{"id":345804,"date":"2025-12-15T01:44:07","date_gmt":"2025-12-15T01:44:07","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/345804\/"},"modified":"2025-12-15T01:44:07","modified_gmt":"2025-12-15T01:44:07","slug":"is-a-canadian-defence-giant-possible","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/345804\/","title":{"rendered":"Is a Canadian defence giant possible?"},"content":{"rendered":"

\t\tRead: 4 min<\/p>\n

Canada has never built a defence giant of its own.\u00a0<\/p>\n

For decades, Canadian military firms have fed parts and services into American and European weapons programs \u2014 a model that suited modest budgets and a comfortable reliance on the United States.<\/p>\n

Now, a more dangerous world has Canadians realizing we can no longer take our security for granted, says Balkan Devlen, a senior fellow at the Macdonald-Laurier Institute think tank.\u00a0<\/p>\n

\u201cThe [geopolitical] order \u2026 created after the Second World War \u2026 is maintained through actual contributions,\u201d he said. \u201cIt is not an automatic thing.\u201d<\/p>\n

The 2025 budget<\/a>, released Nov. 4, marked the federal government\u2019s most ambitious attempt in decades to change the status quo. It promises billions in new defence spending and a Defence Industrial Strategy to bolster domestic military capability.<\/p>\n

\u201cIt is difficult to think of another budget that lays out a greater willingness to invest and develop [Canadian defence] companies,\u201d said Carleton University professor Philippe Lagass\u00e9, who specializes in defence policy and procurement.<\/p>\n

Dominion Dynamics, a new, Ottawa-based company that integrates Canadian-made sensors and software into military platforms, could be an early case study on the success of this strategy.\u00a0<\/p>\n

\u201c\u200aNow there are all of the right pieces to the puzzle,\u201d Dominion Dynamics COO Mitchell Carkner told Canadian Affairs.\u00a0<\/p>\n

\u201cWe have private capital being infused into the space, sovereign private capital. We have a government that is spending two per cent [of GDP on defence] and will go to five<\/a>.\u201d<\/p>\n

Old challenges, new opportunities<\/p>\n

The global defence industry has long been dominated by defence giants, such as Lockheed Martin and RTX Corporation, that are known in the industry as prime system integrators. These companies design major defence machinery, such as aircraft or missile systems, and source their component parts from hundreds of subcontractors.<\/p>\n

Canada has failed to sustain its own prime system integrator due to inadequate domestic demand and inconsistent political support.<\/p>\n

\u201cYou first need to be able to provide [companies with] a sufficient amount of funding and demand and support through your own acquisition process until such time as they can set themselves up for greater export,\u201d said Lagass\u00e9.\u00a0<\/p>\n

The Canadian aircraft manufacturer Bombardier and flight simulator manufacturer CAE are two exceptions, but both primarily serve civilian customers. Shipbuilding giant Irving has won contracts to produce ships for Canada\u2019s navy, but it does not have the export capacity of major American or European primes.<\/p>\n

Some experts believe the country\u2019s best hope for a sovereign defence industry lies not in replicating the massive manufacturing footprints of traditional primes, but in building a \u201cneo-prime\u201d \u2014 that is, a software-driven systems integrator.\u00a0<\/p>\n

The model would mirror emerging players in the United States and Europe, such as the American company Anduril and German company Helsing. Both rapidly develop modular hardware and AI that can be easily integrated into existing military systems, networked across different platforms and updated quickly as new threats emerge.<\/p>\n

\u201cOur notion of what a defence prime looks like might need to change,\u201d said Lagass\u00e9.\u00a0<\/p>\n

\u2018Our mission\u2019<\/p>\n

Dominion Dynamics may be well-positioned to become a neo-prime.<\/p>\n

Founded in June, the company raised funding from private Canadian investors and recruited talent almost exclusively from within Canada. Its goal is to replicate Anduril and Helsing\u2019s success in Canada.<\/p>\n

\u201cThere really hasn\u2019t been an integrator-level sovereign capability,\u201d said Carkner of Dominion Dynamics. \u201cThat is our mission.\u201d<\/p>\n

Dominion\u2019s first product, an Arctic surveillance and command-and-control system called Auranet, was built in just 100 days and trialled by the Canadian Rangers in September. The company plans to test a second-generation model in February.\u00a0<\/p>\n

The Arctic\u2019s harsh conditions make for great testing grounds, says Carkner, and could help the company one day export products to NATO allies seeking Arctic capabilities.<\/p>\n

Carkner says the global shift toward inexpensive, software-enabled systems lowers the barrier for entry for Canadian firms aiming to compete at the integrator level.\u00a0<\/p>\n

\u201cYou put all those things together, that is our opportunity to create that integrator \u2026 where we don\u2019t need to have massive, deep supply chains that you build over decades.\u201d<\/p>\n

Sparking industry<\/p>\n

Industry leaders say the real test of the success of Ottawa\u2019s defence strategy will be whether the government agencies that buy military equipment start to change.\u00a0<\/p>\n

In particular, all eyes will be on the Defence Investment Agency<\/a>, the new agency tasked with streamlining large procurements and supporting domestic industry.<\/p>\n

\u201cWhat I\u2019d be looking for is some kind of muscle added to the Defence Investment Agency,\u201d Lagass\u00e9 said, noting that the DND and CAF set requirements for defence procurement, and the new defence agency will reside within Public Services and Procurement Canada.<\/p>\n

If the DND and CAF set contract requirements that are easier for established international players to meet, Canadian firms may lose out.<\/p>\n

\u201cHow are we ensuring that DND \u2026 doesn\u2019t just put up walls and fight that [procurement] process?\u201d he said.<\/p>\n

A spokesperson for Public Services and Procurement Canada told Canadian Affairs the government is trying to speed up defence procurement by taking a more flexible, risk-based approach to approving contracts.\u00a0<\/p>\n

The department is also relying more on early partnerships with industry, to identify and respond to military needs quickly.<\/p>\n

For startups like Dominion, the most pressing concern is a clear path to commercialization. New entrants often struggle to move from prototype to program-of-record, says Carkner.\u00a0<\/p>\n

\u201cFor a sovereign set of businesses to really break hold, a pathway to commercialization needs to be clear,\u201d he said.<\/p>\n

Devlen, of the Macdonald-Laurier Institute, says the goal for Canada\u2019s defence sector should be to prioritize specific areas rather than to aim for a totally Canadian supply chain.\u00a0<\/p>\n

\u201cWe will never have the industrial base or capabilities to produce everything we need,\u201d he said.\u00a0<\/p>\n

\u201c\u200aSo it requires strategic thinking about what our strengths are, where we can focus on the [national] defence and produce things not only for our need, but also for our allies.\u201d<\/p>\n

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