Defence Spending Must Include a Dual-Use Strategy

On Monday June 1, Matthew da Mota, Research Director for Emerging Technology and National Security, presented to the House of Commons Standing Committee on Science and Research, for a study on Canada’s dual-use and defence research needs.

Matthew delivered the following remarks on behalf of the Canadian Shield Institute:

Thank you to the committee for inviting me to speak on this important issue.

I’m Matthew Da Mota, and I am Research Director of Emerging Technology and National Security at the Canadian Shield Institute for Public Policy.

Defence spending is a notoriously poor long-term economic investment. The real value will come from dual-use technologies, multi-use infrastructure, and spillovers into other sectors — and that doesn’t happen by accident.

The risk is that we spend to meet our targets of 2% and 5% of GDP without building anything lasting. A further risk is that in rushing to meet those targets under external pressure, we damage an already strong research ecosystem — one that has real deficiencies in IP retention and commercialization, but is nevertheless world-class. What we need is an ecosystem where non-military research thrives freely, defence needs are communicated clearly, and the pathways between them are well defined — focused on deep tech that is broadly dual-use, with targeted defence-specific investments where needed.

Firms and institutions need to be equipped with the right governance tools and expectations. This requires a clear definition of dual-use in the context of Canada’s strategic goals. Without it, we risk over-designation — the wrong research investments, export controls that limit scalability for SMEs, and civilian technologies becoming targets for adversaries.

This also means developing a readiness assessment framework so that labs and research centres understand the research security and cybersecurity requirements for dual-use and defence work. Institutions also need increased capacity for tech transfer and greater strategic  guidance from government to meet the complexity of what is expected.

Finally, Canada needs to close the gap between ideas and production. Co-locating manufacturing with innovation infrastructure is the precondition for spillover to happen. Manufacturing infrastructure has its own gravity, pulling in supply and value chains and expanding the ecosystem where technology can be developed, commercialized, and scaled — and where good jobs are actually created. The greatest opportunity is in next-generation manufacturing: quantum materials, photonics, advanced materials, and drones. Canada already leads in quantum research and photonics. The task is to build manufacturing capacity around those existing strengths.

Canada’s difficulties commercializing the vast sums we invest in R&D are well known.

Fixing this requires IP guardrails attached to public funding, and the institutional capacity to mobilize intangible assets on behalf of Canadian firms — both defensively protecting IP and helping smaller companies compete against foreign competitors wielding large patent portfolios as moats. Proprietary data deserves the same treatment; Canada lacks both the protections and the mechanisms to mobilize it effectively.

Standards shape what gets built, by whom, and under what conditions. Canada largely adopts what others set. A dedicated standards office, capable of coordinating across defence and dual-use domains and positioning Canadian innovations as reference points in allied processes, particularly NATO, is essential.

In dual-use domains specifically, we need standards that govern how technologies pass between defence and civilian contexts — defining appropriate controls, data handling, and the levels of research security required at each stage. These practices currently exist in fragments — the DIS now demands they be unified into a coherent framework.

The committee should recommend: an operational definition of dual-use adequate for procurement and R&D decisions; co-located manufacturing alongside innovation hubs targeting next-generation strategic technologies; an innovation asset collective to mobilize and protect IP, with guardrails on public funding and dedicated investment in tech transfer offices; a strategic standards office coordinating across defence and dual-use domains; a readiness infrastructure covering assessments, research security support, and capital access for smaller firms; and a calibrated designation policy that protects what needs protecting without undermining Canadian innovators or the independence of the research ecosystem.

Shield stands ready to support the committee and the government by going deeper in each of these areas at your request.

Thank you.