Canadian Global Affairs Institute’s Annual Defence Procurement Conference

Speaking Notes for

The Honourable Carla Qualtrough
Minister of Public Services, Procurement and Accessibility

Canadian Global Affairs Institute’s Annual Defence Procurement Conference

Chateau Laurier
Ottawa, ON
October 25, 2018

Check against Delivery 

Introduction

Thank you for that kind introduction.

Before I begin, I would like to acknowledge that we are on the traditional territory of the Algonquin people.

It is a pleasure to be here with you all at the Canadian Global Affairs Institute’s annual Defence Procurement Conference.

I can tell you that the Canadian Global Affairs Institute is a valued partner, with whom we regularly exchange perspectives on how to improve defence procurement.

When I took on the role of overseeing Public Services and Procurement Canada, my instructions were clear.

The Prime Minister mandated me to work with other ministers to ensure the women and men of the Canadian Armed Forces and the Canadian Coast Guard get the equipment they need—on time and on budget.

When it comes to our defence policy, it’s my job to make our ambitious procurement goals become a reality.

Strong, Secure, Engaged

Many of you are very familiar with Canada’s defence policy, Strong, Secure, Engaged.

It is a bold policy—one that focuses on the heart of the Canadian Armed Forces: the brave women and men who wear the uniform.

We ask these women and men for so much, and they answer the call with valour and distinction.

Whether it’s responding to natural disasters, defending our sovereignty, or ensuring peace and security abroad, we have a duty to make sure they are equipped to succeed in any operation, and that they have our full support—before, during and after their service.

And it’s why I’m so proud of the policy our Government has put forward.

It features a significant increase in defence spending, and boasts an ambitious plan to spend more on equipment and infrastructure purchases.

I can tell you that we are committed to ensuring those purchases are done in a responsible way—in a way that puts people first.

People at the heart of procurement

We use that term often in the Government of Canada—putting people first.

But what does that actually mean when it comes to defence procurement?

It means that our number one priority is always our women and men in uniform—that they have the tools they need to do their jobs and keep Canada safe.

It means that, when possible, we give our support first and foremost to the defence and security industries right here in Canada, acknowledging the jobs and growth you generate for hard-working Canadians.

It means that we strive to take a more strategic approach to achieving social and economic benefits, in part by increasing contract opportunities for Canadian and local businesses, as well as under-represented groups.

Finally, it means that we ensure all of our procurement processes are fair, open and transparent, and provide best value and benefits for all Canadians.

These are important goals.

But above all else, at the end of the day, we need to make sure we are delivering the goods—there’s nothing more important to our Government and to our military than that.

We have made many gains by modernizing the way we do procurement to make that happen, which I will talk more about in a moment.

But first, let me tell you about our progress on some major procurement projects supporting Canada’s defence policy.

Progress on major defence procurement projects

Fighter jets

As you know, our fighter jet process is one of the largest procurements the Government has ever undertaken.

And it represents the most significant investment in the Royal Canadian Air Force in more than thirty years.

Three years ago, we were at a complete standstill with this process.

Today, I am happy to report that this ambitious undertaking has found real momentum.

In December last year, we launched an open and transparent competition to purchase 88 advanced fighter jets.

One month later, in January, we held our first open industry day, attracting over 200 participants from more than 80 companies and 7 countries.

In February, we published a list of eligible Suppliers and invited them to participate in the formal supplier engagement, which began that same month.

And in April and May, government officials conducted regional forums in six cities across the country that drew over 600 participants from more than 200 companies.

Today, I’m happy to announce that we’ve reached another milestone.

Over the next few days, we will be releasing the draft request for proposals to eligible suppliers. This is an important milestone after months of effort and consultations.

We will be working with suppliers over the coming months on these drafts. The formal request for proposals will be officially released to eligible suppliers next spring.

We expect to award a contract in late 2021 or early 2022, with the first aircraft delivered in 2025.

In the meantime, we’re working with the Australian government to acquire 18 F-18 fighter jets and associated spare parts from the Royal Australian Air Force, to supplement our existing fleet. We expect to take delivery of the first two jets in 2019.

Future Aircrew Training Program

That’s the hardware—the jets that will carry our air force into the future.

For the pilots and aircrews that serve Canada so bravely, our Government is taking bold steps forward to renew their training.

Our goal is to provide a comprehensive program of pilot and aircrew training services for the Royal Canadian Air Force.

The program will deliver state-of-the-art pilot training, as well as training for air combat systems officers and airborne electronic sensor operators for decades.

Like many of our other defence procurements, we will be applying our Government’s Industrial and Technological Benefits policy to promote Canadian content.

The policy maximizes opportunities for Canadian companies, supports innovation through research and development, and helps grow export opportunities from Canada.

Canadian Surface Combatant

These are bold undertakings supporting an ambitious yet realistic plan.

As I mentioned earlier, the fighter jet procurement is one of the largest processes in our history, but it’s not the biggest we’ve ever run.

That distinction goes to the Canadian Surface Combatant project which is the largest procurement ever undertaken by the Government of Canada.

The ships we will purchase are going to form the backbone of our Royal Canadian Navy.

This is a multibillion dollar project that will span the next 20 to 25 years, resulting in ships that will serve the Navy for decades.

We need to make sure that we are picking the best possible solutions bidders can put forward.

That’s why, during the evaluation process, we allowed bidders the opportunity to adjust their proposals if they did not demonstrate compliance.

Last week we took a major step forward.

After careful consideration, we identified a preferred bidder, and will now undertake the next step in the selection process with Lockheed Martin Canada, which will include negotiations and due diligence.

I want to stress that no contract will be awarded until this process is successfully completed.

This approach is about due diligence, and rightly so, given the magnitude of this project.

Through our due diligence and negotiation process, we will ensure the eventual winning bidder is financially capable of delivering on the project, meets combat systems performance requirements, and offers intellectual property rights that support our ability to operate and maintain the ships.

I can assure all Canadians that every effort is being made to effectively execute this purchase.

If all goes well, we expect a contract to follow in early 2019. The start of ship construction remains scheduled for the early 2020s.

National Shipbuilding Strategy

The Canadian Surface Combatant project is one part of the National Shipbuilding Strategy.

In the eight years since its inception, the National Shipbuilding Strategy has not been without challenges and has provided important lessons learned.

But with every build, we learn more, and we are diligently applying those lessons as we move forward.

Now, we’re seeing real progress—and most importantly, our suppliers are delivering.

For example, just a few weeks ago, I had the pleasure of attending the naming ceremony for the HMCS Harry DeWolf in Halifax.

This is the first Arctic and Offshore Patrol Ship to be launched, and it marked a significant achievement in our National Shipbuilding Strategy.

Two more Arctic and Offshore Patrol Ships are currently under construction.

Construction of the fourth ship will start within a few months.

The Arctic and Offshore Patrol Ship project represents a major investment in the future of the Royal Canadian Navy as well as the Canadian economy.

It is and will continue to create and sustain thousands of well-paying, middle-class jobs across the country.

And through our industrial and technological benefits policies, Irving Shipbuilding has committed to making business investments in Canada of equal value to the contract cost.

On the other side of the country, at Vancouver Shipyards, Seaspan has begun work on the construction of the Royal Canadian Navy’s two Joint Support Ships.

Just last December, Seaspan also launched the first of our state-of-the-art Offshore Fisheries Science Vessels, with two more already under construction.

We are also demonstrating our ability to respond to evolving capability requirements.

For example, in August, we awarded a contract to Chantier Davie of Lévis, Quebec, for the acquisition and conversion of three icebreakers.

Work is underway to prepare the first ship for service in the Canadian Coast Guard this winter. Conversion of the other two icebreakers will follow.

This contract is not only helping the Coast Guard get the capability it needs for the upcoming icebreaking season, it is also helping to secure well-paid, middle-class jobs at the shipyard.

These are just a few examples of how our National Shipbuilding Strategy is delivering tangible results for the Royal Canadian Navy and Canadian Coast Guard.

Modernizing our procurement process

As you can see, we’re moving forward on many fronts, and we’re doing it by engaging with stakeholders throughout the process.

We’re working hand-in-hand so that all suppliers who can meet our needs are able to participate on a level playing field.

Of course, we know the relationship between our Government and vendors is a two-way street.

We will always hold vendors and suppliers to the highest standards.

But we also recognize that we have work to do to ensure our processes meet the needs of those vendors, so they can deliver their goods.

Vendors have called for a more streamlined, efficient approach to procurement and those calls have not gone unheard by this Government.

We recognize that with the scope of Canada’s defence policy, finding efficiencies within the procurement process is important to achieving our goals.

Under Strong, Secure, Engaged, our Government has embarked upon an ambitious plan that will see a 70% increase in defence spending with a commensurate increase in military procurement.

I do not need to impress upon this audience the magnitude of activity facing the Government of Canada in the implementation of Strong, Secure, Engaged over the coming years.

With this increase in spending, we need to make sure projects are up and running in a timely manner without sacrificing our due diligence.

Over the last three years, we’ve taken many steps forward to modernize our practices—like engaging more directly with industry during the procurement process, as we’ve done with our fighter jet procurement and others I’ve mentioned here today.

These steps are helping make military procurement more efficient.

Today, I am pleased to inform you that along with my colleague, the Honourable Scott Brison, President of Treasury Board, Public Services and Procurement Canada are finalizing a new approach to implement a new risk-based contract approval process, which will help to streamline defence procurement.

Economic and Social Benefits

It’s important that we get defence procurement right.

What can’t be lost in all this, is the significant economic impact these projects have on our country.

Contracts related to the National Shipbuilding Strategy alone between 2012 and 2017 are contributing $8.9 billion, to Canada’s GDP, and result in 8,800 jobs a year.

We’re leveraging the size of the investments related to these projects to make an impact on our social and economic objectives.

In our procurements, military and otherwise, we are looking at ways to ensure opportunities for businesses owned or led by Canadians from under-represented groups—such as women, Indigenous Peoples, and persons with disabilities.

For example, we can look at what the shipyards are doing.

Irving Shipbuilding has partnered with Women Unlimited to open new doors for women in skilled trades.  They also run Pathways to Shipbuilding, which is an innovative pilot program that provides Indigenous students with opportunities to pursue careers in the marine sector.

And Seaspan has helped fund the Camosun College, Women in Trades Training Initiative. A 12-week trades skills foundation program, designed to give students an overview of marine-related trades, through in-class work and hands-on experience.

Closing

All of our procurement processes are important, and I would argue there’s nothing more vital to the well-being of this country our work to support our military.

As a mom with a son in the Navy, I can tell you that this responsibility is especially meaningful to me.

The brave women and men who wear the Canadian Armed Forces uniform keep us safe and secure, and we have a duty to give them the tools they need to get the job done.

That work can be complex and time consuming, and it comes with high stakes.

Our Government will continue to be transparent and open, to improve procurement processes, and we will strive to ensure our procurements generate innovation, jobs, and opportunities for all Canadians.

Most importantly, for all our sons and daughters, for all of our loved one who serve so bravely…

We will make sure, no matter what, that they have the equipment and training they need to keep Canada safe and secure for years to come.

Thank you.