Defence Procurement Is Moving and Canadian Innovators Need to Be in the Room

By Daniel Perry,
Director of Federal Affairs

In late May, Canada’s defence industry was on full display at CANSEC, the Canadian Association of Defence and Security Industries trade show. CANSEC is Canada’s largest defence event, bringing together government officials, foreign dignitaries, military leaders, and the private sector in one place.

This year’s event felt different. Ottawa’s top brass was out in force to sell Canada’s defence sector, and to sell the defence sector on Canada. Ottawa is signalling a new approach to defence procurement with more spending, faster timelines, and a greater focus on building capacity in Canada.

The war in Ukraine, growing tension with China, instability in the Middle East, cyberattacks, Arctic security, and an unpredictable United States have all changed the conversation. Canada can and should continue to work closely with allies, but it can no longer assume that other countries will always have the equipment, supply chains, industrial capacity, or political will to move when Canada needs them to.

That is why defence is now being discussed as more than a military issue. It is an economic issue. If Canada wants to defend itself, it needs more than soldiers, ships, planes, and equipment. It needs companies that can build, repair, supply, secure, and improve those systems here at home.

The Prime Minister’s announcement at CANSEC pointed in that direction. The federal government announced a series of measures tied to the Defence Industrial Strategy, including changes to the Industrial and Technological Benefits Policy, a new Strategic Partnership Framework, a Defence Concierge Service, and the launch of a Defence Advisory Forum.

Those names sound bureaucratic, because they are. But behind the Ottawa language is a practical question: when Canada spends billions on defence, how much of that money will actually build lasting capacity in Canada?

That is the question CCI has been raising through our recent policy work. In our recent policy report, Buying What We Build, looks at how public procurements, when done correctly, are one of the most powerful economic policy tools available to government has to support scaling firms. Used well, it can help Canadian firms secure reference customers, retain intellectual property and data under Canadian stewardship, and scale into global markets. Used poorly, it can move public dollars through Canada while leaving the highest-value activity, decision-making, and long-term economic returns elsewhere.

The same logic applies to defence. The Defence Industrial Strategy identifies the right instruments: investment, financing, procurement reform, Industrial and Technological Benefits reform, and the Defence Investment Agency. But execution will determine whether these tools build Canadian capacity or simply reinforce the systems that already exist.

That is why the Defence Advisory Forum will be an important early test.

Its membership should reflect the full defence and dual-use economy, including Canadian-headquartered innovators building in AI, cybersecurity, secure communications, advanced manufacturing, aerospace, space, quantum, sensors, data infrastructure, and other strategic technologies. These firms are not peripheral to modern defence. Increasingly, they are where defence capability, economic security, and industrial advantage are being built.

Canada should not make the same mistake it has made in other advisory processes by leaving the innovation economy outside the room. Global competition is no longer organized around goods alone. Advantage now flows through control of intellectual property, data, software, standards, and supply chains. That is true in trade policy, and it is true in defence.

CCI’s 2026 CEO Survey showed that Canadian scale-ups are focused on securing customers, embedding in global value chains, and shaping the markets where future growth will occur. Defence is one of those markets. With major procurement spending ahead, Canada has an opportunity to help Canadian innovators secure early customers, validate their technologies, and build the domestic industrial base the country now needs.

The announcements at CANSEC are a step in the right direction. The next phase needs to be about implementation, discipline, and making sure Canadian innovators are part of the system being built.

Canada has companies ready to serve. The question now is whether Ottawa can turn defence spending into lasting Canadian capacity.

About the Council of Canadian Innovators

The Council of Canadian Innovators is a national member-based organization reshaping how governments across Canada think about innovation policy, and supporting homegrown scale-ups to drive prosperity. Established in 2015, CCI represents and works with over 175 of Canada’s fastest-growing technology companies. Our members are the CEOs, founders, and top senior executives behind some of Canada’s most successful ‘scale-up’ companies. All our members are job and wealth creators, investors, philanthropists, and experts in their fields of health tech, cleantech, fintech, cybersecurity, AI and digital transformation. Companies in our portfolio are market leaders in their verticals, commercialize their technologies in over 190 countries, and generate between $10M-$750M in annual recurring revenue. We advocate on their behalf for government strategies that increase their access to skilled talent, strategic capital, and new customers, as well as expanded freedom to operate for their global pursuits of scale.