Government Operations Committee on June 9th, 2026

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

I'll follow up on that, actually.

Dr. Fry, I see that in local communities, there have been buy local policies for decades to boost business, but upstream, there was a political will to invest and be more flexible. Today, I hear you, and that's more or less what I'm seeing. What about our businesses, our champions who have been let down, and our pride?

My big fear right now is about business succession. Are we going to be swallowed up or, on the contrary, are we going to use foresight and ensure that we preserve skills, innovation and, ultimately, who we are? Do you think the government should already be on the offensive to ensure business succession, or even consolidate what we have as industries?

[Dr. Noah Fry]

Yes, I do agree that we need to do more beyond just the policy itself. As I mentioned during the last round of questions, this is more of a passive, middle- to long-term strategy. In my view it's still entirely justifiable—and necessary, given the moment—but if you're not providing supports to industry now, then it's difficult for them to benefit in the middle to long term.

Is this independently an industrial strategy? In my view it isn't. I think there are strategic components to it, especially around the sourcing policy, in which there's a clear philosophy: We're thinking about steel, aluminum and wood. There is clearly an ideology and clearly an aim here, whereas in the other components of the policy, there are also aims but, again, they're more passive.

As I mentioned before, I want to see this done in concert with other measures. That's not to say that buy Canadian, in and of itself, is an unworthy idea or that this policy is unworthy, but it can't function if we aren't investing more in industry.

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

That's great.

Mr. Shimooka, you have a few seconds left.

[Richard Shimooka]

The nice thing about defence is that it is an investment, in some ways. If you're talking about $70 billion or $100 billion in defence investment over however many years, there's real funding coming in there.

Even when we're buying from abroad, the ITB policy in some ways ensures that there's some of that. I think there are quibbles on that—that's not the thrust of your question—but I think it does allow that. I think there are ways to do it more effectively at times.

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

Thank you.

Thank you, Mr. Chair.

[The Chair, Conservative, Kelly McCauley]

Thank you very much.

Go ahead, Mr. Patzer.

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

Thank you very much.

Mr. Shimooka, is there any chance that this strategy might actually cause procurement costs to increase? Are there any concerns around that?

[Richard Shimooka]

I think so, to some degree. For a lot of the policies, it depends on how they're constructed. One of the challenges that you can see.... Let me use the example of Poland. Poland sees the threat as being extremely high. They have, in many of their procurements, just completely disregarded any reciprocal offset formula for their systems. Often, in cases, you'll see the cost of their procured capability compared to a country like.... Let's say that they bought F-16s several years ago. They could be 20% to 30% lower just because there's no reciprocal offset, and that's because they're buying a finished good from another country, and the offset policy does basically incur additional costs. It can frequently have that effect.

Now, often the question is, are we buying something that's going to ensure there's a sustainable industry, as I talked about before, about licensed production, or is this going to be something that ends after the last aircraft or whatever is produced? Those are questions. It can very easily increase costs. Historically, in Canada, some of this has actually increased cost significantly when we have had a buy Canada policy. It has to be weighed between what your industrial effect is and what we are trying to achieve going forward.

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

Mr. Fry, just building a little more on the issue around how trade agreements work, is there potential for further restrictions to buy Canada because of some of the trade deal requirements that we have? I'm just following up on my colleague's question.

[Dr. Noah Fry]

Yes, and one question I have is that there's clearly a desire to have a small business set-aside, which is a great idea. The challenge is we don't have that derogation within CETA, so that undercuts our potential to have a small business set-aside unless we want to make it very low value. That's an example of where we haven't quite carved out our needs to reflect our wants today. That's what I'm concerned about the most.

There may be some internal desire—and this speaks to a larger issue, as I was mentioning earlier, around waiver conditions or exceptions—to waive or accept a procurement because there's a fear there's a larger international supplier who might kick up a storm as a result of domestic preference conditions. I'm worried about that potential hazard as well, an informal chill on the use of the buy Canadian policy.

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

Are there any concerns around the $5-million floor? It started at $25 million, and it's dropping to $5 million. Is that going to create a bit of an issue for small businesses in particular trying to get into the space?

[Dr. Noah Fry]

I don't think so. Whether it's $25 million or $5 million, both are generally covered with an international trade agreement, so that's not really the issue. What it does is open up a lot more contracting opportunities.

In 2025, for example, when we were looking at contracts—original contracts valued over $25 million—I believe it was about 35. Now we're opening it up to about 280. Not all of those are going to be reserved for buy Canadian, for various reasons. Some of them have limited procurement, and some of them never have competition to start with, so there are other restrictions that further limit that sample, but we are now growing to a larger number of contracts. Ideally, small businesses may benefit from that, but for them, the larger contracts can be very difficult in terms of tendering, because the bid documentation they need to fill out can be so cumbersome. You're submitting almost a novel when you're participating in some of these processes. For them, it's going to be very challenging, and that's why there needs to be an additional small business aspect to the policy, and I understand that is planned at some point.

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

What about intellectual property? Generally, when you're buying an OEM piece, you don't own the software that you get with it. If we're trying to build more things in Canada, or even if we're importing some goods from another company, in the case of the Gripen fighter—if the government decides to go that route—is there any concern that we don't actually own the software, and, therefore, we have that issue around not having the ownership of that IP?

[Dr. Noah Fry]

That concern has been raised by some civil society actors. There are many people in this space, and some of them really want some IP criteria to be included in the definition of “Canadian supplier”. I personally prefer employment, but I'm open to either being a potential condition for qualifying as a Canadian supplier.

Part of it comes down to what your philosophy is for a buy Canadian policy. Is it about driving entrepreneurship, or is it about mitigating the current effects of trade actions, principally by the United States, but also instability more broadly? If it's the latter, then maybe employment is a better condition; if it's the former, then maybe we need more language around IP.

[The Chair, Conservative, Kelly McCauley]

Go ahead, Ms. Sudds.

[Jenna Sudds, Liberal, Kanata, ON]

Thank you, Chair.

Thank you to both the witnesses for being with us today.

I will say that in my riding of Kanata, here in Ottawa, there's been a lot of discussion about the opportunities that the buy Canadian policy presents, typically around defence companies as well as in the dual-use or technology sector. There's lots of discussion and lots of excitement.

Dr. Fry, in a previous answer you made the comment around it being an ambitious policy, that it's necessary but is not an industrial policy, and that it should be done in concert with other initiatives. I'm paraphrasing, but I think that's what you said.

I'm curious about your perspective, given that we've also moved forward with the defence industrial strategy, which does obviously include the tenets of the buy Canadian policy.

What is your perspective on how those complement each other and reinforce the policy itself?

[Dr. Noah Fry]

That's a great question.

I'm not quite an expert on defence policy, so I think Richard might offer a bit more insight on that specifically.

To the ambition versus restriction conversation, and specifically around industrial strategy—I think that was the term I used—the literature and now, increasingly, civil society are divided between industrial policy and industrial strategy, where the latter sounds a bit more active and the former sounds a bit more passive.

I think there are strategic components to the policy. I really do. In the sourcing policy, or the materials component of the policy, there's very clearly a philosophy here. We are thinking about industries that are being impacted by American trade actions, and we are trying to ensure that we are sourcing from those industries at home so that we mitigate the effects of those actions to the best degree possible within public procurement.

There are inherent limits to public procurement. That's why I and many others believe that industrial strategies need to include other policies in concert with each other to mitigate those effects and perhaps allow some of those suppliers, who may reasonably benefit from this policy, to participate in the first place.

One of the key indicators I'm looking for from the buy Canadian policy is whether we are going to see more participation. I mentioned in my opening remarks that tenders on average have fewer than two bids. If we can get that up while having a buy Canadian policy, that would be a positive indicator. I'm looking for that specifically—if this policy will incentivize new entities to step forward and participate within public procurement.

[Jenna Sudds, Liberal, Kanata, ON]

I agree. That's a great metric.

Mr. Shimooka, would you like to comment on that as well?

[Richard Shimooka]

I think your point about small and medium-sized industries in Canada is a really good one. It's been really challenging for them historically. Even today, we are potentially on a defence.... The DSRB, or the defence, security and resilience bank, announcement may come soon. One of the big issues is obtaining capital for increasing their ability to meet some of these demands.

We have to realize that the defence environment is highly regulated. There are security concerns. In some of these areas, even in dual use, there are very few firms that can actually work within that space, and getting the talent necessary is going to require years of development through education, funding and whatnot.

When we think about these areas, it's nice to see that companies are excited to go forward with this. My previous comments about sustainability of funding notwithstanding, trying to reduce some of these regulatory barriers and create the ability for them to participate in the defence marketplace, for lack of a better word, is really important.

As a comparative example, if you look at the United States over the past 10 years and how they have tried to transform the Department of Defense's ability to contract firms by looking at non-traditional suppliers, that is now seen as a real strength for their ability to procure new and novel systems that are becoming more and more important for places like Ukraine.

In order to sustain what you're asking for, that's an area that needs a hard look.

[Jenna Sudds, Liberal, Kanata, ON]

Building on that—and we haven't touched on this yet today—part of the buy Canadian policy is to bring forward, quite soon, a small and medium-sized business procurement office. If you were to provide your insights or guidance around how best that office should be shaped, what would you prioritize?

I'll put that to both of you briefly, because we're probably out of time.

[The Chair, Conservative, Kelly McCauley]

Yes, I'm afraid we are out of time. Perhaps you can provide your answers to us in writing.

Colleagues, we are done.

Mr. Shimooka, it was wonderful to have you back at OGGO. I appreciate your time.

Dr. Fry, it was great to have you here. Hopefully we'll see you again another time.

Colleagues, we are going to suspend for about two minutes, and then we'll get to our next round.

We are suspended.

[The Chair, Conservative, Kelly McCauley]

I call the meeting back to order.

We have two new witnesses. One's virtual. Can I just ask that if you have a question for the two of them, you direct it to someone specific? That way, our online guest, Mr. Straisfeld, will know if it's being directed to him.

We'll start with Mr. Yurichuk. You have five minutes for an opening statement.

Go ahead, please, sir.

[James Yurichuk, Chief Executive Officer and Founder, Wuxly Defence]

Good afternoon, Mr. Chair and members of the committee. Thank you for inviting me to take part in your study on the buy Canadian policy.

My name is James Yurichuk. I'm the founder and CEO of Wuxly. Wuxly is a Canadian-owned manufacturer of advanced outerwear, military soft goods and engineered textile systems.

Since launching in 2015, 99% of everything we've made has been made right here in Canada. We employ more than 50 people directly in Mississauga and 300 in a supply chain from coast to coast to coast. We're exactly the kind of company the buy Canadian policy is meant to support. We're Canadian-owned, Canadian-made and built on a domestic supply chain.

I'm here today because I believe Canada can be a global leader in sovereign, high-performance, cold-weather and soldier systems designed and built right here at home. Like a Swiss watch or an Italian suit, there's something special about Canadian-made outerwear. The buy Canadian policy should take note of this, because there's an opportunity to strengthen Canada's global reputation.

Canadian preference should be strongest in sectors where supply disruption creates national security risks, including defence textiles, PPE, Arctic gear and public safety uniforms. We should treat and prioritize them just as we do critical minerals, steel, aluminum and wood products. If Canada cannot design, engineer and manufacture critical soft goods domestically by Canadian companies, then we are exposed.

We saw this when COVID hit. Wuxly maintained its Canadian supply chain, so we were able to quickly pivot. We produced more than 10 million pieces of PPE for Canada here at home, for frontline workers, when they needed it the most.

When Russia invaded Ukraine, standing by was never an option. Wuxly evolved again and delivered more than 250,000 military soft goods to Europe. Here in Canada we have quickly become a world leader in female combat uniforms, with over 40,000 sets delivered to Ukraine, along with sleeping bags, parkas, tank covers and various soft goods that were all made in Canada.

Today, our engineered textiles are tested, trusted and used in the harshest conditions in the world. We have the domestic industry to build on, but this industry is becoming fragile. According to ISED's numbers, Canada imports roughly 17 billion dollars' worth of apparel imports each year. Too many of those are resold by foreign-owned firms, hollowing out our Canadian operations, talent and IP, with billions and billions of dollars ultimately leaving our economy. Sadly, contributing to this grand number are military clothing imports from Asia, which Canada continues to allow to clothe our Canadian Armed Forces.

Sovereignty is not just about fighter jets, shipyards and exquisite systems. Canada has a real strategic advantage in cold-weather and Arctic textile systems, and our allies are taking notice. We can't let this opportunity slip by. Demand is growing at home and abroad, and deployments are only increasing year after year. This is where Canada can truly lead. Given the room to grow, we can create thousands of jobs and bring real skills back to the places that lost them.

That is why the buy Canadian policy matters, and that is why it is the right direction. Its success will come down to how it is implemented. Today, a product can be called Canadian while the ownership, IP and value chain sit offshore. Enough with the maple washing. True domestic value means Canadian ownership and IP, Canadian manufacturing and Canadian suppliers—not just the seller's address or office.

We have to treat technical textiles and defence soft goods as strategic industrial capabilities, just like wood and steel. That means secure supply chains, speed when a crisis comes, stronger quality control in jobs and skills, and know-how that stays in this country.

As a Canadian company, we're asking for a fair opportunity to compete at this pivotal moment—not just for now but for the long term. When the world thinks about gear built for the extreme cold and harsh operating conditions, Canada should be the country it thinks of. We have the expertise, environment, climate and industrial base to build on. The question before this committee is whether we choose now to be that country.

In my former career as a CFL player, my coach used to preach that we have to be brilliant at the basics. For Canada, this means getting the fundamentals of this policy right so that we can maximize its full potential.

For the soldiers protecting this country and representing Canada around the world, and for the allies who are counting on us, let's reawaken the Canadian textile industry. Let's make the world's best outerwear right here at home in Canada.

Thank you. I look forward to your questions.

[The Chair, Conservative, Kelly McCauley]

Thank you very much.

We'll now go to Mr. Straisfeld for five minutes.

Go ahead, please.

[Andy Straisfeld, President, MRE Canada]

Thank you very much, Mr. Chair and members of the committee.

It's a great opportunity to appear here to talk about Canada's buy Canadian policy.

I come before you not as an academic or a career public servant but as an innovator, an entrepreneur and a contractor who has spent years working with Canada's defence, manufacturing and industrial sectors. My perspective is shaped by experience on the ground, working with companies that create jobs, invest in communities and support Canada's strategic interests. As president and founder of MRE Canada, a company specializing in domestic food production and manufacturing for the Canadian Armed Forces, I understand the importance of Canadian sovereignty, not only for our military but for the resilience of our economy and supply chains.

Today, countries around the world are investing heavily in domestic manufacturing, because they've learned a critical lesson: When demand surges or crises emerge, access to essential supplies cannot always be guaranteed. For Canada, this extends beyond major weapons systems. Military rations, ammunition, components, packaging technologies, logistics systems, advanced materials and electronics all contribute to the operational readiness. A military cannot operate without sustainment. It cannot fight without supply chains. At its core, a buy Canadian policy is more than a procurement policy. It's an economic policy, an industrial policy, a sovereignty policy and, increasingly, a national security policy.

The recent years have exposed vulnerabilities in global supply chains, whether they're caused by geopolitical instability, trade disruptions or other international crises. Canada has learned that dependence on foreign suppliers can leave it exposed when other nations prioritize their own needs. Resilience requires more than trusted trading partners. It requires the ability to produce, sustain and scale critical capabilities here at home. Building that capability or that capacity requires long-term investment, and those investments depend on the confidence that government procurement will remain consistent over time. We've seen what happens when that confidence disappears. When Canada faced critical shortages, businesses stepped forward, invested capital, expanded facilities and built domestic production capacity. That was during COVID-19. However, when the immediate need passed, many were left competing against lower-cost imported goods without sustained support. Much of that capacity disappeared, and those investments were lost. That lesson should not be forgotten.

The same principle applies today in defence manufacturing. If government expects industry to invest in new production lines, workforce development and infrastructure, companies must have confidence that procurement commitments will endure long enough to justify those investments. A successful buy Canadian policy should therefore be measured by not only the contracts awarded today but the industrial capacity that exists 10 or 20 years from now. The question is not whether Canadian companies can compete. They already do. The question is whether our procurement system gives them a fair opportunity to succeed. Too often, procurement focuses on the lowest upfront cost, yet true value extends far beyond the purchase price. When contracts support Canadian workers, research and development, tax revenues and domestic supply chains, the economic return benefits the entire country. Every dollar spent with a Canadian supplier supports jobs, innovation, apprenticeships, exports and future growth. This is particularly important as Canada works to strengthen its defence industrial base. We cannot build a resilient defence ecosystem overnight. It requires sustained investment, predictable procurement and confidence that domestic firms will have the opportunity to grow.

To succeed, a buy Canadian policy must be implemented carefully.

First, Canadian content requirements must be meaningful and transparent. Canadians should have confidence that products labelled as Canadian genuinely create value in Canada.

Second, the policy must support small and medium-sized enterprises. Many of Canada's most innovative firms begin as small businesses but face significant barriers in navigating complex procurement systems. Today's small firms can become tomorrow's industrial champions.

Third, the policy must focus on long-term industrial development rather than short-term political objectives. Buy Canadian should not be viewed as protectionism. It should be viewed as a strategic investment. Every major industrial nation actively supports sectors it considers essential to economic prosperity, resilience and national security. Canada shouldn't be different.

In closing, Canada faces a strategic choice. We can continue to treat procurement primarily as a purchasing exercise focused on short-term costs, or we can recognize it as one of the most powerful tools available to strengthen our industrial base, economic resilience, emergency preparedness and national sovereignty.

The lesson is simple: If capacity is not maintained, it's eventually lost. Once lost, it becomes difficult, costly and time-consuming to rebuild.

If Canada wants domestic companies to invest, innovate, hire and expand, we must provide confidence that strategic Canadian capabilities will continue to be valued long after the crisis has passed. A successful buy Canadian policy should not simply purchase Canadian products. It should build Canadian capacity.

I thank you very much, and I look forward to your questions.