Thank you, Chair.
I really appreciate the opportunity to speak to this committee about the topic of buy Canadian provisions, with a specific focus on my own research, the defence industrial base. I'll keep my remarks short, as I'd like to maximize the amount of time for the members to ask questions with regard to their specific interests.
On the whole, increasing the scale of domestic defence production is a laudable goal, but caution must be taken in how it is applied and where. Certainly, there have been notable successes in our history. The industrial buildup during the Second World War was a critical component of Allied war efforts and proved transformational for our country's economy. At the same time, care must be taken to avoid some of the less inspiring outcomes. We must avoid the temptation to develop highly specialized capabilities that are designed for bespoke Canadian requirements or tailored purely for domestic jobs. Our history is littered with examples of high-cost, low-capability orphan fleets, colloquially known as “unicorns”, that have not realized sustainable industrial outcomes. They consume scarce defence resources and have led to a less effective military. Rather, what should guide defence industrial development are strategic and military considerations that will determine the demand and need for capabilities. This is a call that a number of other expert witnesses have repeated across various parliamentary committees over the past six months.
Being able to produce capabilities at large scale has become a hallmark of a modern defence strategy. As is evident in Ukraine today, militaries must be supported by an industrial enterprise that can provide thousands of drones, artillery shells or other consumables daily to ensure victory. Herein lies a significant challenge. Contemporary defence supply chains, like their civilian counterparts, are highly complex and can span dozens of countries, hundreds of suppliers and tens to hundreds of thousands of components. While specialization can increase efficiencies, it can also be highly vulnerable to disruption due to conflict or changing geopolitical dynamics. Many have argued that through reshoring supply chains, Canada might be able to develop resilience from such events. However, if the process of developing sovereign supply chains results in systems that are produced at low levels and high costs, it can have negative consequences that are similar to supply chain disruption.
Many different approaches can manage these issues and bear examining. There are no clear right answers. There are just different approaches to managing cost, risk, capability and industrial development, which I hope we can discuss today.
Thank you for your time. I look forward to your questions.