There’s a flurry of activity in Canada’s defence sector these days.
The Canadian government has made unprecedented investments in military personnel, readiness, equipment, infrastructure, and in the defence industrial base. Overall, the country is investing over $63 billion across the Department of National Defence (DND), the Canadian Armed Forces (CAF), and other government partners. Spending is allocated not only to traditional military equipment and services, but also to cyber security, space, and support for veterans.
And with these investments, the Government of Canada has achieved the 2% of gross domestic product (GDP) defence spending goal as set by the North Atlantic Treaty Organization (NATO).
These investments create opportunities for small- to medium-sized companies with defense-sector products and services, particularly in the aerospace, shipbuilding, and automotive manufacturing industries. However, defence is a highly-regulated field, requiring specialized certifications such as:
- Controlled goods and security licenses,
- Cybersecurity certification, and
- Quality control certification (i.e., ISO 9001).
Which certifications will be required are largely dependent on the type of contract and the supplier. Tier 1 suppliers (such as OEMs) generally have stricter requirements, while Tier 2 and 3 suppliers (which provide raw materials and basic components) have less stringent regulations. Information security is also a major consideration for potential military suppliers; an OEM that places an order with a smaller company will need to know that its information is secure. This may require changing IT service suppliers, but finding the right solution for a small company can be challenging.
Making the most of these new opportunities in Canada’s defence sector will require businesses to take an honest look at their operations to ensure they’re ready for what’s ahead. Do your company’s skills match the industry’s requirements? Do you already have customers in that sector? What steps do you need to take to be prepared for these opportunities, and what resources do you have to allocate to these tasks?
BDC has some great advice for SMEs looking to become part of Canada’s defence supply chain, and we recommend reading their blog in its entirety to understand – and prepare for – the opportunities ahead. And (as always), follow our blog for industry updates.
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