A Strategic Moment for Canadian Security and Prosperity
Canada faces a pivotal moment where national security, economic competitiveness, and independence increasingly depend on strategic investments in both defence and innovation. According to a distinguished group of Canadian leaders including former ministers, retired generals, and business executives, the country can no longer rely on geographic isolation for protection or assume trade relationships alone will sustain economic prosperity.
Connecting Defence Investment to Economic Growth
The 2025–2026 federal budget represents a significant turning point, marking the first substantial defence investments Canada has made in decades. This commitment reflects growing recognition that Canada's prosperity stands on a foundation of sovereign security. These investments represent more than just military spending—they constitute a strategic choice to strengthen Canada's position in an increasingly contested global landscape.
Countries that lead in defence innovation consistently demonstrate stronger productivity, economic growth, and global influence. Every satellite, sensor, and artificial intelligence system developed within Canada simultaneously strengthens both national safety and the economy. When executed properly, defence investment stimulates research and development, creates skilled employment opportunities, and helps small and medium-sized enterprises evolve into global competitors.
Learning from Allied Success Stories
Canada's allies have already demonstrated successful models for integrating defence and economic policy. The United States established IQT, a venture capital firm backing critical technologies with dual security and commercial applications. The United Kingdom's National Security Strategic Investment Fund connects public funding with private capital in fields like artificial intelligence, quantum computing, and robotics. Meanwhile, NATO has launched its own Innovation Fund to support similar initiatives across member nations.
These specialized units combine two distinct skill sets into what the authors describe as a 'superpower': business-savvy investment diligence to identify globally competitive startups, and rapid contracting capabilities to iterate new technologies against defence and security challenges.
A Canadian Solution: Defence Technology Venture Capital Unit
The authors propose establishing a Defence Technology Venture Capital and Rapid Contracting Unit that would complement the new Defence Investment Agency focused on larger purchases. Traditional procurement processes move too slowly for today's innovation pace, while venture-style models used by allies can rapidly transition ideas from laboratory to field deployment.
This approach would enable Canadian entrepreneurs to scale their operations domestically, attract international investment, and generate high-value exports. Rather than being their last adopter, Canada would become the first customer for innovative technologies. Existing Canadian technology corporations would gain early access to emerging innovations, while the armed forces would benefit from disruptive technological advantages.
The timing appears particularly favourable. For the first time since the 1960s, multiple factors align in Canada's favour: a strong research base spinning out technology startups faster than ever, accelerating innovation enabling startups to outcompete established players, and a reversal of the traditional 'brain drain' into a 'brain gain.' The critical challenge now involves strategically channeling these advantages by connecting defence investment to Canada's emerging technological strengths.
