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A worker operates a forklift to move coiled steel outside a warehouse at Ontario Shipyards in Hamilton, Ont., January 27, 2025. REUTERS/Carlos Osorio/File Photo
The Ontario government has announced $215 million in funding for shipbuilding and the broader marine sector in the province, saying it would support Canada’s national shipbuilding strategy and new federal commitments to defence spending.
“With our NATO allies meeting this week, Ontario workers are ready to step up and build the ships that will protect Ontario and Canada,” said Prabmeet Sarkaria, Ontario’s minister of transportation.
“As the federal government increases its defence commitment to meet our NATO spending targets, our government is ensuring Ontario workers and businesses have the skills and equipment they need to help. Now, it’s up to the federal government to ensure Ontario shipbuilders are included in its National Shipbuilding Strategy.”
In addition to a $200 million investment in shipping the provincial government announced in February, Ontario will be establishing a $15 million Ontario Shipbuilding Grant Program (OSGP) to expand the province’s shipbuilding sector.
The OSGP will fund projects that support skills training, infrastructure improvements, investments, and machinery and equipment for the sector. Through the program, shipbuilders will be given access to grants for up to 50 percent of eligible costs for projects supporting the shipbuilding industry’s competitiveness, business growth, and long-term capacity.
The provincial government noted that marine transportation contributed over $280 million to Ontario’s GDP in 2024, and that if the Great Lakes Region were a country, it would be the third-largest in the world with $7.5 trillion in GDP.
The National Shipbuilding Strategy was launched back in 2010 under then-Prime Minister Stephen Harper to equip the Royal Canadian Navy, Canadian Coast Guard, and Transport Canada with vessels. According to the federal government, contracts under the strategy are worth $2.8 billion per year in GDP, and have created 21,400 jobs over the last decade.
Ontario Shipyards is currently working to extend the vessel life of two Canadian Coast Guard ships, the George R. Pearkes and the CCGS Terry Fox. The shipyard has completed over 50 dry-docking and refit projects on Coast Guard vessels since 2012.
The federal government recently announced it would spend $9 billion on defence in 2025 to meet NATO’s initial 2 percent target by March 2026. The increased military spending will include $2.6 billion on recruitment and retention programs, $2.1 billion for defence research and development, $2 billion for military aid and additional defence partnerships, $1 billion for strategic military capabilities such as advanced radar systems and additional vehicles, and $800 million for new and existing military equipment.
Ottawa also agreed this week to raise its defence spending target to 5 percent of GDP by 2035, in line with other NATO countries. The new guidelines include 3.5 percent reserved for core defence spending and 1.5 percent of spending for items related to defence, such as critical infrastructure, civil preparedness, and cyber defence.
During the last election campaign, the federal Liberal Party pledged to expand the Royal Canadian Navy’s capabilities with new submarines and additional heavy icebreakers, integrate the Canadian Coast Guard into the military, and work with Canadian shipyards to ensure their capabilities are maximized and they use Canadian steel and aluminum.
