The Source Canada Newsletter, Monday August 3, 2026

I used to fly old single-engine airplanes, the kind where everything happens low and slow. Taking off is not a burst of acceleration as much as a gradual process. The actual point of liftoff is subtle. When the wheels leave the ground you feel the absence of friction, which is how you know you're airborne.

Looking at the news over the last week gave me that same feeling. That we're moving from sentiment and announcements to actual progress. Some of the friction seems to be leaving the system.

Changes are also happening quickly at DND. After announcing the Defence Drone Initiative marketplace, last week Joint Forces Command opened an industry engagement track for the Canadian Deep Precision Strike Capability, scoped explicitly around a capability that can be fielded quickly and sustained at scale. And an RFP went up for Light Forces General Purpose Uncrewed Aircraft Systems: a 26-day window closing August 25, a minimum of 80 complete systems, maximum value around $6.6 million, all of it delivered to 7 CF Supply Depot in Edmonton by March 1, 2027.

These are clear buying signals from DND and also signals of speed. Some of the submission deadlines are uncomfortably short.

Not all change feels comfortable.

Alberta's technology minister Nate Glubish told vendors bidding on provincial digital contracts to reprice for AI-era productivity or lose the work. He cited an in-house build delivered for $2.5 million in under a year against a lowest bid of $54 million over three years, and called time-and-materials billing out of date. This is a government telling suppliers that their pricing has not caught up to technological changes.

Change is outpacing our definitions. The Canadian SHIELD Institute notes that the Defence Industrial Strategy names dual-use a priority without an operational definition firm enough to drive procurement. Many people still do not even agree with on counts as “Canadian” in Buy Canadian.

But it's a sign of momentum that we are moving faster than the definitions instead of waiting for them to catch up, which they will eventually.

Highlighted Deals

  • Alberta technology minister Nate Glubish told vendors bidding on provincial digital contracts to reprice for AI-era productivity or lose the work. He cited an in-house build that met the needs of a contract whose lowest bid was $54 million over three years, delivered for $2.5 million in under a year. The province has open-sourced its Velocity White Papers as the roadmap. BetaKit
  • Canada's Ocean Supercluster committed funding to three B.C.-led ocean projects worth more than $25 million. The largest is the $11.7 million Project OceanShade, led by Vancouver's Miru Smart Technologies, adapting its electrochromic dynamic glass for marine vessels. Vancouver Tech Journal
  • FedNor is investing $2.7 million in two Northern Ontario defence projects through the Regional Innovation and Defence Initiative. ITPS Canada receives $1.5 million to relocate its International Tactical Training Centre to a 21,000 square foot hangar at North Bay's Jack Garland Airport, delivering Fighter Lead-In Training for NATO and allied pilots. SKADI Cyber Defense Corporation receives $1,200,909 to commercialise Frostbow, an AI cyber defence system. The projects are expected to create more than 60 jobs. True North Strategic Review
  • Cohere is partnering with Toronto dictation startup Superwhisper so that Cohere's Transcribe model powers Superwhisper's voice-to-text app, replacing Nvidia's Parakeet as the baseline local model. It runs on-device, so user data never reaches a foreign-owned cloud. Superwhisper says roughly 40 per cent of its revenue now comes from enterprise plans. BetaKit

Counter Signal

  • Documents obtained by The Logic show the head of the Communications Security Establishment signed off on an exemption from Buy Canadian rules covering everything the agency buys, as its budget climbs past $2 billion. The exemption is blanket rather than limited to specific classified purchases. The Logic

Capital

  • NordSpace Ventures, the investment arm of Markham's NordSpace Corp., has taken an undisclosed strategic stake in North Vector Dynamics, a Calgary-based Canadian-owned defence technology company working on counter-UAS interceptors, aerial targets and hypersonics. NVD is the second company in the portfolio after Alberta hyperspectral imaging firm Wyvern. Both companies sit in the Hypersonic Innovation Network awarded under DND's IDEaS program, and NordSpace intends to make its Hadfield-150 propulsion, manufacturing and test infrastructure available to NVD. BetaKit
  • Toronto telematics data startup Terminal raised a US$20 million Series A led by Battery Ventures, bringing total funding to roughly US$26 million since its 2023 founding. Penske Transportation Solutions and Intact Private Capital, the investment arm of customer Intact, joined the round. Terminal supports more than 325 telematics integrations and processes about two terabytes of vehicle data per day. BetaKit

Defence

  • A new RFP for Light Forces General Purpose Uncrewed Aircraft Systems is live on CanadaBuys. The tasks go beyond ISR to force protection, targeting and strike with air-dropped munitions. Requirements include growth margin for future payloads, vendor-agnostic networking, a full technical data package so Canada can build its own payloads, and a line-of-sight data link with a mandatory five kilometre range. The related Defence Drone Initiative Request for Supply Arrangement is open until August 14. True North Strategic Review
  • Canada has opened an industry engagement track for the Canadian Deep Precision Strike Capability, led by Canadian Joint Forces Command, aiming for a long-range precision strike capability that can be fielded quickly and sustained at scale. Canada appears to be running its own track rather than joining the twelve-nation NATO Deep Precision Strike Capability Investment Initiative. True North Strategic Review
  • Defence Minister David McGuinty met pension fund leaders and Canadian defence industry representatives in Toronto to accelerate the Defence Industrial Strategy launched in February 2026. BDC reported that six months into its $6 billion Defence Platform it has backed 130 Canadian small and medium-sized enterprises and is closing in on $1 billion deployed. EDC has provided roughly $2 billion in financing and insurance to defence and security companies since expanding its mandate in 2025. Canadian Defence Review
  • HFI Pyrotechnics announced a $120 million growth and expansion program at its Edwardsburgh Cardinal, Ontario facility, the first phase of a five-year plan. The company makes specialty military pyrotechnics, training simulators and search-and-rescue marker devices. It has added 50 positions since November 2025. True North Strategic Review
  • A profile of ONE9, founded in 2013 by former JTF2 squadron commander Glenn Cowan and now the security and defence investment platform of Kensington Capital Partners, tracing Special Mission Fund I, exits including Tomahawk Robotics and goTenna, ONE9 Capability Labs, and the Inuit-majority-owned Arctic joint venture Sapujjijiit. The Icebreaker

Policy

  • Gordon Harling, President and CEO of Montreal's CMC Microsystems, argues opaque procurement and cultural barriers keep Canadian SMEs out of defence. SMEs are 92 per cent of businesses in Canada's defence sector and 40 per cent of its employment, yet 38 per cent of interested entrants plan to hire outside consultants purely to navigate the process. His central complaint is that dual-use funding pays for prototypes but not for testing, modification or production, so companies cannot get units into the field. He proposes challenge-based funding rather than pre-selected technological solutions, disbursed by a third-party not-for-profit rather than a government or defence agency, stackable with SR&ED and IRAP, with early sales to search-and-rescue and first responders sustaining companies until defence buys. Research Money
  • Matthew da Mota of the Canadian SHIELD Institute argues Canada needs a sharper operational definition of "dual-use" before the label loses meaning. He traces a century of Canadian dual-use research from the NRC's 1916 founding through the Avro Arrow, Chalk River and CANDU, the Canadarm, and the deep learning work of Hinton and Bengio, and proposes convertibility as the test. He notes the Defence Industrial Strategy names dual-use a priority without an operational definition firm enough to drive procurement, and that Budget 2025 stretched the term to cover ports, roads, railways and air hubs. The Canadian SHIELD Institute
  • ISED has opened a consultation on spectrum licensing for space launch vehicles and variable trajectory spacecraft, categories the current rules do not cleanly handle. Comments are due September 30, with replies closing November 4 and a final framework intended for spring 2027. SpaceQ
  • New Oxford Economics analysis finds Ottawa will not reach its goal of $600 billion in annual exports to non-U.S. markets until the 2040s on the current trajectory, and that moving faster requires rapid investment in ports and transportation infrastructure. Senior economist Michael Davenport said Canada has more room to grow market share in the Indo-Pacific than in the U.K. or European Union. The Logic

Ecosystem

  • Kevin Carmichael argues Canada is caught in a self-reinforcing loop of risk aversion: established companies do not want to invest, and talented people do not want to create new companies. The Logic
  • St. John's has become an unlikely hub for tech startups, built substantially on talent recycled out of Verafin, the fraud-detection company Nasdaq acquired for US$2.75 billion in 2020. The Globe and Mail

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