As a coastal state, Canada’s sovereign rights extend beyond its lands and include its territorial sea, exclusive economic zone and the outer limits of its continental shelf. The nation holds the enviable position of being one of only three countries in the world bordered by three oceans (Pacific, Atlantic and Arctic), with Russia and the United States being the other two that share this advantage. While initiatives are being pursued to grow Canada’s blue economy, many projects still operate in silos. With increasingly complex national security threats and continuous disruptive innovations in allied naval systems, defence spending is now one of Canada’s top priorities. Directing that spending to areas that also leverage growth in ocean and marine systems holds tremendous potential to expand the blue economy, in addition to advancing Canada’s geopolitical interests.
The “blue economy” encompasses the use of ocean and inland water resources for economic purposes as well as their sustainable management. The term not only includes core ocean-based economic activities, such as shipping and blue biotechnology, but also pertains to ventures that have direct or indirect impact on the extent and type of operations conducted on the oceans, in pursuit of economic, national security or political ends. Because of this expansiveness, the blue economy is cross-sectoral and a largely multi-faceted ecosystem, and its economic impact is increasingly substantial.
Segmented Versus Integrated Approach
A few recent local developments point to the increasing relevance of the blue economy. First, increased naval capabilities are one of the fixed points of interest of Canada’s new Defence Industrial Strategy (DIS). Announced in February 2026 by the federal government, the DIS is projected to inject $595 billion into the Canadian economy over the next 10 years. Second, under the newly created Shipbuilding Program, the Ontario government in 2025 pledged $215 million to support shipbuilding initiatives; this was complemented by a second investment of $90 million in July 2026. Third, fully 57 years since Canada last laid a keel for a destroyer, the construction of River-class destroyer warships has started in Halifax, Nova Scotia. Lastly, Canada’s Ocean Supercluster — an industry-led innovation cluster, supported by the federal government, that prioritizes the development of ocean-based innovations — envisions increasing Canada’s ocean economy to $220 billion by 2035. These are all different strategies, but they all pertain to Canada’s blue economy.
As Canada looks to these expansions, the economic figures for the European Union’s blue economy add a layer of optimism and perspective to the horizon. Its 2025 report indicates that the blue economy sectors generated a remarkable turnover of more than €890 billion in 2022, with an increasing share attributable to naval defence spending.
Blue Growth Intersectionality
As defence spending grows, critical minerals, or critical raw materials (CRM), become crucial to manufacturing naval defence vessels and to integrating them with advanced technology applications. Specifically designed research and development projects that prioritize the sustainable mining, refining and repurposing of materials for use in naval defence create a significant link between these two sectors. For example, Canada is the fourth-largest producer of nickel and aluminum worldwide, and steel and nickel alloys are instrumental raw materials for manufacturing warships and submarine parts. Essentially, developing robust initiatives that promote the sustainable production of aluminum and nickel and create a diversity of local jobs in mining and refining communities has the potential to deliver impacts that transcend traditional “blue” focuses. Such initiatives can also leverage Canada’s position as an alternative supplier of CRM, reducing global reliance on China for these commodities.
At the same time, policies that promote strategic alliances with Indigenous communities in mining areas (including in the Arctic), the National Research Council of Canada, universities, colleges and industry are key to sustainable outcomes. With large deposits of CRM located on Indigenous lands, compliance with the United Nations Declaration on the Rights of Indigenous Peoples in the extraction of these materials requires prior free and informed consent from Indigenous Peoples, as well as fair and equitable benefit sharing in these activities. It is therefore relevant for CRM-driven naval defence developments to undertake consultations that reflect respect for Indigenous rights, and for agreements to provide appropriate market-value remuneration for mining activities. As a result, policies that build awareness of Indigenous rights in CRM ventures and foster meaningful Indigenous participation in these projects become crucial.
Further, modern naval warfare increasingly relies on advanced technological capabilities. The technology architecture of naval defence systems is driven by innovations, some of which are industry spinoffs from research universities. For instance, Primordis, a spinoff from Purdue University’s research laboratory partnership with the US Office of Naval Research, has developed a patented autonomous energy intelligence system, which monitors energy usage and guides naval defence decisions in real time. This application, much like radar technology and the Global Positioning System, was initially developed for military applications but also serves civilian purposes. Similarly, collaborations between academia and the Department of Defence (DND) for the development of new naval capabilities are not particularly rare.
However, to leverage blue growth in Canada, what’s needed is a streamlined policy that addresses bottlenecks in the production and commercialization of advanced naval defence systems and applications, and one that exhibits clear and actionable convergence among the technology transfer offices of research universities and colleges, industry, and the needs of the DND. This convergence would include implementing intellectual property (IP), environmental and dual-use technology incentivization action plans at all stages of the relationship. Such an approach would foster cross-sectoral collaboration — thus allowing innovators across different programs to partner in the design and commercialization of advanced naval systems — while also benefiting from federal or provincial and territorial support. For example, under this approach to blue growth policy integration, the developer of a clean-technology naval defence system may find the North Atlantic Treaty Organization’s DIANA (Defence Innovation Accelerator for the North Atlantic) organization and the federal government’s Patent Collective Program useful to develop and scale market-ready technology.
In addition, the diverse configurations and uses of naval defence systems mean that a comprehensive approach to IP integration does not end with patents and trademarks, but rather with a diversified blue IP portfolio in which industrial designs are also positioned as strong IP assets. Very few industrial designs originate from Canada, particularly when compared to other countries such as the United States and South Korea, whose innovators have used industrial designs to enhance the novel aesthetic features of naval defence systems.
Although Canada is not a member, Pillar Two of the AUKUS Agreement strongly indicates where Canada should be headed in pursuing an interwoven, blue-driven innovation ecosystem. Pillar Two priorities include the development of hypersonic missiles and quantum technologies to advance underwater military capabilities. Canada should implement policies that allow Canadian naval defence start-ups to easily scale and become crucial suppliers of these systems. This is even more relevant now, given, for instance, Canada and South Korea’s interest in a joint defence cooperation agreement, and Canada’s leadership in establishing the Defence Security and Resilience Bank, which provide opportunities to develop interoperable naval defence applications. If a workable scale-up strategy is built, it can change the blue growth narrative and make Canada a globally competitive supplier of advanced naval defence technologies.
As Canada accelerates its defence spending, the opportunity is not simply to build more ships, but to treat naval defence as connective tissue across the blue economy. That means embedding all economic and innovation policies that are crucial to the naval defence supply chain into a single framework rather than pursuing each in isolation. That framework should include CRM policies, Indigenous participation and IP and innovation strategies. If Canada links technology transfer, dual-use incentives and a diversified blue IP portfolio, its innovators can become key suppliers to allied defence partnerships worldwide. The question is whether naval defence stays boxed in or becomes the engine of Canada’s blue growth.
