Maxime Bernier

[National Defence, March 1st, 2007]

Mr. Speaker, I am a bit surprised that the Liberal Party is attacking us on defence procurement.

In December 2000, when the previous Liberal government signed a contract with Boeing for the CF-18, it asked for only 17% show of benefits. We are asking for 100% show of benefits for Canadian industry.

Once again, the Liberals failed. We are delivering on a job that the Liberals did not get done.

[Aerospace Industry, March 1st, 2007]

Mr. Speaker, what we require from Boeing under our industrial development policy is economic spinoffs in Canada, to the tune of one dollar for each dollar. We want quality economic spinoffs. This is what we demand, and this is what we are getting.

I am asking the Bloc Québécois member to tell me what his party could demand for the aerospace industry? The answer is nothing, zero, niet. It cannot demand anything, and it cannot deliver anything.

[Aerospace Industry, March 1st, 2007]

Mr. Speaker, I have always said that I am confident the aerospace industry in Quebec and Canada can position itself favourably following these military procurements.

In this House, which parties can get economic spinoffs for the aerospace industry? Certainly not the Bloc Québécois, because it will never be in office. Certainly not the Liberal Party, because it was in office for 13 years and it did not do anything. In fact, it cut the national defence budget. Certainly not the NDP, because it turns its back on our armed forces.

We are acting for our armed forces and for the aerospace industry.

[Aerospace Industry, March 1st, 2007]

Mr. Speaker, we are defending the interests of Quebec and Canada. We are delivering 100% of the economic spinoffs, but the leader of the Bloc Québécois is unable to deliver economic spinoffs for Quebec.

The Bloc Québécois lost ground in Quebec during the last election campaign, and the leader of the Bloc Québécois has called that the “mystery of Quebec”. He should have called it his Quebec nightmare.

The Bloc Québécois has become the “Montreal Bloc”. Count on me in the next election campaign. We are going to be able to rename the Bloc Québécois the “Laurier—Sainte-Marie Bloc”.

[Business of Supply, March 1st, 2007]

Mr. Speaker, I thank the member for his question. As he well knows, the budget will be tabled in the House on March 19 and the government will make a decision concerning this program in the next few weeks.

I have already told the aerospace industry that we are examining this program and that all the options are on the table. Once this review is done, in due course—in the next few weeks, I hope—we will advise the House and the Canadian industry on the future of this program.

[Business of Supply, March 1st, 2007]

Mr. Speaker, I would like to make it clear to my colleagues that meetings took place with the industry. I met several times with Mrs. Sue Dabrowski. I will specify the dates. I had the opportunity to meet with her twice, as well as with several members of the aerospace industry last January 27 and August 14, in Montreal. Therefore, that settles it for meetings with the aerospace industry. If Mrs. Dabrowski wants to meet with me a third time, or even more, I will always be available, as I have been in the past.

As for the Bloc Québécois, we see that it is changing its position once again. After criticizing our government for buying military equipment for our troops, the Bloc Québécois is now asking us to get involved politically. I repeat that we have confidence in Quebec's aerospace industry. Indeed, my colleague from the Bloc Québécois said that Quebec's aerospace industry is competent, innovative and competitive on the Canadian and world stage. I am sure that this industry will be in a position to get contracts from Boeing as well as others.

Telling us that it will not be able to get contracts unless there is political interference is an insult to the aerospace industry. We believe that this industry is competent, good and competitive in Quebec as well as in Ontario and Manitoba. It is able to position itself so as to get these contracts.

My role as the Minister of Industry is to ensure that the policy is respected, that there are dollar for dollar returns, that every dollar of military procurement brings economic spinoffs of a dollar, that this is done in high technology and that there are real economic spinoffs. When the Liberals were in office, hotel rooms were considered economic spinoffs. I am talking about real economic spinoffs that will be appreciated by the industry and will enable it to take its position in Boeing's world chain and that of other suppliers. That is the important thing. Economic spinoffs must be quality ones and we are ensuring that they are. I can assure the House that they will be.

[Business of Supply, March 1st, 2007]

Mr. Speaker, I would like to reassure my honourable colleague with regard to meeting with stakeholders in the Quebec aerospace industry.

I met with them in Edinburgh and London at a well-known annual air show where the world aerospace industry was present. I was able to speak with all players and representatives of the various industries, the Quebec association representatives and Quebec aerospace businesspeople. I met them again in Montreal at the Winter Aviation Ball held a few weeks ago. I am well aware of their expertise and their requests.

If I am asked to meet with them, I would be pleased to do so once again. I would like to say that, in my role as Minister of Industry, meeting with stakeholders in various industries is a priority for me.

As for my colleague, the member for Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, I am somewhat surprised by his position on military equipment and the purchase of said equipment because, on October 26, 2004, he voted against the Conservative motion to guarantee that the Canadian forces would be adequately equipped for war missions and peacekeeping. That was a motion moved by my colleagues and not supported by the Bloc Québécois, including the member for Montmagny—L'Islet—Kamouraska—Rivière-du-Loup. It is somewhat paradoxical because the Bloc Québécois opposes investing in the Canadian Forces and making military purchases, but it is in favour of economic benefits for Quebec.

I want to say that, on this side of the House, we support giving our Canadian Forces the best possible equipment so that they can do their job properly and we can meet Canada's international commitments. Furthermore, this is to be done with full respect for our industrial development policy, our policy on industrial economic benefits in Canada. That is a priority for us.

I am confident that all businesses in Canada working in the aerospace and defence sectors will benefit from these economic spinoffs.

[Business of Supply, March 1st, 2007]

Mr. Speaker, my hon. colleague from the Bloc Québécois talks about the expertise and competitiveness of the aerospace industry in Quebec and Canada. I wish to tell him that we are quite aware of this.

The aerospace industry is a high-tech industry that has successfully positioned itself among the best in the world. I saw this for myself last spring when I went to Farnborough, to London, to meet with the people from the aerospace industry in Canada and Quebec, and their colleagues from other countries. I met many stakeholders during that stay. Even here, in Canada, I have had the opportunity to meet people from the industry and to observe their ingeniousness and expertise. That is why we granted this contract to Boeing, since it was the supplier that met and meets all the conditions stipulated by the armed forces so that we could provide the equipment the armed forces have to have to do their job.

Canadian suppliers will benefit from the economic benefits arising from the purchase of military equipment. We think it is important for them to occupy a long-term position in Boeing’s supply chain. As you know, Boeing is a company that does both military and civil work. With their new plane, the Boeing 787, there are many business opportunities for companies. We want these companies to take advantage of the business opportunities that arise, instead of telling Boeing what contracts to give out. Economic logic being what it is, if we force Boeing to do business with a non-competitive player, Canadian taxpayers will all end up paying for these decisions and this political interference. We believe that Canadians and the Canadian armed forces should have the best equipment possible at the best possible price, while ensuring there are economic benefits for Canada. This is why we asked Boeing for these economic benefits to be high-level ones in nine technological sectors. We think that the Quebec aerospace industry will position itself well with regard to these contracts and will be able to position itself favourably in the Boeing supply chain for all these contracts on the world scene.

I am delighted with, and proud of, the investments that we have made in Canada in the aerospace sector, and of the investments to come. As I said in committee, these military purchases will generate over $12.6 billion in economic benefits. This will help all Canada’s regions. The aerospace industry sees very clearly that, under a Conservative government, it is treated well since it will benefit from these economic spinoffs.

Today I heard a most interesting story from my colleague about aerospace companies and the wonderful success of these companies in Canada. As I said, the industry is doing very well. Canada ranks fifth in the world with regard to production of aircraft and civil aircraft. The Canadian aerospace industry is an international leader, notably—and this is important—in leading sectors such as regional planes, small gas turbines, flight simulators, visual simulators, civil helicopters, landing gear for heavy planes, air-conditioning systems for aircraft and in-flight visual simulation. These are the areas of expertise to be found in the Canadian aerospace industry and we can be proud of them.

The four large Canadian aerospace companies are Bombardier, Pratt & Whitney Canada, CAE and Bell Helicopter. All of those companies have major facilities in Quebec. About half of the employees in the aerospace industry in Canada are in Quebec, that is a fact. More than half of all sales in the aerospace sector come from the province of Quebec. Quebec is a real pillar of the aerospace industry in Canada. Bombardier, as we know, has just announced the launch of its CRJ 1000 series, its new 100-seat regional jet. CAE is investing $630 million in research and development over the next six years. Innovation is essential in the aerospace industry. CAE is also continuing its successful expansion in the Middle East and Asia.

Also in Asia, it is establishing the global academy that bears its name.

Bell Helicopter celebrated the 20th anniversary of the opening of its Mirabel plant. The company is developing new, modular and affordable product line technologies that have already received more than 220 orders, unprecedented in the industry. These few examples clearly demonstrate that the Canadian and Quebec aerospace industry is a dynamic presence on the international scene.

The new government of Canada has done a lot to find markets for the Canadian aerospace and defence industry, both in Quebec and elsewhere in the country. This government is committed to building Canada's place in the international community, and that commitment includes honouring our obligations to our international partners, such as NATO, which means making wise purchases of military equipment.

Unfortunately, under the Liberals, military equipment was never replaced. The Liberals endangered the lives of our soldiers by their inaction. Our government has got things back on track. We did this by announcing military equipment procurement programs. Our government affirms its unwavering commitment to our brave soldiers who protect Canada, its people and its interests.

Our soldiers who are deployed abroad are defending our values, the values we hold dear, our Canadian values of integrity, free enterprise, individual liberty. Yes, we will never turn our backs on our soldiers, either here in Canada or abroad. First and foremost, we want to be sure that our military has adequate military transport equipment for their military deployments.

Whether here in Canada, on rescue missions and in disaster relief, or elsewhere in the world, we also want our military to have the equipment it needs, right here in Canada, for those kinds of rescue missions or for those operations abroad. That is why we have purchased the Boeing aircraft and have scheduled the purchase of other aircraft.

Under the former Liberal government, our soldiers had to rely on the goodwill of our neighbours and allies to arrange their deployments abroad. The era of turning our backs has ended. We are making sure, now, that our Canadian Armed Forces have the equipment they need to perform their duties.

In addition to that, Canada's new government is also determined to build a prosperous and competitive economy that will benefit all Canadians.

Our government has taken the right approach to create a supportive environment and to encourage and reward hard work, stimulate innovation and foster the development of Canadian industry and more especially, the aircraft industry.

We are energizing the Canadian economy by giving our industries an opportunity to help develop future technologies and by developing new, quality markets for this industry. Our way of handling the Canadian industrial benefit policy is based on our commitment to strengthening the aerospace and defence sector and stimulating the Canadian economy.

Unofficial measures to ensure that Canadian industry benefited from military procurement and spin-off effects go back to the 1970s. The federal government turned this into an official policy barely 20 years ago under Brian Mulroney. The purpose is to ensure that Canadian industry benefits from the purchases that are made, regardless of the company chosen to provide the equipment needed by our troops.

That is what is called industrial participation or economic benefits or offset purchases, and this practice has been adopted by many governments, including this one. This policy will produce lasting economic benefits for Canada.

Every time the federal government undertakes major defence procurement programs—and I would like to say this for the benefit of my hon. colleagues—three departments are involved.

The first, of course, is the Department of National Defence, which determines the equipment specifications. The second is Public Works, which handles the procurement process and the awarding of contracts. My department, Industry Canada, develops the industrial benefits plan to ensure that Canadian industry derives real, specific, strategic benefits from military procurement.

On February 2, 2007, the government announced the purchase of four C-17 Globemaster III aircraft for a total of $1.8 billion.

This sum includes the additional infrastructure required at National Defence, training and the administration of the program by the Government of Canada.

The modernized infrastructure, training and administration by the Government of Canada constitute direct investments in our economy right here in Canada. The industrial benefits policy does not apply to them, therefore, because these investments are made here in Canada.

Despite all that, the equipment that we are going to purchase for our armed forces will result in more than $1 billion in economic benefits, as I explained earlier.

When the planes are purchased, the government will also have to award maintenance and service support contracts for them. A service support agreement worth $1.6 billion was signed with the US forces. It has two parts. The first, worth about $900 million, will be subcontracted to Boeing. Boeing is covered by the requirements of the industrial benefits policy so that we will see an equivalent amount return to us here in Canada. This means basically that $900 million will flow back to Canada in economic spinoffs.

As for the second component, the services provided by the U.S. armed forces are not covered by the industrial benefits policy, since governments and foreign governments are not subjected to the requirements imposed on foreign companies. Therefore, our policy does not apply to a foreign government.

These benefits are similar to those that will be generated by the procurement project for aircraft, that we announced. These economic spinoffs for Canada will be spread over a period of more than 20 years.

Suppliers who will get contracts with Boeing can announce them as they win them, over the weeks and months to come.

In the past, it would take over two or three years to design similar procurement programs. However, in this case, with Boeing, I am pleased to point out that we were able to develop the transport aircraft procurement plan over a period of just a few months.

Our government succeeded in obtaining for Canada economic spinoffs totalling about $869 million so far—this represents the acquisition cost of the aircraft—and even more in terms of procurement and service. As I said, this additional $900 million in economic spinoffs is related to service and support for these aircraft.

Hon. members are aware that we also announced the acquisition of helicopters, ships, trucks and tactical airlift. I should point out that each procurement program will also trigger major spinoffs for the Canadian industry.

Under our industrial benefits policy, for every contract dollar awarded under our defence procurement process, contractors must commit a corresponding dollar in economic activity in Canada. This is a 100% return on investment for the duration of the contract. It means an investment of one dollar for each dollar, and that requirement is not negotiable.

We will ensure that this policy is complied with and that all its criteria are well understood by Boeing or by the other companies that will be suppliers for the Government of Canada. We will also ensure that all the businesses working in the aerospace and defence industry are aware of these business opportunities, as we have done in the past.

Moreover, we require companies that win these contracts to not only invest in Canada, but to do so in a significant fashion, over the long term, in leading-edge technology. The objective is to help Canadian companies become part of the global supply chain and continue to be. This means that the Canadian industry benefits from the government's procurement programs, regardless of where the successful bidder's head office is located.

Industrial benefits transactions have to meet three criteria to be considered by my department. The first criterion is that the work has to result from a procurement program. In the case of Boeing, it is a military procurement and we have made sure there are economic spinoffs for Canada.

The second criterion stipulates that the work has to be done over the period set out in the contract. It has to be new work for Canadian businesses.

The third criterion states that the work has to respect the principle of growth, by which companies can use existing business relationships, but only the new work counts for the purposes of respecting the economic spinoffs requirement. Quebec or Canadian companies can use their business relationships to get economic spinoffs, but only the new work counts for the purposes of respecting the economic spinoffs requirement, in other words, the new work done here in Canada.

Furthermore, for the C-17 procurement program, we specified that the aerospace and defence sector had to benefit from 50% of the industrial spinoffs and that at least 30% of these spinoffs have to target key technologies. The nine key technologies are the following—these are technologies we discussed with the Quebec and Canadian aerospace industry. We chose these technologies because they are technologies of the future for the Canadian aerospace industry and we want this industry to position itself favourably for future contracts. These nine technologies are the following: advanced manufacturing and emerging materials; avionics and missions systems; communications and control; propulsion and power management; security and protection; sensors; simulation, training and synthetic environment; space; and unmanned vehicle systems.

We are also requiring that small businesses benefit from 15% of Boeing's contracts that are subject to economic spinoffs. These businesses are critical for ensuring the growth and viability of the aerospace and defence sector. Generally speaking, they are the main drivers of our economy.

At the end of the day, the purpose of the industrial benefits policy is to allow companies in the Canadian aerospace and defence sector to demonstrate their capabilities and establish lasting business relationships with major corporations from other countries. Our government has obtained real strategic benefits for the Canadian industry.

For the first time ever, the Aerospace Industries Association of Canada and the Canadian Association of Defence and Security Industries have worked with the government, with my department, to develop the list of nine key technologies that I was talking about earlier. These are technologies that, in the eyes of the industry, are critical to the future of the aerospace industry in Canada.

We have also made it very clear to prospective bidders that we expect them to work with companies across Canada.

For instance, Boeing held four regional sessions for the industry, one in each region of Canada. In the Atlantic region, on September 7 and 8, 2006, during an air show in Halifax, Boeing met with Canadian stakeholders to ensure that they properly understand the business opportunities available to them. Similar sessions were also held in the western region, in Calgary on October 3 and 4, 2006; in the Quebec region, in Montreal on October 24 and 25, 2006; and in the Ontario region, in Toronto on November 7 and 8, 2006.

Thus, Boeing was able to meet with hundreds of Canadian businesses during these sessions and take stock of the strengths and capabilities of businesses from across the country. The procurement of strategic airlift is the first procurement strategy in a series of five, as I mentioned earlier.

For each of these projects, we will insist that Canadian businesses undertake quality activities and be able to reap the economic benefits.

Canadian benefits are a serious contractual obligation. My department requires annual audit reports and performance guarantees.

I would like to remind the House that I am very pleased with what we have done for the aerospace industry. Every year, businesses that are awarded contracts with the Canadian government must be accountable with respect to the Canadian industrial benefits policy. If those businesses do not meet their contractual obligations, there will be serious financial consequences.

I would like to emphasize that I will be very vigilant in ensuring that businesses respect their contractual obligations. The industrial benefits policy must be followed to the letter. Our approach to industrial benefits is based on the overall approach of this government. This is the approach taken by an honest, transparent government, a government that cares about its industries and cares about its aerospace industry.

I would like to remind the hon. member of the Bloc Québécois that his party is very familiar with the Quebec aerospace industry, as am I. I am certain that this industry will be able to position itself well in future contracts with Boeing and with other bidders for the other military procurement contracts that this government is planning in the months to come.

[Business of Supply, March 1st, 2007]

Mr. Speaker, the hon. member spoke of the laissez-faire attitude and said that this government does not care about the aerospace industry in Quebec and Canada.

I would like to say that this is entirely inaccurate, since we have required the aerospace industry and Boeing, which won the aircraft bid, to invest one dollar in economic activity in Canada for every contract dollar awarded. Those are the facts. We have required that Boeing respect Canada's industrial development policy.

In addition, we asked Boeing to ensure that the investments are made in key technologies, which are the technologies of the future for Canada's aerospace industry.

My colleague and member of the opposition said that we required nothing of Boeing, which is completely untrue. We required that Boeing invest in key technologies critical to the aerospace industry and based on a list developed with the help of the industry.

I would ask my colleague where he is getting his facts, and how he can say that this government is doing nothing, when we have invested several million dollars in our Canadian armed forces.

What more can the Bloc Québécois do to help the Canadian armed forces and the aerospace industry? In my opinion, in its platform, the Bloc Québécois is against military spending, which means it is against economic benefits.

[Aerospace Industry, February 28th, 2007]

Mr. Speaker, I am proud of our record. I see that the Bloc Québécois is still asking questions and getting excited, but the Bloc Québécois will never be able to take action for the people in Quebec's aerospace industry. I was flabbergasted to see the slogan on the Bloc Québécois website, with the picture of the leader of the Bloc Québécois. The slogan reads, “I invest in Quebec”. I will let you in on how much the Bloc Québécois invests in Quebec: nothing. And that means nothing in economic spin-offs for Quebec.