Canadian SMEs Need to Be the Priority, Not an Afterthought
By Ben Seaman, President, Convergence Design Services
Canada's Defence Industrial Strategy set a real target this year: raise the share of defence acquisitions awarded to Canadian firms from 43 percent to 70 percent within a decade. The government has moved on this quickly, and that's worth acknowledging. For a sector that's spent years complaining about slow procurement, this is a genuine shift.
But hitting that target and building a strong Canadian defence industry aren't automatically the same thing. Prime Minister Carney himself has pointed out that roughly 75 percent of Canada's defence capital spending has historically gone to the United States. Closing that gap takes more than a policy target on paper. It takes real decisions about who actually gets the work.
Why This Matters Beyond One Sector
I've said this before and I'll keep saying it: Canadian innovation and IP sovereignty need to be prioritized in defence spending, not treated as a secondary consideration behind established international suppliers. Small and medium-sized Canadian defence companies are the backbone of this industry's growth, and they represent something bigger than economic output. They're a direct contributor to the country's long-term security.
A defence industrial base that depends on foreign suppliers for its core technology doesn't control its own timelines, its own upgrades, or its own intellectual property. Every dollar that builds domestic engineering capacity is a dollar that stays inside Canada's ability to design, adapt, and sustain its own defence systems, rather than renting that capability from somewhere else.
Convergence is a founding member of the Alliance of Canadian Defence Companies, a trade association launched this year specifically because Canadian-owned and Canadian-controlled defence firms needed a unified voice in how this money gets spent. A strategy built to strengthen Canadian sovereignty needs to be judged by whether Canadian-owned companies actually grow because of it, not just whether the topline spending number goes up.
What Success Should Look Like
The government's own strategy sets a real target: 70 percent of defence acquisitions going to Canadian firms by 2035, up from 43 percent today. That's the right ambition. The part that matters now is how it gets measured and delivered.
A rising national percentage can still leave small, privately held Canadian innovators on the sidelines if the growth flows mainly through large, already-established players. The strategy's stated goal of growing revenue for Canadian small and medium-sized defence businesses is the number worth watching closely as this plays out, not just the aggregate Canadian-content figure.
Canada has the ingredients to get this right: genuine engineering talent, companies already exporting certified systems, and a policy framework that's finally designed to build domestic capability instead of just buying it elsewhere. What happens next comes down to a simple question: does that capability get built inside Canadian-owned companies, or inside the Canadian branch office of a company headquartered somewhere else. That's the choice that actually matters, not just whether the topline number hits 70 percent.
