Opinion: This is our opportunity to build Canada’s economy and defence at the same time

Members of the Helicopter Air Detachment aboard HMCS Montreal conduct helicopter hoist drills with a CH-148 Cyclone helicopter in a file photo from Feb. 13, 2022. Photo by Corporal Braden Trudeau / Canadian Armed Forces

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Canada’s security, competitiveness and independence now depend on how we invest in defence and innovation.

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We can no longer rely on geography for protection or assume that trade alone will sustain our economy. Two connected challenges demand immediate attention. The first is security: our ability to defend our sovereignty and sustain our alliances is seriously threatened. The second is economic: productivity has stalled, our industrial base has eroded, and our dependence on the United States has become a vulnerability.

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The 2025–2026 federal budget takes an important step forward. For the first time in decades, Canada is making significant new investments in defence. This commitment is commendable. It reflects a growing recognition that Canada’s prosperity stands on a foundation of sovereign security.

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But these investments are more than defence measures. They represent a strategic choice to strengthen Canada’s position in an increasingly contested world. And to build on this momentum, Canadians must leverage a key principle that our allies already grasp: security policy is also economic policy.

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Countries that lead in defence innovation also lead in productivity, growth and global influence. Every satellite, sensor and AI system built in Canada strengthens both our safety and our economy. Done right, defence investment spurs research and development, creates skilled jobs, and helps small and medium-sized firms grow into global players.

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This is finally Canada’s defence and economic moment. For the first time since the 1960s the scales are tipping our way. Our strong research base is spinning out technology startups faster than ever before, leading high value job creation across the country. The accelerated pace of innovation is enabling innovative startups to outcompete large incumbents. And our persistent brain-drain is reversing into a brain-gain. But we need to channel this opportunity by connecting our defence investment to these innovation advantages. The key is finding the intersection between defence technology needs and Canada’s emerging technology strengths.

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Our allies have already figured this out. The United States created IQT, a venture capital firm that backs critical technologies with both security and commercial uses. The United Kingdom’s National Security Strategic Investment Fund links public funding with private capital in fields like artificial intelligence, quantum computing and robotics. NATO has launched its own Innovation Fund to support similar efforts across member countries. These units combine two different skill sets into a superpower: business-savvy investment diligence to identify globally competitive startups, and rapid contracting to iterate those new technologies against defence and security problems.

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Canada should learn from these, then compete to win.

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To do so, we need to establish a Defence Technology Venture Capital and Rapid Contracting Unit. This unit would complement the new Defence Investment Agency focused on large purchases. Traditional procurement is too slow for today’s pace of innovation. Our allies’ venture-style models move ideas quickly from the lab to the field. Canadian entrepreneurs would get to scale at home, attract international investment, and generate high-value exports. Canada would become their first customer, not their last adopter. Existing Canadian tech corporations would get earliest access. And the armed forces would get disruptive technology advantage.