Industry and Technology Committee on Oct. 1st, 2025

[Sima Acan, Liberal, Oakville West, ON]

Thank you very much, Mr. Chair.

Thank you very much for coming here today and being with us.

General, my question is for you.

Ms. Hadwen, if you would like to add any comments, I would be happy to hear those, too.

Based on your past deployments, can you identify specific operational challenges that stemmed from limitations in equipment, logistics or support systems?

[Major-General Jeff Smyth]

Yes, that's a great question. There are a lot.

With regard to challenges from deployments, living conditions are always one, but that's not necessarily an industrial challenge.

Our ability to develop and implement weapons that address the threat in a very timely manner is always concerning, not purely from an industrial perspective but also with regard to what happens when we get them into the hands of our soldiers, sailors and aviators, to make sure that they are properly trained and able to conduct planned operations. These things take time, particularly with the level of complexity that we're looking at with some of those weapons. Obviously, the number of resources that we invest into making that transition as easy as possible for the people who are operating with a weapons system is very important.

[Sima Acan, Liberal, Oakville West, ON]

Thank you.

Furthermore, could you elaborate how effective Canada's military plan, “Our North, Strong and Free”, is at addressing these issues in terms of procurement innovation and domestic capability development?

[Major-General Jeff Smyth]

I wouldn't necessarily have an opinion on “Our North, Strong and Free” in particular, other than to say that there's a lot of great capability that has been announced that fills capability gaps that we've identified for a very long time. In an ideal world, if we could get it from military requirement to field capability as quickly as possible, then that would be the ultimate aim for me.

[Wendy Hadwen]

If I could add, I would simply offer that our colleagues at Public Services and Procurement Canada might be interested in offering some of their perspectives as part of your study.

We know that our defence industrial strategy will definitely require a close partnership with that department on the procurement, which I think Kendal referred to as our most important tool. With the government having announced the creation of a defence investment agency and the consolidation into a more agile construct, there is every sign of a commitment to solving the procurement challenge. Our job is also to make sure that we're very clear about what it is that we need, what problems we're solving and how industry can help us. We don't have time to operate in silos.

[Sima Acan, Liberal, Oakville West, ON]

Thank you very much, Ms. Hadwen.

General, given your leadership role in NORAD capabilities and operational oversight, how have limitations within Canada's defence industrial base, such as procurement delays, supply chain constraints or lack of domestic production in capacity impacted our military readiness and interoperability with allies?

[Major-General Jeff Smyth]

I think the way you phrased the question bears a different type of answer. I would say that, given the relative recency with which the NORAD modernization policy came out, after “Strong, Secure, Engaged” and before “Our North, Strong and Free”, we have a bunch of initiatives that we're moving very rapidly right now through the procurement system.

I don't think it really has impacted our ability to deliver those, given the high-tech, complex nature of the operational problems we're trying to solve.

[The Chair, Liberal, Ben Carr]

Thank you very much.

Mr. Ste‑Marie, go ahead, please.

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

Thank you, Mr. Chair.

Last summer, on July 10, the Department of National Defence awarded a major contract worth $100 million for night-vision binoculars. The industry was very concerned and said that the technical requirements as drafted ensured that only one U.S. company was eligible. A U.S. competitor also said that these requirements did not reflect industry standards or NATO allies' requirements. There was also a complaint from Cadex in Saint-Jean-sur-Richelieu. The Canadian International Trade Tribunal ordered the government to suspend its purchase while it conducted the investigation. Two European companies sent letters to the tribunal in support of Cadex's complaint.

It reminds me of what happened when the CP‑140 Auroras were replaced: the American company Boeing, rather than Bombardier, was favoured, given the wording of the call for tenders. We could also add the example of the F‑35s.

There will still be benefits in Quebec and Canada, but why are calls for tenders so often drafted in such a way as to exclude suppliers from the Canadian economy?

[Wendy Hadwen]

Again, I would encourage you to invite our colleagues from Public Services and Procurement Canada to answer that question. I dare say that the government's new “buy Canadian” policy is intended to require public servants to do more business with Canadian companies. However, there will be special cases where the technical needs the general referred to earlier will require different treatment.

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

I would like to ask you a very short second question, which concerns another topic.

Tell us about the importance of strategic and critical mineral reserves for defence in the country's economy. Why is procurement so important, particularly for NATO members and for the Canadian military sector?

[Wendy Hadwen]

This is a very important opportunity. We work closely with Natural Resources Canada, which is responsible for managing critical minerals, of which we have a certain amount, and trying to find a way for Canada to benefit from international markets. Just recently, in June, the Minister of National Defence signed an agreement with his NATO counterparts to further work in this area.

We see very clearly that Canada has a chance to take a leadership position, because our natural resources are only matched by those of Russia and China. There are many opportunities in the economies of the west and the alliance countries. We are paying close attention to this.

In addition, in the context of establishing a DIS, we are trying to provide good advice to the government to support mechanisms that will enable our department, in collaboration with Natural Resources Canada and Innovation, Science and Economic Development Canada, to take advantage of these opportunities.

[The Chair, Liberal, Ben Carr]

Thank you, Mr. Ste‑Marie.

Mr. Bains, you will close off this round with five minutes, sir.

[Parm Bains, Liberal, Richmond East—Steveston, BC]

Thank you, Mr. Chair.

Thank you to our guests, our deputy ministers, General Smyth and the members of the armed forces for joining us. Thank you for your service and your dedication to these efforts to make sure that we can enhance our national defence capabilities.

General, you talked about the technology ecosystem. When we invest in our defence, how important is it to have interoperable capabilities with our allied nations? How important is that to decision-making, when you're talking about everything from aircraft to ships?

[Major-General Jeff Smyth]

Interoperability is one of those issues that we hold very high in our requirements, I would say.

If you think back to the foundation of NATO, and Canada was a founding member, there was the ability to define standards that allow us to work easily with our partners. Those types of interoperability standards came as a result of thousands of casualties that the allies had during World War II. We've learned—and we've paid in blood—that we have to be able to work closely with our partners and allies.

When we look at an air domain perspective and the ability to defend North America, that's something we very much do with the United States through our binational relationship through NORAD. By the same token, when we deploy forces with a NATO force, we have commonality in terms of our doctrine, training and equipment so that our radios can talk to each other, for example, and our data links can share critical operational information.

In short, interoperability is incredibly important for our ability to work with our allies.

[Parm Bains, Liberal, Richmond East—Steveston, BC]

Thank you for that.

You talked about unsettling lessons. I want to just go to Russia's invasion of Ukraine and how prepared we are as democratic nations. There are an estimated 120 different conflicts around the world at this time.

I think this includes the U.S. that, according to Reuters, did not produce NATO-standard 115-millimetre munitions from the summer 2014 to the fall 2015, the year of Russia's annexing of Crimea. It was worse prior to the invasion. The U.S. military's industrial plan involved sourcing explosives from overseas, including a factory in eastern Ukraine that is now Russian controlled.

What is necessary to provide stability for this kind of defence production in Canada? What regulations should we be looking at regarding demand production, pollution and those kinds of things?

[Major-General Jeff Smyth]

I'll say very simply that stability in funding is critically important. When it comes to buying weapons systems in Canada, there may be cases where we will need to buy something off the shelf from another country to fill a capability gap that exists right now. At the same time, we need to invest in the Canadian industry to develop the next thing that we might want to replace that with. That stability in funding is critical.

I can speak for the Royal Canadian Air Force right now. We're currently in a position where most of our aircraft are at the end of their service lives, and we have to buy something now to fill that gap. Canadians expect to continue to be able to defend. In some cases, an investment in Canadian industry to help us produce the next weapons system or capability is required, but it may not deliver for 10, 15 or 20 years because of the level of technology that's required in research and development and industrial production capability. Then there's also the requirement, in some cases, for us to buy something off the shelf for right now.

I leave it at that from a requirement perspective. I'll pass it over to my colleagues if they have anything they want to add on the industrial side.

[Kendal Hembroff]

Mr. Chair, I would just say that, especially given the discussion that's taken place in the last hour, one thing we hear a lot from Canadian industry is the need for early engagement to understand the needs of the CAF, allowing for better planning on the part of Canadian businesses. They're looking at how they can participate in the Canadian defence market. It also allows programs across the federal government, including programs at ISED, to make informed decisions about the types of projects we fund. That type of discussion and triage are really important in terms of making sure that we're effectively marrying up supply and demand.

[Parm Bains, Liberal, Richmond East—Steveston, BC]

Thank you, and if I have just a quick, final—

[The Chair, Liberal, Ben Carr]

Unfortunately, Mr. Bains, that's all the time we have—and we're already running over. I apologize; I went to you more quickly than I ought to have.

Mr. Guglielmin, I apologize. The floor is yours for the final five minutes.

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

Thank you, Chair.

Major-General, building on the challenges highlighted with the F-35 procurement, Canada's defence procurement woes are further highlighted by the nearly $1-billion increase to the costs for navy supply ships, accompanied by significant delays and bureaucratic hurdles. Retired Vice-Admiral Mark Norman has bluntly described both the military procurement system and its relationship with the industry as “broken”, calling for a complete rebuild from first principles. From your experience, do you agree with that assessment?

[Major-General Jeff Smyth]

I would say that, in any complex system, there's always room for improvement, and we continually strive to improve how we do business on a daily basis.

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

Ms. Hadwen, how vulnerable is Canada's north to foreign influence when we fail to invest in our own infrastructure? Are you at all concerned that our inaction is leaving room for adversaries to fill the gap, either economically or technologically?

[Wendy Hadwen]

I think last year's commission of inquiry into foreign interference illustrated the extent to which our adversaries are attempting to manipulate Canadians all over the country.

I am observing, as the government launches the Major Projects Office and nation-building projects, a huge opportunity for us to get aligned with what we need to do to protect and build Canada. At the moment, I have a lot of positive impressions about our ability to meet this challenge because we all want the same thing.

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

Ms. Hadwen, given the significant public funds involved and, unfortunately, the public's declining trust, what specific accountability measures or reforms would you recommend to increase transparency, ensure that defence procurement projects are delivered on time and within budget, and meet both our military and industrial objectives?