Canadian defence companies eye idle auto plants for growth plans

Canadian defence companies are eyeing idle automotive plants and laid-off workers for their expansion plans as vehicle makers grapple with trade friction and uncertainty about the future of the industry in Canada.

Among the interested parties are Ottawa-based defence tech company Dominion Dynamics and Brampton, Ont.-based armoured vehicle maker Roshel. Both companies are working on bids to occupy unused manufacturing space in the Canadian automotive sector to bolster the production of defence goods, in hopes of fostering industrial hubs supported by an injection of federal funds.

“This is Canada’s chance to reindustrialize,” said Eliot Pence, chief executive officer of Dominion Dynamics.

The Canadian auto industry has been struggling with tariffs enacted by U.S. President Donald Trump starting early last year. Some plants have ceased operations or moved production, and thousands of workers have lost their jobs or been left without certainty on when they could be restored.

Last Friday, the union that represents workers at a Stellantis assembly plant in Brampton said the multinational automaker had informed the union about its plans to potentially close and sell the facility. The plant has been idle, and its 3,000 employees without work, since February, 2025. In October, the company announced it would move planned production of its Jeep Compass from Brampton to Illinois, provoking further questions about the future of the Canadian plant.

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Meanwhile, the Canadian defence sector is trending in a markedly different direction, with the federal government striving to spend 5 per cent of the country’s gross domestic product on defence by 2035. The industry is in growth mode and companies like Dominion are sizing up the country’s struggling auto plants and workers as a potential opportunity for their growth plans, pending confirmation from Ottawa of a reliable flow of defence funds.

“The Canadian economy is at a hinge moment, where we can leverage everything our workers have learned about manufacturing to build new defensive technologies and capabilities,” said Marco Mendicino, a former federal cabinet minister and current senior counsel at law firm Cassels Brock & Blackwell LLP, where he advises defence companies.

Dominion’s pitch for the Stellantis assembly plant is one example of what this shift could look like.

Mr. Pence said he’d like to create a defence industrial zone at the massive idle facility. With Dominion at the helm, he’s looking to join forces with a handful of other Canadian companies, many of which will likely come from the Alliance of Canadian Defence Companies – an industry association Mr. Pence helped found.

Together, the coalition could buy or lease the plant, and Dominion could use it to anchor the production of its Autonomous Collaborative Platform, a drone that flies alongside crewed fighter jets, according to Mr. Pence.

The Stellantis workers are part of his pitch as well, with Mr. Pence saying he could hire 1,000 of them.

But first, Dominion needs a clear indication that the federal government is willing to work with the company as a partner on its Autonomous Collaborative Platform – something Ottawa has yet to confirm.

Dominion isn’t the only defence company in Canada eyeing idle space in the auto sector while waiting on a signal from Ottawa.

Brampton-based armoured vehicle maker Roshel is a finalist in the competition for a contract with the federal government to manufacture up to 2,100 light utility vehicles and 500 trailers for the Canadian military.

If his company wins, chief executive officer Roman Shimonov said he’ll need more space to scale production, and he sees the footprint created by the commercial automotive sector in Canada as a good place to start. Plus, he is also willing to re-hire laid off auto workers.

“That’s the opportunity for the Canadian government, both on a provincial, municipal and federal level, to repurpose some of the facilities that are underutilized,” he said.

Roshel wouldn’t be coming to these facilities alone. Mr. Shimonov said he has strategic partnerships with major companies outside of Canada that are looking to localize their production here, including some in the defence sector.

“The problem with the Canadian environment is that we don’t have the infrastructure because the whole industry was neglected for so many years,” he said.

If the federal government wants to spend billions of dollars on defence over the next several years, and it wants to spend it in Canada, it’s going to have to ensure the capacity is there for companies to scale up, he said.

Flavio Volpe, head of the Automotive Parts Manufacturers’ Association, said his priority is pushing for Stellantis not to sell its Brampton plant but to produce its recently announced Chrysler Arrow vehicle there.

Ideally, the auto plant stays in the business of vehicles, he said.

But failing that, the co-location of defence companies within auto plants is an opportunity worth pursuing, Mr. Volpe said, adding that defence won’t replace the auto industry. There are many differences in the way the two industries operate, from production volumes to follow-on maintenance and repair contracts to their primary customers.

Yet, what defence companies can do is supplement the struggling automotive industry and tap into its existing supply chain, he said.

If tariffs are eroding Canada’s ability to win automotive programs, Mr. Volpe said, “Then you have to do this clustering strategy to let these advanced mobility manufacturers be the supply chain for companies like Eliot’s [Dominion Dynamics].”

“He’s going to need a supply chain, and he’s going to need it immediately.”