Evidence of meeting #24 for Industry, Science and Technology in the 43rd Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was industry.
A recording is available from Parliament.
Liberal
Helena Jaczek Liberal Markham—Stouffville, ON
Would you consider any movement in a direction such as Ms. Medve has made for her business?
President, Boeing International, The Boeing Company
Yes, quite possibly we would. As I say, the Boeing workforce we are going to need in Canada is something we have to take very seriously, assuming the business develops in the way I have described. We are talking about new skills in the industry. I thus absolutely take that away.
Let us see whether we can respond to you a bit.
Liberal
Dr. William Lyons Senior Director, Global Technology and Global Engineering, Boeing Engineering Test & Technology
Thank you.
I would just add to what Sir Michael said that our Composites Knowledge Network, based around UBC, is actually producing knowledge process documents for 200-plus SMEs and counting.
The training that we do—that research—translates into action for not just our immediate members but also for the SMEs that are part of the CRN, as we call it, the Composites Research Network.
Liberal
Helena Jaczek Liberal Markham—Stouffville, ON
Thank you very much.
I think we were all very impressed with some of the arguments made by the Canadian Taxpayers Federation looking at what we can do without direct subsidy.
Mr. Hamilton, from Hexagon, you mentioned that you felt we needed clear export controls. Could you clarify that or elaborate a little on exactly what you mean and what kind of recommendation you are making?
Chief Revenue Officer, Hexagon Autonomy & Positioning Division
Let me begin by saying that I'm not advocating for different export policy. I think it is up to the politicians to decide where we export.
What exporters need—and we export about 90% of what we manufacture in Canada—is clear guidelines and a partnership with government agencies to help us export. If we have to wait three, six, nine or sometimes 12 months to understand whether we can deliver a product to a customer, we're not competitive. Those customers will go elsewhere, and they have options.
Maybe this is a slowdown from COVID, but it is a slowdown we saw even before COVID started.
Liberal
The Chair Liberal Sherry Romanado
Thank you very much.
Mr. Lemire, you have the floor for two and a half minutes.
Bloc
Sébastien Lemire Bloc Abitibi—Témiscamingue, QC
Thank you, Madam Chair.
My question is for Mr. Oehrli, from Rheinmetall Canada.
First, Mr. Oehrli, thank you for being here today and for making us aware of the importance of the defence industry in the economy, particularly in the current context.
You mentioned the industrial benefits policy. You talked about key industrial capabilities and you said that the government has a list of capabilities that it prioritizes, but that the list is limited.
Why should Canada include more on that list? I'm thinking particularly of the potential impact on emerging SMEs in terms of supply chains and quality jobs in the industry.
President and Chief Executive Officer, Rheinmetall Canada Inc.
Thank you for the question, Mr. Lemire.
As we understand it, 16 industries are currently prioritized in the economic benefits policy. Calls for tender will highlight business opportunities for those industries. The policy therefore gives them an advantage.
Also as we understand it, in 2017, the Government of Canada gave a company called Avasant the mandate to create a list of key industrial capabilities in Canada that could be supported. The list actually contains 58 industries with different industrial capabilities. A selection was then made. From the 58 industries, 16 were chosen for encouragement and support in the current policy.
We of course feel that consideration should be given to expanding that number to include some industries that are not yet recognized in the policy. This would allow investment in the sector, thereby creating a positive effect on economic development.
Bloc
Sébastien Lemire Bloc Abitibi—Témiscamingue, QC
Thank you.
Aside from the ways of improving the industrial and technological benefits policy, are there other government policies, acts or regulations, not counting those dealing with military procurement, that are obstacles to your development and success?
President and Chief Executive Officer, Rheinmetall Canada Inc.
In Canada, the tendering process is covered by a number of acts and regulations. The industrial benefits policy is important, but there is a direct link with exports as well. In the current policy, exports are prioritized. You are awarded points when you can demonstrate your skills internationally. The regulations must follow. So, on the one hand, exports are encouraged, and on the other, issuing export permits is slowing down. So there is certainly an imbalance.
In our view, as my colleague said earlier, this is not a matter of questioning the basis for export permits. Of course, we subscribe to that practice. However, we have seen the delays increasing four- and five-fold. Before the COVID-19 pandemic, working in a climate like that would have made us lose our customers and our competitiveness. That interrelationship is important for us.
Liberal
The Chair Liberal Sherry Romanado
Thank you very much.
Our next round of questions goes to MP Garrison.
You have the floor for two and a half minutes.
NDP
Randall Garrison NDP Esquimalt—Saanich—Sooke, BC
Thank you very much, Madam Chair.
I hope the arrival of the recycling truck outside my house will not interrupt the questions that I have or the time remaining.
I found the comments on industrial technological benefits from a couple of presenters very interesting.
I'd like to go to Sir Michael Arthur and ask him to expand a bit on what he said about the 100% benefits and the contract-value question.
President, Boeing International, The Boeing Company
The Canadian government requires that we reinvest after 100%. I think its $11 billion over past history, and $8.8 billion or $9 billion of that has already been done. We've set that aside. We've fulfilled our obligations. We're in the remaining $1.8 billion that's left, so we are investing in things happening in Canada.
If you want some exact examples, perhaps we can send you some of those after, so that you know where we sent the money.
NDP
Randall Garrison NDP Esquimalt—Saanich—Sooke, BC
My concern about it is that without those kinds of industrial benefits, large investments we make.... Again, I'm back to the defence committee. Things like fighter jets don't help us maintain the aerospace industry in Canada.
That's really my interest in the importance of these agreements.
President, Boeing International, The Boeing Company
Actually, with respect, I beg to differ on that.
If we see, for example, the Super Hornet campaign going forward.... If we were to be successful in that, we would do a huge amount of investment in Canada in the sustainment of the whole project going forward. We haven't yet worked out which suppliers we would work with, but I'm quite confident that there would be a wide range of Canadian supplier companies that we would be working with in the implementation of such a contract.
This is definitely keeping sustainment to the aerospace industry across Canada. We have 500 suppliers already in Canada, you know.
NDP
Randall Garrison NDP Esquimalt—Saanich—Sooke, BC
Thank you very much.
Mr. Oehrli, I believe you also had some comments on that. Maybe give us just a brief response on the same question.
President and Chief Executive Officer, Rheinmetall Canada Inc.
Our point is that we should not allow overcommitment.
Today the policy has been changed slightly in the 2.0, which allows, actually, overcommitments by companies. That basically means that if you take an obligation of one dollar, maybe the company decides to invest $1.20. This appears in the short term as being very good and encouraging for the industry, but it actually weakens the competition in the long term.
Our point is that this should be capped, because otherwise it's quite similar to a dumping practice.
Liberal
The Chair Liberal Sherry Romanado
Our next round of questions goes to MP Dreeshen.
You have the floor for five minutes.
Conservative
Earl Dreeshen Conservative Red Deer—Mountain View, AB
Thank you very much, Madam Chair.
Thank you to all of the witnesses.
So far this morning, we've talked about subsidies and we've talked about training. I'd like to focus on regulations and red tape. For the questions that I'm going to ask, if the presenters could make sure that we are dealing with that aspect and how that affects them....
We know from the Canadian Federation of Independent Business that regulations cost Canadian businesses about $30 billion each year in compliance costs alone, and small businesses are the ones that feel the brunt of that.
We've just heard that delays make you lose clients, and this is one of the critical aspects that we have.
I'll start first with Mr. Hamilton.
As far as GPS technology is concerned.... You spoke, as well, about spectrum disruption, hacking as far as GPS signals are concerned, and innovation. Are there particular regulations and red tape that you can see that would help your side of the industry?
Chief Revenue Officer, Hexagon Autonomy & Positioning Division
We talked a bit about export. I think I said what I needed to say on that front. We need a partner in government to help us export and be leaders in this worldwide, and to be quick and agile in our export policy and processes to let us do that.
On the other side, the opening up of the airspace, I guess we're looking for more regulation and more guidance on interoperability of unmanned and manned aircraft. The more guidance we can give industry on the timeline for the opening of those opportunities, the more it will attract investment in all the technologies required for autonomy into Canada. I think that's not reducing regulation but providing the regulatory framework that gives certainty to industry so that they can invest in future technologies.
Conservative
Earl Dreeshen Conservative Red Deer—Mountain View, AB
Thank you.
Ms. Medve, when you were giving your presentation, one of the things you spoke of was being able to maintain maintenance in Canada and there seemed to be some impediments that were of concern to you.
Could you discuss what those impediments are? Are there things, again, in regulations and red tape that could be eliminated in order to make it easier for you and people within your part of the industry to compete?
President, KF Aerospace
Given that we're time-restricted, I'll just focus on the one that we're having the most immediate problem with.
When we have out-of-country customers having heavy maintenance on their aircraft, they want to send a technical representative to be with the airplane throughout that check. That can last several weeks. Pilots can come and go, in and out of the country, with relative ease, but now, suddenly, the maintenance technicians who are coming to sit with their airplanes and walk them through this major check with us are being impeded.
I've had our HR person on the phone for hours to Ottawa, trying to find somebody who will let this person into the country. We're declared an essential service, but we can't do our work if these technicians can't come into the country and sit with their airplanes while they go through maintenance. That should be a relatively easy thing to solve.