Industry and Technology Committee on Nov. 26th, 2025

[John-Paul Danko, Liberal, Hamilton West—Ancaster—Dundas, ON]

Thank you, Chair.

My colleague opposite did an excellent job of asking some pertinent questions. My questions are mainly for Madame Lussier and Madame Proulx.

I'm trying to get a sense of the size and scale of the Quebec aerospace industry and defence cluster. Are there some lessons from the success we've seen in Quebec that could be applied to other jurisdictions across Canada?

[Mélanie Lussier]

As I said earlier, the aerospace industry in Quebec represents 250 businesses and 43,000 employees. It has annual sales of $23 billion. It’s the largest exporter in the province.

One of the most effective initial steps was the government’s decision to support the industry and to position it as a strategic priority. We’re fortunate to have a Quebec aerospace strategy that effectively aligns various ministerial priorities with business priorities, ensuring businesses receive the support they need.

One area where we’ve not done as well as other provinces and territories or other countries is in developing dual-use technologies. On our end, we have always designed civilian aerospace products. I’ll use the obvious example of Bombardier, which produces the Global Express and modifies it for military use and missions. Meanwhile, France and the U.S. use their defence sectors to design products, and businesses can later take them to market for civilian use.

More investments in defence give us an opportunity to turn around what we have always done and use the defence sector to design products that can be commercialized later.

That said, there is no doubt that having a Quebec strategy enables us to align orders, set priorities and focus on a strategic sector for the province.

[John-Paul Danko, Liberal, Hamilton West—Ancaster—Dundas, ON]

Madame Proulx, did you have anything to add?

[Véronique Proulx]

The government has recognized industry as a strategic priority and has actively invested in it accordingly. These investments were essential to eliminating risks for our businesses and for fostering their growth. The aerospace sector model, by dint of the support provided by the government, is a very good model that should be replicated in the naval, onshore and cybersecurity sectors. It's important to ensure that companies in these sectors can compete globally. We need to keep in mind that governments are very involved in the U.S. and in Europe, in any country with an aerospace industry. In defence, we must ensure that we support development and diversification in these sectors.

I would like to return to the industrial and technological benefits policy, which will be essential to developing forward-looking sectors and to having an industrial and technological benefits program with specific objectives. We need to ask ourselves what we want to develop in the onshore and cybersecurity sectors in Quebec and Canada. We can't do everything and so we have to make choices, and the industrial and technological benefits policy will certainly be an interesting approach for the government.

[John-Paul Danko, Liberal, Hamilton West—Ancaster—Dundas, ON]

Thank you.

I want to switch to procurement. This is a particular interest of mine, having worked in private practice and government and having written quite a few contracts myself.

Difficulty in accessing defence contracts seems to be a particular barrier to expanding defence benefits across the country. Are there any particular barriers or things related to defence procurement in particular that you would like to see changed to benefit the industry by being more open on the procurement side?

That is to either Madam Lussier or Madam Proulx.

[Mélanie Lussier]

Procurement is certainly a long and complex process. That's why it is difficult to access contracts. Many of our members are SMEs, as I said earlier. We must cut red tape and reduce paperwork. As mentioned earlier, the first hurdle is figuring out how to secure a first contract.

There's one area where we've not done well in recent years and that relates to key industrial capabilities that have been defined. I'll take the example of Canadian Aviation Electronic Industries, or CAE. The company offers pilot training and flight simulation programs. It's the best in the world in this field and has extremely important capabilities for Canada. We're fortunate to have a company like CAE, which is considered a key industrial asset, and yet, it is forced to bid on contracts. This process spans several years and demands substantial financial resources, along with a large team to manage the application paperwork.

That's fine, it must be done, but when it comes to areas where we know we are the best in the world, we need to be more agile and faster.

As I've mentioned in various forums, we need to adopt a bolder approach that is less traditionally Canadian and actively support Canadian companies, particularly those with critical industrial capabilities.

In short, when it comes to procurement, we must be willing to choose our champions and proceed a little more directly, while reducing red tape. We also need to simplify the procurement process.

We're not saying that we should automatically award all the contracts without review. We need to exercise due diligence and carry out the necessary checks, but we also need to ensure that we give priority to our businesses. There is no doubt that we need to make the process less complex and to reduce red tape.

[John-Paul Danko, Liberal, Hamilton West—Ancaster—Dundas, ON]

Thank you.

How much time do I have? Am I out?

[The Chair, Liberal, Ben Carr]

I'm sorry, Mr. Danko. We are over.

Mr. Ste‑Marie, you have the floor for six minutes.

[Gabriel Ste-Marie, Bloc, Joliette—Manawan, QC]

Thank you, Mr. Chair.

I would like to welcome the three witnesses and thank them for joining us today, and for their presentations.

My questions are for Ms. Proulx and Ms. Lussier.

Ms. Lussier, you mentioned that Quebec has an aerospace strategy. Unfortunately, that is still not the case in Ottawa.

Is the industrial defence strategy a good opportunity to adopt an aerospace strategy?

[Mélanie Lussier]

Yes, that's correct. We have persuaded the government to adopt a strategy that includes defence components. This will be done in a slightly reverse order, but I'm looking forward to this strategy so that we can get the signal we have been asking for for so many years. It's extremely important to us.

First, we want to ensure that the industrial defence strategy will consider the aerospace sector as a sovereign capability requiring development and targeted investment. We believe that this will compensate for the absence of a national aerospace strategy. In any case, we will certainly welcome it.

[Gabriel Ste-Marie, Bloc, Joliette—Manawan, QC]

Thank you.

In your opinion, is it important to focus on local expertise in the industrial defence strategy?

[Mélanie Lussier]

I'll give Ms. Proulx an opportunity to supplement my answer, but beyond the initial contract, this allows us to develop products that can also be exported subsequently. The aerospace industry is an export industry. Accordingly, the skills we develop here when we award contracts to local companies can also be used abroad.

Beyond the initial investment, this creates economic spinoffs and allows us to develop the skills needed for decades to come. In the aerospace sector, defence contracts last 50 years. We can therefore imagine what will happen when we have the capacity to export the products we develop here to five or six countries. It's a double win for Canada and the industry.

[Gabriel Ste-Marie, Bloc, Joliette—Manawan, QC]

Thank you.

Ms. Proulx, would you like to add anything?

[Véronique Proulx]

I will reiterate what I said earlier. It's important that forthcoming investments provide an opportunity for us to develop businesses and capabilities we can export for years to come.

This afternoon, as part of our RV Affaires activities, we had the opportunity to welcome Martin Brassard from Héroux Devtek. This company successfully positioned itself internationally, thanks to the industrial benefits program that was in place at the time.

With the billions of dollars set to be invested, it's important to deliberately assess which areas within the aerospace sector we want to develop.

Today, I spoke with people from the technology and engineering services sector. Several sectors can benefit from the forthcoming investments. We must ensure that we develop local expertise and then export it to create wealth for Quebec and Canada.

[Gabriel Ste-Marie, Bloc, Joliette—Manawan, QC]

Thank you very much.

I'll continue with you, Ms. Proulx.

Ms. Lussier, please feel free to add your point of view, if necessary.

Ms. Proulx, Ms. Lussier noted that the defence procurement strategy needed to be revamped when she spoke about the coalition's recommendations.

You also spoke about the importance of clarifying requirements prior to issuing calls for tender.

Could you please explain this point in more detail?

[Véronique Proulx]

In other parts of the world, including the U.S. and France, industry and defence work together from the outset. Rather than starting with a specific product, they start with a need and look at how industry can meet it.

Since Canada does not have a “large” defence industry compared to the Americans and Europeans, the need corresponds to a product that is not necessarily manufactured or available locally.

If we want to develop our sovereign capabilities, it's important to start by looking at what the need is and work with industry from the outset. This will address many of the challenges we face in procurement. I am referring to the question that was asked earlier.

I'll invite Ms. Lussier to contribute her perspective.

[Mélanie Lussier]

We can draw inspiration from the U.K. In Quebec, we have quite a few people who have developed expertise, particularly at Bell Textron, and have moved to the U.K.

The U.K. reformed its procurement practices. In some cases, like us, they are forced to procure externally, primarily from the U.S. They compel the original equipment manufacturer, or the prime contractor, to include British content from the outset.

Take the example of certain Dash fighter aircraft platforms. When 16 or 26 units were acquired, they featured a certain amount of British components and they managed to sell them to other countries. They leveraged this process with the first 26 aircraft purchased by the U.K. and for other aircraft.

This must be done at the time of purchase. When we are forced to buy a specific product to meet our needs, we can push for Canadian content from the outset. It's about working proactively and defining skills.

We may not be able to manufacture the entire fighter jet, but we may be able to incorporate the artificial intelligence expertise that has been developed in Montreal and our aerospace expertise. Some of the systems or niches we have developed can be incorporated into a fighter jet.

[Gabriel Ste-Marie, Bloc, Joliette—Manawan, QC]

Thank you.

I have 20 seconds left so I'll give you time to wrap up on the importance of the Canadian content criteria in procurement.

[Mélanie Lussier]

Ms. Proulx, you have the floor.

[Véronique Proulx]

It's important to promote local content, local manufacturers and companies that employ local workers, as Americans and Europeans do.

We really need to rethink our approach and focus on local content and the development of our local subsidiaries.

Beyond materials, we need to look at manufacturing and service delivery in its entirety.

[Gabriel Ste-Marie, Bloc, Joliette—Manawan, QC]

Thank you very much.

[Véronique Proulx]

Thank you.

[The Chair, Liberal, Ben Carr]

Thank you, Mr. Ste‑Marie.

Mr. Falk, the floor is yours for five minutes.

[Ted Falk, Conservative, Provencher, MB]

Thank you, Mr. Chair.

Thank you to our witnesses for their testimony.

Ms. Lussier, I would like to begin with you.

In March, in the Montreal Gazette, you were quoted as saying that even before the tariffs, a “climate of uncertainty” was slowing investment in Canada.

How much responsibility does the government bear for creating this climate of uncertainty and lowering the investment in Canada, and how does the prolonged uncertainty affect Canada's defence industry and Aéro Montréal?

[Mélanie Lussier]

In my opinion, the current climate of uncertainty stems more from geopolitical factors than from actions by the government.

Even before the U.S. imposed tariffs, there were changes on the geopolitical front and some uncertainty. The government did not create this situation. Global factors are chiefly responsible. We were already sensing a slowdown, which did indeed accelerate rapidly due to tariffs.

That said, our business environment is still quite favourable. We have financing. As previous witnesses have said, we are fortunate in Quebec to have Investissement Québec and the Caisse de dépôt et placement du Québec, for example. Funds, capital and financiers are available.

It's true that the aerospace sector is often one of the first to be affected in times of uncertainty. People are obviously a little more cautious when there is uncertainty related to geopolitical factors.

However, I'd like to reassure you that we are still very resilient. We demonstrated this after the COVID‑19 crisis. Flights were suspended for a year, and we managed to turn the situation around.