Toronto, December 24, 2025: As the United States continues to disrupt global trade dynamics, Ontario is increasingly looking to the defence sector to stabilise its economy and reduce reliance on its largest trading partner, Economic Development Minister Vic Fedeli has said.
Speaking in a recent interview, Fedeli acknowledged that uncertainty stemming from Washington’s trade policies has forced countries worldwide to rethink their economic strategies. He said governments and businesses now begin each day wary of fresh developments from the U.S., prompting Ontario to diversify its global partnerships.
Fedeli, who serves as Ontario’s Minister of Economic Development, Job Creation and Trade, travelled to 20 countries this year to strengthen economic ties and explore new opportunities. While the pace of international travel may slow slightly in 2026, he said the province will now focus more strategically on defence-related partnerships and investment.
Ontario aims to attract foreign defence manufacturers to set up production in the province while also helping existing local firms access new international markets. The province is also working to expand domestic defence manufacturing capacity.
A key opportunity lies in steel production, particularly at Algoma Steel, as global defence spending surges. Fedeli pointed to the European Union’s proposed $1.3-trillion ReArm Europe plan as an example of the massive demand expected for defence materials. Ontario and the federal government are exploring a joint partnership with Algoma Steel to fund a second steel plate line and new infrastructure-grade beam production, initiatives expected to create long-term employment.
Algoma recently announced plans to cut around 1,000 jobs as it transitions from coal-based production to electric arc furnaces, a move driven partly by U.S. tariffs. The layoffs drew criticism, especially since the company previously received $500 million in government support. Fedeli defended the investment, saying it was crucial to keeping the company operational.
Ontario is home to around 300 companies producing defence components, and Fedeli hinted that further provincial support announcements are expected in the new year. He also defended Ontario-based firms exporting defence equipment to the United States, including armoured vehicle manufacturer Roshel, despite criticism from human rights groups over its U.S. clients.
Mining and critical minerals are another focus area, with companies looking to supply defence markets. Fedeli said Ontario’s $500-million critical minerals processing fund aims to ensure these resources are processed locally, creating value-added jobs while still allowing private companies to sell internationally.
“Our goal is simple,” he said. “We want to add value here in Ontario and create jobs, while making our economy more resilient for the future.”
