Canada’s defence sector is creating new opportunities for Canadian technology companies. The federal government’s Defence Industrial Strategy, launched in February 2026, aims to strengthen Canada’s domestic defence industry, prioritize Canadian suppliers, and accelerate investment in Canadian innovation and commercialization. 

For startups and scaleups, this means a growing role in strengthening Canada’s defence capabilities. This includes companies developing technologies specifically for defence, as well as those with existing commercial solutions that could address defence and national security needs. 

Defence buyers need documented evidence that a technology performs under relevant operating conditions, meets security and infrastructure requirements, and delivers consistent results. This evidence helps procurement teams assess a solution’s technical readiness and suitability for further evaluation. 

Startups and scaleups need to identify what their technology must demonstrate, how to test it, and how to document results that support procurement decisions. 

When startups understand what the defence sector looks for, they can make informed decisions about how to validate their technology and demonstrate its readiness. Through the CENGN Living Lab Initiative, Canadian startups and scaleups gain access to specialized testing environments, technical expertise, and non-dilutive project funding to validate their technology for any sector, including the highly regulated defence sector. 

What Is Dual-Use Technology?  

Defence technology is often associated with in field solutions, like drones, military vehicles, surveillance systems, and equipment used in combat operations. Though important, the defence sector also needs technologies that support activities beyond the battlefield, including: 

• Communications and infrastructure support 

• Training and simulation 

• Supply chain and logistics 

• Manufacturing 

• Maintenance and sustainment 

Dual-use technologies are products, systems, or solutions that have both commercial and defence or national security applications. They may be developed for commercial use and later adapted for defence applications or designed to serve both purposes from the outset. 

For example, a cybersecurity platform developed for financial services could also protect defence networks. An autonomous navigation system designed for agricultural surveying could be adapted for unmanned defence systems. Communications technology developed for remote communities could also support military operations in areas with limited network coverage. 

The value of dual-use technology is that the same core technology can serve different sectors and applications. Companies can build on existing products and expertise rather than develop entirely separate solutions, while reaching new customers and continuing to serve their commercial markets. This approach also supports Canada’s defence priorities. The federal government’s Defence Industrial Strategy identifies dual-use technologies as central to strengthening Canada’s defence industrial base. 

Why Canada’s Defence Sector Is Looking for Startups 

The Government of Canada reports that small and mid-sized businesses account for 92% of Canada’s defence industrial base and 40% of its employment. It also aims to increase the share of defence acquisitions awarded to Canadian firms to 70% over the next decade. These priorities are creating more opportunities for Canadian businesses to bring their technologies into the defence sector (Source: Government of Canada, Defence Industrial Strategy). 

For startups and scaleups, three key take aways from the strategy are particularly relevant: 

• A greater focus on Canadian suppliers. The government aims to increase the share of defence acquisitions awarded to Canadian firms to 70% over the next decade, creating a stronger focus on domestic suppliers and supply chains. 

• A significant role for smaller businesses. Small and mid-sized businesses already make up a large part of Canada’s defence industrial base. The government is introducing measures to help them participate in domestic and international defence supply chains. 

• New funding to advance defence technologies. The government has committed $244 million through the Defence Industry Assist stream of NRC-IRAP to help small and mid-sized businesses advance defence and dual-use technologies. 

What Do Defence Buyers Look for in a Technology? 

Defence buyers assess whether a technology can meet an operational need, perform reliably in its intended environment, and meet the security and technical requirements of a project. Startups need to be prepared to demonstrate this through testing, documentation, and evidence of their technology’s readiness. 

1. Proven performance under realistic conditions 

Defence buyers need documented evidence that a technology performs as intended under conditions that reflect its proposed application. This includes clear performance measures, detailed test results, and repeatable outcomes that can be reviewed as part of a technical evaluation. 

2. Security and data sovereignty 

Defence applications may involve sensitive or classified information. Buyers need to understand how a technology handles data, where information is stored, who can access it, and what safeguards are in place. 

Data sovereignty refers to a country’s authority over data under its laws. It is closely linked to data residency, which refers to where data is physically stored. The Government of Canada’s Guideline on Service and Digital identifies Canadian facilities as a principal option for storing sensitive government data. Companies developing defence technologies should understand the data storage and security requirements that apply to their intended use. 

3. Scalability and reliability 

A technology must be able to maintain its performance as demand, operating conditions, or deployment requirements change. Buyers look for evidence that a solution can operate consistently over time and handle the demands of its intended application. 

For software and cloud-based solutions, this may involve load, stress, and endurance testing. For hardware, it could include testing under environmental conditions such as temperature extremes, vibration, rough terrain, or extended operation. 

4. Technology readiness 

Technology Readiness Levels (TRLs) provide a framework for assessing how mature a technology is, from basic research (TRL 1) to successful operation in a real-world setting (TRL 9). The Department of National Defence uses this nine-level scale through its Innovation for Defence Excellence and Security (IDEaS) program. 

The required TRL varies by program and opportunity. Companies should understand the expected readiness level and have testing and validation results to support it. 

How Do You Produce the Results Defence Buyers Need? 

Startups need a clear testing approach to demonstrate that their technology meets the requirements of its intended defence application. This involves more than testing whether a solution works. Companies need to test under relevant conditions, document the results, and have the technical expertise to interpret them. 

• Design tests around real operating conditions. Testing should reflect how and where the technology will be used. Consider the environmental conditions, workloads, network limitations, and other factors that could affect its performance. 

• Use testing infrastructure that meets the requirements. The testing environment must reflect the technical, security, and data residency requirements of the intended application. This may include Canadian infrastructure where the handling of sensitive data requires it to stay within the country. 

• Document test results clearly. Record the testing methods, system configurations, performance data, and findings. Clear, reproducible results help others assess how the technology performed and identify areas that may need further development. 

• Access the right technical expertise. Designing tests and interpreting results can require specialized knowledge and equipment that early-stage companies may not have in-house. Working with experienced technical partners can help companies build a stronger testing approach and produce evidence that supports further evaluation. 

For many startups, accessing the right testing infrastructure and technical expertise can be a challenge. These resources are important for validating performance, identifying gaps, and building the evidence needed to advance a technology. 

How CENGN Supports Canadian Startups Building Defence and Dual-Use Technologies 

Through the CENGN Living Lab Initiative, Canadian startups and scaleups can access specialized testing environments, technical expertise, and non-dilutive project funding to validate their technologies. These resources help companies validate their technologies, assess how they perform in relevant environments, identify technical gaps, and produce documented results to support further development and commercialization. 

CENGN projects can support a range of technology areas relevant to defence and dual-use applications, including autonomous systems, robotics and UAVs, AR/VR training, IoT wearables and smart sensors, situational awareness, cybersecurity, cloud applications, and resilient connectivity. These technologies can support activities such as field operations, training, supply chain management, manufacturing, and maintenance. 

Through a CENGN project, companies gain technical expertise, project outcomes, and documented results they can use to guide product development, demonstrate their technology’s capabilities to potential customers, and support discussions with investors and industry partners. This evidence can help companies strengthen their proposals, build confidence with potential defence customers, and land new contracts. 

Demonstrate What Your Technology Can Do  

Canada’s defence sector is creating opportunities for Canadian technology companies. For startups and scaleups developing defence and dual-use technologies, demonstrating what your solutions can do is an important step towards working with defence customers. 

Defence buyers need evidence that a technology can meet their requirements and perform in its intended application. Testing and validation help companies demonstrate their technology’s capabilities, address technical gaps, and build confidence with potential customers. 

Through the CENGN Living Lab Initiative, Canadian startups and scaleups can access specialized testing environments, expert engineering and project management support, and non-dilutive project funding to validate their technologies and demonstrate their capabilities to potential customers.  

About the Author

Zeyi believes good technology deserves good communication. She enjoys turning complex ideas into clear, engaging stories that help people understand not just how technology works, but why it matters. Her writing focuses on making innovation more accessible and connecting technical ideas with the people who can put them into practice. 

As Content & Digital Media Specialist at CENGN, Zeyi creates content that communicates the impact of advanced networking technologies across Canada’s innovation ecosystem. Through articles, digital campaigns, and digital media, she shares the stories of the people, partnerships, and technologies driving commercialization and helping Canadian innovation reach the real world. 

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