Good morning.
My name is Christyn Cianfarani, president and CEO of the Canadian Association of Defence and Security Industries, CADSI for short.
Our association represents several hundred firms across Canada that produce defence and security-related goods and services for both domestic and foreign markets. We have included the statistics for our sector on a supplemental handout.
A significant fraction of our membership is in the military and defence aerospace sector. For example, our members work in aircraft fabrication, structures and components; and military aircraft maintenance, repair and overhaul; and simulation systems.
As you’ve heard from other witnesses, the Canadian aerospace industry is going through a difficult time. This is particularly the case on the commercial aviation side. The defence side of Canadian aerospace has held up somewhat better through the pandemic. Defence departments around the world, including Canada’s, have not curtailed capital and maintenance spending significantly, at least not yet.
I have one key message that I would like to leave you with today, namely, that there is an important opportunity in front of us to provide further support to this industry through the defence procurement function of government. This would constitute both smart procurement and, as I have referred to it elsewhere, cheap stimulus to help Canada’s economy rebound.
As you know, four years ago the government published a new defence policy titled “Strong, Secure, Engaged”, SSE. This policy committed to historically large budget increases to DND over 20 years, a significant fraction of which is devoted to recapitalization of the forces.
The government committed to growing the defence budget from $18.9 billion to $32.7 billion over 10 years, an increase of over 70%. This is not a trivial sum of money.
These funds were booked into the fiscal framework of the government pre-pandemic, and therefore they have no impact on the deficit. Let me be abundantly clear here: contrary to what you may have heard from other witnesses, this is not an ask for new money.
In conjunction with SSE, the government also published a document called the “Defence Capabilities Blueprint”. A cursory examination of this document reveals at least 40 aerospace procurements of various sizes and scopes, with cost estimates and timelines provided.
We all know about the future fighter capability project, but this is by no means the only significant project the Royal Canadian Air Force has in its plans. I’ll give you a few more examples. There are also the Canadian multi-mission aircraft, at over $5 billion; future fighter lead-in training, at $1 billion to $5 billion; and the CH-149 Cormorant mid-life upgrade, at $1 billion to $5 billion, and I could go on. There are planned procurements involving new equipment; upgrades to existing equipment, operations and maintenance; and in-service support. Canada’s aerospace industry can and should play a major role in these acquisitions because it has the capabilities to do so.
As for recommendations for your consideration, we proposed to the government months ago in CADSI’s four-part plan, “Partners in Economic Restart”, that defence procurements, in which Canadian industry has demonstrated capability, should be prioritized and pulled forward in the acquisition schedule.
The government should systematically and aggressively use its existing policy instruments—such as the industrial and technological benefits program and value propositions, the Canadian content policy, national security exceptions, mandatory carve-outs and so on—to drive Canadian defence industry growth and jobs and, more specifically for your purposes, aerospace growth and jobs.
Critics of this approach will label it as protectionist. So be it, though I would point out that defence trade is exempt from most international trade agreements, and that all of our NATO allies are far more aggressive in favouring their domestic defence industries.
We’re proposing what I’ve called smart procurement combined with cheap stimulus as a way to drive employment and investment in the defence aerospace business with projects that were already on the government’s books and budgeted for pre-COVID.
It's a no-brainer. It's one key way to help the struggling Canadian defence aerospace industry and the aerospace industry.
Thank you. I look forward to your questions.