Industry leaders point to potential barrier in PM Carney’s defence industrial strategy

The prime minister unveiled a multi-billion dollar defence plan aimed at boosting Canadian firms, securing contracts at home and creating jobs nationwide.

MONTREAL — Workers at the Quebec-based CAE greeted Prime Minister Mark Carney on Tuesday as he officially launched Canada’s first-ever defence industrial strategy, an ambitious policy aimed at building a robust domestic industry to reduce Canada’s reliance on foreign suppliers to arm the Canadian Armed Forces.

Matthew Bromberg, president and CEO of CAE (formerly known as Canadian Aviation Electronics Ltd.), applauded the government’s new strategy, saying it shows the country is committed to developing a defence industrial base in this country.

“Having seen how this works in other countries around the world, having spent 25 years in aerospace and defence, I think this is the right move for Canada, for Quebec and for CAE,” said Bromberg.

About half of CAE’s contracts are now linked to the military, with 90 per cent of its flight simulators now exported around the world.

The Canadian Association of Defence and Security Industries (CADSI) says companies like CAE, as well as several smaller manufacturers, could benefit.

“It’s landmark, it’s historic, it is a very big deal for the defence industry to say that they are going to start preferencing Canadian firms in the procurement regime,” said CADSI president and CEO Christyn Cianfarani.

“They’re expecting to add 125,000 new jobs, which is basically two-and-a-half times the size of the sector: that is real growth. That is a magnitude we have not seen since basically the 1950s.”

But industry leaders warn those ambitions will not be realized if the procurement process is not streamlined. Cianfarani called it the “Achilles heel” of the strategy.

“They will have to make significant changes to the procurement system and they will have to start moving contracts. I can’t stress how much faster it needs to be than how the current system functions today,” Cianfarani said.

“If that happens, it is completely doable. If it doesn’t happen, it could undermine the entire strategy that we just heard about today.”

Carney says the centrepiece of the new approach is the Defence Investment Agency, or DIA.

“The DIA will streamline and speed procurement, will cut red tape, and it will expand domestic production,” he said.

Quebec’s Manufacturers and Exporters, or the Manufacturiers et Exportateurs du Quebec in French (MEQ), also focused on the importance of ensuring the procurement system aligns with the government’s stated priorities.

“There’s good intentions in this strategy, but I hope it works,” said MEQ president and CEO Julie White. “ And we’re going to be there to help the government make those links with the small- and medium-sized businesses.”

White also noted that there needs to be more clarity as to what the government means when it refers to Canadian manufacturers. Several military contractors are subsidiaries of foreign companies, and represent thousands of jobs in the country. Those, she says, cannot be left out of the process.

“Our goal is to revitalize our sector, put it back into shape and grow our business,” White said.

CAE, formerly Canadian Aviation Electronics, is a manufacturer of simulation technologies, and was founded by R. Patrick, an ex-Royal Canadian Air Force officer, nearly 80 years ago. The company says it has the capacity to ramp up to answer Canada’s call.

“You are standing in the single-largest facility in the world that develops and produces simulators,” said Bromberg. “We can absolutely support all the demands of Canada and the export market.”