Why are Canadian tech companies paying more attention to defence?
If you run a Canadian tech company, defence probably hasn't been on your radar. It should be now, and here's why.
In 2026, Canada reached NATO's 2% defence spending benchmark, with roughly $63 billion allocated to defence this year alone. The federal government has also committed to increasing the share of defence contracts awarded to Canadian companies to approximately 70%.
That investment has already created new funding opportunities, and we’re also seeing private investment follow:
Ottawa's Dominion Dynamics turned a $21 million January seed round into a $139 million Series A by June, the largest in Canadian defence history. Closer to home, Calgary-based North Vector Dynamics demonstrates what's possible. Two University of Calgary engineering professors founded the company to develop counter-drone technology. They started with $2.5 million from the IDEaS program, then converted that into a four-year, $4.2 million contract with Defence Research and Development Canada. Not a funding round. A customer1.
The core question isn’t whether to pivot your startup to defence; more broadly, it’s whether this growing market is relevant for the innovative technologies your company is already building.
What is dual-use technology?
Many founders assume defence contracting is reserved for large aerospace companies or long-established government suppliers. Increasingly, that's no longer the case.
Defence organizations are looking for technologies that already exist in the commercial market and can be adapted to solve military challenges. These products, with both civilian and defence applications, are known as dual-use technologies.
One of the best-known examples is the Xbox controller.
Microsoft designed it for gamers, not submarines. But when the U.S. Navy needed a simpler, more intuitive way to operate the photonics masts on its Virginia-class submarines, the commercial controller proved to be a better solution than the specialized equipment it replaced2.
Silly String is a stranger story. Troops in Iraq found that if you sprayed it across a doorway, it would drape over tripwires without setting them off. A party toy, saving lives. Nobody at the company saw that coming 3.
How can I tell if the military needs my technology?
If you think your technology could have a defence application, the next step is validating whether there's real demand. Fortunately, you don't have to guess - the government publishes what it's shopping for.
Start with the Defence Capabilities Blueprint, a searchable database of current and future procurement projects.
Search for the problems your technology solves, whether that's in sensing, surveillance, autonomy, cybersecurity, RF systems, advanced manufacturing, or another area of expertise.
If you identify a relevant project, don't stop there. Each project includes contact information for program representatives. Reaching out with a focused question can provide far more insight than trying to interpret procurement documents on your own.
It's also worth attending Department of National Defence industry days and innovation events. These sessions provide an opportunity to hear directly from defence buyers, better understand upcoming procurement priorities, and gauge whether your technology fills a real gap.
Searching, asking questions, and engaging with the defence community are simple first steps that can help you distinguish between an interesting idea and a genuine market opportunity.
What’s next after identifying a potential defence application opportunity?
Suppose the search turns something up - a product that succeeds commercially usually isn't ready for military use as-is. It needs further development, testing under harsher conditions, and security and compliance planning that you've never had to think about. Suddenly, a finished product has a to-do list again. That's where many companies encounter what's commonly referred to as the readiness gap.
Fortunately, there are funding programs and incentives designed to help companies bridge that gap.
In Part Two of this series, we'll look at what it takes to become defence-ready, from security clearances and procurement readiness to funding programs and how SR&ED can support the additional R&D often required to bring dual-use technologies into the defence sector.
If you're exploring whether your innovation could have a defence application, Copoint can help you assess funding opportunities, evaluate SR&ED eligibility, and build a strategy for bringing dual-use technologies to market.
Kyler Fisher is a Senior Technology Advisor at Copoint.
Sources:
1 BetaKit, 2025: https://betakit.com/north-vector-dynamics-secures-4-2-million-contract-with-national-defence-for-hypersonic-propulsion/
2 Navy Times, 2017: https://www.navytimes.com/news/your-navy/2017/09/18/navy-plans-to-use-xbox-controllers-for-new-periscope-systems/
3 Time, 2006: https://time.com/archive/6679211/not-so-silly-string-in-iraq
