🎯 Three-Shot Burst
Ottawa has launched a long-awaited Defence Investment Agency (DIA) to streamline the purchase and delivery of military equipment, the Globe & Mail reports.
Major defence procurements in Canada will now go through a single agency as part of the federal government’s plan to reform a process that industry has long lamented as a bane to the Canadian defence industrial base.
The agency will only oversee procurements valued at $100 million or more.
Credit where it’s due: The government is focused on getting the major contracts right, working from big to small, and addressing the procurement of ships, planes, and submarines first.
Not so fast: The government has signaled that its challenge is principally expediting large contracts, the majority of which will go to existing suppliers (read: US primes), as opposed to encouraging new entrants and developing sovereign capabilities:
➡️ “Smaller contracts [under $100M] will continue to go through standard processes” that are “currently fragmented across several departments, slow to consult industry, and too complicated to respond to rapidly evolving military needs.”
Defence procurement in Canada is often particularly difficult to navigate for small-to-medium-sized enterprises (SMEs) that don’t have the resources or capital to withstand the lengthy processes. There’s no specific mechanism in place within the new agency to support SMEs.
Bottom Line: New entrants, particularly domestic startups and scaleups, will live or die based on the rapid ability to win contracts well under the new 100M threshold.
Canada cannot and will not meet our economic and security objectives without ensuring that homegrown technology companies build here and stay here. If we’re serious about building a domestic industrial base, we need to consider these smaller procurements too.
We anticipate additional changes to contracting thresholds that will benefit smaller companies, such as the ability of commanders to purchase within their own units, to be announced in the coming weeks.
Related:
Hundreds of Canadian companies making ‘dual use’ products useful for defence, survey finds… Rearming the military: Should Canada buy it or build it?
DIA Pundit Gallery: Why the DIA Changes Everything (for the better) for Canadian SMEs… How Canada’s new defence agency will build national strength… DIA is a good first step, but there’s a lot of work ahead… New defence procurement agency helps, but more needs to be done to secure Canada
Toronto-born NATO innovation leader James Appathurai says NATO is losing arms race with Russia and China and needs “bridging technologies” from countries, including Canada, to quickly close the gap. Read James’ recent Icebreaker exclusive on the topic of defence procurement reform
Why do defence procurements typically move so slow? Because the government wants to complete ‘mega projects’ that connect all systems together… Canada’s new warships could be obsolete by delivery time
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Dominion Dynamics is hosting an event in Ottawa titled “Building a Defence Tech Ecosystem in Canada” on October 15. RSVP to NickLandon@dominion-dynamics.com if you’re interested. Space is limited.
🤝 Sovereign Capability
How Canada Squandered Its Drone Lead
The military drone traces its lineage through a surprising Canadian chapter. During the 1960s, Canadair (now Bombardier) manufactured a prototype launched from a truck bed with a booster rocket. The technology of the day posed some limits. It could follow only a pre-programmed route. It used film cameras for surveillance, and the drone parachuted back to earth for recovery, its landing cushioned by inflatable airbags (crashes were frequent). This machine, called the CL-89, was crude by today’s standards, but it proved that remotely piloted vehicles could play an active role in Cold War surveillance. It was among the first drones widely fielded by NATO forces. Its successor, the CL-289, improved on its design with greater range and imaging capabilities, serving well into the 1990s.
Canadair sold its drone systems to the French and German governments in 1987, capping a twenty-five-year period during which Canadian firms were recognized as leaders in military drone technology. But without sustained government investment or procurement, that early advantage started to fade. Much of the credit shifted abroad—to Israeli battlefield innovations in the ’80s and to the US in the ’90s. Both of those countries were laying the groundwork for what drones would become: sleek, sensor-packed weapons. When Canada embraced drone warfare again, it did so by rediscovering a capability it had once helped invent.
Read the full piece here.
Related:
Is Canada ready for a future that could be worse than the past?
Ukraine, which is relatively poor and not otherwise a member of the high-tech vanguard, has nevertheless turned itself into the Silicon Valley of military drones. Is the Canadian Armed Forces working like that?
Process has become the mantra of slowing things down, and that will kill you in war:
There could be ‘mutual interest’ in Canada building its submarines, says German armament secretary… A 1973 NASA technical memo on opening up the Northwest Passage… Canada’s next Arctic move: Look west
Canada needs a sovereign wealth fund
AI and cloud infrastructure is the railway of the future — why isn’t Canada building it?
Canadian Space Mining Corporation (CSMC) has been awarded a $1 million CAD contribution from the Canadian Space Agency (CSA) to advance development of a first-of-its-kind nuclear reactor designed to power a permanent presence on the Moon
NordSpace and C-Core partner to build ground station infrastructure across Canada
Dual use: Ukraine needs more prosthetics. This Canadian company is ready to help
Join us at Invest Ottawa on October 29th for an interactive forum featuring leading voices in artificial intelligence, national security, and geopolitics:
⚔️ Combat Readiness
No Plan Survives First Contact — Including The Space Force’s
The best laid plans of America’s war planners and procurement officers may hold firm in the next war emergency. But if and when such plans go awry, a group of privately-funded commercial space, aerospace, and defence companies are already building in earnest to provide backup options.
Instead of relying entirely on government to centrally plan America’s future defence and prosperity, there’s a lot to be said for mission-driven investors and entrepreneurs who anticipate what is needed and take it upon themselves to ensure supplies are available. This is particularly true in the case of companies which can scale dual use products, services, and networks into the market before government needs them.
Related:
Russian incursions [video]: German authorities say swarms of drones deliberately flew over critical infrastructure including the Thyssenkrupp naval shipyard in Kiel, Kiel University Hospital, a power plant, the Kiel State Parliament, and the Heide refinery that supplies Hamburg Airport with kerosene… Europe is at war with Russia, whether it likes it or not… U.S. to provide Ukraine with intelligence for missile strikes deep inside Russia; possibly the Tomahawk’s too
British defence innovators are taking their most advanced drones and uncrewed boats abroad- not because of demand, but because of UK regulation. According to The Times, some companies report it would take five staff six months to complete Civil Aviation Authority paperwork, while similar approvals in Spain or Canada take just weeks
Canadian tech helped U.S. strike alleged Venezuelan drug boats
U.S. approves sale of mobile artillery rocket systems to Canada
Initial guidance for the modernization of the Canadian Army so that it can meet the expected demands of the future operating environment in 2040
Robot wars: Autonomous drone swarms and the battlefield of the future… Shooting down cheap drones that cost $2,000 to $3,000 with million-dollar missiles is neither effective nor sustainable… Why the most advanced military in the world is playing catchup on the modern battlefield… What a US Special Forces veteran said after seeing Ukraine’s front lines
Anduril and Palantir battlefield communication system ‘very high risk,’ US Army memo says
How a Silicon Valley ‘warlord’ got the Pentagon’s attention: Restaurant app founder pivots to AI-powered machine guns
Ukraine’s Ground-Drone Revolution: A Wake-Up Call for the U.S. Army
🍁 Canada, companies need to go beyond buzzwords to innovate dual-use defence tech
Last week, The Icebreaker was delighted to co-host York University’s annual Ernest C. Mercier Lecture in Entrepreneurial Sciences. The Globe & Mail has the story:
Rahul Goel dreamed of building a rocket company ever since he was a little kid, but it took years before he felt confident he had the skills and funds to make it a success in Canada.
Last week, before a crowd of students, investors, executives and government officials gathered at York University, Mr. Goel told the story of how he ended up founding that company, NordSpace. His presentation was part of a broader discussion about what Canada should be doing to fund innovation in defence.
His keynote address was followed by a debate-style panel, during which speakers lamented Canada’s inability to retain entrepreneurial talent and pitched ideas about how the government could better support companies that develop dual-use technologies suitable for both defence and civilian applications.
“There is no reason in the world Rahul should be bootstrapping a rocket company. Absolutely not. It’s shameful that our government is not helping you in a more meaningful way” — Sam Macdonald, co-founder of Deep Trekker Inc.
Related:
Mark Maybank: What Are Dual-Use Technologies—and Why They Matter for Canada
Hyperspectral: Off-the-shelf smartphone cameras can become advanced sensors
Team Greypoint wins Canada’s first Defence Tech Hackathon
🔫 Hot Shots
ICYMI: CDL Defence, Vimy Forge, and Calian Ventures launch programs to boost Canadian defence tech… Attendees returning from DEFSEC Atlantic report that ITB policy becoming more uncertain
Flywheel: Kudos to our partners at the European Defense Tech Hub — their first hackathon alum are now joining as sponsors
Blank Cheque: Blank-Cheque Firm MAK Files for $100 Million IPO in Canada. MAK is targeting acquisitions in sectors including tech-enabled services, space and defence, and prioritizing businesses with recurring revenues and low customer concentration… Once targeted by activist investors, Matt Proud is now a formidable shareholder gadfly himself (on Calian and Plantro)… Booz Allen Hamilton is tripling its venture capital commitment to defence, up to $300 million, with plans to make 20-25 deals over the next five years
Missing piece: The economic gains the government seeks will only materialize if Canada safeguards its defence industrial base as vigorously as it promotes it. If adversaries can steal our technology, disrupt our supply chains, or sabotage our critical infrastructure, the strategy will fail
Breaking Through: How to Predict, Prevent, and Prevail over the PRC Cyber Threat… PRC-linked actors built a capability to take down American telecom networks while operating in the US… China is winning the cyberwar… Army garrison commander in Japan also occupies a spot in the blogosphere
Next big thing: VCs are increasingly eyeing startups building things like interceptor drones as countries push to build “drone wall” protections. But some investors remain cautious… Is European defence tech ecosystem in a bubble?
Do the joke: In corporate security circles, a ghastly new fear has led to some strange advice for recruiters interviewing potential IT staffers: Ask the candidate to insult North Korea’s Supreme Leader, Kim Jong-un
Code Orange: Trump again floats Canada joining the U.S. as the 51st state… This is what the opening move of the U.S.’s attempted annexation of Canada could look like… Northerners see Trump’s U.S. as greater threat to Arctic than Russia
Code Red: Due to the US government shutdown, SF Fleet Week is about to be headlined not by the US Blue Angels but the Canadian Snowbirds. [Editor’s note: We are happy our neighbours get to see some decent pilots for a change!]
The other side has problems too: China produces one-third of everything manufactured on Earth, increasingly leading to destructive price wars and overcapacity
The Product is the GTM: The most iconic defence companies in history learn how to translate any capability into a contract
Kamikaze: Anduril co-founder on how massive early funding rounds can inflate startup valuations and outpace the market, usually ending in disaster… Never Lift Revealed as Early Investor in Cambridge Aerospace as Startup Confirms $136M Raised
Dual use history: How merchant shipping capacity as seapower shaped the Hundred Years War
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.