---
title: "Canada Rocket Company Bets on a Homegrown Rocket as U.S. Relations Fray"
description: "The Toronto startup will spend $30 million on an Ontario engine test site as it aims for a medium-lift launch by 2032."
author: "rews desk"
published: 2026-10-01T15:30:49Z
modified: 2026-10-02T03:22:02Z
url: https://rews.cc/a/canada-rocket-company-bets-on-a-homegrown-rocket-as-u-s-rela-286d87
language: en
tags: ["space", "defense", "canada", "military", "ai", "us", "world"]
publisher: "Rews (https://rews.cc)"
---

# Canada Rocket Company Bets on a Homegrown Rocket as U.S. Relations Fray

*The Toronto startup will spend $30 million on an Ontario engine test site as it aims for a medium-lift launch by 2032.*

By rews desk · October 1, 2026 · https://rews.cc/a/canada-rocket-company-bets-on-a-homegrown-rocket-as-u-s-rela-286d87

## In brief

- Canada Rocket Company will spend $30 million on an engine test site beside London International Airport in Ontario
- Its R-2 would lift 12.5 metric tons to low-Earth orbit, with nine methane engines and a first stage built for reuse
- The firm dropped a light-lift plan; starting small would have meant a 16-year path to medium lift
- Ottawa’s new Defense Industrial Strategy lists space launch among 10 priority capabilities
- Founded in Toronto in late 2025, the company aims for a first R-2 launch by 2032

Canada Rocket Company said this week that it would spend $30 million to build the country’s first rocket-engine test facility, on a 50-acre plot beside London International Airport in Ontario, the first big step in a plan to fly a Canadian medium-lift rocket by 2032.

The site will hold what the industry calls static tests, with the engines fixed to the ground as they fire, along with offices and assembly space, Hugh Kolias, the company’s co-founder and chief executive, [told The Globe and Mail](https://www.theglobeandmail.com/business/article-canada-rocket-co-ontario-engine-testing-facility-hugh-kolias/).

The rocket it is all aimed at is the R-2, a medium-lift vehicle that in renderings looks not unlike SpaceX’s Falcon 9: nine methane-fueled engines, a gas-generator engine cycle and landing legs that point to eventual reuse of the first stage, [according to Ars Technica](https://arstechnica.com/space/2026/10/as-us-relations-fray-canada-gets-serious-about-its-own-launch-industry/). It could carry up to 12.5 metric tons to low-Earth orbit.

Getting there meant dropping an earlier plan for a light-lift rocket. “From a technical perspective and an infrastructure perspective, essentially 90 percent of everything you do on that light lift piece gets thrown out the window, and it’s almost like a net new program,” Mr. Kolias said. “And everyone said, if you’re not going to try to commercialize light lift, then why even do it in the first place? And that kind of hit us relatively hard.”

Rockets generally take seven to eight years to bring to market, so starting small would have meant a 16-year path to medium lift, Mr. Kolias [told BetaKit](https://betakit.com/canada-rocket-company-wants-to-build-a-sovereign-alternative-to-spacexs-falcon-9/). The company still plans a small pathfinder, the R-1, but the R-2 would be its first commercial launcher, [SpaceQ reported](https://spaceq.ca/inside-canada-rocket-company-and-its-fast-tracked-path-to-medium-lift-launch/).

The politics behind the project are raw. Canada has leaned on the United States for its defense for decades; in 1959 the Canadian prime minister canceled the Avro Arrow interceptor then under development, and the country’s aerospace industry has never quite recovered. Canadian satellites still typically ride into orbit on American rockets. Relations with Washington have since frayed.

Earlier this year Ottawa released a Defense Industrial Strategy meant to give the country a strong industrial and technological base for defense readiness. Space is one of the 10 capabilities the report sets out, with “space launch” among the priorities.

“I think the geopolitics has actually created a fantastic opportunity, not just for us, but for other Canadian industries to finally build real ambitious industries,” Mr. Kolias said. “We’re pulling a little bit away from the globalist movement and realizing that there are some core aspects, both economically and from a sovereign or defense and military perspective, that you should own your own destiny.”

The company is young. Mr. Kolias and his co-founder, David Tenny, the chief technology officer, set it up in Toronto in late 2025 and raised a $6.2 million seed round from Canadian investors, among them Ripple Ventures, BDC and Garage Capital, [SpaceQ reported](https://spaceq.ca/canada-rocket-company-enters-the-launch-the-north-sweepstakes-and-raises-6-2m-in-seed-round/).

If all goes well, Mr. Kolias said, the first R-2 could be ready to launch by 2032.