$39M for two drones?
Procurement neglects to name vehicle platform and manufacturer
🎯 Three-Shot Burst
Ottawa just cut a cheque to home-grown MDA Space to bolt long-range surveillance drones onto Royal Canadian Navy Halifax-class frigates. It’s the first time Canadian warships will operate Class-2 uncrewed aerial systems.
What’s inside the box?: Defence hasn’t named the airframe, but the price tag and specs scream the S-100 Schiebel Camcopter. Think 6-hour endurance, 200 km control radius, and a 50 kg payload bay roomy enough for radar, EO/IR sensors, or even electronic-warfare kits.
Oh Canada: The price tag appears hefty, although both Australia and Thailand have acquired in this price range, depending on support, integrations and broader program cost add-ons. Still, shoehorning unmanned ops onto ships designed in the Cold War is never plug-and-play.
The department has earmarked $39 million to acquire the first two drones, with an option of ordering another four. The first pair won’t come online until 2028.
Bottom line: The order does not meet CAF operational needs in the immediate term. On cost, it is difficult to get a read until there is clarity on the hardware selected.
By 2028, our frigates will finally get organic ISR that outranges their radars, which is vital for Arctic sovereignty patrols and lurking subs. It’s also a domestic industrial win as MDA keeps high-value systems work and associated IP north of the border, a rarity in CAF procurement bingo — though some argue Canada’s defence primes are the wrong answer entirely for this new era.
Success paves the runway for larger UAS buys under the Remotely Piloted Aircraft System (RPAS) project.
Related:
Canada already in a recession, but defence spending will lift growth… NATO's rearmament reignites age-old defence debate of quantity vs. quality
The Canadian drone industry is spinning up — with lessons from Ukraine
DND is looking for next-gen acoustic tracking algorithms that can detect, classify, localize, and track vessels of interest in complex harbour environments — apply today
Beyond Visual Line of Sight drone operations have been stuck in regulatory purgatory for years in the US. That changes in 2026
Western-built Drones Can’t Deal With Electronic Warfare. One Latvian Drone Manufacturer Could
Canada has allocated $307 million over 20 years for an Airborne Early Warning and Control (AEW&C) aircraft that will vastly improve Canada’s ability to detect, track and prioritize airborne threats
Medicine Hat aerospace cluster set to benefit from Canada’s defence boost… B.C. plans to release its own defence framework in October… Drones aren’t swarming yet, but they will soon
📋 Procurement Update
Thanks to the 400+ companies that took our survey aimed at mapping the Canadian dual-use tech ecosystem. We are in the process of briefing Government of Canada officials involved in crafting the new Defence Industrial Strategy on the results.
Related:
Friend of the Icebreaker Philippe Lagassé has released the Defence Agile Procurement Insights and Analysis (DAPIA) final report produced through a collaborative initiative between the EXA Consulting Group and Carleton University's Canadian Defence and Security Network… Philippe has been busy this summer, also publishing a new book on the armed forces this week… and in case you haven’t had enough of him:
Mark Carney has a golden opportunity to redefine Canadian identity and defence… Canada plans to spend more than one trillion on defence by 2035. Will Canadians capture that value?
Ottawa’s industrial benefits policy plagued by inefficiencies, contractors say… Feds need to ‘rethink’ industrial benefits policy and refocus on defence capabilities
Transform Canada's Military with Smart Procurement:
“These reforms are especially urgent because the nature of combat has changed dramatically. The war in Ukraine has shown that modern combat requires thousands of cheap, networked systems over expensive platforms. Ukrainian forces produced 2.2 million drones in 2024 and now manufactures over 200,000 monthly. These drones cause 69% of strikes on troops and 75% on vehicles. And, the pace of change is extreme. New drone designs appear every 8-12 weeks. In the current environment, a multi-year delay on a decade long procurement project is simply not acceptable.”
💾 Canada’s first Defence Tech Hackathon
LAST CALL for signups!
The Defence Tech Hackathon will be a catalyst to jumpstart a world-class ecosystem that builds sovereign capability in Canada. Our goal is to attract top talent, rapidly prototype real-world solutions, and bridge the gap between innovators and military end-users.
We are still finalizing details, but here is what we know so far:
Hosted September 20 at the DMZ in Toronto
We will aim to rapidly prototype dual-use tech that solves real operational gaps for the Canadian Armed Forces
We are considering a challenge for a prototype platform that ingests multi-modal sensor feeds (satellite, UAV, radar, acoustic, etc.) and fuses them for real-time Arctic domain awareness
If you’re a software engineer who is defence-curious, this could be for you. We are looking for folks with domain expertise/experience in one or more of: defence, dual use tech (software and technology that can be used for both civilian and military applications), or Arctic operations; or who have any prior experience with multi-modal sensor fusion and real-time data platforms
🤝 Deal Corner
Q2 Defence Tech Numbers are In
Q2 smashed the previous quarter, the previous Q2 YOY, and probably was the best quarter for defence venture funding ever. 2025 is only half-way done, and on track to pass 2024's deal value in Q3, pass 2021's record in early Q4.
Larger, later-stage deals in more mature companies are driving these numbers.
Autonomous systems and advanced computing are easily the hottest sectors. Counter-UAS and on-shore manufacturing are heating up.
Related:
A16Z’s David Ulevitch says government programs and frameworks (like ESG) can’t solve problems that are really about our ability to build and compete. Capitalism can.
European VCs are raising more specialist defence funds. Is it a good idea?
Is Defence Tech VC Backable?
From hackathon project to battlefield autonomy startup in less than 9 months — a success story from our partners at the European Defense Tech Hub
What makes our next European Defense Tech Hackathon unlike anything else?
Access to DTU ASTA—one of the world’s largest indoor arenas for testing autonomous land, sea, and air systems!
🚀 Launch Window
Getting Screeched In
NordSpace announced today that construction has officially begun at its Atlantic Spaceport Complex (ASX) in Newfoundland and Labrador, marking a pivotal milestone toward Canada’s first commercial space launch and first operational commercial spaceport.
The groundbreaking at Space Launch Complex 02 (SLC-02) signals the start of a transformative project to establish Canada as a leader in the global space industry.
“Like the land, air, and sea - space is now a critical domain we must unlock, and launch a sovereign capability we must own. Canada's economy, security, and future hang in the balance.” — Rahul Goel, CEO
The ASX is expected to support NordSpace’s first commercial launch of its Taiga suborbital rocket later this year with its first launch window opening on August 25th 2025, powered by the company’s proprietary 3D-printed Hadfield Mk III liquid rocket engine.
The mission is named "Getting Screeched In".
Related:
Moonlit Greenhouse: Canadensys Aerospace is working with the Canadian and German space agencies to build lunar greenhouses that will deliver the light, nutrients and monitoring systems to make it possible to grow fresh produce on the moon
Sovereign hypersonics: North Vector Dynamics, which has been focused on counter-UAS kinetic interceptors designed to neutralize group 1 and 2 drones, has won a contract via DRDC to advance tech meant to counter hypersonic threats. Its new hypersonics work will involve design and testing of scramjet engines and flight testing of hypersonic vehicles
🍁 Canada’s Inaugural Defence Power 50 List
Nominations are now closed for Canada’s Defence Power 50 List.
Our selection committee co-chairs Erin O'Toole, Glenn Cowan, Philippe Lagassé, Sheldon McCormick, and Eliot Pence will begin deliberations, with the inaugural list set to be announced this Fall.
🔫 Hot Shots
Get Eur-own Army!: Calls for a European fighting force grow louder, but decades-old divisions, political hesitancy and reliance on the US persist… Canadian military backs F-35 while Spain and India reject the U.S. fighter jet… Path cleared for Canada to take part in Trump’s 'Golden Dome' missile shield
Cold plunge: A new multi-purpose Arctic training and testing facility based in the Yukon
Spy Thriller: The Chinese spy eavesdropping on Airbus and Thales satellites in the countryside
No Fly Zone: Pentagon skipping Canadian security forum makes U.S. look weak, summit president says
Falling behind: Once an AI world leader, Canada is now losing the AI startup race
Inside track: Inside the US Army's report on how Russia is fighting in Ukraine
Dual use: If Canada repurposed defence tech to churn out squadrons of water bombers, this country could contribute substantially to the global war against wildfires… In China, green tech is treated as dual use… Are we witnessing the material dethroning of the West as the central driver of world history?
Future of war: Anduril’s Palmer Luckey saw the future of war in Ukraine, and wants us to prepare for it
Home team: A new national summit focused on one big goal: helping Canadian companies buy more Canadian technology
Pay up: Government announces
majoroverdue pay and compensation boost for Canadian Forces personnelEconomic warfare?: China is wrecking the economics of critical minerals. Between 2022 and 2025, cobalt dropped 59.5%, nickel 73.1%, and lithium 86.8%. Rare earths are now below breakeven for most non-Chinese producers… America once stockpiled critical minerals like it stockpiled munitions. Then the free market came for the warehouses… Where the US gets its rare earths… America’s reliance on foreign minerals… American companies are innovating around China’s rare earth export restrictions
Economic security: How the US and its allies can rebuild economic security… A China dominant in defence research creates vulnerabilities for Canada, notably by impeding our ability to successfully undertake deterrence measures as we increasingly risk falling behind the innovation curve
Lender of first resort: A task force co-chaired by UK Chancellor Rachel Reeves and Defence Secretary John Healey formally endorsed the creation of the Defence, Security and Resilience Bank (DSRB)… Canada’s RBC has signed on
Ukrainian innovation: A remote-controlled robot armed with a Soviet-era surface-to-air missile system, now shooting down Russian aircraft while keeping soldiers out of harm’s way… A report from the frontlines details how Ukraine now has the first AI-powered drone interceptors taking down Shaheds
Semi secure: The US is exploring ways to install better location trackers in semiconductors, underscoring Washington’s effort to curtail the flow of chips made by the likes of Nvidia to China. Meanwhile, Taiwan’s TSMC—which makes semiconductors for Nvidia and Apple—discovered a possible leak of trade secrets related to its advanced chipmaking techniques… US Army negotiating contract for autonomy software for robotic initiative
Target practice: Armin Papperger runs a German defense company arming Ukraine. The efforts have brought the weapons supplier unprecedented riches, and put a target on his back
Speed run: NASA plans to speed up the construction of a nuclear reactor that could be used on the moon. As well as generating power, it could help with designs for a possible future powerplant on Mars
Supply chain: Seaspan signs MOU with Algoma Steel, Stigterstaal Canada to strengthen domestic steel supply chain… Seaspan moves closer to construction of Canadian Coast Guard’s icebreakers
Waterloo Thesis: Why Canada’s Future Still Runs Through Its Talent Engine… The suburbs of Toronto are one of the world’s most neglected talent areas… Computer science grads struggle to find work in AI era
No end in sight: A new Israeli tech newsletter details how Israel is fighting a war it can’t afford, for an outcome it hasn’t defined, with money it doesn’t have
🤝 Meet the Defence Tech Community
See you Thursday?
Defence Tech Patio Drop In, August 14 in Victoria, B.C.: Sign up here to join VCs, founders, operators, defence primes, and the defence-curious, over a few cold beers on a sunny patio.
If you’ve got battlefield intel, classified tips, or just want to call in an airstrike on our typos, hit “reply” and sound off. Whether it’s a new tech sighting, a rumour from the mess hall, or feedback on our comms, we want your SITREP.