There’s a lot of talk these days about how Canada should capitalize on the coming increase in defence spending — and how some of that money should be directed toward space. The instinct is sound. But I think that the way it’s often framed is missing a key point, and a significant opportunity.
Yes, Canada should spend more on space, but it actually does not need to be that much more. But the money needs to be spent differently. The goal should not be to just spend more money on new systems to meet specific needs. It should also be to build capability — to strengthen the ecosystem of founders and firms that can both serve Canada’s needs and compete globally.
Take for example the goal of building a sovereign launch capability. It is an idea whose time has finally come (after 60 years), but the objective should not be limited to developing a launcher and a launch site on Canadian soil. It should be seen as an opportunity to leverage those requirements to develop a launch capability that is not only Canadian, but that also addresses the increasingly critical need for accessible launch. A solution that is not only cost effective, but which is also responsive, ecologically friendly, and deployable around the world.
In other words, we should capitalize on our own requirements to build something that is relevant and necessary in the wider (and much larger) space market. Accessible launch capability is only an example of that approach. The point is to leverage any increase in financial resources to seize this opportunity to make Canada, and Canadian entrepreneurs, leaders in the Real New Space Revolution.
The technologies that people typically think of when they talk about the “new space revolution” — cheaper (but less responsive) launch, miniaturized electronics, reusable rockets — are only the starting conditions. As I have written before, the real revolution will arrive when we lower the cost of designing, building, and testing spacecraft, and when we make launching them more responsive and more widely distributed geographically. That’s when innovation in space will begin to resemble innovation on Earth: fast, iterative, and widely accessible.
Until then, we haven’t actually changed the true cost of getting to orbit and operating successfully.
Where Canada fits
Canada has a genuine and maybe unique opportunity to lead in this next phase of the revolution — but not by trying to match the scale of NASA or the Pentagon. Our strength should come from focus and from having a space sector and community that is a tight-knit combination of deep experience and entrepreneurial drive. Among only a few countries in the world have that combination of innovation, experience, and confidence to take a lead in this new way of getting off the planet.
We also have a history, in space, of picking important technology and operational niches – and then occupying them successfully for decades. So, rather than funding massive, vertically integrated, capital-intensive projects, Canada should invest in the enabling technologies that make it cheaper and faster for anyone to design and test and responsively launch space hardware. In the end, the goal should be to build an entrepreneurial foundation — a generation of Canadian companies that make it easier for others to build, integrate, get to, and operate in space.
This is not actually just about funding research. It’s about understanding what founders really need to turn good ideas into operating systems. In space, that comes down to three things: vision, discipline, and capital.
Vision — Give founders problems worth solving
To be clear, vision is not the same as imagination. There are many founders, or prospective founders out there with innovative solutions to technical problems. There is no shortage of great ideas. There is a shortage of clearly defined problems that need those solutions. What founders need is a reason to apply their innovation and creativity to real-world problems that come with constraints and limitations.
This is where government can play a role. Because when government defines real operational needs — things that genuinely matter in order advance government policy or develop capabilities or to meet military requirements — it gives founders a target worth aiming at. A clear, well-articulated problem focuses vision and channels creativity. But such problems also come with clearly delineated constraints within which real solutions are possible. That’s where true entrepreneurs can shine, using their natural creativity to solve real problems in the real world.
I would argue that the Canadian Space Agency has been doing this already with the Space Technology Development program. I believe the Department of National Defense has an opportunity to develop the IDEaS program into something similar. The important goal that cannot be overlooked is that these are not just procurement programs, they are exercises in the practical development of disciplined capacity.
Discipline — Create opportunities to perform
The point is that discipline doesn’t come from attending incubators or developing investor pitch decks. It comes from delivery.
So, in fact, it turns out that the best thing government can do for an early-stage company is to give it a chance to perform — to deliver something that matters to a real customer. This is actually a massive unmet need in the current space economy. There are very few customers who will trust untried suppliers with contracts to deliver real products. But, meeting specifications, managing risk, hitting deadlines: those are the crucibles in which capable space companies are forged.
So, government should focus on programs that treat small firms as suppliers, not petitioners. The government should do what it does best, and what it is required to do. Contract for and buy deliverables that meet specific requirements, and which must be produced using quality control and financial reporting systems that require attention to detail and to processes. These programs build discipline by demanding performance, something that no amount of private capital can do.
Capital — Help it flow by building confidence
So, let’s talk about capital. Yes, the government can and should be a source of capital. There is definitely a role for direct, non-dilutive government funding. But actually, the government can have a much greater effect by leveraging what that funding signals.
When a company earns a government contract by putting together a good bid that combines innovation with detailed planning and then delivers on that commitment successfully, private investors take notice. At least the good ones do. Responsible investors should and do look for evidence of vision and discipline. It is this combination that differentiates companies headed for long term success from those that show up well in incubator pitch competitions raise money and are never heard from again.
As more investors begin to understand this fundamental truth about the space sector, the experience of successfully delivering to government is becoming a key factor in what makes capital flow — not because the government replaces the market, but because it helps the market trust earlier.
This leverage effect is what turns small government programs into multipliers of private investment. It’s what converts capability into growth.
Spend to build capability, not ownership
The temptation, especially when new money appears, is to think in terms of things to buy satellites, payloads, missions. That is necessary because government needs to have requirements before it spends money. But one of the requirements that should be considered is not only the physical asset that is being acquired but also the lasting capacity and its attendant socio-economic benefit. This is a viable and important factor that should be included in new procurement initiatives.
A dollar spent helping a Canadian company develop a testing platform or a component technology that can be reused across missions does far more for national capacity than a dollar spent on another one-off procurement whose requirements are limited to those defined by a particular government department.
If we want to be part of the real new space revolution — the one that lowers the cost of doing space — we should leverage our existing experience, and capabilities both inside government and in the private sector to create an environment that values the technologies and companies that make that possible and which give new innovative companies the space and time to develop real solutions to real problems. That is how Canada can lead.
The coming increase in defence spending is a rare chance to take the leadership role. If we use it to just buy hardware, we’ll have… well… more hardware. But, if we use it to build capability, then we will have much more. We will have a future.
The cost of launch is no longer the barrier it once was. The cost of building for and accessing space still is. Reducing those real costs with innovative solutions that solve real problems is where the next revolution will happen.
This is where Canada, if it chooses, could lead.