Victor Fedeli, Ontario’s Minister of Economic Development, is following the money, and the money is gushing into defence.

Defence spending in the Western world is set to climb fast. Even Canada, a perennial laggard on the weapons front, is getting into the game. At the NATO summit in The Hague, which starts Tuesday, the 32 member states will be asked to commit 5 per cent of their GDP to defence, up from the alliance’s decade-old spending target of 2 per cent – a target Canada and seven other countries have never met.

“I would call all the new defence spending a game changer for everyone in the industry,” Mr. Fedeli told The Globe and Mail in Milan, where he was visiting Italian companies, including those in the defence industry, that he hopes to lure to Ontario.

As he was speaking, Ontario received some good news. At the Paris Air Show – a trade fair for aerospace companies – France announced its intention to purchase two GlobalEye early-warning aircraft, with options for two more, from Sweden’s Saab. The aircraft, equipped with the latest radar and surveillance technology, is based on the Bombardier Global 6000/6500 business jet, which is primarily built in Toronto and Mississauga.

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Mr. Fedeli is ramping up his visits to Europe to try to tap into the defence-spending bonanza. He is often joined by Khawar Nasim, the former diplomat who is the new CEO of Invest Ontario, the agency that offers incentives to foreign investors, among them electric vehicle and battery makers, to set up shop in the province.

Their mission is becoming critical as Ontario’s auto industry, which directly employs about 100,000 people, comes under pressure from U.S. President Donald Trump’s tariffs. The tariffs, set at 25 per cent for Canadian cars sold in the U.S., are adjusted to account for their U.S. parts content, meaning the effective rate is 12.5 per cent or lower. Still, the duties are high enough to damage the Ontario industry.

The Globe reported earlier this week that the U.S. tariffs will reduce auto production in Ontario by more than 56,000 vehicles this year alone, with deeper drops expected over the next few years, putting assembly lines in Oshawa, Oakville, Ingersoll and Alliston in jeopardy. The upshot is that Ontario must work hard to diversity its industrial base as the U.S. market goes from reliable job generator to potential job destroyer.

“My instructions from Doug Ford are to look around the world for new investment because of the Trump tariffs,” Mr. Fedeli said. “We want as many products as possible to be made in Ontario.”

Mr. Fedeli, 68, known as “Vic” to colleagues and friends, is of Italian descent and a former mayor of North Bay, Ont. He was Ontario’s finance minister for a year, until mid-2019, and has been Economic Development Minister since then.

The pre-Trump era was good to Ontario, especially in the auto and life sciences sectors. In the last four years, Ontario landed $46-billion in auto investments, mostly in electric vehicles and batteries. A few of those projects are now on hold as a tariffs-triggered investment chill has set in and EV sales have slowed (hybrid cars are currently the hot sellers). Honda Canada has postponed its $15-billion EV project in Ontario.

Defence investments could fill the gap left by the downturn in the EV business. Federal Industry Minister Mélanie Joly, who attended the Paris Air Show with Mr. Fedeli, and Prime Minister Mark Carney have said repeatedly that Canada must reduce its overwhelming dependence on U.S. suppliers for Canada’s military procurement.

Mr. Fedeli said Ontario’s aerospace sector has the most potential to create defence-related jobs. The sector has 46,500 employees in more than 200 companies. They make everything from landing gear and avionics to engines and complete aircraft, such as the Bombardier jet that will be turned into Saab GlobalEyes. A few of the companies also make components for the Lockheed Martin F-35 fighter jet, which Canada has ordered to replace its aging fleet of CF-18 Hornets.

“Every Canadian aerospace company we met at the Paris Air Show expects to gain business as defence spending increases,” Mr. Fedeli said.

Two foreign defence companies will soon boost their presence in Ontario, adding “hundreds” of employees, Mr. Fedeli said, though he would not identify the companies or reveal the value of the investments. An Italian company is also set to make a significant investment in the province, though it’s in “advanced manufacturing,” not defence.

Ontario’s aerospace fortunes, as well as those of Quebec, could rise if Canada were to choose a European aircraft as part of its fighter-jet program. Canada has ordered 88 F-35s but has, so far, committed to buy only 16 of them. Mr. Carney put the rest of the order under review shortly after he became Prime Minister in March.

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In 2021, Saab’s Gripen E-series jet made the short list to replace the CF-18s, and the Swedish company offered to build the Canadian version in Canada (the F-35 is built in the U.S.). Ms. Joly met with Saab and other aerospace giants at the Paris Air Show. She would not reveal whether the offer to make the plane in Canada was still on the table.

“Our goal is to make sure we create jobs in the country, we are able to attract the most investment possible,” she told reporters.

Building new frigates for the Canadian navy, an $80-billion-plus project, is another opportunity Ontario is exploring. But the province’s few, small shipyards would have to be greatly expanded with the help of European shipbuilders to tackle such an enormous construction program.

“Italian companies are world class in this sector, and we anticipate that the current economic climate will present new opportunities,” Mr. Fedeli said.