Mission Critical: Why Canada’s race to space is of national urgency

North Star: Canada’s US$10-billion space opportunity

The value of all orbital launches in 2025 reached US$19 billion, up a third in a year.⁵ Global launch value could total an estimated US$265 billion between 2027 and 2035.⁶ Little of that market, however, is open for competition, as China, Russia and other major space nations launch their own satellites from a home base and most governments currently fly missions on national rockets.

There is, however, at least a US$10-billion market that the Canadian launch industry can compete for between 2027 and 2035, as operators from Luxembourg and France to South Korea and Japan look to launch satellites into space for commercial and scientific purposes, as well as for defence.

That figure is conservative as it extrapolates from 2025 data and only accounts for government satellites securing slots internationally, as Spain, Luxembourg and South Korea did in 2025. It also includes commercial demand that to date has relied on Falcon 9 launches, but excludes the government markets of the United States, China, Europe, Japan and India, which mostly fly on their own rockets.⁷

However, some of those markets are running short of rockets.

The European Union expects its governmental missions to exceed planned Ariane 6 and Vega C rocket supply by 2030–31, and the European Commissioner for Defence and Space has warned of a shortage of launchers by around 2030.⁸

A made-in-Canada launch option could boost the domestic satellite industry and facilitate the launch of assets on short notice from allies. Rocket size matters, too. Canada’s military has targeted sovereign launch for 2028, but only for a small rocket with a payload of 200 kg. Small rockets carried only 4% of all satellites launched in 2025, with the rest flying on larger Falcon 9s, which carry about 17 tonnes.⁹ Satellites light enough to hitch a ride on a 200 kg rocket make up about a quarter of Canada’s planned satellites but are less than 2% of the total mass. So, while a small launcher meets the military’s need for a quick-response vehicle, a spaceport requires the launch of medium-lift rockets—capable of carrying a tonne or more—to sustain itself.

The demand may be coming: the medium-Earth-orbit component of the Arctic communications program, the Defence Enhanced Surveillance (which will succeed RADARSAT for military use) and the Surveillance of Space 2 project, could all add Canadian military satellites that based on comparable systems could require 10 to 25 tonnes of payload by 2035 on medium or heavy rockets.¹⁰

Canada’s domestic launch developers are increasingly converging on this opportunity with medium-lift capabilities, albeit through different development strategies, timelines and capital requirements.

Capturing even a small share of the market would be significant. If a Canadian small rocket reaches orbit in 2029 and grows to six launches a year and a medium-lift rocket debuts in 2033 and flies four times by 2035, it would add up to 31 launches, worth a total of more than US$400 million. That’s about 4% of the total addressable market (TAM), and about US$150 million a year by 2035 (roughly a tenth of the projected TAM that year.)¹¹

Canada’s first foreign launch revenue will likely come through its spaceport in Nova Scotia by 2028. Germany’s Isar Aerospace signed a 10-year agreement in July 2026 to fly its Spectrum rocket from Spaceport Nova Scotia from 2028, and U.S. operator SEOPS recently booked five Spectrum launches for 2028–2030 from Norway and Nova Scotia.

Allied defence also gives Canadian launchers an edge. Germany’s defence minister noted recently that national security must not get stuck “in commercial queues,” and allied governments are expected to prioritize military launches over commercial ones.

Canada also recently joined NATO’s STARLIFT network, which is building allied capacity to replace satellites on short notice. A rocket flying from Canada, able to reach the polar orbits used for Arctic surveillance, would be highly competitive for these customers.

As momentum picks up, Ottawa will need to decide how to structure the next tranche of launch spending: what payload capabilities to prioritize, which milestones to stage funding against and how to purchase launches. Defence should anchor those choices, as the most valuable part of the market and where sovereignty matters most. On average, a defence satellite costs five times more than a typical satellite to build and launch, and militaries pay for assured access. Defence is set to account for nearly half the value of satellites built and launched over the next decade but represent just 9% of satellite volume.¹²

Financing Canada’s launch capability

Given the upfront capital-intensive nature of the industry, meeting the rising government and commercial demand will require considerable financing.

The country’s three rocket developers—Canada Rocket Company, NordSpace and Reaction Dynamics—have raised a combined $200 million, including $8.3 million that has been conditionally awarded to each under Ottawa’s Launch the North program. But that is a fraction of what it costs to bring a rocket into service. Canada Rocket Company, a Toronto-based firm set up in 2025 to develop  sovereign launch capabilities, says it needs up to US$660 million to fly its first rocket, a Falcon 9 alternative, in 2032.

Commercial demand alone will not close that gap. Even if Canadian rockets won every launch contract for the roughly 129 Canadian satellites currently without a ride to orbit, the revenue would be US$290 million based on current prices—less than half of Canada Rocket Company’s target.

Institutional investors have started to engage. The Business Development Bank of Canada (BDC) co-led Canada Rocket Company’s seed round in January 2026 and Reaction Dynamics has raised approximately $51 million to date, including a Series A financing backed by Investissement Québec. But early rounds still fall well short of the capital needed for an initial launch. Between development and first flight is where most ventures fail and financing matters most.

Government support is also needed to take on the risky nature of space launches: of the 216 small-launch programs tracked worldwide in 2025, only 37 had attempted orbital launch and 17 were operational. A further 112 had been cancelled, retired or gone dormant.¹³

Customers of Canadian satellite manufacturers can supply additional demand. A Canadian rocket would potentially allow domestic companies to sell satellites and launch as a package and steer foreign customers’ launches to Canadian soil.

Government funding will need to lead the way. SpaceX, for example, received a US$1.6 billion NASA Commercial Resupply Services contract that saved the company from bankruptcy early on its journey. Texas-based Firefly Aerospace received a US$93.3 million NASA contract before its first successful orbital launch with its Alpha rocket in 2022. 

What Canada offers

• Geography. Once completed, rockets launched from Spaceport Nova Scotia in Canso will be able to fly south over open ocean into the polar orbits used by Earth observation and surveillance satellites. Only a small number of allied sites, such as Vandenberg in California, Andøya in Norway and Saxa Vord in Scotland offer similar vantage points.

• Proprietary technology and expertise. Canada already builds and operates satellites that allies want. Telesat’s 225-satellite Lightspeed low Earth orbit (LEO) network will serve commercial customers, the Canadian Armed Forces and NATO allies. MDA Space is building Lightspeed satellites, and its CHORUS radar technology will form the basis of Canada’s RADARSAT replenishment satellite. Kepler Communications launched the first 10 satellites of its optical data relay network in January 2026, using optical links compatible with U.S. Space Development Agency standards to move data in between satellites, aircraft and ground in real time.

• A spaceport with an anchor tenant. The Department of National Defence has leased a pad at Spaceport Nova Scotia for 10 years at $200 million from Maritime Launch Services, with full orbital capability targeted for 2028. Quebec-based Reaction Dynamics, specializing in hybrid rocket propulsion and small satellite launch vehicles, plans its first orbital attempt there, while South Korea’s hybrid rocket maker Innospace has signed a letter of intent. A second site, NordSpace’s Atlantic Spaceport Complex in St. Lawrence, Nfld., plans orbital launches starting in2028 for light lift and medium-lift vehicles.

• Alliances. Canada, which has space agreements with France and Norway, now belongs to several of the main allied frameworks for space, including the European Space Agency and NATO’s STARLIFT launch network.

Allied launch options

Lessons for Canada:

Facing a national security imperative, many allied governments have moved faster and committed more capital than Canada. Three lessons stand out:

1. Buy launch slots, not just rockets. Every successful model pairs development funding with a government commitment to buy flights.

• Europe: Ariane 6 and Vega C operate under a 2023 agreement that guarantees a minimum number of government launches each year, backed by up to €340 million a year in support.

• European Space Agency: member states committed €902 million to the European Launcher Challenge, which pays for launch services as companies hit milestones, including reaching orbit before 2028.

• Germany: companies were awarded funding on the condition that they fly government payloads on their first two launches.

• United States: SpaceX’s Falcon 9 was built on NASA cargo contracts, and the military’s national security launch program has committed about US$13.7 billion to roughly 54 missions through 2032.

Lesson for Canada: Committed government payloads would give providers a reason to invest in Canadian sites. Ottawa’s Launch the North program, however, is a $105-million initiative with no commitment to buy launch slots. The next generation of allied launch providers are filling their order books and choosing where to fly from. Canada can offer both a launch site, once completed, and a steady flow of government and commercial payloads. Committed early, that combination can buy Canada a standing on allied rockets that others cannot get.

2. Cooperate with allies.

• Sovereign access increasingly means launching from allied territory and deepening industrial and military cooperation.

• The UK’s 2026 space strategy leaves building rockets to “Germany and other allies” and puts its money into its spaceport.

• France has opened its Kourou launch base in French Guiana to German and Spanish companies.

Lesson for Canada: Every established rocket that can carry Canada’s largest satellites serves its own government first. EU missions alone are projected to exceed Ariane 6 and Vega C supply by 2030-31. H3’s order book is dominated by government missions; U.S. national security launches take precedence on Vulcan Centaur’s heavy-lift orbital launch vehicle Vulcan, and Blue Origin’s flagship New Glenn and, increasingly, Falcon 9. Wherever capacity is constrained, Canadian payloads will rank behind those of the host nation, further supporting the case for domestic launch capability.

3. Establish legal foundations early.

• New Zealand brought its Technology Safeguards Agreement with the U.S. into force within six months of signing, before it hosted California-based Rocket Lab’s first launch. That agreement has since allowed the U.S. Space Force to fly a rapid-response military mission from New Zealand. Australia completed a similar agreement in nine months.

Lesson for Canada: Canada concluded negotiations on its own agreement more than two years ago but it has yet to be finalized. Without a launch act (Bill C-28, the Canadian Space Launch Act is at second reading), foreign rockets cannot use Canadian sites.