First of all, I'd like to extend the regrets of Madame Dabrowski, the general manager of the AQA, who could not be here today.
Mr. Chairman and honourable members, it is a great privilege to be before you today to present the interests and concerns of over 200 SMEs of the Quebec aerospace industry which we represent through our association, the AQA. Thank you for this opportunity.
The AQA urges the government to work more collaboratively with industry and all stakeholders well in advance of the procurement process and throughout the entire life of the aircraft in a manner that will support an existing and established Canadian aerospace industry and help take our Canadian troops bravely and confidently into the 21st century.
The Quebec Aerospace Association and its members are pleased with our federal government's intentions to invest in new aerospace equipment to serve the fundamental and growing needs of our Canadian Forces at home and abroad. We applaud this bold effort to bring our forces strongly into the 21st century.
The members of the AQA are based in the region of Montreal and its surrounding areas, which hosts the third largest aerospace centre in the world. This is the only aerospace centre in North America that comprises all the necessary elements to build an entire aircraft and service it throughout its life. This is a jewel for Canada that is to be respected and promoted for the benefit of all Canadians working in the high technology industry. This centre of excellence is also the envy of our international competitors and if our Canadian government is not strategic in its apportionment of business flowing from these major military procurements that will essentially define the shape of our aerospace industry in Canada for the next 20 to 30 years, then Canada risks losing our hard-earned market share and the 40,000 jobs that it supports.
Defending the interests of the SMEs that provide the working backbone to this great centre should never be misunderstood as a notion of historical entitlement. Rather, it has taken many years and a formidable level of government investment of Canadian taxpayers' dollars to create and nurture this centre. Canada has great reason to be proud of this achievement and must support a military procurement policy that leverages this expertise and capability to maintain our market and technical position.
Aerospace is a strategic element of Canada's overall industry. This industry must be properly nurtured, or else Canada risks losing its leadership position in the world aerospace market. It is not acceptable to allow a sole-sourced bidder to arbitrarily decide where the work should go in accordance with their agenda. Canada's agenda for aerospace must be respected and defended by the Canadian government. The CIBs from military procurements are seen as key strategic opportunities to leverage Canadian R & D investments and leapfrog our Canadian know-how and expertise to maintain a competitive advantage versus our U.S., European or Asian competitors. Our international competitors are doing everything possible to develop their own centres of excellence. Canada must do the same or lose market position, lose market share and lose jobs. It is inconceivable for the government to turn its back on these investments and risk losing its current position as one of the largest and possibly the most dynamic aerospace centres in the world.
More specifically on the subject of CIBs, the notion of the Canadian aerospace industry competing for downstream contracts after the bidders are handed multi-billion dollar contracts without any competition is inconsistent. In fact, under the current conditions, the Canadian aerospace industry as a whole, and particularly the SMEs of Quebec, have little to no visibility or control into how a sole-sourced bidder will decide who will get contracts, as there is no indication of a formal competitive process for deciding how contracts will be allocated. The only regulations that can govern these allocations are the guidelines of the CIB agreement that put demands on how the bidder is to distribute the potential work.
Without a strong and focused CIB plan, a sole-sourced bidder has essentially been awarded full power of decision on how the Canadian industry will participate. This is completely unacceptable as it jeopardizes our entire aerospace industry in Quebec with an impact that will be felt for the next 20 to 30 years a legacy that the AQA firmly believes it must protect and defend.
In the opinion of the AQA, there is an inherent partnership that exists through the best and worst of times between Canada's military and the industry that supports it through innovation, investment and perseverance. The AQA supports a coherent and collaborative procurement approach that considers the benefits to all stakeholders when making major procurement decisions. The stakeholders include and are not limited to the Department of National Defence and the brave troops that rely on state-of-the-art equipment, Public Works and Government Services Canada, the industrial players and the associations that represent them at all levels, the institutions that work collaboratively with industry in R&D efforts, and Industry Canada which plays a critical role in understanding and preserving the fabric of our vast aerospace industry. There has been a serious lack of transparency throughout this recent military procurement process on behalf of the federal government. The decision to go sole-source, the fragmented CIB plan, and the lack of support from our government for strategic CIB distribution leaves our aerospace industry and our SMEs in Quebec at grave risk.
The AQA recommends that the Canadian government implement a traceable small business set-aside of at least 20% stemming from each contract awarded to a foreign firm to ensure that our SME aerospace industry is well maintained in Quebec. Similar programs already exist elsewhere and in particular in the United States. This type of initiative will ensure that the grassroots of our industry is included in the successes of our procurement endeavours.
The AQA firmly believes the only way to ensure the best deal for all Canadian stakeholders in a military procurement is through an open and competitive process that begins well in advance of the procurement target date, with transparent consultation involving all stakeholders, to consider each important perspective in delivering the best equipment to our troops. This process should be designed to address the overall collection of military mission requirements while considering how the procurement process can leverage Canadian expertise in delivering state-of-the-art solutions to the end-users.
The objective will be to ensure the highest quality of support to our troops and provide vital incentives to our aerospace industry to step up to the challenge of meeting these needs. This process is a vital and necessary step that must be taken if Canada is to fully benefit from major military procurements. To achieve this will require much effort, careful consideration, and planning, but the alternative is a divided and fragmented strategy that leaves the industrial stakeholders largely disenfranchised from the military procurement process and a procurement policy that is deleterious to the maintenance of our global industrial prowess in aerospace.
The SME members of the AQA are more than industrial players in the aerospace industry. They are family-run businesses that have been built through sacrifice and dedication to a craft or a vision of making a contribution to Canada's success. The only way to protect these visionaries and dedicated people is to quickly establish a more competitive and transparent military procurement strategy that includes the collaboration of all stakeholders to guarantee that Canada is well defended and remains at the leading edge of aerospace technology. Together we stand.
Thank you. Merci beaucoup.