Ladies and gentlemen, honourable members, good morning and thank you for inviting me to speak to you today.
I'd like to take the next few minutes to give you the perspective of my industry, the Canadian defence and security industry, on the United Nations Arms Trade Treaty and the importance of raising the bar globally to a unifying standard and reducing weapons proliferation.
CADSI is the national voice of more than 800 Canadian defence and security companies that produce world-class goods, services, and technologies that are made across Canada and sought the world over. Our member companies contribute to the employment of more than 63,000 Canadians across the country, pay wages 60% higher than the average manufacturing wage, and generate $10 billion in annual revenues.
If you refer to the most recent “State of Canada's Defence Industry” report, which is from 2014, you'll notice that our industry's major segments pertaining to revenues include aircraft fabrication, structures, components, and maintenance, repair and overhaul at 31%; combat vehicles and related maintenance, repair and overhaul, and other related defence goods and services at 28%; command, control, communications, computers, intelligence, surveillance, and reconnaissance, or C4ISR, including avionics and simulation systems and other electronics at 25%; naval ship fabrication, structures, components, and maintenance, repair and overhaul at 9%; firearms, ammunition, missiles, rockets, and other munitions and weapons at 4%; troop support at 2%; and live personnel and combat training services at 1%.
Our members take pride in delivering defence and security goods, services, and technologies to the Canadian Armed Forces, Coast Guard, and security service providers to keep Canadians safe and secure on a daily basis. The most relevant number to this discussion, however, is that 60% of our sector's revenues come from exports. That means our members' innovative technologies, products, and services are sought out by governments across the globe. The fact that Canadian companies are highly competitive in highly regulated and protected foreign markets suggests our industry is both innovative and productive. In other words, ours is an industry that Canadians should value. We need to recognize that defence exports are essential to maintaining leading-edge industrial capabilities, a skilled and knowledgeable workforce, and an advanced technological base here at home.
Before discussing the UN ATT specifically, I'd like to point out that the existing Canadian export control regime, which our members adhere to on a daily basis, is highly robust and rigorous. The Canadian defence export regime consists of three separate approval processes and sets of regulations: the automatic firearms country control list, the controlled goods program, and the Export and Import Permits Act. It involves multiple federal government departments, including Global Affairs Canada, Public Services and Procurement Canada, National Defence, and Justice Canada. If you haven't had a chance to peruse the depth and breadth of these documents, I actually have them here with me today.
Canada's accession to the UN ATT will further enhance our very strong defence export regime and raise the bar globally for other countries whose defence export control processes are not up to Canada's very high standards. The treaty places additional burdens on countries that export small arms and military equipment, to ensure the weapons are not diverted to third parties or misused by the actual recipients. It will also regulate the practice of brokering, where weapons are exported from one third country to another. This is in part why CADSI called on the government last year to accede to the UN ATT.
In Canada the government sets tough parameters, rules, and regulations on defence exports, and our companies follow them. In terms of the new requirements on defence exports that arise out of Canada acceding to the UN ATT, we only ask that government continue to provide a predictable and timely framework within which businesses can operate. Industry needs a process that allows our companies to fairly pursue market opportunities with the confidence that they are supported by their government.
It's important that the government communicate as early and clearly as possible regarding its comfort with exporting a particular good to a particular country and end-user. Companies do not want to invest significant resources in pursuing potential sales opportunities if the government denies them the permit at the end of the process. The export licence is the final stage in the process, not the first.
In conclusion, CADSI fully supports Canada's acceding to the UN ATT. All of our allies are signatories to this treaty, and Canada should be as well. The Canadians who work for defence and security companies care and are concerned about the world in which they live, and are proud of what they do, make, and sell. They share the same basic values that we all share.
I'd like to thank the committee for providing our industry with an opportunity to appear before you today to share this message, and I welcome any questions you may have.