Government Operations Committee on June 9th, 2026

[The Chair, Conservative, Kelly McCauley]

Thanks.

Mr. Patzer, go ahead, please. You have six minutes.

[Jeremy Patzer, Conservative, Swift Current—Grasslands—Kindersley, SK]

Thank you very much, Mr. Chair.

Thank you to both witnesses for appearing here today.

Congratulations on a fantastic career, Mr. Yurichuk. I'm a big CFL fan from Saskatchewan, but I digress.

As part of the buy Canadian policy, the government has said for a long time now that it will launch the small business procurement program in spring 2026. It's June 2026, and we still don't have that program out there. What concerns do you, as an SME yourself, have when there is a delay in this part of the program?

[James Yurichuk]

That's a great question.

I'm sorry to hear about the Saskatchewan fan part, but aside from that, I think, as an SME, that there's always a runway. There's a burn. You get certain signals, and you try to react and triage some of the signals that you're hearing from industry and government. When they're not brought on time, that means the runways are taking up space and the cash is burning. You have to make decisions. Making these decisions quickly helps the small and medium-sized businesses, so we're certainly in favour of bringing some of this timing forward.

[Jeremy Patzer, Conservative, Swift Current—Grasslands—Kindersley, SK]

For you, then, what would be the most important thing that should be part of the policy? What would be some of the definitions, requirements or targets for you to really make sure that you fit into this policy?

[James Yurichuk]

I think it would be just really looking at the real Canadian factors. Where's the company from? Where's the ownership? Where's the operation? Where does the IP land? It would be looking at all of the things that truly make it Canadian. It can't just be partial or piecemeal. Where is that wealth ending up when a project is complete? Understanding those factors and giving some credits towards true Canadian companies will certainly help out a company like ours.

[Jeremy Patzer, Conservative, Swift Current—Grasslands—Kindersley, SK]

There's a concern that government contracts will be bundled and that it could create a reverse incentive working against an SME. Do you see that as a potential problem, that you could be squeezed out because of the bundling by larger companies to get those contracts?

[James Yurichuk]

Certainly in the past what we've seen is projects favouring incumbents. They reach a certain criteria, and it's tough to make that for the insurgents like us. Sometimes you see the ladder getting kicked once they're up there. Unbundling them a bit and giving some opportunities—not making it $1 million to make.... We've been part of proposals where it cost us $400,000 or $500,000 just to put the proposal in. There's a lot of work, and that really sidelines a lot of companies. I heard an earlier witness mention two proposals as the average. We have to get those numbers up.

[Jeremy Patzer, Conservative, Swift Current—Grasslands—Kindersley, SK]

You touched on another piece there. I've heard from other businesses in other areas. We hear a lot about, say, shovel-ready projects. That's a buzz phrase that we hear a lot. In your case, it's more of a shovel-worthy type of project. You have capabilities, and you have some capacity, but if you're able to get that bid without having to go through $500,000 or $1 million in building a report and a proposal, only to be denied and to lose that money that you could have been investing into your company or into whatever your next line of textile might be....

Would you see some value in something like that, something where we know you have the capability, so you can be successful without having to go ahead with a massive spend just to find out it's lost?

[James Yurichuk]

Yes, a trend that we've been seeing south of the border is these two-phase contracts. If you meet the certain capability, they show you what the reward can be at the end of the way rather than just putting the whole contract all together. In our case, let's say that we have to make a jacket that's good for -60°. If we make it to -60° and hit that goal, then there are 1,000 jackets behind it.

That is a rudimentary example, but making those off-ramps and de-risking it for both the buyer, Canada, and the supplier in industry will certainly favour the SMEs.

[Jeremy Patzer, Conservative, Swift Current—Grasslands—Kindersley, SK]

Right on.

If this is at all to be successful, and let's just say the government does manage to roll this out, what is the opportunity for you as a Canadian supplier?

[James Yurichuk]

In our particular case, I think there's quite an opportunity to fill a meaningful capability gap here in Canada, bringing in thousands of jobs that we've lost overseas as we continue to import 17 billion dollars' worth of apparel each year. Bringing these jobs back would be super important.

There's also an opportunity to export. As I said during my witness statement, we are known around the world for being cold-weather experts, yet we continue to export a lot of this work outside the country.

If you can believe it, Canada now imports our long johns, our base layers for the Canadian Armed Forces. We let go of our long johns. We have to bring these back, along with other things, the outerwear and everything that goes into it. We were once known as the best outerwear country in the world. We've let it go over the last 30 or 40 years.

In the U.S., they protected themselves—

[The Chair, Conservative, Kelly McCauley]

I'm afraid we're past our time. I have to interrupt there.

[James Yurichuk]

Okay. It's to be continued.

[The Chair, Conservative, Kelly McCauley]

Yes.

Go ahead, Ms. Sudds.

[Jenna Sudds, Liberal, Kanata, ON]

Thank you, Mr. Chair.

Thank you to both of the witnesses for joining us today.

I'm going to start online, with Mr. Straisfeld.

One of your last statements in your testimony caught me, that the buy Canadian policy can't be just about buying Canadian products but about building industrial capacity. Obviously, these are really important goals as we think about what we'd like to come out of this policy.

I asked a similar question in the first hour to another witness.

Given that we introduced the defence industrial strategy shortly after the buy Canadian policy, they are building blocks. The defence industrial strategy is really about building that industrial capacity across this country in key capabilities that we have identified as areas where we want to see sovereign capabilities.

I'm curious about whether you view that in the same way, as complementary in that building block that we needed to put in place.

[Andy Straisfeld]

The assessment is correct, and I'll amplify it a bit more.

I was at CANSEC last week, and I was speaking to a lot of manufacturers we would want to partner with as an SME. As an innovator with my foundation, I've gone through ISED programs like NGen, IRAP, NRC and ISC. There they teach us to work collaboratively, to expand and to build a network so you can build greater and bigger things.

When I sat down at the Canada pavilion to speak to the military people there, it was very clear that they have no idea what is available in the market. At the same time, the whole idea of building resilience and buying Canadian is also finding a way to get all ministries and all groups that are interested in purchasing.

I'm going to be a bit funny in this and say that there should be something like a Canadian Idol for investment and procurement. There should be a catalogue, so that, if you are looking for something weird, you could go to that catalogue and find some SMEs, some medium and large companies that can do this.

I think that plays into what I was building on and what you were suggesting with the last panellist earlier.

[Jenna Sudds, Liberal, Kanata, ON]

That's fascinating.

One thing I've learned recently, which I think is quite excellent, is that the team that built the defence industrial strategy has now set up a portal where companies can register. I would suggest that it's trying to bench those strengths and capabilities we have in the incredible thousands of companies across this country.

I take your point. It is certainly something that needs to happen. I'm starting to see some building blocks to meshing the sector a bit closer together.

I think I'll pivot. Thank you very much for that. I'll go to the room and to Mr. Yurichuk.

You made some comments around some of the struggles in being a small or medium-sized business. As was rightly pointed out by one of my colleagues, we are in the process of establishing a small and medium-sized business procurement office to help address some of the challenges that an SME would typically have had in the past, trying to do business with government.

I would value your insights as to what would make this office most efficient and effective for you.

[James Yurichuk]

I think industry engagement is important, but real signals are important. Right now industry is going out to events every week, and there are different conversations happening. There's a lot of excitement building up, but we really need to put pen to paper and start rolling out those contracts. The speed of those contracts will be very important to the SMEs.

You know, there's a real eagerness. There's excitement out of CANSEC. The industry is very excited to get going on some of these exciting projects.

[Jenna Sudds, Liberal, Kanata, ON]

Most definitely. Thank you.

Mr. Straisfeld, maybe I'll go to you on the same question.

[Andy Straisfeld]

I'm sorry. Could you quickly rephrase the question?

[Jenna Sudds, Liberal, Kanata, ON]

Yes. I apologize. It was with respect to the new small and medium-sized business procurement office. What would make that most useful and relevant to you in terms of being helpful moving forward?

[Andy Straisfeld]

I think it's a great idea. Perhaps we can put some guarantees in there. One of the biggest problems with small and medium-sized enterprises, in any funding program that has a portion for them, is that there's always a danger—I've heard this with a lot of our projects—that the money has already been spent or has been tapped out, and we don't understand how it was possible. The key here would be to analyze a fund that is really dedicated to those.

You were mentioning before the $5 million up. A lot of us are going to band together for the $2.5-million project. We're going to try to get together, so that we can get that funding. I think if it's open-minded enough to allow for people to collaborate, to share and to work like they do in other ISED-sponsored programs, it will be very successful.

[Jenna Sudds, Liberal, Kanata, ON]

Thank you very much.

[The Chair, Conservative, Kelly McCauley]

Madame Gaudreau.

[Marie-Hélène Gaudreau, Bloc, Laurentides—Labelle, QC]

A little birdie told me you've been to Montreal before, right? Was it Sherbrooke?