules, contract visibility, and export opportunities. To address these issues, he suggested Ottawa consider policies including government-backed risk-sharing tools, loan guarantees, and incentives to attract further private-sector capital. “Capital will go where it’s welcome, and if it sees a return,” White said, while acknowledging that implementing such measures would not be straightforward.
Last month, BMO announced plans to deploy up to C$70 billion in new capital over the next decade across sectors critical to Canada’s economic security, with defence identified as a key priority. White underscored that while early-stage funding is often accessible for defence companies, many encounter a bottleneck when seeking growth capital required to participate in government procurement and commercialize their products.
To bolster the bank’s defence sector strategy, BMO appointed Michael Bonner, head of Canadian personal and business banking distribution, as enterprise chair for the Canadian defence sector. Bonner will serve as a liaison between the bank, government agencies, and industry associations on matters related to defence financing, export credit, and procurement policies. Reporting to him will be BMO’s defence and security adviser, retired Major-General David Fraser.
Federal projections estimate that over the next decade, total investments in defence-related infrastructure will reach C$290 billion, alongside C$180 billion in direct defence procurement, with 70 percent expected to benefit Canadian companies. Canada’s ambition to allocate 5 percent of its gross domestic product annually to NATO commitments by 2035 could generate an estimated C$150 billion in annual economic impact, potentially increasing the country’s GDP growth by 0.2 percentage points each year over the next ten years.
White also noted rising foreign interest in Canadian defence and other critical sectors following the federal government’s recent investment summit. “Have I seen my inbox get more active with people who are interested in investing in Canada? For sure,” he said, cautioning that while this uptick in activity is encouraging, it typically takes time to translate into finalized investment deals.
Prime Minister Mark Carney has emphasized the importance of attracting more foreign capital to strengthen Canada’s economic resilience and reduce reliance on the United States, making the defence sector a focal point for both government and financial institutions alike.