Canada’s 2025 federal budget, unveiled this week, arrives at a pivotal moment in the nation’s economic and strategic trajectory. Framed as a “generational investment,” the budget outlines C$141.4 billion in new spending over five years, targeting housing, defense, clean energy, and innovation. Yet despite its ambitious tone, the budget still falls short in key areas, most notably in aerospace and sovereign space capability.

There is light at the end of the tunnel. But it’s not yet a launch pad.

A Budget of Bold Themes

Finance Minister Chrystia Freeland described the budget as a blueprint for “Canada Strong”, nation that builds, defends, and innovates. The government has committed to tackling affordability, climate resilience, and national security, while maintaining a projected deficit of C$78.3 billion for 2025–26.

Among the most notable allocations:

- C$32.8 billion for housing and urban infrastructure

- C$24.5 billion for defense modernization, including NORAD upgrades and Arctic sovereignty

- C$21.7 billion for clean energy transition

- C$18.2 billion for healthcare and pharmacare

- C$6.4 billion for AI, quantum computing, and innovation hubs

These investments reflect a shift toward long-term capital budgeting, separating operational costs from strategic infrastructure. It’s a welcome evolution in fiscal planning, but one that still leaves critical gaps.

The Space Budget: Symbolic, Not Strategic

Canada’s commitment of C$182.6 million to develop sovereign space launch capability is a historic first. It signals recognition that access to orbit is no longer optional, it’s essential for defense, climate monitoring, and economic competitiveness.

But let’s be clear: C$182.6 million is not enough. It’s a symbolic down payment, not a strategic investment.

To put this in perspective:

- A single Falcon 9 launch costs US$67–90 million

- Building a launch site like Rocket Lab’s LC-1 or Spaceport Cornwall can exceed C$100 million

- Developing an orbital-class rocket from scratch typically requires C$500 million to C$1 billion

Canada’s space ambitions, whether through NordSpace’s Taiga rocket, Reaction Dynamics’ hybrid propulsion, or MDA’s satellite platforms, require sustained funding, regulatory support, and public-private partnerships. Without these, the country risks remaining a customer in the global space economy, rather than a contributor.

Aerospace: The Missing Engine

Beyond space launch, Canada’s aerospace sector remains underfunded and underleveraged. Once a global leader in aviation innovation, Canada now faces stiff competition from emerging players like India, South Korea, and Brazil.

The 2025 budget offers little in the way of direct support for:

- Advanced aerospace R&D

- Commercial aircraft innovation

- Defense aviation modernization

- Talent pipelines for aerospace engineering

This is a missed opportunity. Aerospace is not just an industry, it’s a strategic multiplier. It drives exports, fuels regional economies, and underpins national defense. Canada’s aerospace sector employs over 200,000 people and contributes more than C$25 billion to GDP. Yet it receives a fraction of the support allocated to other sectors.

Light at the End of the Tunnel

Despite these gaps, there are reasons for cautious optimism.

The budget’s emphasis on capital investment, innovation, and defense integration lays the groundwork for a more resilient Canada. The inclusion of space launch capability, however modest, is a signal that Ottawa understands the stakes.

Moreover, the rise of companies like NordSpace, which plans to launch dual-use satellites for wildfire monitoring and defense data relay on SpaceX’s Transporter-17 mission next summer, shows that Canadian ingenuity is alive and well. These startups are building the infrastructure of tomorrow, but they need fuel.

What Needs to Change

To truly “touch the billion,” Canada must:

- Scale Space Funding: Increase space launch and satellite investment to at least C$1 billion over five years, matching peer nations like Australia and South Korea.

- Support Aerospace R&D: Create a dedicated aerospace innovation fund, with incentives for commercial and defense aviation breakthroughs.

- Build Talent Pipelines: Expand STEM education, aerospace apprenticeships, and university-industry partnerships to cultivate the next generation of engineers and scientists.

- Modernize Procurement: Streamline defense and space procurement to favor domestic innovation and reduce reliance on foreign platforms.

- Establish a National Space Strategy: Articulate a clear roadmap for Canada’s role in space, civilian, commercial, and defense, backed by sustained funding and international collaboration.

Conclusion: From Symbolism to Sovereignty

Canada’s 2025 budget is a step forward. It reflects a government willing to invest in resilience, innovation, and national capability. But when it comes to aerospace and space, the budget is still orbiting symbolism, not sovereignty.

If Canada wants to be more than a passenger in the 21st-century space race, it must allocate more than token funding. It must build launch pads, satellites, and talent pipelines. It must touch the billion, and beyond.

Because in space, as in strategy, altitude is everything.