Canada stands at a pivotal moment where the convergence of security and economic imperatives demands a bold and strategic response. The 2025–2026 federal budget marks a historic shift, with significant new investments in defence—a recognition that Canada’s prosperity hinges on sovereign security. However, this is not just about bolstering military capabilities; it’s about leveraging defence spending to drive economic growth and innovation.
The twin challenges of security and economic stagnation are inextricably linked. Canada can no longer rely on geographical isolation for protection or trade alone to sustain its economy. The erosion of our industrial base and stagnant productivity underscore the urgency of this moment. The federal budget’s defence investments are a commendable start, but they must be part of a broader strategy that integrates security policy with economic policy.
Countries that lead in defence innovation also lead in productivity, growth, and global influence. Every satellite, sensor, and AI system developed in Canada strengthens both our safety and our economy. Defence investments can spur research and development, create skilled jobs, and help small and medium-sized firms grow into global players. This is Canada’s moment to capitalize on a burgeoning tech startup ecosystem, reversing the brain drain and turning it into a brain gain.
To fully seize this opportunity, Canada must connect defence technology needs with its emerging technology strengths. Allies like the United States and the United Kingdom have already established venture capital firms and funds that support dual-use technologies—those with both security and commercial applications. NATO’s Innovation Fund is another example of how defence investments can drive technological advancement.
Canada should follow suit by establishing a Defence Technology Venture Capital and Rapid Contracting Unit. This unit would complement the new Defence Investment Agency, focusing on large purchases. Traditional procurement processes are too slow for today’s rapid pace of innovation. A venture-style model would accelerate the transition of ideas from the lab to the field, allowing Canadian entrepreneurs to scale at home, attract international investment, and generate high-value exports. This approach would ensure that Canadian tech corporations have early access to cutting-edge technologies, while the armed forces gain a disruptive technological advantage.
“A stronger security and defence strategy can be the backbone of a modern industrial policy, one that restores productivity, strengthens sovereignty and renews a shared sense of national purpose,” said Hon. Scott Brison, one of the signatories of the open letter to the National Post.
The federal government has laid the groundwork with its new defence investments. The next step is to ensure these investments support innovation, commercialization, and long-term growth in Canada’s burgeoning deep tech startup economy. By acting with clarity, speed, and resolve, Canada can turn this moment of global pressure into a turning point. This is our chance to move from complacency to capability, building an economy that secures our future sovereignty and prosperity.
In the words of John Ivison, “Suddenly, Canada seems serious about defence after years of military neglect.” The establishment of a new agency to speed up Canadian military procurement and reconsider U.S. purchases underscores this newfound seriousness. It is a step in the right direction, but it must be part of a broader, more integrated strategy that recognizes the interplay between security and economic policy. By doing so, Canada can position itself as a leader in both defence and innovation, ensuring a secure and prosperous future for all Canadians.