A Calgary-based defence tech startup that recently emerged from stealth has been awarded a four-year, $4.2-million contract by Canada’s defence department as the federal government looks to increase military spending.
North Vector Dynamics, co-founded by University of Calgary engineering professors, calls itself a defence and autonomy company that develops high-speed aircraft propulsion, training systems for drone attacks, and missile systems guided by artificial intelligence (AI).
Defence Research and Development Canada awarded the contract to obtain“expert engineering support” for “high-speed and hypersonic aeropropulsion technologies.” This covers aircraft flying at speeds above Mach 5, or five times the speed of sound.
“Canadians have stepped up in a very big way.”
Paul Ziadé
North Vector Dynamics
The research, which will be carried out at a Canadian military research station in Saint-Gabriel-de-Valcartier, Qué., covers technologies for hypersonic cruise missiles, hypersonic glide vehicles, and defences against those objects, according to a summary of the contract. It also includes “investigating small satellite launcher concepts” for space access.
In an interview with BetaKit, North Vector co-founders Craig Johansen and Paul Ziadé said this technology could be used for high-speed weapons such as missiles, launch mechanisms to put vehicles into orbit, or hypersonic drones for patrolling the Arctic.
“It’s not necessarily to develop a vehicle, but to develop the expertise and make sure Canadian defence is at the forefront of knowledge and expertise in this area,” Johansen said.
North Vector, previously Think Solutions Engineering, emerged from stealth under its new name in May after having worked on defence technology for counter-uncrewed aerial systems (CUAS), or systems to target and take down drones. The startup previously landed a total of $2.5 million in government grants through the Innovation for Defence Excellence and Security (IDEaS) program. It was also one of two startups in the first Aerospace Accelerator Program this year at Innovate Calgary.
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Ziadé told BetaKit that North Vector’s CUAS products, which target consumer drones used for military purposes, are closer to commercialization than its aeropropulsion technologies. He claimed North Vector has received interest from large defence companies in the US, the United Arab Emirates, and the Philippines.
The startup is backed by Ottawa-based One9, a defence tech venture capital (VC) investing platform acquired this year by asset manager Kensington Capital Partners.
North Vector has 10 employees and says it is in the midst of raising its first round of VC funding. “Canadians have stepped up in a very big way” when it comes to investing in military and defence tech, Ziadé said, which he said has traditionally seen low levels of interest from the Canadian private sector.
Outside of Canada, investors have increasingly poured money into defence tech—a broad category which can include surveillance and intelligence software, armoured vehicles, drone technology, and lethal weapons. According to US Pitchbook data, VC investment in defence tech in 2025 so far has reached a new peak of over $7 billion invested, more than over four times the level of investment seen in 2022.
Canada’s largest VC investor, the government-backed Business Development Bank of Canada, told BetaKit this week it plans to accelerate its support to the defence sector through its services, including capital, financing, and advice.
At the same time, Prime Minister Mark Carney has pledged to increase national defence spending to the new NATO target of 5 percent of annual gross domestic product by 2035. This includes 3.5 percent of GDP for core military capabilities, such as “modernizing [Canada’s] military equipment and technology.”
Ziadé and North Vector chief commercial officer Omar Saleh applauded the government’s spending targets in an opinion piece in The Globe & Mail, calling for Canada to “stop stigmatizing defence work and instead treat it like aerospace, energy or AI.”
Carney also announced a new Defence Procurement Agency and the creation of the Bureau of Research, Engineering and Advanced Leadership in Innovation and Science (BOREALIS), a defence research initiative similar to the US Defense Advanced Research Projects Agency (better known as DARPA). Tech industry lobby groups such as the Council of Canadian Innovators welcomed the move and argued that the government should prioritize buying Canadian-made technologies.
Ziadé added that defence procurement has traditionally been on too long a timeline to ensure that delivered technology matches current needs.
“By the time you’re actually getting the equipment, the requirements are outdated,” he said.
This push for investment in defence tech comes as AI-enabled and autonomous weapons are being deployed at scale in conflict zones around the world. The Ukrainian military’s use of AI in its war with Russia “makes human judgment about targeting and firing increasingly tangential,” according to New York Times reporting. Meanwhile, the Israeli military’s use of digital tools, including its Lavender AI system for identifying military targets, could violate international laws of war, according to Human Rights Watch.
However, Ziadé told BetaKit that the autonomy of its defence systems mainly involves guidance, navigation and some computer vision algorithms for its CUAS systems. He anticipates that humans will be involved in decision making.
“In the systems that we’re developing right now, we definitely see a human in the loop…for decision making on whether or not to engage a threat,” Ziadé said.
Feature image courtesy North Vector Dynamics.