VIDEO The Business Development Bank of Canada expects to launch new initiatives aimed at bolstering Canada’s economic sovereignty following the roll-out of a $6 billion defence platform over the past year, says the head of the arm’s-length Crown corporation .
“Getting into the defence sector is one way to show that we’re open to take not necessarily more risks, but different kinds of risks,” said Isabelle Hudon, chief executive of the BDC. “After 12 months in this sector, it’s showing us that it doesn’t have a huge impact on our risk profile, so it’s just that it was an unknown territory for us.”
During her second term as CEO, which began this month, BDC is preparing to become active in sectors that could be similarly designated as higher risk, at least initially. While specific sectors have not been chosen yet, she said they will align with bolstering Canada’s “economic sovereignty” and areas under consideration include critical minerals and quantum computing.
“We will keep at aiming at serving a greater number of entrepreneurs with small loans in all sectors across the country,” Hudon said, “but also over-investing time, talent, and money in specific sectors that will be critical (to) … how sovereignty will be delivered for our economy.”
She said a model for BDC is the KfW Development Bank in Germany, which serves sectors that are aligned with country strengths as identified by the government.
“We have not yet landed on the final short list of specific sectors, but you’ll see us way much more aggressive in a good way in some specific sectors with time, money and talent,” Hudon said. “We we recognize that it’s our role to do this.”
In the latest financial results, released this week, BDC delivered a record $11.6 billion in new investment and financing to small and medium-sized businesses in Canada , which the bank says will contribute up to $28 billion in GDP over the next five years.
In fiscal 2026, BDC authorized 21 per cent more transactions (in dollar value) to business with “elevated risk models” and smaller, younger businesses including those that are underserved by traditional financing than in 2020.
In addition, a “pivot to grow” program was launched to help businesses absorb trade shocks and preserve liquidity in a more uncertain environment, with $177 million in loans.
BDC also reported strong financial performance, with $1.04 billion in net income, and declared a $75-million dividend that was returned to the federal government, BDC’s shareholder.
“These dividends, totalling more than $1.5 billion since 2021, are a key benefit of BDC being financially self-sufficient, enabling it to deliver value to Canadian entrepreneurs while ensuring its performance directly benefits Canadians,” the development bank said in a statement.
With more than 100,000 clients, BDC is now serving about a third of its potential base, Hudon said.
She described fiscal 2026 as a year with two speeds, with uncertainty slowing demand in some areas and urgency driving activity in sectors hurt by the trade war with the United States.
About $220 million was deployed to softwood lumber companies in the fiscal year that ended March 31, she said, adding that the figure has grown to close to $400 million now since then as the program was expanded beyond lumber mills to additional sub-sectors, and as BDC undertook direct loans in addition to providing loan guarantees.
“When I look at my colleagues, we did great great job,” Hudon said. “Some would argue that that was not enough. I will say okay, but what we’ve delivered in fiscal ’26 was amazing work and a learning curve for us — a huge learning curve.”
Hudon, who said she plans to attend the Canada Investment Summit in Toronto in September, is also Canada’s lead negotiator in establishing the Defence, Security and Resilience Bank , a multilateral financial institution backed by public and private capital that will provide long-term, low-cost financing for defence and support collective security.
She said talks are underway with countries including Germany and the United Kingdom about potentially joining Canada and the eight other countries that have so far committed to establishing the defence bank.
“We’re in conversation with Germany and U.K., just to name a few … and looking for the bank to be run early next calendar year,” Hudon said. “We will probably be a little bit more than nine countries signing the charter; we’re aiming this into the fall.”
The countries already committed to the defence bank’s creation are Canada, Belgium, Greece, Albania, Latvia, Luxembourg, Romania, Türkiye and Ukraine.
Canada was selected as the headquarters of the new multilateral defence bank in April, and at least five cities are vying to host the headquarters: Vancouver, Calgary, Ottawa, Toronto and Montreal.
Hudon said other Canadian cities could also throw their hats into the ring and the decision on where to house the DSRB rests with the prime minister and cabinet.
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