The Source Canada Newsletter, Monday August 24, 2026
The breaking off of trade negotiations between the US and Canada, and the immediate imposition of 50% tariffs on US$20 billion in goods, is a jolt.
But it is a sign of how far the relationship has worsened that it’s a jolt, not a shock. Negotiators were acutely aware that Canadian sentiment was to get the best deal possible but not to sign a bad deal. Canadians were prepared for the worst because we have already been living in the new world order, something Prime Minister Carney described as “a rupture, not a transition” in his speech at Davos in January.
This time might be different. It could be the worst-case scenario. Retaliatory moves may be met with counter-retaliatory moves in an escalating and unpredictable cycle.
But Canadians need not be reminded that uncertain times are ahead. Canada is already responding.
The federal government’s Buy Canadian Policy is designed to ensure more taxpayer dollars go to building domestic businesses, including SMEs. The Defence Industrial Strategy will invest billions in the domestic defence industry.
The world is finding Canada to be an attractive destination for investment. Global investors been invited to the inaugural Canada Investment Summit. The Milken Institute is running its first ever Global Dialogues Toronto at the same time.
What’s even more encouraging is a newfound Canadian confidence. You hear this emanating from entrepreneurs who have decided to shed some of that outdated Canadian humbleness.
Ontario-based Avidrone won first place in DARPA’s Lift Challenge, the only drone to achieve close to a 4:1 payload-to-weight ratio. Ottawa’s Dominion Dynamics raised $139M, the largest defence Series A in Canadian history. Ali Asaria, co-founder of Transformer Lab, announced his product launch by unapologetically saying “we think it could change the world.” There are many more and they are getting louder.
This is how Canadian entrepreneurs respond to an environment of increasing uncertainty. It goes against conventional wisdom which counsels that we should prepare for uncertain times by hedging more and investing less.
We’re seeing the opposite from our innovators. It’s no surprise. This is a group of people who enjoy being contrarians.
Canada needs more contrarians, not as a reaction to a trade war or any other external threat.
We need more business leaders willing to look at an uncertain future and decide to invest more. To transform their organizations by becoming more innovative. To buy more Canadian technology.
Other countries have discovered the value of investing in and buying Canadian innovation. If our largest companies start to do the same their investment will pay dividends over a long time horizon that will outlast any trade war.
Highlights
Air Transat signs a ten-person Montreal startup to run its disruption recovery. BetaKit, Aug 20. StratosX has landed Air Transat as launch customer for X360, which pairs predictive modelling and generative AI with an airline's own operations data to recommend how aircraft, crews and passengers get rerouted when flights go off schedule. Air Transat is integrating it into its operations control centre.
Helcim raises $53 million as the Moneris sale reshapes Canadian payments. BetaKit, Aug 21. The Calgary processor closed a Series C led by BDC Capital's Growth Venture Fund at a $250-million valuation. CEO Nicolas Beique says business surged after Francisco Partners agreed to buy Moneris, and part of the money goes to an extension letting merchants swap out the default processor embedded in booking and invoicing software.
Counter Signal
An Australian vendor takes the scheduling layer on RCAF aircrew training. True North Strategic Review, Aug 17. SkyAlyne, the CAE and KF Aerospace joint venture priming Future Aircrew Training, selected Ocean Software to deliver FlightPRO and TAMS across 15 Wing Moose Jaw, 15 Wing Southport and 17 Wing Winnipeg.
Kongsberg wins roughly $150 million for remote weapon systems on Canadian vehicles. True North Strategic Review, Aug 20. The Norwegian contractor signed a NOK 1.1 billion follow-on with General Dynamics Land Systems-Canada for PROTECTOR RS4 systems on the Armoured Combat Support Vehicle, weeks after Canada ordered 190 more of the vehicles in a $1.4-billion deal.
Capital
The Canada Growth Fund puts US$20 million into EnerPure. The Logic, Aug 21. The Manitoba-founded, Calgary-based cleantech closed US$35 million all-equity, with the government fund taking the larger share and US firm Rice Investment Group leading at US$15 million. It funds a first commercial used-motor-oil recycling plant in Alberta, starting up in late 2027 at 32.6 million litres a year.
BDC profit more than doubles as its venture portfolio rebounds. The Logic, Aug 20. Net income hit $1.04 billion for the year ended March 31, up from $402 million, with $11.6 billion in new financing deployed. The venture arm swung to a $218-million profit from a $58-million loss, driven by roughly $402 million of paper gains on AI, quantum and other advanced technology holdings.
Peripheral raises US$8.7 million to turn 2D camera feeds into navigable 3D sports video. BetaKit, Aug 17. The Toronto company, founded in 2024 by two University of Toronto robotics graduates, was co-led by Deloitte Ventures and Inovia Capital with Khosla Ventures following on. It moved from San Francisco to Toronto in 2025 and has run demos with the Toronto Raptors.
Legio raises US$5 million for campus safety operations. BetaKit, Aug 17. The Toronto startup took seed funding from Klass Capital for an AI-native platform aimed at college and university public safety departments, with the money going to product and a design partner program with post-secondary institutions.
Defence
Ottawa wants two million drones a year. The Icebreaker, Aug 18. The target is roughly a 200x increase on current Canadian output, alongside the Defence Drone Initiative marketplace that opened for supplier prequalification in July. The same piece notes Canada intends to buy its first long-range deep strike system from a foreign supplier rather than a domestic one.
MDA Space delivers its first LEO satellites as prime contractor. True North Strategic Review, Aug 17. Eight replenishment satellites built, integrated and tested in Montreal reached orbit Aug 15 for Globalstar's constellation. It is the first time MDA has been prime on a commercial communications constellation, with nine more in final integration and a new high-volume facility now running.
Policy
How Carney plans to wage the trade war. The Logic, Aug 22. Canada has committed to dollar-for-dollar retaliation starting September 8, targeting American steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics. The list is built to hit U.S. sectors that have Canadian substitutes rather than inputs Canadian manufacturers depend on.
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