Ministers Fraser and Thompson announce $16M in major federal defence investment in Newfoundland and Labrador
Press Release + Noah Note
News release
Regional Defence Investment Initiative supports businesses to grow, innovate and scale up for global defence opportunities
March 19, 2026 · St. John’s, Newfoundland and Labrador · Atlantic Canada Opportunities Agency (ACOA)
The world is changing rapidly. The international rules-based order is fading, and technological change is expanding the fields of conflict. The Government of Canada is responding by rebuilding and reinvesting in the Canadian Armed Forces and strengthening the defence industrial base.
Through Canada’s first Defence Industrial Strategy, the government is aligning long-term defence investments with industrial capability to support Canadian businesses, strengthen supply chains, and reinforce Canada’s role as a trusted ally. In Newfoundland and Labrador, the Government of Canada is making targeted investments to help local aerospace and defence companies grow, creating jobs, and building long-term industrial capacity.
Today, the Honourable Sean Fraser, Minister of Justice and Attorney General of Canada and Minister Responsible for the Atlantic Canada Opportunities Agency (ACOA), and the Honourable Joanne Thompson, Minister of Fisheries and Member of Parliament for St. John’s East, announced a $16 million federal investment to support five local companies in Newfoundland and Labrador. The investment will help develop and manufacture critical equipment and technologies here in Newfoundland and Labrador, as well as support more than 115 highly skilled jobs and strengthen the following local companies within Canada’s defence and security supply chains:
PAL Aerospace Ltd.
Virtual Marine Technology Inc.
Solace Power Inc.
CoLab AI Inc.
Rutter Inc.
As a pillar of Canada’s Defence Industrial Strategy, the Regional Defence Investment Initiative (RDII) is building a strong, resilient defence industrial base by helping small and medium-sized businesses scale up and adopt advanced technologies. These investments are strengthening Atlantic Canada’s industrial capacity, growing Newfoundland and Labrador’s role in Canada’s defence industry, and ensuring Canada has the capabilities it needs to respond to evolving global security challenges while supporting long-term economic growth.
Funding Breakdown
The Government of Canada is providing an investment of $16 million under the Regional Defence Investment Initiative (RDII) to five businesses in Newfoundland and Labrador.
PAL Aerospace Ltd.
St. John’s, Newfoundland and Labrador
Commercialize a new missionized aircraft solution to offer enhanced capabilities that strengthen Canada’s potential in maritime and northern surveillance, and Arctic sovereignty.
Investment: $7,500,000 (repayable)
Virtual Marine Technology Inc.
Paradise, Newfoundland and Labrador
Develop and deliver marine simulation-based training solutions for defence.
Investment: $2,500,000 (repayable)
Solace Power Inc.
Mount Pearl, Newfoundland and Labrador
Enhance capabilities in delivering wireless power and data solutions in harsh environments, including the Arctic.
Investment: $4,000,000 (repayable)
CoLab AI Inc.
St. John’s, Newfoundland and Labrador
Deliver AI-powered collaboration software solutions to meet defence markets requirements.
Investment: $1,000,000 (repayable)
Rutter Inc.
St. John’s, Newfoundland and Labrador
Develop and deliver enhanced radar technologies for naval and Arctic defence operations.
Investment: $1,000,000 (repayable)
Quotes
“Good jobs here at home and in Newfoundland and Labrador helping build the future of Canada’s Armed Forces. That is the real impact of this investment. We could not be prouder of the role Newfoundland and Labrador is playing in strengthening Canada’s defence capabilities. Through Canada’s new Defence Industrial Strategy, local companies are growing, innovating, and building more of what Canada needs at home to stay secure, sovereign, and economically strong.”
The Honourable Sean Fraser, P.C., K.C., Member of Parliament for Central Nova, Minister of Justice and Attorney General of Canada and Minister responsible for the Atlantic Canada Opportunities Agency
"This investment is creating good, skilled jobs for the people of Newfoundland and Labrador, and it reflects what we know about our province. We have the talent, the expertise, and the businesses to lead. Newfoundland and Labrador is strategically positioned for Arctic and maritime defence, and companies here are already developing the next generation of defence technologies.”
The Honourable Joanne Thompson, Minister of Fisheries and Member of Parliament for St. John’s East
“The local businesses receiving funding today have built strong reputations and are proven leaders in their fields and in Newfoundland and Labrador’s economy. With this Government of Canada support, we are seeing the strength and value behind dual-use technologies and the potential they have when it comes to defence. Great minds – and we have many here in our province – are meeting the moment and helping to build Canada stronger.”
Tom Osborne, Member of Parliament for Cape Spear
“This support from the Government of Canada through the Regional Defence Investment Initiative is a strong vote of confidence in PAL Aerospace’s proven capabilities and an acknowledgement of the role we are poised and ready to play in Canada’s defence ecosystem. This project will allow us to build on decades of experience in aircraft modification and global special missions operations to deliver advanced, made-in-Canada solutions designed to enhance surveillance, enforcement, disaster response, and sovereignty, particularly across Canada’s Northern and Arctic regions.”
Calvin Ash, Chief Executive Officer, PAL Group of Companies
Quick facts
The $379.2 million Regional Defence Investment Initiative (RDII) is a three-year initiative delivered by Canada’s Regional Development Agencies (RDAs).
Today’s announcement is part of ACOA’s $38.2 million allocation, over three years, under the Regional Defence Investment Initiative (RDII).
With more than 200 firms in the defence industry, Atlantic Canada delivers advanced shipbuilding, aircraft and engine maintenance, sonar and acoustic systems, training and simulation, ground vehicle technologies and cyber resilience.
Atlantic Canada is home to nearly 10,000 direct aerospace and defence jobs, representing 20% of national defence industry employment.
Noah Note: I'm watching PAL like a hawk here. If you remember a few months ago we reported that there were discussions of replacing the Red Dash fleet in the near-future with a new, manned platform. Given PALs extensive history taking Dashes and slapping together random ISR platforms on any given sunday… I'm certainly looking at this announcement and at the least raising an eyebrow at things.
Maybe something to ask around again. I haven't asked about the Red fleet in a little while now. Something of interest though to keep on your radar.
Thanks Noah! Yes, it will be interesting time for PAL going forward!
Regarding "random ISR platforms", PAL has had a native ISR solution every since is bought and fully integrated Canadian firm https://cartenav.com/