Industry and Technology Committee on Nov. 26th, 2025

[Goran Pesic]

It's good to see you. My hair is a bit whiter, but 20 years have gone by in a flash. It's nice to see you and congratulations.

We need to look at the notion of patient capital. Patient capital, to an earlier point, could come from pension funds or definitely from a sovereign wealth fund of some form—however we determine patient capital needs to look.

We need to define what that means in our context. This is all new. Whatever we believe Canada needs, we shouldn't be looking to other countries for examples. We need to create, with our home-owned solutions, opportunities that are meeting our current circumstances and our marketplace needs and demands.

The defence industry is a managed economy. It's outside the normal business cycle. For example, if the normal business cycle is five to seven years, basically the defence business cycle is one of potentially 10, 15 or 20 years, or even a generation. This managed economy needs to be seen as such, with different rules that apply versus market-based rules that are for the commercial market.

[The Chair, Liberal, Ben Carr]

Thank you, Mr. Noormohamed.

Good afternoon, Mr. Ste‑Marie.

You have the floor for six minutes.

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

Good afternoon, everyone.

Thank you to our witnesses for joining us.

I’d like to begin with Mr. Pesic, from Samuel Associates.

Mr. Pesic, since you didn’t have time to finish the third point in your presentation, I’ll give you time to wrap up your remarks to ensure we understand your point of view.

Thank you.

[Goran Pesic]

Thank you very much.

The third point is the notion that integrated defence literacy needs to be among our population. I would propose that a national day of recruitment to celebrate service and inspire national pride—provincial, regional and local—be celebrated on the first Monday in June. This is about creating a team environment.

For instance, how do employees from Canadian Tire, Tim Hortons and McDonald's, or any employees wearing a uniform, get involved? Honestly, I see the national day of recruitment as a great opportunity for them to show how they're doing work in the service industry with a uniform and delivering excellence to customers. That notion is how we can get those sectors of the economy, especially the service sector, to be in an excellent place to promote a national day of recruitment.

I'd like to mention something important, and that is not to forget our veterans. According to an organization we've supported and continue to work with, the Homes for Heroes Foundation, there are currently 10,000 homeless Canadian veterans. That's according to a McGill study it had commissioned.

When we think about a defence industrial strategy, we need to think about the veterans in different categories. In considering the ITB policy or Canadian content—however we get involved with the metrics around the obligations towards some projects—perhaps a veterans component could be seen as improving the ITB regime, or whatever point system one would have in a competition for an RFP.

That was my last point. I hope that completes my thoughts on some recommendations today.

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

Thank you very much, Mr. Pesic. Perhaps I’ll get back to you later.

I’d like to clarify something with Mr. Chaulk, from Solace Power.

First, Mr. Chaulk, it appears that you didn’t have enough time to finish your presentation. You can take some time to do so now.

[Neil Chaulk]

Thank you. I was nearly done as well. I apologize for that. I actually did try to time it.

My final point was regarding policy recommendations: maintain the industrial benefits programs and procurement decisions to encourage scale-up participation, and ensure that scale-ups have access to long-term procurement visibility; to continued support of the regional development associations, such as the Atlantic Canada Opportunities Agency, the western diversification fund and so on; to export support through the trade commissioner service; and to IP retention and development incentives. These are all essential things, and they're such a force multiplier for start-ups that it's impossible to overstate that. That's it.

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

Okay, thank you very much.

Mr. Pesic, could you provide more details about the office you have recommended? Who would connect clients with producers?

Perhaps you can share a few examples.

[Goran Pesic]

The proposed new office of defence innovation and commercialization is intended to be a one-stop shop for companies, associations, interested entrepreneurs and others. I like to look at it as a window into what we consider all the defence innovation initiatives. Companies that are looking for grants could have a place to go to get information and qualification. Information, such as on getting a security clearance or participating in programs on the innovation side, could be seen as that, so this is a very high-level proposal that I'm suggesting.

On the commercialization side, this is a very big “valley of death” slope that a lot of companies hit. They may get, for example, Government of Canada money to participate in a program, like the IDEaS program, but where they fall off is on the notion of commercialization. Currently, no government organization, department, agency or Crown corporation has the opportunity to help a company to the next step of commercialization, so that could be seen as important.

Also, this office could serve as the hub for intellectual property. As government is giving grants and developing innovative technologies, it could be seen as working with companies on how to protect IP. What does that actually mean? Does the government want to purchase some of the IP and provide royalties for IP? Also, how does one secure IP from adversaries?

We don't necessarily have answers, but those would be some of the early-stage discussions on this new office of defence innovation and commercialization.

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

Thank you very much, Mr. Pesic.

Thank you, Mr. Chair.

[The Chair, Liberal, Ben Carr]

Thank you, Mr. Ste‑Marie.

Your generosity is making me look like the villain here. Anyway, that’s kind of you.

Mr. Falk, the floor is yours for five minutes.

[Ted Falk, Conservative, Provencher, MB]

Thank you, Mr. Chair.

Thank you to our witnesses here this evening at committee.

Mr. Gharagozli, I'd like to start with you, if I may. You talked about there being more investment dollars available in the U.S. for venture capitalists. I'm a little curious, though, about the process, because we are looking at the procurement for the whole department.

As a space company, do you have to come up with an idea for a shiny new object you have to sell to somebody? Do you get your direction from the government, in its budget or vision, on what's needed? Does the department come to you and say, “This is what we would like you to come up with. Can you develop it?”

[Arad Gharagozli]

That's a really good question. I think that can come in different formats, depending on what the direction of the company is.

When it comes to defence, it's a bit of a tricky area. I would say that many Canadian companies do not have the classification to have those talks freely with the CAF to understand what the gaps and requirements are to then put forward a proposal. For example, if you're looking at sovereign and Arctic communication systems, or if you're looking at above-ground horizon systems, what are the gaps, where can we come in and where does the innovation come in?

There, programs like IDEaS come in, and they propose a general idea. They say they're looking at enhancing communications, say, and ask if anybody has ideas. That's one stream. A lot of companies look at that and try to understand what the requirements are, but it's a shot in the dark. Most of the time, they might not be true.

In the second case, you can look at what other countries are doing, what sorts of capabilities they have and whether we can develop the same things here. We certainly use a lot of those capabilities, especially when it comes to earth intelligence as well as communication. We simply do not own a lot of those capabilities, so some companies may look elsewhere and—

[Ted Falk, Conservative, Provencher, MB]

When you buy those capabilities from some of our defence partners, do they come with source code?

[Arad Gharagozli]

Most of the time, no.

We buy them as a system, if that. It depends on the platform you're talking about, but most of the time you just get access to the data. In a lot of cases, the data goes through almost a filtration system to see, for example, if Canada is okay to own that sort of data or intelligence.

[Ted Falk, Conservative, Provencher, MB]

Thank you.

Mr. Chaulk, I'd like to expand a bit on some of your comments.

Your board chair has previously stated that there have been a lot of headwinds when it comes to developing products in the last 10 years under the Liberal government. They haven't created an environment for entrepreneurship and innovation. Start-ups are very different from scale-ups.

When you access government money—and you talked about most of our IP leaving this country for commercial purposes—is there an opportunity for government to create equity in these companies when it provides initial funding?

[Neil Chaulk]

I would say there is an opportunity. It's not typically done. Usually it's a loan from the RDAs, such as ACOA. That could be a consideration.

One thing I see as a problem with the way it is done today is transitioning from a start-up to a scale-up, given the magnitude of money required to sustain a scale-up. Your payroll goes from a couple of hundred thousand dollars a month to $1 million a month or so, and then more. The level of risk that the RDAs and others are willing to take on to invest in you—in other words, the amount of money—is not there. There's really no mechanism for that today that I know of, except maybe the SIF program under ISED, but that's not easy to get either.

[Ted Falk, Conservative, Provencher, MB]

Boeing has made a significant investment in your company.

[Neil Chaulk]

Yes.

[Ted Falk, Conservative, Provencher, MB]

Is that because there are government incentives in the United States for them to do that, or is that just because they see commercial value?

[Neil Chaulk]

Boeing gets ITBs when they do anything with us, because we're a small Canadian scale-up.

All of our business with Boeing, with one exception, was on projects like CH-47 or other things. We were doing work that they wanted done. We are probably one of the only companies in the world that do the harsh-environment wireless power thing we do. Even under water, we can transfer energy.

We've done a lot of helicopter work, mostly with them. They did it, but of course, ITB sweetened the pot. Also, we had, last year, a $10.3-million investment framework. That made them get the multiplier for the investment framework.

[Ted Falk, Conservative, Provencher, MB]

Okay.

[The Chair, Liberal, Ben Carr]

Thank you, Mr. Falk.

Madam O'Rourke, the floor is yours for five minutes.

[Dominique O'Rourke, Liberal, Guelph, ON]

Mr. Gharagozli, your presentation really resonates. We heard a presentation two weeks ago at the space reception. The head of Space Canada, I believe, said that there is no defence without space. There are no telecoms and there is no surveillance—all that stuff. We need space. Your point was very well taken.

I'm curious. Budget 2025 has put nearly $82 billion over five years into defence. We'll meet the 2% NATO commitment, and we're throwing a path to meeting the 5%. Is that not sufficient? Should it be allocated differently? Perhaps you could answer really quickly, because I have a couple of other questions for the other witnesses.

[Arad Gharagozli]

That amount is sufficient, but how much of that money is actually going directly into space capability development programs, and how much is actually going to advance a lot of these SMEs from a start-up scale to a scale-up stage? Those are very important questions.

[Dominique O'Rourke, Liberal, Guelph, ON]

We've also introduced a productivity superdeduction and a newly expanded SR and ED program. Would either of those things also be helpful to the space sector? I ask because they're sector agnostic.