It would be my pleasure.
The world is in a state of persistent competition, often devolving into conflict, enabled in large part by emerging and disruptive dual-use technologies. As Canada contemplates its way forward in this period of heightened geopolitical risk, we must begin by asking what it means to win in the 21st century.
I argue that winning today is less about tanks, drones and artillery shells, and more about building a dynamic and agile economy, one that leverages Canada's comparative advantages to generate prosperity while ensuring our security. Achieving this outcome will be possible only through the deliberate alignment of public and private capital to accelerate the dual-use technologies essential to Canada's productivity as well as our national security.
My name is Michael Smith. I'm the chief operating officer of ONE9, Canada's first and only defence and dual-use focused venture capture fund. Before joining ONE9 in 2022, I spent 13 years in the regular force with the office of the judge advocate general, specializing in operational and international law. I completed a master of laws in 2019, focusing my research on lethal autonomous weapon systems. This combined experience now shapes how I see Canada's position in a rapidly evolving global landscape.
Canada finds itself at an inflection point. Public and private sectors alike have a rare opportunity to collectively shape the development of our defence and dual-use ecosystems. Taking full advantage of this opportunity demands that we focus on the three core components of any ecosystem: competency, capital and customers. Other witnesses have already spoken to elements one and three, highlighting Canada's need to safeguard our talent, as well as our abysmal history in procurement. I will focus on element two, capital.
Returning to the idea of winning in the 21st century, I begin by cautioning that a defence industrial strategy, in the absence of a broader industrial strategy, risks learning the wrong lesson. Indeed, Canada and our allies didn't win World War II because of our defence industrial base. We won because we were able to weaponize our existing industrial base, demonstrating the enduring truth that security is achieved, not by building more weapons but by investing to build the economic and technological strength that make weapons possible in the first place.
China, soberingly, illustrates this point by controlling the supply chains and technologies that underpin present and future productivity—rare earth elements, batteries, microelectronics, robotics and advanced manufacturing. It now possesses the ability to weaponize its manufacturing might without significantly impacting its industrial output. It is estimated that China could weaponize one billion drones by using less than 1% of its assembly capacity, less than 5% of its battery output and only a fraction of its printed circuit-board production. That capacity is not the result of a Chinese defence industrial strategy. It is the by-product of industrial strategy executed at scale and built upon a foundation of investment into emerging and disruptive dual-use technologies.
Canada will never match such industrial scale. We must, therefore, focus our resources on where we could lead. In a world of constrained capital and finite industrial capacity, we must be deliberate about where we invest to build sovereign capability and where we collaborate with trusted allies, striving to become a net technology maker rather than taker. Yes, we must maintain a baseline capacity of classically understood defence capabilities, such as shipbuilding and munitions production, but this alone will not guarantee our success in today's world. Canada's recognized strengths—artificial intelligence, quantum, advanced materials, energy and the critical minerals that underpin them—must form the backbone of a national strategy that builds economic power, strategic autonomy and deterrence in equal measures.
In the end, only capital will convert this ambition into capability—aligned, coordinated, patient capital—yet, among our allies, Canada stands out for what we don't yet have, which are instruments to align public and private capital towards strategic technologies, like the U.S. office of strategic capital or the U.K.'s national security strategic investment fund. Thus, after setting a national strategy that plays to Canada's strengths, I believe that the single most impactful thing the Crown can do is seed the venture capital ecosystem to ensure that critical early-stage technologies make the leap from concept to commercialization.
However, we do not expect the government to do this alone. Like the OSC and NSSIF, the Crown's role is not to pick winners but to shape behaviours and catalyze change across private capital markets. By aligning public purpose with private capital, Canada can show that “defence” is not a dirty word but a cornerstone of national resilience, unlocking billions in investment and making capital itself a strategic instrument of national power. The task before us is not to build a war economy but a winning one. Government must set clear priorities, provide predictable demand and align policy so that private capital can flow towards technologies that advance both our prosperity and security.
When public purpose and private capital move in the same direction, we build more than technologies: We build the enduring industrial and economic strength that winning in this century demands.
Thank you. I look forward to your questions.