Thank you very much.
Hello, everybody. As you know, my name is Dana O'Born, and I am the chief strategy officer of the Council of Canadian Innovators. I am joined here for today's session by my colleague Daniel Perry.
CCI is Canada's 21st-century business council. We represent the voices of over 175 homegrown Canadian scale-ups led by innovators and entrepreneurs.
We're pleased to support this study, and we commend the federal government for recognizing that Canada's defence and economic security are inseparable. The focus on building a full pipeline from R and D to commercialization, scale-up and global sales is the right approach, and it is reflected in the new defence industrial strategy.
Around this time last year, CCI and a number of cyber and defence companies came to Ottawa to meet with a refreshed government and a new cabinet. The discussions revealed that Canada lacks a reliable source list for its dual-use sector, prompting us to launch an ecosystem-wide survey with The Icebreaker. We identified nearly 430 Canadian-headquartered revenue-generating export-oriented firms, yet few sell to the Government of Canada, and these findings underpin our recommendations to the committee today.
The survey data also told us the following: Canadian dual-use firms are developing NATO-relevant capabilities; firms view government procurement as essential, but many struggle to access Canadian customers and to navigate the system; many firms are selling to foreign governments, suggesting that Canada is not fully leveraging its own defence innovation; there is a limited understanding of security and procurement rules, and this prevents firms from bidding and complying and effectively scaling in Canada; and many firms need support although a strong group could be fast-tracked with targeted assistance.
We asked a simple question: Can Canada meet its NATO commitments and strengthen our defence industrial base? The answer is yes, yet 11 months on, many of the challenges identified in our survey persist for the defence and dual-use firms we work with across the country.
Last month, Innovation, Science and Economic Development released a report of their own on the state of Canada's defence industry”. It revealed that Canada's R and D framework is suppressing the growth of small and medium-sized enterprises. Despite making up over 90% of the sector, SMEs have reduced their self-funded innovation to $136.5 million. Meanwhile, a 309% surge in government grants has created a false sense of progress as businesses survive on government research dollars instead of developing and owning their own products. For Canadian technology companies to scale globally, the federal ecosystem must reward private IP ownership and commercialization, not grant dependency.
The same disconnect appears in defence procurement. Despite a strong Canadian capability in AI, cyber and digital systems, the government is still failing to act as a strategic first customer. As a result, Canadian innovation is often being pushed overseas instead of being used to solve domestic capability needs. Both our survey and the government's report tell a story of Canadian firms finding faster success abroad than they do in Canada.
With defence spending on the rise, Canada has a chance to move from strong research and weak commercialization to turning ideas into capability, jobs, exports and a strategic advantage.
This opportunity matters even more in the context of NATO commitments. Meeting future defence spending targets is not only about how we spend but about how intelligently we invest and what we own. If we want Canada to contribute credibly to collective defence, we need a research and innovation system that can turn civilian research strengths into procurable military capabilities and export-ready companies while making the scaling of Canadian dual-use innovators a core sovereignty and defence policy priority.
This means aligning universities and colleges, granting councils such as the National Research Council, industry experts and federal departments in common missions to find faster pathways from lab to deployment.
We believe Canada should use this moment to do three things.
First, shift innovation policy towards commercialization and Canadian IP ownership. What we invest in, Canada should own, especially when it's a technology of economic advantage.
Second, make the new tools work for dual-use firms. The defence concierge service that the Prime Minister announced a few weeks ago should provide clear answers, clear pathways and clear timelines for Canadian companies looking to access government procurement opportunities.
Third, streamline and demystify the federal procurement scenarios by improving access pathways and significantly expanding targeted outreach and guidance so that dual-use firms can navigate requirements, compete effectively and scale within Canada. Without clearer pathways and stronger engagement, Canada may lose innovators, jobs and defence capacity to allied markets. We believe Canada has an opportunity here, given the capacity and intelligence that already exist right here at home.
Thank you so much for having us here today. We look forward to the conversation.