Thank you, Mr. Chair and the members of committee, for having me.
I’m Matthew da Mota. I'm research director of emerging technology and national security at the Canadian Shield Institute for public policy. We work on creating solutions to enhance Canadian economic and digital sovereignty.
Defence spending, generally, is a notoriously poor long-term economic investment, though it is important and essential for national security. The real value we're going to get out of the promise from the defence industrial strategy has to do with how we leverage dual-use technologies, multi-use infrastructures and spillovers into other sectors. That won't happen by accident.
The risk in not delivering on that is that we spend to meet our targets of 2% and 5% of GDP on defence spending without building anything lasting or durable. A further risk is that in rushing to meet those targets under external pressure, we damage an already strong research ecosystem, which has deficiencies and issues around IP and other areas but is nevertheless world class.
What we need is an ecosystem where non-military research thrives freely, defence needs are communicated clearly and the pathways between them are well defined, focused on investing in deep tech and broadly dual-use technologies, with targeted defence-specific investments where needed and where essential.
Regarding readiness, firms and institutions need to be equipped with the right governance tools and expectations to be able to meet this need. This requires a clear definition of what dual use actually means in the context of Canada's strategic goals. We've heard general definitions, but we need a very specific one about what we're trying to achieve. Without it, we risk over-designation, which might lead us down various negative paths.
This also means developing a readiness assessment framework so that labs, research centres and SMEs understand the research security, cybersecurity and other requirements for dual use and defence work. Institutions also need increased capacity for tech transfer and greater strategic guidance from government to meet the complexity of what is expected.
Finally, Canada needs to close the gap between ideas and production. Co-locating manufacturing with innovation infrastructure is the precondition for spillover to actually happen. Manufacturing infrastructure has its own gravity, pulling in supply and value chains and expanding the ecosystem where technology can be developed, commercialized and scaled, and where good jobs are actually created. The greatest opportunity for this is in high-tech areas like quantum.
Regarding IP and intangible assets, Canada’s difficulties commercializing the vast amounts of money we put into R and D are well known. Fixing this requires IP guardrails attached to public funding and institutional capacity to mobilize intangible assets on behalf of Canadian firms, both defensively protecting IP and helping smaller companies compete against foreign competitors wielding large patent portfolios as moats.
Regarding standards, standards shape what gets built, by whom and under what conditions. Canada largely adopts the standards others set. A dedicated standards office capable of coordinating across defence and dual-use domains and positioning Canadian innovations as reference points in allied processes, particularly in NATO, is essential.
In dual-use domains specifically, we need standards that govern how technologies pass between defence and civilian contexts so that firms and institutions understand how this movement should be happening, defining the appropriate controls, data handling, levels of research security and so on required at each stage. These practices currently exist in many fragments. The requirements of the DIS mean we need to make sure we have a more coherent and clear framework for institutions.
It's my recommendation that the committee should recommend an operational definition of dual-use tech geared towards deep tech investment, procurement and R and D decisions; co-located manufacturing alongside every DISH and every hub we built to serve the DIS's needs; an innovation asset collective to mobilize and protect IP, specifically in defence and dual use, with guardrails attached to public funding to ensure that we capture IP and leverage it properly; a readiness infrastructure and a readiness framework covering assessments, research security support and capital access for smaller firms; and a calibrated designation policy that protects what needs protecting without undermining Canadian innovators or the independence of the research ecosystem.
The Canadian Shield stands ready to support the committee and the government, if needed, on any of these issues at any request.
Thank you.