Minister’s Speech: CANSEC 2024

Ottawa, Ontario - May 30, 2024

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Opening

Thank you for that warm introduction. My thanks to the Canadian Association of Defence and Security Industries (CADSI) for the invitation to participate in this year’s conference.

Special thanks to the Canadian Association of Defence and Security Industries Management Committee, and in particular to Christyn Cianfrani, President and CEO, and the entire CADSI team.

Our government deeply values the relationship we have with CADSI, and we know how important your industries are to our country’s safety and well-being.

Canada’s defence industries are not only trusted to deliver the capabilities to protect the lives of our people, our nation and our way of life; they’re also a key part of our economic and industrial base that contributes to the livelihood of Canadians.

We’re committed to working with industry as partners and to build our defence industrial base. Procurement is one way we can achieve that together.

Military procurement can be a complex fusion of industry innovation, public policy development, political will, diplomatic negotiation and public discourse, all of which requires significant investment and ongoing engagement with a broad range of partners and suppliers.

When it comes to defence procurement, our priority is to always ensure that members of the Canadian Armed Forces (CAF) have what they need to successfully execute their missions.

We rely on them to defend Canada, to join partners in overseas missions of peace and security, and to respond to increasingly frequent and damaging climate emergencies.

Whenever possible we will run open, fair and transparent competitive processes.

And we will always ensure that every contract we enter into includes benefits to Canada’s defence industry.

This is because the work you do helps our armed forces perform to the highest standard and creates well-paid middle-class jobs in communities across the country.

Government action to date

Since 2015, in partnership with your industries, we have taken action to strengthen Canada’s armed forces.

In recent years, our government concluded procurements for some 130 new aircraft for the Royal Canadian Air Force, including the F-35 fighter jets, and the Husky and P‑8 aircrafts.

And when it comes to ships, through the National Shipbuilding Strategy, we have stood up a vibrant, re‑energized and effective industry across Canada.

This work alone creates or sustains over 20,000 jobs annually across multiple sectors and contributes around $2.26 billion annually to Canada’s gross domestic product (GDP).

With Seaspan out west and Irving in Atlantic Canada, we have 2 strong, enduring and fruitful partnerships that bring good jobs to tens of thousands of middle-class Canadians, year after year.

In April 2023, we welcomed Chantier Davie as the new strategic partner under our new National Shipbuilding strategy, allowing us to build more ships faster while bringing more economic benefits to middle-class families in Canada and in Quebec.

Smaller shipyards and numerous suppliers, including those in Quebec, also play a key role in the strategy and benefit from the revitalization of the shipbuilding industry.

Canada’s defence policy

At the foundation of these achievements is Canada’s comprehensive defence policy, Strong, Secure, Engaged, released in 2017.  

As forward-looking as that document was, it could not keep pace with what was to come.

The world we live in has changed since then; and there is a real and urgent need to respond to rapidly evolving international security threats.

That’s why the Prime Minister and the Minister of National Defence recently announced a new policy update: Our North, Strong and Free: A Renewed Vision for Canada’s Defence.

This updated defence policy is accompanied by an additional investment of $8.1 billion over 5 years and $73 billion over 20 years in defence spending.

Yesterday, Minister Blair walked through some of Canada’s defence priorities with you.

Today, I would like to talk about the policy update from a procurement reform perspective, as well as share details about a few recent announcements in the defence sector.

Defence procurement reform

Canada needs a procurement system that functions effectively and efficiently so it can better respond to evolving security threats and emerging capability requirements.

As it stands, however, defence procurement can be a long and arduous process. It must be streamlined.  

As part of the defence policy update, we are undertaking a Defence Procurement Review to assess and deliver on recommendations to the extent to which we can accelerate procurement, maintain and enhance contract security, and support Canada’s defence industrial base.

To achieve this transformation, we will need to challenge the status quo on a number of fronts.

I know that my officials have been in close contact with CADSI and with other industry players to discuss much-needed improvements to our processes.

We have heard you and we are taking action.

First, we’re reviewing the rules and regulations that govern military procurement, as well as the internal processes used to define requirements and approve projects.

We’re identifying ways to compress timelines for major government acquisitions. It’s important to be thorough, but given how quickly the global security landscape changes these days, we cannot afford to lose time.

And I know, from my experience as Minister of Health during the pandemic, that we have the ability to push the system to deliver better results, faster, when we are faced with an international crisis and urgent domestic need.

We’re working with you, our industry partners, to change the way we consult with defence industry to adopt a more strategic approach.

We’re going to get smarter about how we invest in innovation, and how we acquire and integrate your innovations into CAF capabilities. Because we know that the transition from innovation to product can be challenging.

Finally, we’re going to collaborate more closely with our allies on how we define requirements, how we develop new equipment and systems that support interoperability and strengthen our shared defence, and how we procure them.

We will support Canadian industry to be globally more competitive as new opportunities emerge in a rapidly changing defence market.

On that point, I just returned from a visit to Washington, my first as Minister in this portfolio.

I took the opportunity to meet with Ambassador Hillman, as well as PSPC’s Washington Sector. This was an opportunity to highlight the important role they play in supporting Canada’s relationship with our largest trading partner. We spoke at length about the integrated nature of our defence industries, and how maintaining key sovereign capabilities can benefit both Canada and the United States.

PSPC’s Washington Sector manages all Canadian acquisitions conducted through U.S. Foreign Military Sales.

Currently, the Sector oversees a portfolio valued at $13.5 billion US dollars, supporting critical projects like Canada’s Multi Mission Aircraft, Surface Combatant and Manned Airborne Intelligence, Surveillance and Reconnaissance capabilities.

I also met with key defence and aerospace industry representatives, including those from Boeing, Lockheed Martin, Arcfield and RTX, as well as officials from the U.S. government.

These meetings were aimed at strengthening ties and advancing shared Canada-U.S. economic and security priorities.

The fact is, Canada is on track to more than double our defence spending from 2016 and, like our allies, we’re operating in an environment that demands urgent action.

That action is not possible without a strong partnership between the government and your industries.

Industrial and technological benefits

We know just how important you are to a strong and free Canada, and our government understands how much you fuel the local economies from coast to coast to coast in this country.

Last year alone, the Canadian defence industry contributed close to $12.6 billion in GDP and 78,000 jobs across Canada's economy.

That’s why we continue to apply the Industrial and Technological Benefits policy whenever possible, to ensure Canadians and the Canadian defence industry are getting full value out of our contracts.

Just looking back over the past 6 months, we have made a number of key defence announcements with these industrial benefits provisions.

In January, a contract was awarded to Bell Textron Canada Limited for a value of $2 billion, based out of Mirabel, to provide in-service support for the Royal Canadian Air Force’s active fleet of Griffon helicopters.

This investment has the potential to create or maintain over 1,100 jobs annually and to contribute at least $125 million annually to our GDP over the life of the contract.

Just before that, in December, we awarded 4 contracts, totalling $1.68 billion, to General Dynamics Mission Systems–Canada. They will provide support for the Land Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance systems that will enable Canadian Army operations both at home and abroad.

These contracts will generate nearly 2,400 highly skilled jobs each year, and contribute nearly $260 million annually to our GDP.

And in November, we finalized an agreement to acquire up to 16 Boeing P-8 aircraft to replace Canada’s current maritime patrol aircraft, the CP-140 Aurora.

We made sure that this procurement would come with benefits to Canada’s industry; it has the potential to contribute at least $358 million annually to the GDP over a 10‑year period, fuelled by more than 3,000 jobs each year for Canadian industry.

Last week, as part of this industrial and technological benefits package, the proponent announced $240 million to create a Montreal-area aerospace innovation zone, which will help grow the aerospace sector in Quebec and in Canada.

Just yesterday, my colleague, Minister Blair, announced a $11.2‑billion contract awarded to SkyAlyne Canada Limited Partnership for the Future Aircrew Training Program.

The Program has the potential to create or maintain 3,400 jobs and contribute $405 million annually to Canada’s GDP over a 25-year period.   

Minister Blair also announced 2 contracts in connection with the Logistics Vehicle Modernization project.

The contracts were awarded to General Dynamics Land Systems-Canada in a joint venture with Marshall Canada, and they have the potential to create or maintain 1,500 jobs while contributing $200 million to Canada’s GDP over an 8-year period.

These are just a few recent examples, but they demonstrate real progress on our defence acquisitions and a very real and positive impact for Canadian workers.

Our defence policy update also includes a number of other actions that will bring even more industrial and technological benefits to Canadian communities.

Announcements

To that point, I’m pleased to make 2 announcements that will further support those who serve so bravely, and provide more good jobs for Canadians.

The first is a contract extension for in-service support for one of Canada’s key rescue aircraft.

Cormorant

The Cormorant is Canada’s primary search and rescue helicopter, and the fleet is critical for rescue operations in Canada’s challenging geography and climate.

Today, we’re announcing the amendment of the contract to extend by another 6 years the in-service support for the Cormorant with IMP Aerospace of Enfield, Nova Scotia.

This contract extension, estimated at more than $1 billion, will sustain the fleet until full operational capacity is reached for the Cormorant Mid-Life Upgrade project.

This has the potential to contribute close to 210 jobs annually, while inputting at least $23 million annually to Canada’s GDP over a 9-year period.

Aurora

We equally have important news to share today, regarding our Aurora maritime patrol aircraft.

As the P8 is set to enter service over the coming years, we have a duty to keep our Aurora aircraft in proper working order, to ensure a seamless transition.

These aircraft are based in Comox, British Columbia, and Greenwood, Nova Scotia and are an important part of the Canadian Armed Forces core missions.

These contract amendments will extend services to the CP-140 Aurora fleet by up to 5 years, until March 2030.

These contracts are with IMP Aerospace for the Primary Air Vehicle, and L3 Harris Technologies MAS for the Avionics Systems. Both firms are in Enfield, Nova Scotia.

These contract extensions have the potential to contribute 1,140 jobs annually for Canadian industry and value chain partners and input $120 million annually to Canada’s GDP over a 5-year period.

Request for Information for the Future Fighter Lead-In Training program

We’re also taking action to boost the strength and readiness of our fighter force.

On May 17, a Request for Information (RFI) was posted on CanadaBuys for the Future Fighter Lead-In Training program (FFLIT).

The purpose of this RFI is to share information and solicit comments and feedback from industry, to ensure a seamless transition with existing pilot training programs.

It also aims to have an agile and flexible production level to meet the future needs of the fighter force.

Update: Cyber security certification

Through the Canadian Program on Cyber Security Certification, we’re taking further steps to secure our defence contract information and ensure Canada’s contractors and suppliers are eligible to participate in a full share of opportunities.

Given the sensitive nature of information on these networks, the need for increased security and verification is clear.

We need to protect this information and we need to support Canadian industry in meeting the United States’ mandatory cyber security requirements in defence contracting.

Without cyber security certification, Canadian suppliers risk being excluded from future international defence procurement opportunities.

The government is well on its way to establishing a Canadian program for cyber security certification that works for all parties.

On May 2, the government posted a Request for Information on CanadaBuys.ca seeking feedback on the design and implementation of the program.

Our program will closely mirror the U.S. program, to ensure that defence contractors doing business in both countries will only need to be certified under a single regime.

During my trip to Washington, I met with representatives from the U.S. Department of Defense. We discussed common priorities when it comes to cyber security, including making sure both certification programs are aligned.

This means that Canada and the United States will work with mutually recognized and accepted standards, which will reduce the administrative burden and facilitate certification under a single regime, enabling Canadian suppliers to do business both in Canada and in the U.S.

Update: Contract security program

We have also been engaging stakeholders on the Contract Security Program, and I recently met with CADSI to discuss their suggestions to make contract opportunities more broadly accessible to potential suppliers.

Suppliers with exceptional skills, expertise and capacity cannot afford to miss out on potential opportunities.

Yet, we all agree that security is an essential component of the procurement process, and a shared responsibility between government and industry.

Today, I’m therefore pleased to announce that PSPC will launch targeted consultation sessions where both industry and our programs will open a dialogue on the needs of industry, specifically in the Canadian defence space.  

This engagement hopes to more clearly share the provisions currently in place in contract security clearances, such as provisional clearances, to establish an open and constructive forum for dialogue between PSPC and its defence industry partners, and to promote cooperative problem-solving between PSPC and industry.

PSPC will reach out to members over the next 2 weeks to convene an initial consultation in the July timeframe.

Furthermore, the Contract Security Program has initiated an innovative pilot through a Trusted Partner Program with 2 members of industry to mitigate moderate risks files.

Through this initiative, the Contract Security Program partners with industry to attempt to accelerate clearances by addressing screening files together. Through a shared risk framework, PSPC and industry will help mitigate risks and get workers working faster without compromising security.

The first pilot has been underway for some months, and the second is being put in place as we speak. The Contract Security Program intends to report on pilot progress to date by the end of this fiscal, and look to next steps for potential expansion at that time.

Closing

To close, I want to emphasize that our partnership is absolutely essential to Canada’s security and operational capability, at home and around the world.

We ask so much of our armed forces; we must back that up by ensuring they have everything they need to do the job.

That means leading-edge equipment, robust research and development opportunities, effective and accessible supports at home and in the field, investments in continuous maintenance and service, and a strong plan for the future.

I look forward to our continued collaboration to achieve those outcomes.

And have a great day.

Thank you.