OTTAWA — The Canadian military’s signature program for finding small companies with innovative solutions for defence challenges has just one serious problem, according to an internal audit: it has no mechanism for the military to buy the cool tools it helps create.

The Innovation for Defence Excellence and Security (IDEaS) program began in 2018, with $1.6 billion and a 20-year time horizon. It is meant to get Canadian researchers and companies to tackle specific challenges, and in doing so, build an ecosystem of defence innovators.

The challenges it puts up range from the mundane but important (“Pop up city: Integrating energy, water and waste management systems for deployed camps”) to things that would avert key plot points in techno-thrillers (“Knot vulnerable: Locking down cybersecurity on naval vessels”). Different parts of IDEaS offer help such as research and development funding, contests with prizes and “test drives” of technologies in real National Defence environments.

But the audit pointed out a basic problem in the way IDEaS is designed: it nurtures technologies that meet the needs of the Department of National Defence and the Canadian Armed Forces (DND/CAF), which they do not then actually buy. “The acquisition of the solution by DND/CAF was not the initial scope of the program. As such, the most asked question from innovators is, ‘What happens next?’ For this, the program has no clear answer,” the auditors lamented, in a report The Logic obtained through an access-to-information request.

Similar programs in other countries—including the United States, United Kingdom, Australia and New Zealand, Canada’s closest “Five Eyes” allies—extend to commercialization of the products and services they produce.

No products that have been through an IDEaS process have reached the point of mass adoption, though some are close, DND spokesperson Andrée-Anne Poulin told The Logic by email.

“​​Any procurement of IDEaS-funded technology would be conducted in line with approved government protocols, and under separate budgetary considerations,” she wrote.

Still, she added, the program has many years yet to run, and “looking at options for the direct acquisition of capabilities from the IDEaS program that can be operationalized by DND/CAF remains a priority.”

The CEO of one IDEaS-participating company The Logic contacted, who exchanged emails on condition of anonymity because of the sensitivity of his work, said sending successful IDEaS projects over to regular procurement channels is lethal to their prospects.

Canada’s formal procurement system for military equipment is notoriously cumbersome and plagued by politics, with billions of dollars budgeted but unspent.

“If they don’t buy the equipment that is only available to the military—illegal for civilians—then our industry cannot survive,” he wrote. “So we do more and more research and development on state-of-the-art products that are never fielded.”

Overall, feedback on the program has been good, says the audit report. IDEaS is well known in the defence business, and participants praised the clarity of its challenges and its simple application process. All the challenges have led to projects or initiatives to address them, beating the program’s target of three-quarters.

Fredericton’s Black Arcs, which uses AI to model the consequences of complex decisions—it began in urban planning—participated in an IDEaS competition related to predicting the spread of COVID-19. The two stages combined were worth nearly $1.2 million to the company, but the exposure to DND was valuable in itself.

“They actually put staff in front of us and interact with us as we design,” said Black Arcs’s director of operations, Luke Robertson. “We don’t build stuff in a black box. We want to be showing it to the customer or client and be talking about it.”

Thanks to that feedback, Black Arcs tweaked its features to present data in heat-map formats familiar to the military users, he said

Also, DND was adamant that the software be clear and direct in how it uses artificial intelligence. “That’s borne out to be appealing in the defence sector writ large,” Robertson said, and the IDEaS program helped inculcate the habit.

Despite the generally positive reviews, the auditors did find some problems in the IDEaS program, even assessed on its own terms. Participants wished for more back-and-forth with the department and clearer timelines for each stage of their work. The staff who run the program would like more direction on how to prioritize the ideas for challenges they get. The 6.2 per cent of its funding that the IDEaS program spends on administration might actually be too frugal: its staff are too overworked to run enough challenges to spend the rest of the budget.

The president of Simbiotix Control of Mississauga, Ont., another IDEaS participant, said the program puts too many claims on companies’ intellectual property.

“The program doesn’t help you protect the IP that you’re coming in with, and that’s a big hurdle,” Gregory Lowe said in an interview.

Simbiotix got just under $230,000 toward technology for de-icing aircraft and making sure they stay de-iced before takeoff without relying on a direct human inspection. Simbiotix has a camera system intended to do just that, but Lowe said he was careful to enter only an automated control feature, not the core technology.

“We did get some good out of it,” Lowe said in an interview. “We got the front end of the de-icer pretty much designed. There’s still some software pieces left to it, but it’s probably 60 per cent there toward fully automated de-icing.”

The money wasn’t enough to add any staff, however, and there has not been a second round of funding, he said.