Hundreds of Canadian companies making ‘dual use’ products useful for defence, survey finds

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Canada has hundreds of companies developing dual-use technologies with both defence and non-defence applications, but bureaucratic processes are holding them back from participating in Ottawa’s defence spending push, a new survey finds.

Prime Minister Mark Carney has said that investing in dual-use technologies with defence and commercial applications will be necessary to fulfill his goal of increasing Canada’s defence spending to 5 per cent of GDP by 2035. This could include spending in areas such as quantum technology, artificial intelligence and drones.

According to a new initiative mapping dual-use technology companies in Canada, Mr. Carney has plenty to choose from.

From Atlantic Canada to B.C., a survey by the Council of Canadian Innovators and Canadian defence innovation network The Icebreaker found 428 businesses in Canada that the government could invest in to help the Prime Minister meet his spending goals and boost Canada’s defence profile on the world stage.

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“Hundreds of Canadian firms have the talent, scalability and product maturity to contribute directly to national security in cutting-edge spaces where Canada can be a net contributor to NATO; many are already selling to other NATO allies,” Matthew Lombardi, co-founder of The Icebreaker, said in a statement to The Globe and Mail.

The survey was conducted for about a month until the start of August, and the data collected are now being shared with the federal government.

Mr. Lombardi said he continues to receive inquiries daily from companies wanting to know if they can still fill out the survey to help make their presence known to Ottawa.

Survey questions revolved around topics such as defence capabilities, familiarity with government procurement processes, patent ownership and barriers holding Canadian firms back from achieving success at home.

While almost 90 per cent of companies said procurement was important to their success, about half of them said access to customers, which includes government procurement, was their biggest obstacle to scaling.

Nearly 30 per cent of respondents, or approximately 123 companies, said they’ve seriously considered leaving Canada in the past year and roughly the same percentage said they make more than three-quarters of their revenue exporting.

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“We need to open the door – now – to home-grown innovators building at startup speed before their technologies are snapped up by foreign buyers or venture offshore for friendlier markets,” Mr. Lombardi said.

Harvey Hawes is one of the hundreds of Canadian CEOs who took part in the survey. His Vancouver-based company, Building Bloc Systems, makes microfactories to manufacture and repair medical devices, which can be deployed in a variety of settings from remote communities to military bases.

He’s also one of the hundreds of startup founders in Canada struggling to work with the federal government’s lengthy defence contracting timelines while keeping his company afloat. “You basically have to be of a certain level to survive,” Dr. Hawes said.

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He said he hopes the survey makes it into the hands of the officials working on the fall budget to demonstrate the impact of Ottawa’s flawed procurement system on Canadian businesses, and what can be done to fix it.

“These are the kinds of ammunition pieces that these committee members need to go and change policy,” Dr. Hawes said.

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A presentation of the survey’s results created for the federal government concludes with recommendations such as resolving Ottawa’s security clearance bottlenecks, which companies can get stuck in, lowering the level of authority needed to make procurement decisions and pushing Crown agencies such as the Business Development Bank of Canada to move faster to finance companies.

Kurtis McBride, CEO of Kitchener, Ont.-based Miovision, whose technology can help route traffic through cities in emergency situations using its camera systems installed at intersections, said it’s not hard to envision moving more of his business to the U.S. where there is a greater propensity among governments to support domestic companies. Miovision has opened four offices in the U.S. since it was founded in 2005.

But since Mr. Carney entered office, Mr. McBride has started feeling more optimistic about strategic procurement by the federal government and its level of engagement with Canadian technology companies. He’s just hoping it sticks.

“I’ve seen a change in the narrative, and I really hope that the narrative change turns into actual action on the ground.”