RESILIENCE AND GROWTH, MUTUALLY REINFORCING

With Thanks to NGen and the N3 Summit

WECAN Capital Partners is grateful to Next Generation Manufacturing Canada and to the organisers of the N3 Summit for the invitation to participate in the panel titled "Market Diversification & New Export Opportunities" in Toronto on 31 March 2026. The session explored how Canada can diversify exports, unlock new global opportunities and build a more resilient, future-ready economy.

Particular thanks are owed to the moderator, Caroline Tompkins, President & CEO of FITT, for the care with which she framed the session, and to the fellow panellists who shaped a substantive conversation: Robert Hardt, Founder of Robert Hardt Consulting; Dan Herman (PhD), Strategic Advisor at North Guide; and François Desmarais, Vice President, Trade and Industry Affairs at the Canadian Steel Producers Association. WECAN was represented on the panel by Richard Sealy, Partner.

The thread running through the discussion was the relationship between resilience and growth in how Canada competes in the next economy, building on Robert Hardt's keynote framing of this period as a rupture rather than a transition. The notes below expand on the responses offered from the floor, together with the supporting evidence and sources that a short panel format does not accommodate.

Question Two — Resilience and Growth in Global Supply Chains

"When Canadian companies plug into global supply chains, where do you see them getting the balance right, or wrong, between diversifying for resilience and stretching for growth?"

From the work WECAN does alongside Canadian companies, our central observation is straightforward. Resilience and growth are often presented as opposing postures on a single dial, with resilience cast as defensive and growth as aggressive. We see them instead as mutually reinforcing. Long-duration, patient capital creates the conditions for durable growth, and durable growth in turn reinforces the resilience of the underlying business.

On that basis, our view is that expansion into Europe is not a high-risk stretch for Canadian companies but a strategic choice that delivers resilient, stable growth. We hold this view for three specific reasons, which we set out in sequence below and substantiate with the relevant evidence.

The Europe–UAE corridor combines two categories of capital that are structurally unlike anything a Canadian company can source domestically. On the European side there are the development finance institutions, including the European Investment Bank, national development banks and pension mandates operating to twenty and thirty year horizons. On the UAE side there are sovereign wealth funds of exceptional scale, with the Abu Dhabi funds alone (ADIA at approximately $1.1 trillion, Mubadala at $302 billion and ADQ at $263 billion) managing around $1.7 trillion between them. Both categories share patient duration, policy mandates that do not flip with market cycles, and a structural immunity to the quarterly redemption pressure that shapes domestic equity markets.

The companies that are getting the balance right are those that assemble layered capital stacks rather than placing single-layer bets. A combination of equity, development bank debt and export credit guarantees lowers the cost of capital, lengthens runway and keeps the capital committed through a downturn. That durability is the definition of resilience, and it is also what unlocks the next round of growth capital, because European and UAE investors prefer to co-invest behind a structure they can trust. The UAE corridor adds a further dimension that Europe alone cannot provide, in the form of sovereign capital with strategic flexibility. Mubadala's recent acquisitions of Germany's Techem for €7.84 billion and Apleona Group for €4.18 billion, and MGX's participation in one of the largest AI data centre developments near Paris, illustrate the point that these are active strategic co-investors who bring operational networks and procurement relationships that no purely financial allocator can replicate.

Sources: GlobalSWF 2024; Semafor October 2025; Dakota Middle East January 2026; Bloomberg December 2025.

The second feature is the scale and momentum of the capital pools themselves, and the fact that both legs of the corridor are growing toward the same sectors at the same time. This convergence is not coincidental. It is the result of aligned policy mandates on both sides, with European strategic autonomy and the UAE diversification agenda (UAE Vision 2031, Saudi Vision 2030) directing capital into defence, energy transition, artificial intelligence infrastructure and critical supply chains. On the European side, the EU's Savings and Investments Union is targeting €10 trillion in idle household savings, Germany's €500 billion infrastructure fund is now law and averages roughly €40 to €42 billion per year, and NATO's European members and Canada collectively invested $574 billion in defence in 2025, an increase of twenty per cent on the previous year. McKinsey has reported that European defence technology venture capital has grown by a factor of thirteen since 2021 to €2.6 billion, and a Bank of America fund manager survey in February 2026 recorded a record seventy-four per cent of European managers expecting growth to accelerate.

On the UAE side, GCC sovereign wealth funds deployed $56.3 billion globally in the first nine months of 2025, of which twenty-eight per cent, or approximately $16 billion, flowed into Europe, the highest share in at least five years. Mubadala alone deployed $17.4 billion over the same period. Saudi PIF is targeting a doubling of European assets to $170 billion by 2030, and total GCC sovereign wealth fund assets are forecast to grow from $5.6 trillion today to $8.8 trillion by 2030. The relevant point for Canadian exporters is that these are strategic positions in sectors where UAE states are building direct capability, not generic diversification allocations.

Sources: EU Council SIU 2025; NATO Annual Report 26 March 2026; McKinsey A&D February 2026; Bank of America February 2026; GlobalSWF via Semafor October 2025; PIF Strategy 2025.

The third feature is where the first two have to be operationalised, and it is where most Canadian companies leave value on the table. The default approach to European expansion treats the European Union as a distribution problem of twenty-seven markets with fragmented regulation and complex entry requirements. That framing is rarely useful. The more productive framing is sector-corridor targeting, which identifies where European institutional capital and UAE sovereign capital are co-deploying and enters at that intersection. The co-deployment sectors are visible and consistent, and include defence supply chains, energy transition infrastructure, artificial intelligence compute and data centres, and health technology. Mubadala and Masdar are running European solar and wind joint ventures with combined capacity above twenty gigawatts. MGX and BlackRock's Global Infrastructure Partners are co-investing in European data centre infrastructure at scale. European defence procurement is deliberately rebalancing away from United States suppliers, and Germany's own planning shows the United States supplier share falling toward eight per cent of planned purchases, opening a reallocation that Canadian companies with relevant technology profiles are structurally positioned to fill.

A Canadian company that enters such a sector corridor can sit, from the outset, within a diversified and long-duration capital base, which supports resilience, while also operating inside one of the more active deployment cycles in European capital markets, which supports growth. In our view, this is a practical illustration of how resilience and growth reinforce one another in the European context.

Sources: M&A Worldwide October 2025; EU Readiness 2030; Courthouse News October 2025; Mubadala and Masdar portfolio data.

Question Six — A Disciplined Version of "Global from Day One"

"For a Canadian SME that wants to think globally from day one, what does a disciplined version of that look like? How do they plug into export and supply chain opportunities without taking on brittle levels of risk?"

A disciplined version of "global from day one" is an architectural principle rather than a geographic one. It is not primarily a question of where a company opens its first overseas office. It is a question of whether its capital structure, its procurement positioning and its partnership architecture are compatible with European and UAE institutional actors before the first conversation takes place. The companies that execute this well are not, in a meaningful sense, expanding into the corridor at all. They have been built so that the corridor can plug into them.

Strategic Context — What Has Changed in the Last Twelve Months

Two recent developments have materially reshaped the environment for Canadian exporters, and both warrant explicit recognition. The first is Canada's accession to the European Union's Security Action for Europe programme, known as SAFE, at the Munich Security Conference in February 2026. SAFE opens direct access to European Union defence procurement frameworks and to low-interest financing for joint capability development. It follows the EU–Canada Security and Defence Partnership signed in June 2025, and for Canadian defence-adjacent and dual-use companies it creates an institutional access route into the largest sustained European procurement programme in modern history. The second is the continued deepening of CETA, which remains the most underutilised competitive advantage available to Canadian growth companies. Canadian exports to the European Union are up fifty-seven per cent since 2017, reaching $34 billion, ninety-nine per cent of European tariff lines are now duty-free (compared with twenty-five per cent before CETA), and services companies have legal access to a European government procurement market of approximately €3 trillion. The EU–Canada Digital Trade Agreement is under active negotiation, which means the framework is being extended at precisely the moment it is most needed.

Sources: PMO Canada February and March 2026; Atlantic Council December 2025; BDC and EDC December 2025; EU–Canada CETA Factsheet.

Four Execution Pillars for a Disciplined Approach

Pillar	Execution Principle
01 Sector Before Country	Defence, energy transition, artificial intelligence infrastructure and health technology are pan-European verticals with coordinated procurement frameworks and simultaneous co-investment from UAE sovereign wealth funds and European development finance institutions. The disciplined approach is to enter via the sector rather than a country office. The European Union's Readiness 2030 and SAFE frameworks are sector-level access points, not national ones, and treating them as such removes an entire layer of unnecessary friction.
02 Structured Entry Mechanisms	CETA, joint ventures with European primes and public procurement frameworks are not bureaucratic overhead. For companies that understand them, they are the fastest available route into the market. Canada's February 2026 accession to the European Union SAFE programme adds a direct defence procurement pathway that did not previously exist, and these structured mechanisms tend to become competitive moats once a company has been admitted.
03 Capital-Market Alignment	The source of capital should match the market of deployment. European Investment Bank and European Investment Fund facilities are appropriate for European Union expansion, the British Business Bank and UKEF for the United Kingdom, the $4 billion BDC Defence Platform for defence-sector companies, and UAE sovereign wealth fund co-investment for energy, AI and infrastructure plays. Using domestic capital to fund international deployment is the single most common structural failure WECAN encounters.
04 Controlled Depth Rather Than Breadth	Disciplined execution means one market, one sector and one entry vector at a time. Companies that operate globally from day one in a sustainable way go deep quickly in a single ecosystem, build a track record that European and UAE capital recognise, and then scale. Attempting multiple corridors in parallel tends to collapse execution speed and dilute the capital story for the very investors whose commitment would make the expansion resilient.

Question Nine — Where to Prioritise Resilience, and Where to Accept Risk

"If you had to choose, where should Canada deliberately prioritise resilience over growth in the next decade, and where do we have to accept more risk in order to grow?"

Canada should prioritise resilience in the parts of the economy where a disruption would compromise sovereignty or the ability to act independently in a crisis. That includes the capital structure of nationally strategic firms, the custody of critical data and intellectual property, the continuity of energy and critical minerals supply, and the industrial base that underpins defence and emergency response. In these areas the relevant question is not how quickly the sector can grow, but whether the country retains decision-making control under stress, and the appropriate capital partners are those with long duration and patient mandates rather than those optimising for near-term returns.

Canada should be willing to accept measured additional risk in the sectors where the next decade of growth is being allocated globally, and where absence from the deployment cycle carries its own cost. Those sectors include defence technology, advanced manufacturing, artificial intelligence and compute infrastructure, energy transition technology and health technology. The risk in each case is the normal risk of operating in an internationally competitive market, and it can be managed by anchoring each growth initiative to patient institutional capital before the competitive pressure arrives rather than after. Put another way, the choice is not between resilience and growth but between risks that have been structured and risks that have been ignored.

Question Ten — What Success Looks Like in Ten Years

"Ten years from now, how would you know that Canada has engineered resilience that actually powers growth, instead of resilience that just keeps us safely stuck?"

Ten years from now, the clearest indicator will be the composition of the capital stack behind Canadian companies operating internationally. A Canada that has engineered resilience into growth will be one in which mid-sized Canadian companies routinely sit inside capital structures that combine domestic equity, European development bank debt, export credit cover and UAE sovereign co-investment, and do so as a matter of course rather than as exceptional transactions. A second indicator will be the degree to which Canadian firms are embedded in European and UAE strategic supply chains in defence, energy transition and artificial intelligence infrastructure, measured by procurement awards and joint venture activity rather than by trade mission activity. A third indicator will be the number of Canadian companies that have used the CETA services and procurement chapters in a sustained way, rather than relying solely on the goods chapter that currently dominates the trade statistics.

Conversely, a Canada that has built resilience without growth will look much as it does today in aggregate, with domestic capital structures, a concentration of trade on a single partner and limited penetration of the international procurement frameworks for which it already holds legal access. The difference between the two outcomes is not an unknown, and it is not a matter of chance. It is the cumulative result of several thousand individual company-level decisions about how to build a capital base that can carry a durable international position.