Industry and Technology Committee on Nov. 5th, 2025

[Ben Hendriksen]

Thank you very much.

I apologize. I am not bilingual, so I will be answering in English.

Like many of us, I got my first glance and first reactions. Obviously, there are always opportunities to see more investment in the north. There's always that opportunity when there's a serious infrastructure gap in northern infrastructure needs, but I completely understand the limitations that currently exist.

I think the biggest take-away for myself and a lot of my colleagues in discussing it over the last 24 hours is seeing the attention to the north in a way that seems genuine and is not just a photo op. Now, does the rubber hit the road? As a northerner, it's key to see that now. It's good to have the chance to speak with you all today and to keep that conversation going.

That would be the first blush. The need is great in terms of infrastructure investment, but it's about how to leverage what was announced with private investment and investment with indigenous development corporations.

From an aspect of reconciliation as well, seeing those equity partnership opportunities and the opportunity for private investment more broadly from across the country, as was referenced by one of your other witnesses today, it's how we leverage the investments from the federal government beyond what was announced. We can't always look to Ottawa for every answer, so how do we start and build upon that?

[Gabriel Ste-Marie, Bloc, Joliette—Manawan, QC]

Thank you. That was very clear.

What I note is that there is a lack of infrastructure in your region.

Mr. Leuprecht, have you looked at the budget presented yesterday? We can see that a large amount is allocated to defence, but we don't have a lot of details. Do you want to respond to that?

[Christian Leuprecht]

First, I'll talk about investments in the Arctic. It's about 10 times more expensive to build in the Arctic than it is to build in the south. The calculation of spin-offs is very different in the far north.

Second, we need infrastructure investments in the north. Economies of scale are very different. If the government is not there to subsidize the required infrastructure, there will be no economic spin-offs for private sector investors.

The budget is ambitious. As I said, it's not just a matter of money, but of how the money is spent. Policies, procedures and architecture also need to be adapted.

Quebec, in particular, is an integral part of any industrial strategy and any defence investment strategy. On the one hand, Quebec has the closest port to Europe. The government has already said that it will invest in the Port of Montreal. On the other hand, Quebec would be indispensable if ever we wanted to invest in critical infrastructure to export liquefied gas, in particular, to Europe. It has to go directly through Quebec. We could also ship it through New Brunswick and export it directly from there.

Quebec benefits enormously from equalization payments from the Canadian federation. Therefore, it also has a certain obligation to help generate revenue for Canada in order to meet expectations.

[Gabriel Ste-Marie, Bloc, Joliette—Manawan, QC]

Thank you for that. Obviously, I don't agree with your analysis of the last part, but we'll be able to debate that at another time.

Ms. Intson, I'll ask you the same question.

I don't know if you had time to read the budget that was presented yesterday, but I'd like to hear your comments, if you have any.

[Katheron Intson]

Forgive me for answering your question in English. I need to practise my French, but I won't do it today or here.

I have skimmed the budget and I'm cautiously optimistic, as are many others in this room. I am thrilled by the amount of investment that will be going into this sector.

How that capital is actually deployed remains to be seen, but I'm cautiously optimistic. I do hope that the pendulum swings a little bit from historically supporting the international community in the development and production of their own IP toward our intellectual property, sovereign industrialization and capability.

Otherwise, I would say I'm cautiously optimistic.

[Gabriel Ste-Marie, Bloc, Joliette—Manawan, QC]

Thank you.

Thank you, Mr. Chair.

[The Chair, Liberal, Ben Carr]

Mr. Falk, you have five minutes.

[Ted Falk, Conservative, Provencher, MB]

Thank you, Mr. Chair.

Thank you to our witnesses, both online and here in person, for your testimony.

Dr. Intson, I'll start with you. You talked about our IP capabilities here in Canada and how that's all being exported and nobody is capitalizing on that here.

Can you briefly expand on that?

[Katheron Intson]

I have many friends who are incredibly talented entrepreneurs who have not been able to get Canadian investors on their capitalization tables.

I'll step back for a second. Venture capital as a whole is a model that was proven out in defence. This is something that's not talked about at all, but a Harvard professor actually started the first venture capital fund after World War II to invest in World War II technologies. The return on those investments is what really kicked off the model as a whole.

Now, Canada and Europe and everywhere else were slower to adopt this type of model, so we don't think about that history in the context of our defence spending and our investment. We will see huge returns on that investment if we do invest in Canadian defence but, without that history and without having been part of that start at the inception of VC, we don't yet understand that.

Two of my Canadian friends—I think of Matt at Aalo and Cam at Sentradel—are building defence companies, and they are backed by American investors. The other thing is that since we don't have well-funded start-ups here in Canada, the new talent is going to the States.

I actually often recommend Canadian recent grads with amazing résumés to start-ups in the States that are building defence technologies, because we simply don't have spaces here for them.

[Ted Falk, Conservative, Provencher, MB]

That's good. Thanks.

Dr. Leuprecht, thank you for your testimony.

Back in 2022, you were at the government operations committee and you made a comment about how just throwing money at something doesn't fix the problem, and you were specifically talking about defence procurement. We've seen a lot of money thrown at it in this budget. There aren't a lot of details, but this defence procurement agency is known now as a defence investment agency.

Do you see that as a solution, or is that adding one more level of bureaucracy that is going to make it even more difficult to be successful?

[Christian Leuprecht]

You probably know what Chairman Mao said about the consequence of the French Revolution, when he was asked. His famous reply was that it was too early to tell, so we'll need to see.

I think, on the one hand, the defence investment agency has the potential to underwrite precisely the challenges that Dr. Intson has laid out. In particular, we're not good at underwriting those, especially for small and medium enterprises, and especially in the defence sector. When we do have a successful company, what happens? It gets bought by the Americans, so we just become the start-up pool that then ultimately.... We invest tax dollars and then it gets bought up, so we need to do better.

The defence investment agency has the potential to underwrite. We've done this a little bit with the IDEaS program in National Defence, but I think we need something equivalent to the U.S. DARPA, with high-risk, high-return investments in defence.

We have a very low risk tolerance in general in Canada when it comes to capital, politics and finance, and done well, the defence investment agency can change that.

[Ted Falk, Conservative, Provencher, MB]

I think it will really depend on the mandate and the policies established within that agency.

[Christian Leuprecht]

If the agency is simply about generating jobs in ridings across the country, as often these development agencies are, I think we might create a few jobs, but it's not going to generate the sort of transformation—

[Ted Falk, Conservative, Provencher, MB]

It doesn't address the real issue.

[Christian Leuprecht]

—that we ultimately need to safeguard our sovereignty.

[Ted Falk, Conservative, Provencher, MB]

The other thing you indicated to the government operations committee at that time is that you thought the F-35 goes a long way to meeting our needs as a deterrent.

Are you still of that opinion?

[Christian Leuprecht]

This is absolutely key, what you just pointed out, because we talk about defence and defence investments, but we don't want to invest in defence. We don't want to defend anything. This is the whole point: We want to deter our adversaries and we want to change their minds because when we have to defend, that's going to be exceptionally costly—politically, economically and socially.

We know this as Canadians. We were there from day one in World War I and World War II. That is the reason we know what happens in Europe when the Europeans decide to fight their wars right down to the last Canadian, and we don't want to go there again. This is ultimately why we're investing in deterrence with the sort of no-harm capabilities that we have in collaboration with our European allies. We can provide a lot of the ecosystem that they are looking for.

[Ted Falk, Conservative, Provencher, MB]

Does the F-35 provide that deterrence?

[Christian Leuprecht]

The F-35 is a critical signal to the United States that we are a trusted and loyal ally when it comes to the defence of the continent. The defence of the continent is about protecting our sovereign decision-making, and it's about protecting extended nuclear deterrence. If we can't protect extended nuclear deterrence, we'll get nuclear proliferation among allies and partners. That can't possibly be in our interest. The F-35 is indispensable to this end.

[The Chair, Liberal, Ben Carr]

Thank you very much, Mr. Falk.

Madame Acan, the floor is yours for five minutes.

[Sima Acan, Liberal, Oakville West, ON]

Thank you very much, Mr. Chair.

Dr. Intson, first of all, thank you very much for being here. It's great to see a woman from a technical background and an entrepreneur in the defence industry. It's amazing. That's my interest area as well.

Your company, Sentinel Research and Development, represents the kind of Canadian innovation that the committee is keen to explore, being technologies that are developed and manufactured domestically and aligned with Canada's long-term defence and aerospace priorities.

To begin, could you share how Sentinel Research and Development contributes to Canada's defence industrial ecosystem and what sets your UAV technology apart from the conventional systems currently deployed or manufactured by allied countries?

[Katheron Intson]

First of all, thank you for your kind words.

At Sentinel, we build on a legacy of trade secrets, talent and legacy in composite manufacturing. Between Windsor and Montreal, we have one of the largest aircraft manufacturers in the world. We have the know-how, especially in the type of manufacturing we do, to secure the supply chain in order to scale a company like ours.

We focus on what we call a payload-agnostic drone, meaning you can put whatever you'd like on it. What we've learned on the ground in Ukraine is that the vast majority of first-person view drones that are being used in attacks are retrofitted commercial drones. We see that they have moved from being something that can fly a few feet, a few hundred feet, to several kilometres to hundreds of kilometres.

We have kept an eye on that space. In fact, our chief technical officer was spying on Russia in Telegram channels for 18 months keeping an eye keenly on this space and their manufacturing techniques, capabilities and success against Ukraine in order to field the kind of technology we would develop.

We also see that there is a massive influx of drone production, particularly in the vertical takeoff and landing space and the small drone landscape. We need something that bridges the gap between the aforementioned SkyGuardian and these small DJI quadcopters. We have chosen that mid-sized landscape to focus on.

Besides our cost and our payload agnosticity, we also have a very good performance. Our drone was originally developed in order to be able to dodge and weave in very sophisticated fashions that I have not seen in any other UAVs with similar capabilities, period.

[Sima Acan, Liberal, Oakville West, ON]

What types of missions are Sentinel UAVs currently designed to support? Could you please also walk us through a typical deployment scenario for Canada?

[Katheron Intson]

Again, because they're payload-agnostic, the idea is that these could serve anything from ISR—intelligence, surveillance and reconnaissance—which is what Canada has typically used drones for in the past, to carrying a strike package, which the Ukrainian military is most focused on in terms of use of our system, to carrying electronic warfare jamming capabilities to serving as a decoy. There are 20 different mission sets that our systems are designed for. It really depends on who you're talking to.

Within any of the Canadian Armed Forces' perspectives, we're just having those conversations very early as we've mostly focused our attention on Ukraine, where there's the greatest and most urgent need. Our conversations with the CAF have been very illuminating in terms of how they're thinking about something that bridges the gap between a one-way drone and a drone that comes back many times.

We have started to think about one-way attack drones, but we also have deployed the vast majority of our capital on drones that fly for hundreds of thousands of hours. It's really within that gap. For Canada, our drones will serve as the intersection between ISR and strike. Which way they will be weighted will depend on the mission set.

[Sima Acan, Liberal, Oakville West, ON]

Your company was just founded a couple of years ago. Still, you have made very significant progress. I have seen your product. In developing scalable platforms with defence applications, you took a huge road.

Canadian SMEs have experienced barriers in this space, particularly in accessing capital and scaling advanced manufacturing in the past—