By Al Vigier
For decades, the most powerful person in Canadian defence procurement was a program manager with a simple calculation. Pick the incumbent prime and any delay belongs to the system. Pick the unproven small firm and any slip belongs to you. That math produced the risk aversion the industry has complained about for a generation, and complaining never changed it, because the math was correct.
The current round of reforms is the first that actually attacks the equation. The Defence Investment Agency‘s expanded sole-source and interoperability exceptions give a buyer an on-the-record justification for choosing a newcomer. The modernized ITB regime, with enhanced multipliers and a 90-day approval standard, makes a small Canadian partner cheaper and faster for a prime to carry. Read together, the reforms treat procurement as what it has always been: a market in risk transfer. The Crown has now moved a real share of the risk off its own decision-makers.
What follows from that is uncomfortable for suppliers. The risk did not disappear. It landed on the SME, and it arrives in four forms. Each has a countermove, and the countermoves share one logic: keep pushing the residual risk onto a balance sheet that can carry it. My company, Caseway, a Vancouver AI firm, runs this playbook daily, so these are working notes.
First move: be on the map before anyone searches it
Concierge services and single-window portals route firms to programs, but programs sign nothing. Buying is done by project offices, by the DIA, and by primes carrying ITB obligations. So register on every standing vehicle, source list, and clearance regime before there is a contract in sight; each one is an objection answered before an evaluator can raise it. Answer Requests for Information even when no money is attached, because RFIs are where requirements get drafted, and a firm whose language appears in the statement of work has already half won the shortlist. Above all, read ITB obligations the way a prospector reads a geological survey. Primes with value propositions coming due are hunting for creditable Canadian content, and the new multipliers sharpen their appetite. Arrive as the solution to their compliance problem and the meeting books itself.
Second move: write the evaluator’s defence file for them
A buyer who selects you is betting a career that you will deliver. Certifications, independent penetration tests, and security attestations exist to change what that buyer can write in the record: “vendor holds these credentials” instead of “we took a chance.” Assemble the paper before the decision, not after. Teaming does the same job by a different route. When a prime picks you as a subcontractor, the prime owns the risk, which is why a teaming position on thin margins beats no position at all; the reference converts to direct work later. And if your capability is genuinely unique or interoperability-critical, draft that argument in advance, in language a contracting officer can lift straight into a sole-source justification. Sovereign, non-ITAR positioning is worth building a company around precisely because it survives that scrutiny.
Third move: make the clock someone else’s problem
Government time runs slower than startup burn, and the BDC Defence Platform and regional financing initiatives, welcome as they are, favour firms that already look fundable. The survivors handle the clock three ways. They keep commercial revenue flowing while the defence pipeline gestates, because a paying civilian customer means a departmental delay cannot kill the company. They stack non-dilutive funding, from IDEaS to IRAP to allied research programs, with the discipline to chase only what fits the roadmap they were building anyway. And they raise equity against qualified pipeline rather than booked revenue, timing the round to land just after a visible catalyst, when the story writes itself.
Fourth move: borrow a lane that actually exists
Canada’s remaining structural gap is the absence of a protected route from a validated pilot to a production contract. Our innovation programs deliver companies to a successful trial and abandon them there. Until Ottawa builds the lane, borrow one. Scope every pilot as a wedge into an existing program of record, and settle the transition language before the pilot begins, even informally. Use allied systems that pre-authorize the jump: the American SBIR Phase III and Other Transaction pathways, and NATO DIANA‘s route into alliance procurement. A Canadian firm that validates at home, converts abroad, and returns carrying a foreign contract becomes the safe domestic choice overnight. It is a strange incentive for a sovereign industrial policy to create, but it is the one we have. Failing that, target the sustainment and upgrade cycle, where software insertions into in-service platforms move on shorter clocks and build the incumbency the whole system rewards.
The ledger, honestly kept
The reforms are real, and the government’s half of the bargain has genuinely improved. But no policy can perform the supplier’s half, and the base rate for Canadian defence SMEs reaching sustained production revenue remains stubbornly low. The firms that beat it will be the ones that treat every stage of the pursuit as a risk-transfer negotiation, moving the buyer’s residual doubt onto a prime, a certifier, an allied government, or a commercial customer. Ottawa rebalanced the ledger. Closing it is still private work.
Al Vigier is a Canadian Army veteran and the founder and CEO of Caseway, a Vancouver AI company serving legal and defence markets.
