Coauthored by Benjamin Bergen, President of the Council of Canadian Innovators, and Eliot Pence, founder of Tofino Capital, for Digital Journal.
“The greatest business failures often come not from playing the game poorly, but from continuing to excel at things that no longer matter.”
This statement, by Shane Parish, should haunt every policymaker and defence executive in Canada. As governments consider how to rearm and rebuild after the NATO Summit last month, Canada, more than any member of the alliance, is at risk of building the military of yesterday — faster, better, and more expensively — instead of preparing for what tomorrow will demand.
For the better part of four decades, Canada has underinvested in defence. But perhaps more dangerously, we’ve outsourced our imagination to others.
Our defence-industrial complex is a derivative one.
Branch offices of foreign primes, licensed resellers of technology built elsewhere, and contractors who know how to navigate procurement processes, not build for the edge of warfighting innovation. Canada’s latest defence policy (“Our North, Strong and Free“) champions “speeding acquisition with trusted partners”, a dog whistle for primes.
As Ottawa moves to increase defence spending, there will be a full-court press from these legacy actors — many of them publicly listed and risk-averse — to absorb that capital. They will present roadmaps full of acronyms and “made-in-Canada” slide decks that promise readiness. But what they offer is not transformation. It’s entrenchment.
These companies know how to play the current game. They understand the incentives, the forms, the gatekeepers. And like all incumbents, they will fight to preserve the rules they’ve mastered. But Canada does not need evolutionary change. We need a step-function leap. That won’t come from actors who are structurally and culturally incentivized to avoid risk, avoid speed, and avoid upsetting the status quo.
Publicly traded defence firms, by their very nature, are governed by quarterly performance. The kind of disruption Canada needs — in autonomy, space, cyber, rapid munitions production, Arctic ISR — doesn’t fit neatly into a predictable earnings call. It requires bold bets, fast iteration, and uncomfortable partnerships with dual-use startups and new actors from outside the usual Ottawa circles.
The world is rearming, but in a profoundly different way. The U.S. is pouring billions into attritable systems, autonomous platforms, and software-defined warfare. Ukraine has shown what asymmetric, software-enabled defence looks like. Israel, Estonia, and Taiwan are racing to harden their systems with mesh networks and AI-driven command and control. Meanwhile, Canada debates offsets, studies shipyards and builds bases that end up never getting used.
Traditional primes still have a role, but they cannot remain the center of gravity. Germany’s recent $29 billion tank purchase shows what it means to prepare for the last war. Canada must not make the same mistake. If we want to meet NATO commitments and be relevant on the battlefield of the 2030s, we need a new procurement culture that welcomes non-traditional contractors, tolerates failure, and designs for change.
This exact mindset can also help to build up Canadian startups, by rewarding the hard R&D work necessary to develop innovative and cutting-edge solutions. The most successful countries in the world develop a close and collaborative relationship between government defence requirements and private-sector suppliers.
This is our opportunity to lift up a new generation of Canadian firms that can then sell their innovations to the world.
Right now, the government’s job is not to reward the familiar. It’s to build resilience, deterrence, and capability quickly, differently. That means breaking with the idea that just because a company has successfully delivered a project designed in 1994, it should lead in 2025.
Canada has a narrow window to get this right. Let’s not spend it excelling at things that no longer matter.
Coauthored by Benjamin Bergen, President of the Council of Canadian Innovators, and Eliot Pence, founder of Tofino Capital, for Digital Journal.
