Good morning.
It's a pleasure to be here with you as you start off a day dedicated to bringing together Canadian technology-based companies and international aerospace and defence contractors. C'est un grand plaisir d'etre ici avec vous aujourd'hui.
A few weeks ago, I visited the headquarters of Kodiak Group Holdings in Cambridge to announce a $4.2-million contract for new Canadian-made boots for our Armed Forces. This is a great opportunity for a company from my hometown and it also ensures that our soldiers receive high-quality, Canadian-made protective gear. It's a win-win situation.
This is but one example of the procurement of an exceptional defence-related product produced in this province. Ontario is home to a dynamic and innovative aerospace and defence industry and this sector is a major contributor to the region's economy. With more than 200 aerospace firms, employing 17,000 highly skilled workers and thousands of more along the value chain, it generates more than $5 billion in sales annually. And our region is an incubator of advanced technologies that represents a critical mass of Canadian firms that are helping build an economy based on high-tech and value-added products.
As Minister of State for the Federal Economic Development Agency for Southern Ontario, or FedDev Ontario, I have witnessed first-hand the technology and innovation offered by businesses like Kodiak, as well as Aeryon Labs and VAC Developments, which I will speak about later.
Ontario has the know-how and the means to continue to take on more defence procurement contracts! I know that, together, we can accomplish so much more.
In fact, Canada as a whole has some of the best industrial defence capability in the world. Our companies compete globally, but not without challenges.
We have heard from leaders in the aerospace and defence community that the requirements to compete for contracts are too complex and that the industry is not engaged early enough. This results in a costly and complicated process.
As you may know, Open Text's Tom Jenkins said last year in his report on leveraging military procurement, that we face a once-in-a-century opportunity to promote long-term growth in defence-related industries. It is important that this opportunity is realized, while at the same time maintaining fairness, transparency and competition in our procurements to ensure value for Canadian taxpayers' dollars.
I'm pleased to tell you that the Government of Canada is making progress in the area of defence procurement. To that end, my colleagues Diane Finley, Minister of Public Works and Government Services, and Rob Nicholson, Minister of National Defence, just launched in February Canada's new Defence Procurement Strategy.
Defence procurement continues to be about getting the right equipment to the Canadian Forces in a timely manner. But it also aims to leverage defence acquisitions to benefit the Canadian economy.
Our Government wants to help ensure that money spent on major defence contracts is reinvested in the Canadian economy. The Defence Procurement Strategy will help SMEs build relationships with prime contractors, while also helping to bring made-in-Canada products to global markets.
The potential impacts of these relationships are endless. For that reason, FedDev Ontario and other federal government agencies will play a key role in helping to secure these connections, which I will get to shortly.
But first, I would like to highlight a few measures outlined in the strategy.
As you may know, traditionally, procurement bid proposals have been evaluated based on ‘rating and weighting' of technical compliance and price. The benefits to Canada, formally known as Industrial and Regional Benefits—or IRBs—were assessed simply on a pass-fail basis.
Under the new strategy, one of the biggest changes is the use of a Value Proposition, a ‘rated and weighted' component that would be added to the bid evaluation, which will consider economic benefit to Canada. This would be required on defence and Coast Guard procurements of $100 million and above, as well as selected others with leveraging potential.
That is, companies will have a competitive advantage in bid evaluations if they demonstrate that they're willing to invest in Canada through the transfer of intellectual property, technology transfer, activities that enhance productivity in Canadian firms, or increased participation of Canadian firms in global value chains.
I'd also like to point out that in June 2014, you'll see Canada's first Defence Acquisition Guide published. This will help Canadian firms position themselves for future procurement opportunities.
Our Government will also make sure that we do a better job of promoting Canada's expertise in today's global marketplace. Through the Defence Procurement Strategy, the Minister of International Trade, the Honourable Ed Fast, will put in place a more robust export promotion and economic diplomacy strategy through the Global Market Action Plan. This will support the presence of Canadian companies and organizations at international defence trade shows—as we know that this is vital to industry.
In short, with the new Defence Procurement Strategy, Canadians can be assured that we're using a procurement process that's good for workers, businesses taxpayers and the national economy
And, Canada's regional development agencies will continue as they have been to help engage Canadian firms in defence procurement activities and bring regional knowledge to the table for consideration in procurement decision-making.
FedDev Ontario has taken on this role in southern Ontario and is acting as a business facilitator between small- and medium-sized businesses and prime contractors. You'll be hearing more about this from Harold Deck, Senior Manager, Industrial Development at FedDev Ontario, later this morning.
In addition to being a convenor, FedDev Ontario is also an investor. I'd like to share with you a couple of examples of the work the Agency has been doing to help aerospace and defence companies in southern Ontario.
With support from FedDev Ontario and angel financing raised through the Golden Triangle Angel Network, Waterloo-based Aeryon Labs launched the Aeryon Skyranger. This Unmanned Aerial System deploys immediately, increases flight performance and endurance, and delivers new capabilities in camera quality, network integration and more. Aeryon designs and manufactures these types of unmanned aerial systems for aerial intelligence gathering for a wide range of military, public safety and commercial applications. I'm proud that Aeryon is recognized globally as an industry leader and that its products are being used worldwide.
FedDev Ontario also supported Oakville-based VAC Developments, a company that provides commercial aircraft and military components to recognized manufacturers and organizations. These include Bombardier, Goodrich Landing Gear, Messier-Dowty and the U.S. military. Our investment of more than $1.6 million helped VAC to buy new equipment and to train highly-skilled employees. This has allowed the company to maintain its global competitiveness and expand markets both locally and internationally.
Before concluding, and with your indulgence, I would like to share with you a little information about FedDev Ontario's current funding initiatives that are open for applications, as I am certain they can assist innovative and globally-oriented businesses such as yours.
Let me take this opportunity to highlight two of the Southern Ontario Prosperity Initiatives that will be of interest to this audience.
The first is our Investing in Business Innovation initiative which is very important as it can help early-stage businesses overcome the hurdles they face in raising adequate capital to commercialize products. The Investing in Business Growth Productivity initiative, equally important, is designed to help businesses adopt new technologies and processes to improve productivity, as well as provide support for activities related to market expansion and integration in global value chains.
In addition to these two initiatives, there is the Investing in Commercialization Partnerships initiative and the Investing in Regional Diversification initiative. For more details please visit our website at www.FedDevOntario.gc.ca.
The measures I have outlined today demonstrate our Government's commitment to creating jobs and economic opportunities across Canada and more specifically in Ontario. I am proud of the success that our Government has had in steering the Canadian economy through some rough waters, to the point where we are now the envy of many G-7 countries.
Canada is seen as an increasingly attractive place to invest and to grow a business. In fact, this year, Canada leapt from sixth to second place in Bloomberg's ranking of the most attractive destinations for business.
Our Government will continue to do its part to guide Canada's strong economic performance in an uncertain economic climate worldwide.
Today's event, which brings foreign and Canadian companies together to dialogue on possible partnerships, is just one example of how our Government, under the strong leadership of Prime Minister Stephen Harper, is working to create more economic opportunities for Canada's businesses and workers.
Thank you. Merci.
