02:23 PM EDT, 06/25/2025 (MT Newswires) -- Canada officially agreed to the new NATO defence spending target of 3.5% of GDP plus 1.5% on defence-related infrastructure (which could potentially include investments in things like critical mineral development) by 2035.

With the new 3.5% target now in place, it is clear the Canada's defence spending will remain on an upward trajectory for years to come with positive implications for Canadian defence industry players and related suppliers such as infrastructure companies, analyst Cameron Doerksen writes.

CAE (CAE.TO) stands out as the biggest potential beneficiary from Canada's higher defence spending. The company is already providing training and other support services on multiple major procurement programs already underway in Canada. Most of the procurement programs that Doerksen sees from the new spending (such as new submarines, Army investments, airborne surveillance planes) will require some form of training program for which CAE is ideally placed. Canada's commitment to prioritize Canadian companies in new procurement makes CAE an essential partner to any new non-Canadian supplier bidding on major programs, he adds.

CAE is rated Outperform, with a $43 price target.

Bombardier (BBD-B.TO) Defense segment revenue today is modest, but the company has aspirations to grow the business to US$1.0-1.5 billion by 2030, writes Doerksen. Given its position is one of Canada's leading aerospace companies with extensive engineering and program management capabilities, Bombardier could also expand its range of services for the Canadian military into areas such has aftermarket support, Doerksen says.

Bombardier is rated Outperform, with a $115 target.

Exchange Income ( EIFZF ) Aerospace segment accounts for 11% of total company revenue, but EIF should see some direct benefits over time from Canada's increased defence spending, particularly for the company's PAL Aerospace division.

Exchange Income ( EIFZF ) is rated Outperform, with a $73 target.

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