Canada's Dual-Use Ambitions Hit Procurement Wall
AI-generated image · Bay Street Wire
As the federal government pushes a $6.6-billion Defence Industrial Strategy, commercial tech founders are discovering that security clearances and procurement hurdles are steep barriers to entry.
Canada is attempting to pivot commercial technology toward national security applications, but a significant knowledge gap persists among founders, as BetaKit first reported. According to the outlet, the federal government has signaled this shift through its $6.6-billion Defence Industrial Strategy, creating opportunities for firms specializing in quantum computing, cybersecurity, artificial intelligence, and healthtech.
To bridge this gap, the Vancouver-based organization DIGITAL—one of five federally funded Global Innovation Clusters—launched the Defence Market Access Series. According to DIGITAL Chief Operating Officer Elysa Darling, more than 550 people have participated in the webinars, which aim to align the language used by builders and buyers. DIGITAL Chief Programs Officer Nadia Shaikh-Naeem told BetaKit that entering the defence market requires significant capacity, strategic focus, and security, warning that the process is not easy.
A primary bottleneck is the procurement timeline. Shaikh-Naeem noted that obtaining necessary security clearances alone can take 18 months or more, posing a risk to smaller companies with limited financial runway. Companies typically enter the sector by partnering with major contractors, joining partnerships, or selling directly to the government, each with distinct integration demands.
Despite these hurdles, DIGITAL has identified approximately 60 active or completed projects with defence applications. Examples cited by BetaKit include:
* **Verge Ag**: A Lethbridge, Alberta-based firm that adapted agricultural path-planning technology for use in hazardous terrain in Ukraine, as noted by CEO and co-founder Godard. * **Lumeto**: A Toronto-based company using VR to train military medics, as described by Executive Vice President of Strategy and Business Development Eyal Kleiner. * **Ova.ai**: A Québec-based firm developing AI-enabled immersive training for the naval and aerospace sectors.