The Unglamorous Rebuild
Fixing pay, parts and bases in the shadows so Canada is ready when the world catches fire
Editor’s note: Congratulations to COVE on a successful launch of the NATO DIANA 2026 Cohort last week in Halifax, showcasing ventures entering NATO’s innovation network and underscoring Canada’s role in supporting dual-use technology and strategic innovation.
🎯 Three-Shot Burst
Tom Lawson and Wendy Gilmour write that Canada is on track to meet its pledge to spend 2 per cent of GDP on defence this fiscal year, largely through low-visibility but substantial investments.
Reality check: The government has boosted Canadian Armed Forces pay and benefits, and is funding recruiting, training, health care, grievance reforms, and long-neglected infrastructure and maintenance to improve readiness. It has also begun major capability upgrades, including Arctic radar, long-range precision strike systems, logistics vehicles, Arctic mobility platforms, and rapid moves on submarines, while planning a broader Defence Industrial Strategy.
A little nudge: “Canada’s enthusiasm for rapid militarization began the moment Donald Trump demanded more from America’s NATO allies and deepened as he mused about taking over parts of the Western Hemisphere.”
A new RBC / Eurasia Group report suggests a failure to execute could lead to others, notably the U.S., stepping in.
Bottom Line: If Ottawa crosses the 2 per cent threshold by March, it will signal that Canada is serious about rebuilding military capacity to face a more dangerous world.
Related:
Canadian Armed Forces applications jump nearly 13%… Canada’s Armed Forces must be freed to fight
Poll Shows Canadians Support Higher Defence Spending, but Not to Buy American
Trump’s Greenland gambit exposes Canada’s Arctic vulnerability… Stuck between the US and Russia, Canada must prove it can defend its Arctic territory
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Dominion Dynamics is expanding our team and we’re looking for ambitious Canadians who want to build sovereign technology for the future of national defence.
🤝 Deal Corner
Deutsche Telekom-backed DTCP supercharges European defence tech with $580m fund
DTCP’s Project Liberty fund is seeking investors including corporate backers to fund up to 30 European defence tech startups through Series C stage.
Around the world, corporate capital is flooding into defence tech startups, which had their best funding year ever in 2025.
Several of the largest rounds for European defence and aerospace technology developers in the past year have also notably included corporates. Saab was part of German autonomous defence tech developer Helsing’s Series D in June while Dassault Aviation led a $200m round for Helsing’s French peer Harmattan AI earlier this month.
Related:
Mark Carney’s Davos speech boosts Canada’s push to host new defence bank, Toronto supporters say
North Vector Dynamics CEO Paul Ziadé discusses scaling autonomous defence systems in Canada, navigating procurement challenges, and preparing for hypersonic threats in aerospace innovation
Calian leads $100-million investment to build cross-country defence lab network
Arctic Anduril: New defence tech company opening factory in Kanata… B.C. pension fund backs biggest early stage defence tech fundraise in Canada
Indigenous-owned Flowing River Capital acquires Marshall Land Systems
B.C.’s General Fusion to go public with SPAC deal
As AI moves into the physical world, is Canada missing the boat on robotics?
Y Combinator is no longer investing in Canadian startups… According to Leaders Fund, most companies with a Canadian founder which have raised more than $1M are no longer based in Canada:
Defending Canada’s Arctic will need dual-use technologies. Our manufacturers have a head start
Why European defence startups find France ‘almost impossible’ to work with
Czech defence group with post-Cold War roots looks to go global, could raise over $3 billion
Europe’s $1 Trillion Race to Build Back Its Defence Industry… Europe remains dangerously reliant on American arms
Power outages and small checks: The perils of being a VC in Kyiv
Beacon AI Snags $4M Air Force Air Mobility Command Contract
Noveon Raises $215M Series C
Twentyfour Industries emerges from stealth with $11.8M for mass-produced drones
Elliott Invests in Hypersonic-Flight Company Stratolaunch
A Q + A with Matt Cronin, Senior National Security Advisor at a16z
Booz Allen Hamilton commits $400M to a16z funds
Lessons and Warnings for Canada’s Defence Investment Agency
Spaceman, oh spaceman: Record number of Canadian payloads set for launch in 2026… Canada has quietly built a deep bench of space innovators across launch, optical relay, Earth observation, services, manufacturing, software, and enabling infrastructure:
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⚔️ Combat Readiness
China Trains AI-Controlled Weapons With Learning From Hawks, Coyotes
China’s military is rapidly developing AI-controlled drone swarms and autonomous robots, drawing inspiration from animal behavior like hawks, doves, ants, and wolves to improve coordination, targeting, and evasion in combat [See VIDEO]. Patent filings, procurement tenders, and academic research show the PLA aiming to deploy large numbers of cheap, self-directing drones and robot systems that can overwhelm enemies or create dense defensive shields with minimal human control.
Bottom Line: This strategy plays to China’s manufacturing dominance in drones and reflects both lessons from modern battlefields like Ukraine and Beijing’s skepticism about the combat readiness and autonomy of human commanders.
Related:
Arms makers say that the fast-moving war in Ukraine is changing how they design and upgrade weapons
Pentagon to offer ‘more limited’ support to US allies in defence strategy shift:
Canadian Jet Firm Profits by Playing ‘The Bad Guys’ in Air Combat… The Smart Advantage Behind Manned- Unmanned Teaming (MUM-T) in the Indo-Pacific
Palantir and Ukraine’s Brave1 have built a new AI “Dataroom”
Ships or Munitions?: Clarifying the Discussion on Unmanned Surface Vessels
The Primes Aren’t the Real Bottleneck in U.S. Weapons Production… The Department of War chases the exquisite while ignoring questions that are critical to victory or defeat in war:
Arctic Watch: Organization working to build deepwater port in Qikiqtarjuaq secures support from community leaders… Is it Time for a Nordic Nuke?… China’s Push to Master the Arctic Opens an Alarming Shortcut to US… VC Josh Wolfe suggests Greenland isn’t about Greenland… Icebreakers, the key tech to unlock Greenland, are only made by either US allies or adversaries… The Arctic is a Strategic Distraction… NATO’s revised Maritime Strategy and North Sea security
Bad kids table: How China Wins the Future: build hard capability, place experts inside rule-setting bodies, and—when existing institutions won’t bend—create new ones… Trump Declared a Space Race With China. The US Is Losing… AI-powered air defence could counter Moscow’s greatest advantage — and keep Kyiv in the fight… China is building ‘full-stack’ defence-innovation cities
Everyone calm down: Carney’s viral Davos speech complicates stalled US-Canada talks… Military models Canadian response to hypothetical American invasion… Canadian soldiers have been carrying out Donald Trump’s orders… Is Canada Ready for an American Civil War?… U.S. will have to send its own fighter jets into Canadian airspace if Ottawa doesn’t buy 88 F-35s, Hoekstra says… NORAD pact would change if Canada pulls back from F-35 order, warns U.S. ambassador… Carney to accept Trump’s offer to join ‘Board of Peace’ in rebuild of Gaza… If the US Thinks Greenland is Fair Game, What About Canada’s Arctic Archipelagic Waters?
Diversification or Dependence?: Ottawa Is Getting China Wrong
Spot of
teatrouble: Starmer Says UK Won’t Be Forced to Choose Between US, China… China hacked the mobile phones of senior officials in Downing Street for several years
Space race: Jeremy Hansen is the first CSA astronaut selected for a lunar mission:
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Barrack Hill: Navigating Canada’s defence and procurement landscape with precision.
🔫 Hot Shots
Grey war: The Trump Administration’s Cyber Strategy Fundamentally Misunderstands China’s Threat… CIA taught Ukraine how to target Putin’s Achilles heel… Cyberattack Targeting Poland’s Energy Grid Used a Wiper
The purge: What Xi Jinping’s purge of China’s most senior general reveals
Nuclear corner: An Industrial history masterclass on the history of Westinghouse… Europe produces just 5 Exajoules of the 38 Exajoules of the hydrocarbons it consumes… Dr. Chris Keefer on Why Power Demand Is Growing
Getting chippy: US Secures Historic Chip Deal Amid Tech War With China… Anthropic’s CEO stuns Davos with Nvidia criticism
Odds & ends: TKMS seeks multibillion-dollar investment package to help win Canadian submarine tender… South Korean sub maker Hanwha signs agreement with Algoma Steel… Public service job cuts will be ‘minimal’ in procurement and contracting roles… The new Conconi Family BioDevice Foundry at UBC is a shared use core facility bridging microfabrication with biotechnological and biomedical applications… Canada is sending a delegation to Japan next week as part of the Canada-Japan Subsea Cable Security Project… Picogrid, a company operating in one of the least visible but most important layers of modern military capability
How Canada can move away from its ‘whack-a-mole’ national security strategy
PSA: IDEaS drone surge challenge has officially concluded, and the results are in
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.