How to Sell to Canada: Try America First
Why Canadian startups sell faster to the Pentagon than the CAF
Editor’s note: Thanks to CCI and RBCx for hosting the dual-use tech and defence procurement exchange in Toronto last week. The Icebreaker was delighted to join the panel alongside DRDC & Plurilock.
🎯 Three-Shot Burst
As we await a roadmap for Canadian defence tech to find customers domestically — a document known as the Defence Industrial Strategy (DIS), due this week — it is worth noting that Canada’s most effective export weapon for defence startups isn’t a stealth drone or an AI sensor stack. It’s the Canadian Commercial Corporation (CCC).
Quietly, almost perversely, CCC has become best-in-class at helping Canadian defence companies sell into the United States. Canadian companies can contract through CCC and be considered US domestic firms for bid purposes — an agreement dating back to the end of WWII. It translates Ottawa credibility into Washington contracts, wraps SMEs in a sovereign-backed prime, de-risks FAR/DFARS anxiety, and gives US buyers a single throat to choke. For a Canadian firm trying to crack the Pentagon, CCC is not a “nice to have.” It’s a cheat code.
DARPA has also contracted with Canadian startups directly via CCC, avoiding the need to subcontract from a US prime or open a US subsidiary.
No equivalent apparatus exists to help Canadian defence companies sell to… Canada.
Reality check: At home, founders face a maze of fragmented procurement authorities, risk-averse program offices, glacial timelines, and pilot purgatory. Abroad, Canada shows up with a clean contract vehicle, political air cover, and execution discipline. Domestically, we tell our own companies to wait, resubmit, or scale elsewhere.
Bottom Line: We have built a world-class export bridge to the US defence industrial base—while leaving a moat between Canadian innovators and the Canadian Armed Forces. If you’re a defence founder, the fastest way to sell to Canada may still be to sell to America first. Here’s hoping the DIS changes that!
In the meantime, if you’re looking to connect with CCC, let us know. We have been pipelining Canadian defence startups to the excellent team there since our national mapping exercise last summer.
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💾 Announcing the 2026 Red Team Hackathon Series
A national defence-tech innovation challenge for Canada’s brightest entrepreneurs, startups, and future leaders. This national series brings together entrepreneurial teams and early-stage startups from across Canada to compete for $200,000 in prize money, potential grants, and exclusive internships.
Modern Canadian Armed Forces (CAF) operations involve a growing mix of drones, ground robots, vessels, sensors, and networked platforms operating in complex and contested environments. In these conditions, misidentification of friendly, civilian, or unknown systems—or the loss of situational awareness—can create operational friction, delays, and mission risk.
Kickoff Event: March 7, 2025 | University of British Columbia (UBC), Vancouver, BC
Subsequent events scheduled for Calgary, Ottawa, Toronto, Montreal, and New Brunswick throughout 2026.
Your Mission
Build Find My Force — a secure, intuitive system that allows authorized users to identify, verify, and track platforms in real time, even when systems do not actively communicate, network connectivity is degraded, or platforms operate across domains.
What’s at Stake
Compete for a $20,000 prize pool at Vancouver’s kickoff event, an invite to the National Final in Ottawa, and help shape the future of multi-domain situational awareness.
Application deadline is February 20.
Marketing Partner: The Icebreaker
Presented by: Remote Robotic Systems
Sponsored by: AVSS, Orqa, ThinkOn, and NORRG
👉 Register Now: www.redteamhack.ca
🤝 Deal Corner
FT on Carney’s ‘art of the deal’: Canada leverages subs contract for auto investment
Canada is playing hardball with a $40bn submarine contract as it tries to turbocharge investment in civilian sectors ranging from steel and cars to energy and mining, and boost its economic independence from the US.
“Carney is capitalising on a unique moment of opportunity afforded to Canada by this bidding war,” said Xavier Delgado, a fellow at the Conference of Defence Associations Institute in Ottawa. “This is his version of the art of the deal.”
Signs of Life: The submarine mega-project is an element of Canada’s largest defence investment drive since the Second World War. As part of its plan to reduce its dependence on the US and double trade with non-US partners over the next 10 years, Ottawa is also revisiting a contract to buy 88 F-35 fighter jets from the US.
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Space corner: Rheinmetall and OHB in talks over Starlink-style service for German army… German firm to build two-stage hypersonic plane with horizontal takeoff and landing… CesiumAstro raises $470 million to build out low Earth orbit satellites… Space economy hits $626 Billion “Inflection Point” on path to trillion-dollar era
Niagara College launches drone and defence tech programs
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💳 NATO’s buying spree is booming — and Canada is barely at the table
A deep dive into €39B of NATO procurement shows spending has tripled since 2020, hitting Cold War–era levels. Germany is vacuuming up over a third of recent contracts. The U.S. is slipping. Canada? Sitting at 0.3% of current awards — wildly below our ~6.7% share of NATO GDP.
Why the gap: NATO buys are delivered to Europe, freight included. That structurally crushes Canadian manufacturers shipping heavy kit across the Atlantic. Unless you’re truly irreplaceable, geography beats price.
Where Canada does win: niche manufacturing (Cascade’s C-130 maintenance), specialized components, spare-parts brokering, and software, IT, and services where shipping costs vanish. Strip out one blockbuster contract, and Canadian SMEs are almost invisible.
Add a final wrinkle: Canadian defence champions are quietly being sold to foreign private equity, hollowing out domestic capacity just as NATO demand explodes.
Bottom line: NATO procurement is growing fast, but it’s not “Buy Canadian.” Without unique capabilities or a pivot to software and services, Canada risks watching the rearmament boom from the sidelines.
Special thanks to Joe Noss for this research. For the full special report, visit Publicus.
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⚔️ Combat Readiness
3 accused in Ontario explosives investigation were developing anti-drone weapons system
The three Ontario men accused of storing materials that could be made into explosives had been looking for money to back the production of a military system designed to prevent drone attacks. The pitch video also sheds light on the backgrounds of the three men accused in the crime:
Bottom Line: Being a fast-growing startup is not a charming exemption from the law. If your company’s operations are not legal, it is difficult for anyone to invest in you let alone buy the products you sell. Especially so in defence.
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Arctic corner: Baffinland gives green light to rail line to boost mine’s output, lifespan… Canada is under threat—and the U.S. is not our biggest problem… NATO is readying soldiers for a frozen Arctic war. It means learning to fight on skis and snowmobiles… Collaboration, not exceptionalism, is the key to Arctic peace… Fears grow that Russia will deploy more nukes in the Arctic as New START Treaty expires… Norway says it expects more Russian spying in the Arctic, sabotage activity… CCGS Naalak Nappaaluk – Canadian Coast Guard places large offshore science vessel into service
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📋 New Ombudsman Report Warns of Longstanding Inequities Facing Primary Reserve Members
The Office of the Department of National Defence and Canadian Armed Forces Ombudsman has released a new systemic report, Marking Time: A Decade of Stalled Progress for the Primary Reserve. This report highlights persistent inequities affecting Primary Reserve (P Res) members nearly ten years after the Office first brought the issues to light.
Despite repeated commitments from the Canadian Armed Forces (CAF) to improve support for Reserve Force members injured or made ill through military service, the report finds that little meaningful progress has been made since key investigations were completed in 2016. The earlier reviews—Compensation Options for Ill and Injured Reservists and Part‑Time Soldiers with Full‑Time Injuries—identified gaps in governance, inconsistent access to health care, confusion around entitlements, and systemic administrative delays. Today, according to the Ombudsman, those same issues continue to harm reservists and undermine confidence in the CAF’s ability to support its own people.
The new review, launched in 2024, examined why recommendations from 2016 remain unimplemented and assessed whether they are still relevant. After interviews with CAF senior leaders and months of research, the conclusion was unequivocal: the problems persist, and the recommendations must be implemented.
The report identifies four major systemic barriers that have stalled progress:
1. Governance: Fragmented authority and inconsistent leadership direction have allowed Reserve-related issues to drift without clear ownership. Without a coherent employment model for the Reserve Force, policy alignment and timely decision‑making remain difficult.
2. Cultural Divide: Enduring bias toward Regular Force members has created institutional blind spots that disadvantage reservists—particularly around benefits, compensation, and recognition. Many Primary Reserve members reported feeling undervalued in comparison to their Regular Force counterparts, with some even describing themselves as “second‑class citizens.”
3. Resourcing Constraints: Years of staffing shortages, especially in health services, human resources, and administrative roles, have created delays in policy development, medical access, and compensation claims—issues that directly affect members’ financial stability and well‑being.
4. Administrative Complexity and Digitization: Outdated policies, unclear directives, and manual, paper‑based processes continue to impede modernization. These gaps are especially harmful to part‑time members, who often have limited access to CAF systems and rely heavily on accurate, up‑to‑date guidance.
The report shares troubling examples of reservists facing financial hardship due to delayed or mishandled compensation claims.
To break the cycle of delays and inequity, the Ombudsman is issuing five renewed recommendations for the CAF to implement by January 2027. These include strengthening governance of Reserve Force Compensation, completing long‑overdue digitalization of the Reserve Force Compensation application process, centralizing information on benefits, updating health‑care entitlement policies, and improving communication with members, especially those transitioning out of service.
As Canada continues to rely on P Res members for domestic operations (natural disasters), international deployments, and support to the Regular Force, the report underscores a simple message: meaningful change is overdue, and the time to act is now.
🔫 Hot Shots
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Odds & ends: Forging the Foundations of Canada’s Submarine Future… Force Development: Sustaining Canada’s Future Submarine Fleet… Free virtual event on modernization and the role of Canada’s aerospace industry featuring Major General Jeff Smyth, RCAF (February 19)
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.
An interesting article, at CMC Microsystems we propose a development program, called DUET, with a few guidelines you might find useful
- a focus on civilian emergencies and disaster recovery first, so that products can find a market before going through procurement hurdles
- challenge calls to solve specific problems and subsidies to Canadian SMEs responding to the calls
- technical support from national and international networks to ensure that the solution proposed has all of the technical elements required; Edge AI, sensors, lasers, imagers, etc
- follow through on the project to field trials and a TRL/MRL of 7 so that technology is ready to sell by the end of the project
This approach has the potential to accelerate Canadian design and manufacturing capabilities for safety, sovereignty, and security.