Before a pilot flies a Boeing, an Airbus or an F-35, there is a good chance they first fly a machine built by a company in Montreal. CAE makes the full-flight simulators that airlines and air forces use to train — a business it has quietly come to dominate, with the world’s largest installed base of civil simulators and training operations spanning 160 centres in 35 countries. Something like 220,000 pilots pass through its systems every year. It is one of Canada’s genuine global champions, and most of its work is invisible precisely because it happens before anything real takes off.

CAE runs across three domains. Its civil-aviation business trains commercial pilots on the world’s major aircraft types. Its defence-and-security arm builds training systems and mission simulators for air, land, naval, space and cyber operations, serving the U.S. Army and Air Force and NATO allies. A smaller healthcare division makes medical simulators for surgical and emergency training, a segment that grew after the pandemic exposed how thin real-world training capacity could be.

Riding the defence surge

The defence business is where the story is right now. Military spending across NATO has climbed to generational highs — Germany committing to 2 percent of GDP, Canada’s own multi-year defence package running into the tens of billions, Poland and the UK ramping procurement. Every new fleet of aircraft needs pilots trained on it, and training is where CAE sits. Its defence backlog runs to roughly C$11 billion, which is another way of saying the company has visibility into years of demand before it has to win another contract.

There is a specifically Canadian dimension. Ottawa’s first Defence Industrial Strategy, released in 2025, singled out simulation and training as a domestic capability to be developed and protected — and CAE is the obvious anchor for that ambition. It already trains Canadian Armed Forces personnel, including for the incoming F-35As and P-8A Poseidons, which means the government’s own procurement feeds directly into CAE’s order book. Its acquisition of L3Harris’s military-training business a few years ago also gave it access to classified U.S. programs, a rare thing for a foreign-owned firm. And as Canada builds toward sovereign space-launch capability, CAE’s expertise in simulation for space applications is a natural adjacency — training being one of the less-discussed inputs a space program requires.

The dilemma inside the contract

Here is the part that makes CAE a foreign-policy subject rather than just a defence stock. Training is not neutral. Which militaries CAE trains, and under what conditions, is itself a policy question — the same one that governs arms exports, applied to knowledge rather than hardware. CAE has trained military pilots for Saudi Arabia, the UAE and other states whose human-rights records have drawn criticism from the Canadian government that also champions the company.

This is the defence-export dilemma in one of its subtler forms. A country can scrutinize the sale of a fighter jet; it is harder to scrutinize the sale of the ability to fly one. Simulation sits in a grey zone — it is not a weapon, it exports no ordnance, but it builds capability just the same. Canada has robust-sounding rules about who it will sell arms to. It has thought much less about who it will teach to use them, and CAE operates in exactly that gap.

None of this is a scandal; it is a structural feature of being a training superpower. But it is the reason CAE belongs in a conversation about Canadian foreign policy and not just Canadian business. The company’s backlog is the surest sign of the rearming world it operates in. The quieter question — whose pilots should a Canadian company train, and who decides — is one Ottawa has mostly left to the contracts.

Reading list

  • CAE quarterly results and defence-backlog disclosures (FY2026)
  • Canada’s Defence Industrial Strategy (2025)
  • Capstone Partners: training and simulation sector update (2026)
  • DND Departmental Plan 2026–27