In a new position paper, Space Canada offers several recommendations including that the government should enact policies that will enable the building of a resilient Canadian defence space industrial base.
The recomendations
- Build a resilient Canadian Defense Space Industrial Base
- Modernization procurement to accelerate the adoption of commercial space capabilities for Defense
- Modernize Defense space R&D programs to strengthen the competitiveness of Canada’s industrial base
- Increase export promotion activities to grow Canadian space exports while supporting allies abroad
Meeting the moment?
In the paper Space Canada argues that the nation is at a critical geopolitical inflection point. With threats to Arctic sovereignty rising and global security deteriorating, the organization is urging the federal government to overhaul its approach to national defence by leveraging the domestic space industry rather than relying on foreign suppliers.
The paper highlights a vulnerability in Canada’s current defence posture: the Canadian military currently spends approximately 75% of its capital budget on American suppliers.
Space Canada contends that this reliance puts Canada at a disadvantage, as commercial innovation—which now accounts for 70-80% of the global space market—moves faster than traditional military procurement. To close this gap and meet NATO spending targets, the report recommends that 5% of Canada’s NATO commitment be specifically allocated to space capabilities.
To build a resilient “Defense Space Industrial Base,” the paper outlines several critical policy shifts. Key among them is a move toward “Commercially-Owned, Commercially-Operated” (COCO) models, where the military purchases services (like data or bandwidth) rather than owning the satellites themselves. This approach would allow the military to access state-of-the-art “dual-use” technologies immediately, avoiding decade-long development cycles.
As well, the industry body calls for urgent reform to security clearance protocols. Currently, Canadian companies cannot obtain facility clearances without a contract, yet often cannot bid on sensitive contracts without a clearance. Space Canada argues this “gatekeeper” approach must be replaced with a “pre-sponsor” model to allow domestic firms to compete on a level playing field.
The report emphasizes that connecting defence needs with domestic capability is also an economic imperative. The Canadian space sector currently contributes $2.8 billion to GDP annually and supports over 11,000 direct jobs. If Canada captures its fair share of the booming global market, the sector could grow to $40 billion by 2040.
To realize this potential, Space Canada recommends increasing funding caps for the Innovation for Defence Excellence and Security (IDEaS) program to $1 million for early-stage projects (TRL 1-3) and $4 million for later-stage developments (TRL 4-5).
As with policy recommendations in the past decade, procurement lies at the heart of the issue. Combined with the current extraordinary geopolitical situation, and with defence leaders saying there is a need for speed, Canada finds itself in a position where it must act decisively. Recent history suggests that government bureaucracy is not up to the challenge. The question is, can the government fix this problem?