Al Vigier: The defence boom is here. So far, it mostly pays people like me

Talking about increasing our military capabilities is big business. Actually doing it is less so

By: Al Vigier

Let me open with a disclosure that doubles as the thesis. I run a company trying to sell into Canada’s defence build-up. I attend the conferences. I pay the association memberships. I sit on a panel this fall. I write op-eds about defence procurement, of which this is one. I am, in other words, a fully paid-up participant in the fastest-growing sector of the Canadian defence economy, which is not shipbuilding, not aerospace, and not ammunition.

It is talking about the defence build-up.

Since February, when Ottawa published a Defence Industrial Strategy framing $180-billion in procurement and 125,000 careers, this country has experienced a boom. Not in delivered capability; the first new destroyer arrives in the 2030s and the fighter file has been in review for a year and a half. The boom is in the layer between the announcement and the delivery. Conference passes and trade-show booths. Association memberships, and there is always one more association. Supplier directories, federal, provincial and private. Readiness assessments. Certification consultants. Industrial-benefits advisory. Defence-practice launches at law firms and accounting firms that discovered patriotism the week the strategy dropped. Newsletter analysts. LinkedIn thought leaders. And yes, opinion columns.

Nobody in that list makes anything that floats, flies or fires. Everybody in that list is invoicing.

Here is the mechanism, because it is worth being precise about. A government announcement creates anticipated money. Actual money moves through contracts, and Canadian defence contracts move at a pace the Procurement Ombud politely describes as burdened by risk aversion and weak measurement. Between anticipation and arrival stretches a gap measured in years, and the gap is a habitat. Uncertainty is what feeds it. Nobody can tell a small firm exactly when the money moves, which rules will apply, or what the real requirements are, so an ecosystem emerges to sell maps of the fog. The government’s own opacity, the unpublished timelines and the certification requirements that industry marketing routinely describes more dramatically than the government does, functions as a subsidy for everyone selling guidance.

I want to be fair to the habitat, since I live in it. Most of these people are not grifters. The conferences produce real introductions. Some consultants save clients from real mistakes. The associations do real advocacy with thin resources. A gold rush genuinely needs shovel merchants, and it is not the shovel merchant’s fault that shovels are profitable before gold is.

But the arithmetic deserves daylight, and nobody inside the ecosystem has an incentive to publish it. For a great many small Canadian firms right now, the cost of pursuing defence work, the memberships, the conference travel, the consultants, the certifications, the unpaid months of business development, comfortably exceeds their revenue from defence work. The build-up is cash-flow negative for the companies it is supposed to enrich and cash-flow positive for the people advising them. That is not a scandal. It is just what the early phase of every announced boom looks like, and it will stay that way for exactly as long as announcements outrun contracts.

So here is a field test, offered from inside the aquarium, for telling the builders from the barnacles. Ask one question of anyone in the defence economy, including me: when do you get paid? If the answer is when capability arrives, when a contract closes, when a product ships, you are talking to someone whose interests point the same direction as the country’s. If the answer is while the process continues, while uncertainty persists, while the anxiety holds, you are talking to the habitat. The habitat is not evil. But its revenue depends on the gap staying open, and you should price its advice accordingly.

Apply the test to the commentary economy too. A columnist who profits from the procurement mess has no financial interest in the mess ending. I would like to believe I pass my own test, since my company only makes real money if contracts actually move, but the readers can score that themselves, which is rather the point of publishing the test.

What would shrink the habitat? Not exhortation. Two boring things, both of which Ottawa controls. Move money faster, because every contract signed converts anticipation into delivery and evaporates a consulting engagement. And publish the rules, because every authoritative timeline, every clarified requirement, every procurement standard stated plainly by the government destroys the market for a paid interpretation of it. The intermediary economy is, in the end, just the market pricing government opacity. Reduce the opacity and the price collapses.

Which suggests the real metric for whether this build-up is working, and it is not the announcement count. Watch the conference circuit. The year the defence trade-show economy stops growing is the year the money started moving to people who make things, because the gap the habitat lives in will finally be closing. I say this as someone with a panel slot in October and a booth budget under review: the healthiest possible sign for Canadian defence would be my whole side of the industry getting smaller.

I will still take the panel slot, though. The boom is the boom.

Al Vigier is the founder and CEO of Caseway, a Vancouver-based AI company. He served seven years in the Canadian Army.

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