National Defence Committee on March 22nd, 2018

[Martin Hill]

That's a very difficult question, because it goes much wider than that. One, I think they will need a government push. You're trying to break into the supply chain of the big primes. It's not easy to become a Lockheed Martin supplier and persuade them that you have a great technology. I think you need a very strong government push to help them. I think that's the first thing.

I think participation at the bigger shows in Europe and the States is important, not because you can showcase your capability on a little stand but because you can go around the big primes and talk to them and get to know people. Networking in this sector is almost as important as anything else. You do business with your friends. I cannot stress enough how important it is to be seen two or three times in a domain, to build your personal credibility and your company's credibility. It is an expensive matter, as Janet has alluded to, but the marketing element for those small companies is very important.

[Bryan May, Liberal, Cambridge, ON]

Thank you, Mr. Hill.

[The Chair, Liberal, Stephen Fuhr]

Janet, I know you wanted to wade in there, but I'll have to go to Mr. Bezan. Hopefully, there will be another opportunity for you to comment on that.

MP Bezan.

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

Thank you, Mr. Chair.

My question is to all three witnesses. What's the role of industry to ensure that we have NATO interoperability when it comes to our equipment and services? I'd also like to get your feedback on the Turkey decision to buy Russian S-400 air defence missile systems rather than buying something that is interoperable with NATO nations.

[Daniel Verreault]

I am....

No, go ahead, Martin.

[Martin Hill]

Okay.

Interoperability is not really an industry issue, in many ways. The first way we look at it is of course with regard to standards, and that is something we work on. Even then, we frequently don't actually apply NATO standards. We create our own. So standards is a good, okay word, but I'm not entirely convinced in my own mind that it's the right way to go...or not the right way to go; I don't think it's the whole answer to the question.

I think interoperability is something that the agencies try really hard to achieve in the NATO environment. I think at the national level, it's the procurement executive who does interoperability more than it is industry. Although, of course, industry will say we're fully interoperable, actually it's government demand more than it is an industry output.

I'm not really prepared to comment on the S-400, I'm afraid. That is way beyond my pay grade. It's entirely up to Turkey.

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

Mr. Verreault.

[Daniel Verreault]

Martin stole my point regarding interoperability. It has to be driven by the customer, and industry will respond. Obviously, we don't have broad options in many of the systems today. When you go down the path in avionics interoperability, way early on you decide what standard you will adapt to or you will follow in order to reach as many customers as possible. Since technology now is changing so quickly, you want to pick the right one. That's based on the marketing study that's done years before the product is first designed, and it's based on who the clients are and what the clients, the customers, the military customers, wish to achieve in terms of interoperability of weapon systems, not only between air and ground but also between air and naval assets.

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

Thank you.

Madam Thorsteinson, do you have anything to add to that? We had a brief discussion earlier about this issue of upgrading the procurement process at NATO. What would that upgrade look like if you got to rewrite it, especially with your experience from back when you were in National Defence and military procurement? If you look at what NATO is doing today, how would you upgrade the current process so it works better for member nations and for industry also?

[Janet Thorsteinson]

An issue that has long been advocated is the addressing of military specifications. This is not an industry issue. It is a government issue.

I was listening yesterday to someone talk about the 8,500 mandatory requirements in a recent procurement. I have, from my previous life, some experience of what might constitute mandatory to the extent that people can define what their real requirement is in such a way that industry is in a position to provide the kind of innovative solutions that they have at their disposal and not be ruled out from providing their very best equipment, in some cases, by what may be obsolescent requirements. I think that would be a very radical improvement in how procurement is done not just here but also within NATO.

That's my personal opinion.

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

Thank you. I like it. I agree with you.

[The Chair, Liberal, Stephen Fuhr]

The next question goes to MP Blaney.

[Rachel Blaney, NDP, North Island—Powell River, BC]

My question is going to be brief; maybe we can leave a bit early. What I keep hearing again and again is that it's about the relationships that are built and that we need to sort of create that networking. We're so far away, and that's one of the fundamental big challenges, but there are innovative ways of looking at that.

I feel as though I'm not coming out with a very clear recommendation about how we can actually engage our businesses, how we can increase that networking opportunity. I'm also one of the people who participate in the NATO Parliamentary Assembly. We go out and we do what we can, but what can we do as parliamentarians to give support?

I'm going to come back to what you said, Daniel, and to what I've already said. Instead of waiting for companies to ask to participate, how are we engaging those companies to participate more actively?

[Janet Thorsteinson]

Recognizing the time, I would point out that Martin Hill talked extensively about the idea that there needs to be, in our capital, that kind of close relationship. I think this issue starts at home for us. I believe there is a willingness, in light of Minister Sajjan's statements, to develop that relationship, and I am encouraged by that.

[Rachel Blaney, NDP, North Island—Powell River, BC]

Thank you.

If that's all, then I'm good, Chair.

[The Chair, Liberal, Stephen Fuhr]

You can chime in, Mr. Hill, if you can do it in 60 seconds or less, please.

[Martin Hill]

Yes.

One, you cannot push a company to do something. It's an independent entity. You can either provide it with the framework where it can act—the government can do that, as Janet's just alluded to—or you can push ideas to the company, which is all about, once again, the government, the delegation, the NATEX, CADSI, the trade association, pushing information to the company. Then the company decides what it wants to do.

[The Chair, Liberal, Stephen Fuhr]

Thank you for that.

The last question will go to MP Robillard.

[Yves Robillard, Liberal, Marc-Aurèle-Fortin, QC]

Since its creation in 1968, NIAG has conducted more than 225 studies on a range of topics of interest to the NATO military alliance. Recent NIAG studies and reports have focused on such issues as transatlantic defence technological and industrial cooperation, cyber defence, maritime force protection capabilities, and ground-based air defence capabilities.

What has been Canada's contribution to the studies and reports to date? How do those studies and reports help NATO to develop key capabilities and stimulate the defence industrial cooperation across its member countries? What key themes of interest is NIAG looking at for future studies and reports?

[Janet Thorsteinson]

There has not been as much participation in the studies of NIAG as I would like to have seen over those 200 studies. We've talked a little bit about why that has happened. As we move forward, I hope that we will be able to do that.

It is, I think, exceptionally challenging also to know which countries may have influenced positions or policies, in particular given that NIAG studies operate on a consensus basis. There are no secondary opinions issued in NIAG studies. All the members are equally credited and equally responsible.

[The Chair, Liberal, Stephen Fuhr]

Thank you.

[Martin Hill]

Perhaps I can say one thing here that I think is relevant. North America has a problem, not just Canada, in much of this. There aren't enough United States companies taking part. I think it might be quite interesting for Canada to think about co-operation as North Americans, because it would give you two votes and more push than if you were to try to do it as Canada.

[The Chair, Liberal, Stephen Fuhr]

Thank you for that.

I didn't get a question, and I don't really need one, but I wanted to make an observation. I wrote down a few words: “visible”, “experts”, “engaged”. Obviously, our re-engagement with AWACS is important. I think it will bring some more visibility to our involvement with the organization as a whole. Certainly, leading that battle group and the enhanced forward position in Latvia is another effort that is getting a lot of attention. Regarding experts, I noticed that we had 1.5 NATEXs. France has four or five. Perhaps it's something that we want to consider investing in to help get us more engaged, and then buy Canadian where we can. We have world-class products and services, and it instills consumer confidence in our own military-industrial complex.

Those are all things that we'll have to discuss and think about as we come to some conclusions and some recommendations.

I want to thank all three of you for appearing today in front of the committee.

The meeting is adjourned.