National Defence Committee on Nov. 29th, 2016

[Christyn Cianfarani]

Yes. It's equally important.

[Sven Spengemann, Liberal, Mississauga—Lakeshore, ON]

If you take a more fine-grained view of the industry and go from steel welding to software development, let's say, both of which are part of a naval vessel's construction, how does the multiplier change?

[Christyn Cianfarani]

I can't answer that, actually. I think I would need to go back to Innovation, Science and Economic Development to find out whether they've done a variation on the multiplier based on the skill set, or whether they've done a homogenized average.

[Sven Spengemann, Liberal, Mississauga—Lakeshore, ON]

In terms of the jobs that are being created, you described them as, first of all, as well-paid and, also, longer-term jobs. In your view, is it right to characterize these—and it depends on our philosophy of shipbuilding—as permanent jobs? Or are they fixed contracts and then people are left to compete elsewhere for contracts, either on the civilian or military side?

[Christyn Cianfarani]

It depends on the type of job.

First of all, if someone is working on hulls or build-type labour jobs, they will at some point run through the build cycle. One would hope, though, that with the NSS strategy, they would be—

[Sven Spengemann, Liberal, Mississauga—Lakeshore, ON]

First?

[Christyn Cianfarani]

Yes, exactly. The purpose of avoiding this boom and bust is to actually rotate them onto another ship that would come back into dry dock for refitting, right? There would be those types of jobs.

Then there are jobs such as integration jobs and engineering jobs that would most likely go on throughout the entire build cycle until we start to build another generation of ships, because you will get mid-life upgrades and technology insertions. In fact, some of these jobs will end up.... Simply, we don't have enough volume in Canada alone to sustain the industry. These companies will rotate to an export market.

[Sven Spengemann, Liberal, Mississauga—Lakeshore, ON]

Okay.

[Christyn Cianfarani]

The reason the internal part of the ship is so valuable for us is that it is the easiest piece, or the most world-leading piece that we're able to export.

[Sven Spengemann, Liberal, Mississauga—Lakeshore, ON]

That's very helpful for the committee. Thank you.

I wanted to talk about the export potential, but also, before I go there—and this is last question I'll have for you—I want to explore with you the synergy to the civilian marine shipbuilding side. Feel free to comment outside of the confines of marine and to go into other sectors of defence. How tight is the overlap between civilian jobs and civilian expertise and military shipbuilding?

[Christyn Cianfarani]

In general, the overlap in the industry is huge. Two-thirds of our CADSI members or our companies actually don't exclusively do military work. They have a military and a civilian side. We can't survive on the domestic market alone, in fact, and that's why for 60% of our industry in general the revenues come from exports. There just isn't a way to survive on the domestic industry.

In terms of what we call the “bleed-over” or the dual-use portion of most of the technologies within the ships, they actually have either a civilian use or an alternate military/civilian use. I'll give you an example. Acoustics is a very good example. Acoustics are used on the ships, obviously, to do underwater warfare, if you will, but you can also use them for mapping and charting. Most recently, I think, they were used to find the lost Franklin ship.

[Sven Spengemann, Liberal, Mississauga—Lakeshore, ON]

It's fair to say—and again, we'll be curious to look at the data that you'll give us on the multiplier—that $1.3 million you mentioned may not even include the ancillary benefits that may flow to the civilian side.

[Christyn Cianfarani]

No, it may not, but I defer that to ISED.

[Sven Spengemann, Liberal, Mississauga—Lakeshore, ON]

Okay. Thank you for that.

My last area of inquiry would be about export potential for the Canadian marine industry generally. You've touched upon it. The way I'd like to come at it is to ask you what, in your mind, governments could or should do better to export the Canadian defence industry abroad, specifically shipbuilding.

In fact, some countries do it very differently. The United Kingdom, for example, attaches serving officers to various sectors of its defence industry with no other objective than that of being ambassadors for the industry overseas, in other countries. What could we do better? What should we explore to make sure that the export potential we have is maximized?

[Christyn Cianfarani]

Actually, thank you for that question because, in truth, most recently, you've all seen the behaviour of other countries with the Canadian surface combatant. We have countries bringing ships here to the harbours to show us their technologies and to show us what they can do. As a general rule, we don't go that far as a nation, and we need to start going that far. The expectation is that other nations are openly and aggressively coming to Canada to give us their technologies, and we should be, I would say, aggressively marketing our own technologies outside of our country as well.

The single most important thing, though, that Canada can do is to be the first buyer. One of the things that signals to other nations that you feel that your products and services are first rate and world class is the fact that you buy it in your home nation. It is a great detriment to our companies when we won't buy their products and to try to then turn around and sell them outside, to another nation. It's almost impossible.

[Sven Spengemann, Liberal, Mississauga—Lakeshore, ON]

That's very helpful.

I think that's my time, Mr. Chair.

[The Chair, Liberal, Stephen Fuhr]

Yes, Mr. Spengemann.

We're going to move to five-minute questions.

Mr. Gerretsen, you have the floor.

[Mark Gerretsen, Liberal, Kingston and the Islands, ON]

Thank you, Mr. Chair.

I want to pick up on what you were talking about with Mr. Spengemann. It was about the exports. How would you suggest that Canada go down that road? What's the first step, other than saying, yes, it's important? How do you think we should do it?

[Christyn Cianfarani]

In the most recent few years, there has been a concerted effort to get embassies, trade commissioners, and defence attachés involved in the support of defence products and services, but we're very non-aggressive. I guess that's the only way to put it. We're very tentative about actually naming companies, naming capabilities, and championing those companies and capabilities around the world. We need to do that more aggressively, as I would call it. That's at the base level, right? We need to be unafraid of having a defence attaché going out and saying, “I used that equipment and it was first rate.”

[Mark Gerretsen, Liberal, Kingston and the Islands, ON]

Would you put restrictions on what countries, or sovereign nations, for lack of a better expression, that Canada should engage in that kind of activity with?

[Christyn Cianfarani]

I wouldn't put restrictions on it.

[Mark Gerretsen, Liberal, Kingston and the Islands, ON]

No, I know, but I mean in your opinion.

[Christyn Cianfarani]

What you'd try to do is line it up with the Global Affairs export control regime so that you're obviously not trying to sell to foreign nations that Canada doesn't have best interests in. The second—

[Mark Gerretsen, Liberal, Kingston and the Islands, ON]

Do you think industry is receptive to that?

[Christyn Cianfarani]

I think the industry is very receptive to that.