City ready to capitalize on military spending hike

By Collin Gallant on June 10, 2025.

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Ottawa plans to bolster defence spending, and City Hall’s economic development office says it’s geared to build the sector in the region.

Prime Minister Mark Carney announced Canada will meet a NATO goal of spending 2 per cent of gross domestic this year, or about $9 billion, by boosting spending across the military, to build domestic manufacturing focused on several areas key to southeast Alberta.

“Medicine Hat and the region really is a prime location for investment in the drone sector,” said Selena McLean-Moore, the director the Medicine Hat Economic Development, citing CFB Suffield, Defence Research and Development Canada station at Suffield and the Foremost UAS testing range.

“They’re two key assets … the other factor is that we have a small cluster of aerospace companies that have really taken off because of that location.

“The more can grow those companies, the more we can attract new companies as well.”

Specific areas noted in Monday’s announcement ahead of G7 summit next week in Alberta and NATO summit in The Hague later this month, include “Arctic Over the Horizon” radar now being jointly developed by Alberta-firm Atco Frontec.

Also highlighted are vow to create joint counter drone program, “long-range precision strike capabilities,” increased ammunition and land vehicle production, and procure long-range support ships.

“This historic investment will strengthen our sovereignty and invest in the Canadian economy – growing a world-class defence industry that fuels innovation and job creation,” said Defence Minister David J. McGuinty.

A 55-page report released early this year details the city’s forecast of opportunity in aerospace sector. It lays out contract announcements by private-sector players, federal grants and municipal support for regional airport development over recent years.

The province has stated that growth in the sector could create 1,500 positions in Alberta, such as skilled tradespeople, engineers, software developers and business developers.

The go-forward plan for local officials for local economic developers is to help attract workforce, improved skills training in the area, advocate for research dollars and projects. They will promote existing federal and provincial supports, and potentially explore a “hub” model whereby increasing levels of industry would attract service providers and suppliers to co-locate.

“A lot of initial manufacturing is done in many areas of Canada,” said McLean-Moore. “Where we do well is advanced manufacturing. There may be opportunity for us to look at that supply chain and bring opportunities closer to Medicine Hat.”

Of 14 local aerospace companies surveyed for the city report, 11 stated businesses were growing, but top challenges for business development were access to capital, workforce availability, supply chain issues and facilities.

Improvements to transportation routes, power and broadband internet service would enhance business operations.

Three in four said additional or expanded facilities would be needed in the next five years.

On the international stage, the British Ministry of Defence unveiled its own modernization plan earlier this month, calling for huge investment in land-fighting capabilities, nuclear deterrence and modern warfare, like cyber defence and drone warfare.

It also announced that it was in talks with Canada about future use of the jointly managed facility at CFB Suffield.

The News also broke the story that Defence Research and Development Canada is planning a full-scale replacement of main laboratory at Research Station Suffield at an estimated cost of C$750.

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