Science and Research Committee on May 4th, 2026

[Tony Baldinelli, Conservative, Niagara Falls—Niagara-on-the-Lake, ON]

Which emerging technologies are the most likely to define Canada's defence capabilities over the next 10 years?

[MGen Paul Peyton]

That is a fantastic question.

Within NATO, there are nine emerging disruptive technology focus areas. When we look at the ones that seem to be the most compelling on a defence and security side, certainly in the secure information space, I think it's quantum AI and a lot of innovations on the human health and performance side that speak to national resilience. There are different opportunities. Qidni Labs, for example, is a great company out of Ontario that has a portable dialysis unit. There are so many different areas where we could be leaning forward. Part of the DIANA program is to find out where the areas that are the most significant are and how we find those innovators and accelerate their solutions.

[Tony Baldinelli, Conservative, Niagara Falls—Niagara-on-the-Lake, ON]

Thank you.

[The Chair, Liberal, Salma Zahid]

Thank you, MP Baldinelli.

We will now proceed to MP McKelvie.

Please go ahead, MP McKelvie. You have six minutes.

[Jennifer McKelvie, Liberal, Ajax, ON]

Thank you, Madam Chair.

My first question is for Major-General Peyton.

You mentioned a lot of the collaborations that have happened with more business and innovation, and that you're starting to move more into the academic sector. How do you bring in these new groups that haven't worked in this space? What are the security hurdles that they have to go through? How effective have you been at working through that for industry and also for the academic sector, which traditionally hasn't worked in this space?

[MGen Paul Peyton]

Because we are a dual-use organization, we operate in the unclassified space. It's not actually that difficult for us.

With regard to our innovators, they all go through an industry security vetting process. Once we receive the applications and we've down-selected the most promising, they're then vetted by their own national industrial security vetting and due diligence process. Some are actually vetted out, either because funds are coming from a location that the alliance does not do business with or some of the ownership of the company may be tied to countries that we're not really interested in dealing with. There is a vetting process there.

When we work with the innovators, the question often comes up about intellectual property. Part of our curriculum delivery is teaching the innovators about their responsibility to protect their IP. When we get questions from the innovators, we compare them, through some of our legal connections, to help them address specific questions. All the evaluators, as an example, who help us down-select these companies have to undergo a non-disclosure agreement. Many of them come from the defence community.

The hurdles we've faced haven't been as significant as one might think they have. It is a question that has come up with regard to university access and test facilities, but practically speaking, it hasn't been a big issue for us, seemingly, just yet.

[Jennifer McKelvie, Liberal, Ajax, ON]

That's great.

My next question is for Mr. Asselin.

How are universities getting prepared for this? We talked about some of the issues with IP and commercialization before. What sorts of standard agreements can be made around IP that Defence can agree with? Are there things you still have to do more work on, or are you pretty much ready to go in terms of striking IP agreements?

[Robert Asselin]

I would say that on IP, we've done a lot of work already with DRDC in terms of a lot of our institutions in the U15. DRDC is the research arm of the Department of Defence. You can think about it as a Defence federal lab, in a way. We have comprehensive agreements with many of our institutions. There are IP clauses there. We've worked around these issues. Obviously, there are some adjustments going forward, but I don't anticipate that this will be a major obstacle going forward for our institution.

In other words, we understand that on national security and on sovereignty, there are imperatives that the government obviously has on IP. Our institutions are willing to play ball on that.

[Jennifer McKelvie, Liberal, Ajax, ON]

Thank you.

Major-General, do you have any early examples of success in working with universities and the academic sector or examples of some discoveries or some good commercialization to date?

[MGen Paul Peyton]

It's interesting that a lot of our innovators are actually spinoffs from universities. One is a great company out of the Netherlands that was mapping oyster beds. It had a university solution to do that and it recognized the opportunity for surveillance of critical underwater infrastructure. That company grew under the DIANA program and signed a contract with the Dutch navy. As I said, the innovators are doing very well.

We've had discussions, again, here in Canada about how we leverage the research from the different labs or facilities that exist within the universities here. As I said, a consortium of three universities in Ontario had great quantum test facilities that would support the program. We do an analysis, trying to understand if we have the right test facilities in the right geographical locations across the alliance: Where are our gaps? Where can we fill those gaps? Then we look to fill them.

Something I didn't realize when I came into the job was that the innovation ecosystem within Canada is very vibrant. I just didn't realize the significant amount of talent within Canada.

Here in Halifax, we've had some initial meetings with Dalhousie University and Saint Mary's University. Again, it's a small office, and we're still getting our footprint within the region, but we're making progress there.

[Jennifer McKelvie, Liberal, Ajax, ON]

Thank you.

Through our venture into dual use here in Canada with BOREALIS, do you see significant potential for us to continue the collaborations we have with NATO and our other partners and cause them to flourish? Will we be able to grow them and amplify them?

[MGen Paul Peyton]

I think so.

I think it was a great initiative to lean forward and establish the defence innovation secure hubs. I know the first pilot is in Dartmouth. I believe it's co-located with COVE. I think it is a great facility.

From the DIANA perspective, as some of our innovators mature their solutions and we see the defence pathways where there are secure requirements, being able to bring them into a facility with end-users, whether it's navy, army, air force—

[The Chair, Liberal, Salma Zahid]

The time is up for MP McKelvie. Thank you.

We will now proceed to MP Blanchette-Joncas for six minutes.

Please go ahead.

[Maxime Blanchette-Joncas, Bloc, Rimouski—La Matapédia, QC]

Thank you, Madam Chair.

I'd like to welcome the witnesses who are with us today for this new study.

My first questions are for MG Peyton.

For its 2026 cohort, the Defence Innovation Accelerator for the North Atlantic, or DIANA, selected 22 Canadian companies out of 150 companies from 24 countries. So the potential is definitely here.

What is the main challenge now? Is it turning this innovation into trials, early customers, contracts and actual adoption?

[MGen Paul Peyton]

Yes, and I'll go back to a comment that was made by the original witness, Karn.

I don't think there's an innovation or an ideas problem, but there is an adoption problem. Pulling those solutions through to actually get them into the hands of the end-users is where the real challenge exists.

I wouldn't say that Canada is unique in that problem. We see it all across the alliance. What I do see, though, within Canadian defence, is a degree of enthusiasm to try new approaches.

As I say, Canada was the first to leverage the rapid adoption service regulation. We are the most active in that space in terms of how many contracts are tendered, those that are in progress and indications of interest, so I think that on the Canadian side, there is a significant degree of interest.

In the staffing of NATO DIANA writ whole, 21% of international civilians within our NATO DIANA are Canadian, four of the seven—

[Maxime Blanchette-Joncas, Bloc, Rimouski—La Matapédia, QC]

MG Peyton, thank you for your response.

In the most successful allied countries, is military procurement used as a strategic driver to advance domestic technologies?

[MGen Paul Peyton]

I'm sorry. Can you say that again?

[Maxime Blanchette-Joncas, Bloc, Rimouski—La Matapédia, QC]

In high-performing allied countries, is military procurement used as a strategic lever to drive the development of technologies in particular?

[MGen Paul Peyton]

I think it differs across each of the nations in the alliance. Some of them are more mature in the innovation ecosystems that they have developed, but some of them are leaning very far forward.

Poland just initiated and affiliated with NATO DIANA the Living Lab, which they've just opened in Gdansk, where they're trying to bring innovators together in a central spot where end-users can access and try the products that are there.

Do they see innovation as part of their direction going forward with the capabilities of their defence forces—and not just defence, but security writ large? Absolutely, they do.

[Maxime Blanchette-Joncas, Bloc, Rimouski—La Matapédia, QC]

Thank you.

When a local company sees that major contracts go directly to foreign companies, does that reduce the incentive to invest in research and development here, locally?

[MGen Paul Peyton]

I'm sorry. Was that a question for me?

[Maxime Blanchette-Joncas, Bloc, Rimouski—La Matapédia, QC]

Yes.

[MGen Paul Peyton]

As I speak to some of the innovators, I know there have previously been challenges in accessing the Canadian market. In some cases, it has been easier for those innovators to deal with countries outside of Canada, but I will again say that we are now seeing a greater interest from Canadian defence.

I'm representing NATO DIANA here, but I see Canadian defence entities leaning into the DIANA program to pull some of these innovations into prototyping contracts.

[Maxime Blanchette-Joncas, Bloc, Rimouski—La Matapédia, QC]

I'll give you some concrete examples.

In the case of the $10.4‑billion project to replace the CP‑140 Aurora aircraft in Canada, the federal government chose to proceed without a call for tenders and award the contract to Boeing for its American P‑8s rather than to Bombardier, among others.

We had a solution right here, locally, but the Canadian company wasn't even allowed to bid on the contract.

Can this type of decision by the government weaken a country's industrial base and research and development?

[MGen Paul Peyton]

Sir, I'm sorry, but I'm probably not the right person to address that. It wasn't part of the program.

I understand the defence requirements process, but I can't speak to that, sir. I'm sorry.