Government Operations Committee on May 10th, 2022

[The Chair, Conservative, Robert Gordon Kitchen]

Thank you, Ms. Cianfarani.

I apologize, Mr. Aubertin. Unfortunately, we've run out of time. If you can provide that to our clerk in writing, it would be appreciated.

I will now go to Ms. Vignola for six minutes.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

Thank you very much.

A few weeks ago, Mr. Aubertin, the federal government announced that it had chosen Lockheed Martin's F‑35. I have two questions about that.

Were you surprised by the choice of the F‑35?

In your opinion, what economic benefits will this agreement with Lockheed Martin generate for Quebec? To what extent do you think its workforce and expertise will be called on?

[Alain Aubertin]

Thank you for your question.

No, I was not surprised by the choice. The process was conducted in such a way that officials were able to assess the expertise of the various organizations and their proposals over a number of years.

Firstly, the expected benefits of such a contract, as noted earlier, can be direct. For instance, they can include jobs in the manufacturing and final design of the aircraft's sub-components. In Quebec, there are more than 225 SMEs and industry organizations, not to mention all the universities that are closely involved in our consortium. Furthermore, there are indirect benefits for the development of skills and expertise through workforce training programs.

We are strong believers in the transition to sustainable aviation, and thus in reducing the environmental impact of factories, and reducing greenhouse gas emissions through new technologies and new electrical systems that can be installed onboard for command and propulsion. The development of suppliers resulting from all this direct work has a strong structuring effect.

With respect to innovation and research and development, this is a golden opportunity to reap industrial and technological benefits for Quebec, and even for all of Canada, because there are a lot of partners outside Quebec. There are members who have a presence everywhere. So it is a structuring project.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

Thank you very much, Mr. Aubertin.

My next question is somewhat related to the last one I asked you, so you will have the opportunity to develop your idea.

A few weeks ago, witnesses stated that the partnership between Canada and Lockheed Martin on the F‑35 design had generated $2 billion in benefits for the Canadian aerospace industry, before the contract. They were referring to the design only. Does that amount sound right to you? We do not have the regional data, but do you know what percentage of those benefits will go to Quebec?

At this point, do you think Quebec's aerospace expertise will be called upon under the agreement between Canada and Lockheed Martin? Do you see that coming up in the negotiations?

[Alain Aubertin]

I cannot speak to the value of the investment made in the past, namely, $2 billion for the aircraft design itself. I can tell you however that some of our SME members benefited from direct transactions with Lockheed Martin. As a result of those transactions, those SMEs developed their technology and conducted structuring projects with CRIAQ.

You asked whether I see positive elements coming up in the negotiations. At this point, we have not in any way been asked to cooperate with Lockheed Martin or Innovation, Science and Economic Development Canada to identify specific technology centres, project ideas or centres of excellence in Quebec in order to make progress in this area.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

Are you concerned that you were not asked to participate in the process thus far, or do you consider it normal at this stage of the process?

[Alain Aubertin]

I would not say it is abnormal, but I think the key industry expertise needed by Lockheed Martin must be defined right away, as well as the various aspects of innovation that encourage workforce skills development. We must also look at the main research areas, such as onboard artificial intelligence and highly sophisticated navigation systems for detecting or avoiding collisions or countermeasures. It takes a lot of time to train people and to understand the science behind this field. I think this should be an urgent priority.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

Indeed.

So ultimately you are saying that the government does not consult the aerospace industry enough with regard to fighters and NORAD in particular. Could it consult the industry more extensively?

[Alain Aubertin]

Yes, but that would also mean consulting stakeholders in research and innovation. There are stakeholders in the industry, but academics are also a part of the research and innovation ecosystem. We represent people from the industry, but academics in this field could also make a contribution.

[The Chair, Conservative, Robert Gordon Kitchen]

Thank you.

Now I'll go to Mr. Johns for six minutes.

[Gord Johns, NDP, Courtenay—Alberni, BC]

Thank you.

Thank you again, both of you, for taking time to testify here today at this committee.

We heard earlier about the ITBs, and I just think cheaper isn't always better. We've seen infrastructure and defence procured internationally, in Africa and South America, and we see that we have crumbling examples of cheaper infrastructure built here in Canada.

I want to touch on the ITBs a bit.

Ms. Cianfarani, I want to take a different angle. Can you talk about the critical importance—the value proposition—when it comes to the multiplier effect for human rights, the environment and fair wages, and ensuring that we have supply chains and are developing national security around procurement and ensuring that we do it here at home in Canada? What are the benefits?

That would be great.

[Christyn Cianfarani]

We use a policy here in Canada that's called an “offset policy”, which is the ITB value proposition. As I said, for proposals of a certain size or bids of a certain size, you apply this policy. This is what incentivizes corporations to put supply chain and other technologies or other research projects, etc., in Canada—

[Gord Johns, NDP, Courtenay—Alberni, BC]

Sorry; yes, I understand that. I'm just hoping that you can underscore the importance of it in terms of economic leakages for our country and opportunities in the long run for developing our manufacturing sector.

[Christyn Cianfarani]

Well, as I said, it's critical, because if you don't do this, what happens is that major platform acquisitions will be sourced from other nations.

For example, in the case of the NSS, if we had just bought the Type 26 from the Brits, it likely would not include a maintenance transfer of technology or even a build here in Canada, and effectively we would be hamstrung by another nation getting all the economic benefit. It is a critical piece, because that is the way in which we get work in Canada on things that we don't do in Canada by nature.

[Gord Johns, NDP, Courtenay—Alberni, BC]

I really appreciate your valuable feedback.

Mr. Aubertin, in terms of dual-use technology for both military and civilian purposes, in my own riding I have a company named Coulson Aviation that's doing very important work fighting forest fires all around the world, not just here in Canada. They've refitted their helicopters and airplanes to fight fires around the world.

Do you think we could do a better job in creating dual-purpose military equipment? Perhaps you can speak a bit about how things have shifted.

In the case of our allies, we see Ukraine under attack right now and the important role that Canada could be playing on the civilian level as well. Perhaps you can speak about that, Mr. Aubertin.

[Alain Aubertin]

Thank you.

Yes, quite right.

Technological developments in military aviation have benefits for civil aviation and vice versa. Let me give you an example of the benefits for military aviation.

There are aircraft derived from the Bombardier Global 7500 that have been used by the US military for a number of years. Although the developments we support in the ecosystem benefit civil aviation for the most part, all the other subsystems and manufacturers in the supply chain also benefit military aviation.

We see the same thing in the various military aerospace platforms. The robustness of the systems developed for the military enable civil aviation to produce variants of those systems. We must bear in mind however that companies are subject to very strict rules in terms of export controls, controlled goods, and so on.

As a result, there will always be certain limitations associated with developments in military aviation that are carried on by civil aviation.

[Gord Johns, NDP, Courtenay—Alberni, BC]

I was really impressed, Mr. Aubertin, with your strengths and ambitions document as part of the presentation that you sent us.

You talked about accelerating the decarbonization of air transport. Can you elaborate on how Canada could better support decarbonization and lowering greenhouse gas emissions within your sector, and some of the ambitions that you have and that you're working on?

[Alain Aubertin]

Yes.

Among the vectors for change that contribute to a sustainable aerospace sector, navigation is an important area. Airline companies are working very closely with the major navigation system suppliers, including Thales and CMC Electronics, in Canada. Navigation can be optimized in terms of ground traffic, parking and landing. Optimizing navigation can result in close to 30% of greenhouse gas reductions.

Another change vector relates to propulsion, whether hydrogen and its variants, hybrid or fully electric propulsion. In Canada, there is a history of engine manufacturers in this niche: GE Aviation, Rolls-Royce, Pratt & Whitney Canada, as well as Safran, which provides equipment for helicopters and fixed-wing aircraft. That capacity exists because the suppliers associated with these groups are here.

Another area is aircraft modification. Level 1 groups and original equipment manufacturers design new aircraft configurations.

So there is both technological and industry expertise. We have worked with the industry and universities to accelerate the new generations of technology in order to decarbonize the sector.

[The Chair, Conservative, Robert Gordon Kitchen]

Thank you.

With that, I'd like to thank you, witnesses, for your testimony today and for bearing with us. We were supposed to be done by 5:30, and it's six o'clock, so I appreciate your bearing with us for all this time and answering our questions.

If you feel there is something you might like to add to your testimony, by all means, please submit that to the clerk and we will distribute it to all the committee members.

With that said, Ms. Cianfarani and Mr. Aubertin, thank you very much for being with us.

I'd like to thank our interpreters and our technicians for all the work they've done and for bearing with us for the extra half-hour, and I thank as well our analysts and our clerk. As many of our committee members can see, Ms. Miriam Burke is with us part time when Paul can't be with us.

With that said, I declare the meeting adjourned.