Dominion Dynamics CEO says Canada's 16-year F-35 buy and 20-year drone decision cycle are too slow for modern warfare. What that means for defence investors.
Dominion Dynamics CEO Eliot Pence told a BetaKit Town Hall audience on Monday that Canada’s defence procurement timelines are functionally “irrelevant” for modern warfare. The blunt assessment lands at a moment when NATO allies are recalibrating supply chains and asymmetric threats are changing spending priorities. For investors tracking Canadian defence companies and government-linked contractors, Pence’s critique isolates a structural risk that is not priced into current valuations.
Canada’s Department of National Defence took 16 years to buy F-35 fighter jets and 20 years to decide what drones to buy, according to Pence. He argued that procurement cycles must shrink to weeks, days, and hours, not years. “We shouldn’t be considering these things for more than a year. We have to do in-year procurement,” Pence said.
The gap between NATO’s operational tempo and Canada’s acquisition speed creates a direct vulnerability. If conflict escalates, equipment ordered today may not arrive before the threat environment shifts again. That lag affects both military readiness and the revenue visibility of suppliers that depend on multi-year government contracts.
Defence contractors like CAE Inc., Bombardier Defence, and smaller tech firms often bid on contracts that take a decade to finalize. Pence’s point is that this model assumes a stable threat environment. In practice, by the time a drone or aircraft enters service, the tactical requirements have changed. Companies that win 10-year deals face execution risk if the government later cancels or restructures the program.
Pence founded Dominion Dynamics in 2025 with a specific thesis: Canada needs a domestic systems integrator that can stitch together multiple vendors into one end product built in Canada. “I care that I build the end product–the subs we’re buying, the fifth-generation fighters we’re buying, all of the other things that we are buying,” he said. “I want us to build them in Canada, with Canadians, with Canadian tech that we control and that we own now.”
Systems integrators reduce procurement risk by acting as a single point of accountability. Instead of the Department of National Defence managing dozens of separate vendor relationships, an integrator like Dominion Dynamics would own the full delivery chain. That compresses timelines because the integrator can parallelize tasks that currently happen sequentially.
For investors, the shift toward integration means that defence spending may concentrate in fewer, larger contracts. Companies that can show full-package delivery capability could gain market share, while niche component suppliers may face longer sales cycles unless they partner early.
Pence emphasized that Canada has “privileged … not Canadian companies” for decades. A pivot to domestic sourcing would alter the competitive landscape. Foreign primes like Lockheed Martin and Boeing have historically dominated Canadian defence contracts. If Ottawa shifts to buy Canadian-built end products, the revenue mix for domestic suppliers could expand rapidly.
Two catalysts would begin to close the procurement gap:
Investors should watch for announcements from the Department of National Defence’s procurement office about timeline targets. If the government sets a specific goal–for example, reducing drone procurement from 20 years to two years–that signals real reform. Any pilot program that uses in-year spending authority on a small contract would also be a leading indicator.
Several forces could widen the procurement gap and increase the risk of capability shortfalls:
No single stock is directly named in Pence’s comments, the following sectors are exposed:
Canada’s slow buying creates a gap that allies fill. The U.S., UK, and Australia have all moved to shorter procurement cycles for drones and electronic warfare systems. Canadian forces may become dependent on allied supply chains, which reduces sovereignty – the very risk Pence wants to address.
For traders and investors, the takeaway is straightforward: Canada’s defence procurement process is a known structural risk that has not materially changed despite years of geopolitical pressure. The gap between rhetoric and action will determine whether domestic suppliers see a revenue inflection or continue to lose share to foreign primes. Practical rule: Watch the next federal budget for any line item that shifts procurement authority from multi-year to annual. That is the single metric that separates talk from delivery.
For a broader view of how government-dependent revenue streams can mislead valuation, read Why Government-Backed Revenue Is a Valuation Trap.
Prepared with AlphaScala research tooling and grounded in primary market data: live prices, fundamentals, SEC filings, hedge-fund holdings, and insider activity. Each story is checked against AlphaScala publishing rules before release. Educational coverage, not personalized advice.