Canada’s Defence Firms Are Ready to Boom |
When the federal government announced $81.1 billion in new military spending this past November, I was cautiously optimistic. I’m the CEO of Kraken Robotics, an underwater technology company founded in Newfoundland and Labrador in 2012. We’ve since grown to more than 400 staff members in North and South America and Europe. Today, we design and manufacture advanced sonar, optical sensors and power solutions for unmanned underwater drones that can map the seafloor, inspect critical infrastructure, patrol coastlines and protect ports and sea-lanes.
For decades, no matter which party was in power, Canada’s defence funding has lagged behind our allies. In 2006, NATO members committed to spending at least two per cent of their GDP on defence, but Canada has consistently fallen below that benchmark. In 2024, our expenditure was 1.37 per cent, placing us 27th out of 31 NATO countries. (Sweden has since joined, making it 32.) Our GDP is almost triple the size of Poland’s but we have a comparable defence budget of approximately $40 billion. It’s a challenge for anyone working in this industry: we’ve rarely had the kind of stable, long-term investment required to modernize our domestic capabilities. And although governments have supported innovation, they haven’t consistently followed through with procurement that would actually bring homegrown technologies into service.
Take underwater drones. Canada bought a few in 2002 to test their potential and, years later, procured larger systems for research and development. But we didn’t acquire any systems as a specific mine-countermeasure tool for the Royal Canadian Navy until 2022. In that same 20-year period, our NATO allies adopted underwater drones as standard naval equipment. This gap has left Canada decades behind in an area that is now fundamental to maritime security.
Canada has the longest coastline in the world, stretching across the Pacific, the Atlantic and the Arctic. Up there, melting ice is opening new shipping routes and making valuable resources like oil, gas and minerals more accessible and more contested. In recent years, Russia and China have been active in regions like the Baltic Sea, the North Sea and the offshore of Taiwan. They’re observing—and in........