Industry and Technology Committee on Nov. 26th, 2025

[The Chair, Liberal, Ben Carr]

Colleagues, I call this meeting back to order.

We have three new witnesses and they are joining us by video conference.

We are tracking a bit behind schedule and we have some business to attend to at the end, so we're probably looking at having to cut the bottom two slots.

Mr. Ste‑Marie, I think you’ll have one minute during the second round of questions.

We are joined by Mélanie Lussier, president and chief executive officer of Aéro Montréal, and Véronique Proulx, chief executive officer of the Fédération des chambres de commerce du Québec.

From the Western Arctic Marine Training Consortium, we have John Vandenberg, executive director.

Witnesses, you'll have up to five minutes. I'll have to be tight with the time because we're already behind. The easiest thing to do, with the exception of the first person—unless you can do this quickly as I'm talking—is pull out a little timer on your phone and keep track of how much time has gone by. I'll do my best to give you a little wave, but I may have to interject if we go over the time.

With that, I will turn to the first witness.

We’ll start with Ms. Lussier from Aéro Montréal.

Ms. Lussier, you have the floor.

[Mélanie Lussier, President and Chief Executive Officer, Aéro Montréal]

Mr. Chair, if I may, I’ll give the floor to Ms. Proulx because we’ll do our presentation as a team. Ms. Proulx will go first, and then I’ll supplement her presentation. We’re doing this together.

Is that okay with you, Mr. Chair?

[The Chair, Liberal, Ben Carr]

That’s okay with me.

[Mélanie Lussier]

That’s great.

[The Chair, Liberal, Ben Carr]

You have the floor, Ms. Proulx.

[Véronique Proulx, Chief Executive Officer, Fédération des chambres de commerce du Québec]

Good evening, everyone.

My name is Véronique Proulx. I am the chief executive officer of the Féderation des chambres de commerce du Québec, the FCCQ. I’m very pleased to have the opportunity to speak with you this evening.

The FCCQ represents 120 chambers of commerce, from metropolitan Montreal all the way to Matane, and 1,000 companies operating in the manufacturing, construction, agri-food, life sciences, information technology and financial sectors.

In short, the FCCQ and its members represent Quebec’s economic fabric. Through our network of chambers of commerce, we represent 40,000 businesses operating in all economic regions across Quebec. The FCCQ ensures the voices of businesses are heard by federal and provincial governments, advocating for legislation and regulations that support our businesses and regions.

We have four key priorities, which reflect the interests of our members. Our first priority is access to labour and talent. The second priority is access to markets, including the U.S. market, and to public procurement, which we’ll be discussing today. The third priority is business competitiveness, and the fourth one is regional dynamism, which is vital for keeping our regions open and sustaining operations.

It’s a pleasure to meet with you this evening to talk about defence, because this is a priority sector for us and for our businesses. Why? First, given the significant investments that will be made in Canada and around the world, this is a growing niche and a promising sector for Quebec’s businesses. Second, Quebec is strongly positioned to meet expectations and to capitalize on the forthcoming investments from the federal government across various sectors, including aerospace, naval, onshore and cybersecurity sectors. We are therefore well equipped to support the government with its projects and its investments.

Additionally, the federal government’s investments are likely to benefit a wide range of companies. That’s our goal and that’s exactly what we’re striving for. We certainly want that. Our aim is to secure concrete benefits for Quebec-based businesses across multiple areas of economic activity. Business opportunities will undoubtedly be important in Canada and even more so in the U.S. and Europe. To capitalize on these prospects, it is essential to have a strong voice that highlights Quebec’s strengths and demonstrates how we can support the federal government.

That is why we created the Coalition québécoise pour la défense et la sécurité. I’m here with Ms. Mélanie Lussier, with whom we collaborated to design and establish this coalition. Our goal is very simple: to rally stakeholders in Quebec’s ecosystem to ensure we speak with one voice on behalf of the defence and security sector. We also want to ensure that federal policies focus on Quebec’s strengths, again in the aerospace, naval, cybersecurity and onshore sectors. The government’s investments over the next decade have the potential to have a significant impact on the growth of our businesses—especially small and medium-sized businesses, or SMEs—and our economy.

We conducted a survey to help shape our initiatives. I will provide a brief overview of the results of the survey, which was conducted with Quebec businesses. The majority of the businesses that took part in the survey have an interest in the sector, even though only 20% of them are already in operation in the sector. Seventy per cent of the respondents say they are ill prepared to seize emerging defence-related opportunities. Obviously, the needs vary depending on business size.

Major suppliers and big businesses that are already involved in defence have a very simple message for the federal government: maintain access to the U.S. market. We must prioritize our relations with the U.S. government to maintain access to that market. While what takes place in Canada is important, it’s even more important to ensure that our businesses can leverage the investments that will be made in the U.S.

When it comes to small and medium-sized businesses in Quebec, it’s clear that more needs to be done to promote awareness since 80% of the businesses say they have average, limited or no knowledge of defence-related regulatory requirements. Over 50% of the businesses believe that to integrate procurement chains, they need initiatives or linkages with the major suppliers.

We feel it is important to collaborate with the federal government to advocate for Quebec’s priorities and discuss procurement strategies and the industrial benefits program, to ensure that our businesses can profit from the investments that will be made across Canada.

Without further ado, I’ll turn the floor over to my colleague Ms. Lussier, who will share our recommendations with the committee.

[The Chair, Liberal, Ben Carr]

Thank you very much, Ms. Proulx.

Ms. Lussier, you have the floor for five minutes.

[Mélanie Lussier]

Thank you very much, Mr. Chair.

I wish to thank committee members for inviting us here, and Ms. Proulx for putting the issue in context so clearly.

I’d like to clarify one small point. Aéro Montréal is Quebec’s aerospace cluster. We represent all the 250 companies that manufacture aircraft parts, aircraft, helicopters and flight simulators in the province.

I have the privilege to represent 43,000 individuals who are passionate about working in the aerospace sector in Quebec. I also have the pleasure of working with the FCCQ and with another seven member organizations of the coalition that Ms. Proulx and I co-founded.

The coalition has made five recommendations, which I will share with you today. Previous witnesses have spoken to these recommendations and so I won’t have many surprises for you. However, I believe these recommendations will resonate with your work.

Our first recommendation emphasizes the importance of aligning the future industrial defence policy with existing niches of excellence. Every region in Canada has its unique strengths, and it is essential to build on these assets.

As Ms. Proulx said earlier, the aerospace sector in Quebec, which I represent, is one of the clusters we expect to see feature in the industrial defence strategy, along with naval and onshore defence, and of course the cybersecurity sector. Our goal is to ensure these clusters, which are Quebec’s strength, are reflected in policy to clearly signal to businesses the need for continued development.

Our second recommendation focuses on examining how we do our procurement, which means reviewing the defence procurement strategy to maximize benefits for Canada and Quebec.

Clearly, we’d really like to move from a transactional procurement-based mode to a more proactive mode where we determine in advance the sovereign capabilities that need to be maintained and developed. This will make it easy to collaborate with industry proactively and share the needs of defence and the army. This would allow us to gain a deeper understanding of what industry has to offer, while enabling it to determine what it needs to develop in the coming years—all in a proactive way.

For example, in the aerospace sector, France and the U.S. send these clear signals way in advance. Instead of taking a transactional approach to procurement, they adopt a much more proactive mindset.

We’re very pleased with everything that we’ve heard about “buy Canadian”. However, we also want a government that can be bolder with its procurement approach in Canada or abroad.

Our third recommendation concerns the need to modernize our industrial and technological benefits policy, or ITB, to make it more transparent and ensure that the amounts invested give preferential treatment to the promising niches I spoke about at the beginning of my presentation. We should therefore adopt a transparent, consistently used ITB policy that is enforceable. We feel that at times, the ITB policy comes across as overly cautious. Other provinces and territories are more stringent when it comes to formulating their industrial and technological benefits needs. We therefore want to ensure that our province is equally demanding.

I was very pleased to see that the representatives of SMEs appeared during the first half of this meeting because our fourth recommendation focuses on the need to facilitate access to the defence and security markets for these businesses. SMEs must also benefit from the major investments that are coming.

How can market access be made faster and more seamless? One approach is to provide SMEs with support, including helping them obtain the necessary certifications. It’s also important to assist them in meeting relevant standards, such as controlled goods standards, and to help them with accreditations. Supporting SMEs also means sharing recommendations on available programs. As Ms. Proulx pointed out, we must ensure there are no barriers that prevent them from entering the U.S. market.

The ReArm Europe program represents $800 billion in defence investments, while the U.S. government invests $1 trillion annually in defence. This market therefore continues to be important for our SMEs. There is a need to ensure ongoing support for them in this area.

I have 20 seconds to go and I’ve followed your instructions, Mr. Chair. We’re delighted that the last budget provides for some changes in how Defence Research and Development Canada, or DRDC, operates. DRDC must work closely with businesses to ensure that the innovation for defence excellence and security program, or IDEaS, and BOREALIS, the bureau of research, engineering and advanced leadership in innovation and science that will be established, advance commercialization.

In Canada, we are strong in research, but we need to get our innovations to market. That’s it. My five minutes are up.

[The Chair, Liberal, Ben Carr]

Thank you very much.

Maybe you could share a few pointers with my colleagues on how to follow my instructions.

[Mélanie Lussier]

I lead by example, Mr. Chair.

[The Chair, Liberal, Ben Carr]

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

[John Vandenberg, Executive Director, Western Arctic Marine Training Consortium]

Mr. Chair, members of Parliament, ladies and gentlemen, good afternoon. Thank you for this opportunity to speak today.

I'll begin by giving a brief background of the organization I represent. The Western Arctic Marine Training Consortium is a Northwest Territories registered not-for-profit corporation. All of our directors and 50% of our board are indigenous. The board includes representation of two of the larger commercial shipping companies in Canada.

It's our mission to deliver Transport Canada-approved seafarer training and certifications to northerners, indigenous people and women. These are our target groups, all being under-represented in the marine industry. It is our objective to assist our students to become graduates, to gain certificates, to prepare them for the workplace, to introduce them to employers and to see them gain rewarding lifetime careers as seafarers.

Ours is the only Transport Canada-recognized marine training institution located north of the 60th parallel. Our main campus is in the subarctic community of Hay River, Northwest Territories. We also deliver programs and courses at regional centres in remote communities throughout the north. Our courses are delivered by a roster of marine professionals and experienced seafarers, and all our instructors are approved by Transport Canada. Our school is spacious and well equipped, and with additions next summer, we'll have over $2 million invested in modern simulation equipment to support marine training.

We began delivering programs in January 2024—not quite two years ago. Our operation is funded primarily by Transport Canada through the oceans protection plan, for which we are grateful. The contribution agreement that supports this funding is to end on March 31, 2027. We're also grateful for the contributions made by the Canadian Northern Economic Development Agency, CanNor. These contributions make it possible for our not-for-profit to continue to bring training to northern residents and indigenous people and to deliver capable and certified graduates to industry.

Canada's marine sector plays a vital role in the economy, contributing significantly to GDP and employment. In 2023, the marine economy generated over $50 billion in GDP, and nearly 450,000 Canadians are employed in the marine sector—almost 2% of the national workforce.

There's a significant need for workforce development and training in the marine sector. The job vacancy rate in the sector is about 11%, which is over three times higher than the national average, and the sector will need about another 8,300 employees over the next five years, which is over 30% of the current workforce. The marine workforce is predominantly older and male, with an under-representation of women and minorities. Progress is being made in increasing that participation, but challenges remain. It's estimated that over the next five years, the educational system in Canada will supply graduates sufficient to fill only 42% of the required positions in key marine occupations.

Increased collaboration among the federal government, marine industry stakeholders and seafarer training institutions is essential to improve this situation. We believe this need and the existence of our organization represent an excellent opportunity for northerners and indigenous residents, who are typically under-represented in the marine industry and remote from the larger marine educational institutions.

How am I doing for time, Mr. Chair?

[The Chair, Liberal, Ben Carr]

Mr. Vandenberg, you have about a minute and 45 seconds left.

[John Vandenberg]

Well, I'll skip through some of my verbiage, then, and I'll get closer to the end.

I have a few recommendations for the committee today. I'll leave out the centre part of my discussion with respect to supporting marine training in the north. These are our hopes, if you will, but they're necessary if we are to build a marine workforce that includes those who have often been excluded.

Let us fund initiatives that increase career awareness by visiting and presenting at schools—middle schools, northern schools, high schools, regional centres and remote communities—and by having senior seafarers and role models spread an understanding of the opportunities and educational pathways available to enter the marine industry. Let us improve financial supports for marine training and provide funding for northern educational institutions and educational subsidies for our students. Let us fund projects that provide opportunities for northern students to gain practical experience on vessels to achieve their professional certifications. Let us fund the modernization of training methods, materials and equipment to align with industry needs and to reflect new technologies and northern and Arctic geographies, conditions and perspectives. Cultivating interest in marine careers, whether they're with commercial carriers or with our Coast Guard or navy, is an essential precursor to recruitment.

We have 243,000 kilometres of coastline in this country, 162,000 kilometres of it in our Arctic regions, and all of our larger marine training institutions are located in our southern latitudes. A small northern institution such as ours need not match the advanced training programs and sophisticated equipment that the large public institutions offer—it's not our intent—but it can be on the front line, informing those who otherwise would not know, recruiting those who are inspired and able, and providing pathways to the opportunities they otherwise would not have.

Thank you.

[The Chair, Liberal, Ben Carr]

Thanks very much, Mr. Vandenberg.

As you know, I had the pleasure of visiting when I was in Hay River a couple of months ago. You're doing some really impressive things up there. I'm glad you can be with us today.

Colleagues, we'll move into our first line of questioning.

The floor will be yours, Mr. Guglielmin, for six minutes.

[Michael Guglielmin, Conservative, Vaughan—Woodbridge, ON]

Thank you, Chair.

Madame Lussier, your organization represents aerospace firms most directly integrated into our allied supply chains—companies like Pratt & Whitney Canada that already supply parts to the F-35s.

We've seen reporting that the F-35 outperforms the Gripen E “by a mile”—that's in the DND's 2021 report—scoring 95% on capability compared to 33% for the Gripen. Given that Canadian firms already have high-value work in the F-35 global supply chain, would a shift to a non-partner platform like the Gripen effectively pull us out or risk pulling us out of a multi-billion dollar, multidecade-long network that directly supports jobs in Quebec and Canada?

[Mélanie Lussier]

I might give a bilingual answer.

As an association, we never choose a side in decisions. Both sides will benefit whether we procure the F-35 or the Gripen. In the case of the surveillance contract that was awarded a couple of months ago—Bombardier versus Boeing—my association never took sides. There's a benefit to any decision. As an industry representative, my goal is always to ensure that we get the most benefits.

We could argue that a lot of investment will be done by Lockheed Martin. We could also argue that Saab will do a lot of investment. Among my members, I have people who say they prefer the F-35. Really, I'm going to refrain from choosing a side in that battle. The only thing that interests my members in Aéro Montréal, and my representation, is that in any decision we make, we have to make sure we have Canadian content or that Canada benefits from procurement.

[Michael Guglielmin, Conservative, Vaughan—Woodbridge, ON]

Thank you.

Ms. Proulx, you said that the budget contains very important opportunities—record defence investment, a buy Canadian push in R and D, and a productivity-oriented tax measure. You also warn that taxes remain high and that labour policies limit growth. You pointed to measures taken by our neighbours down south, like the One Big Beautiful Bill Act, as putting Canada at a disadvantage.

I was wondering if you could highlight or elaborate on that briefly.

[Véronique Proulx]

Yes, for sure.

Canada is very close to the U.S., and we have to take into consideration what tax measures are being put in place in the U.S. With the One Big Beautiful Bill Act, the U.S. is reducing regulations and putting in place more incentives to incentivize companies to invest in the U.S.

Right now, when we look at Quebec companies that are exporting to the U.S., a lot of them are being challenged because of the tariffs. It's very difficult for them to access the U.S. market. Plus, protectionist measures are being put in place more and more as the years go by. The question is why a company would stay in Quebec or in Canada if they're being challenged in exporting to the U.S. When they do look at the Quebec or Canadian market, they don't necessarily have access to public procurement, because we don't have criteria in place that favour local content or service companies that employ people here.

The second thing is that we have companies all over Quebec that are not necessarily impacted by the U.S. tariffs but don't have access to the labour they need. What we're saying is that in the current context with President Trump, we don't have a lot of influence on what he will do, but one thing the Canadian government could and should do is make sure we have access to public procurement so we have contracts and have access to the labour we need.

When we look at the defence industry and the investments being made there, we want to make sure, as Mélanie just mentioned, that Quebec benefits from the investments that would be made. Also, it's not just about benefiting, but making sure they go to the right sectors and subsectors so we can develop our supply chain for now and for years to come.

[Michael Guglielmin, Conservative, Vaughan—Woodbridge, ON]

Thank you for that.

The FCCQ's own survey shows that over 70% of respondents feel poorly prepared to seize defence opportunities, and around 80% report low or no knowledge of defence regulatory requirements. I'm just wondering, from the ground, if you feel there's enough detail in the defence procurement strategy for SMEs to understand the process, or if you find it overly complex.

[Véronique Proulx]

A lot of companies don't really understand what the defence industry is about and how to integrate the supply chains. I think a lot of work will need to be done by the government, by economic associations like ours and by the network of chambers across Quebec and across Canada to make sure we can explain where the opportunities will be coming from and what it means for an SME to integrate the supply chains. Where do they actually start? Where do they get the information? Where are the contracts coming from? How can they conform to eventually submit proposals or respond to bids?

[Michael Guglielmin, Conservative, Vaughan—Woodbridge, ON]

Madame Lussier, Aéro Montréal works on supply chain development and initiatives like MACH. That underscores how critical it is for some SMEs to upgrade and integrate into the global value chain.

In practice, what are some of the biggest barriers that Quebec SMEs face when they try to enter the defence supply chain?

You'll have to be brief.

[The Chair, Liberal, Ben Carr]

I’d like to remind our witnesses that we have interpreters and that our guests can use their language of choice.

[Mélanie Lussier]

If you have difficulties hearing me, let me know and I'll switch into French.

With the MACH program, and all the other programs that Aéro Montréal has, we try to de-risk the first contract. Having the first contract in defence is going to take long, especially in aerospace. The investment cycles are very long. We tend to make sure we get funding from the federal and provincial governments to give back to the SMEs in a fashion they understand.

We have programs that are not complicated. The support the SMEs will need will be on de-risking their first certification. The first certification is with ITAR, for example, for controlled goods, or with CMMC. It can cost up to $150,000 to be certified with CMMC.

If you want to deal with the DOD in the United States, that's mandatory. What we do with our programs that are funded by the government is de-risk the first step in the defence market.

[The Chair, Liberal, Ben Carr]

Thank you, Mr. Guglielmin.

Mr. Danko, welcome back to the industry committee. The floor is yours for six minutes.