Thank you. Merci.
The last time I presented to SCOND, I alternated between a French sentence and an English sentence and the whole room was trying to follow. This time I've decided to do it just in English, and the next time I'll do it just in French.
Good morning, and thank you for this invitation to appear before you today.
I'm Daniel Verreault. I'm the Director of Military Systems Operations at GE Canada, here in Ottawa. I've been here for 15 years.
Today in Canada, GE has a terrific portfolio with the military. We are the engine manufacturer for the Hornet and of course the Super Hornet; the Sea King and Cyclone maritime helicopters, the old and the new; the Cormorant and the Buffalo search and rescue platform; the Airbus tanker/transport; the Tutor, now flown only by the Snowbirds, but our trainer for many years; of course in the navy the Canadian patrol frigates; and we were proud to win the Arctic offshore patrol vessel propulsion that Irving is building.
Today I appear in front of you as the vice-chair of Canada's delegation to NIAG, but obviously these subjects could carry us through several meetings. I would be pleased to return at your discretion.
I have two major points from an industrialist point of view regarding NATO and NIAG. One is that it's a significant buyer of goods and services. NATO, as we heard from Janet earlier, represents huge opportunities for sales for businesses, whether from the NSPA, located in Capellen, Luxembourg, or NCIA in Brussels. Together these two organizations issue each year over $5 billion Canadian in solicitations. In a recent report from Colonel Martin Bedard, our Canadian Forces liaison officer, who's now embedded at NSPA, in Capellen, Canadian companies have not been as successful as they should have been in winning contracts at NATO. I agree with his finding, and in my view, remedies are required to rectify the situation.
The government recognized in Canada the importance of defence procurement in creating jobs and generating wealth when it revamped the industrial and technological benefits, the ITBs, and value proposition policies administered by ISED, where for every dollar spent on defence, industry must generate a dollar of industrial activities—and not just any type of industrial activities, but good industrial activities. Although NATO does not permit member countries to demand offsets in return for their NATO contribution—which for Canada represents 6.6% of the budget—perhaps an aspirational goal could be established to begin leveraging this investment.
To arrive at a reasonable target, though, and given the complexity of reporting, a more detailed review is required to better define the value of the contracts issued to Canadian companies. Today in a reporting, a large Canadian company that has an office in Brussels, as an example, is not counted as a Canadian sale. It's easy to determine; it just needs more granularity in the reporting. To that end, we welcome the decision by Jennifer Hubbard, DGIIP at DND, who spoke to you on February 1, to move the NATEX, that's our technical expert position occupied by a Canadian Forces colonel, from the NCIA in Brussels to the NSPA in Capellen. In his report, Colonel Bedard also shed light on the reasons for the weaker performance of Canadian companies relative to foreign ones in securing NATO contracts, and Janet has mentioned a few. The Atlantic is important. Time zone is important, but there is more to it, in my opinion.
My second point is that an action plan to increase Canadian companies' business performance at NATO is thus required, in my opinion. With Colonel Bedard in Luxembourg, and a recent addition of a half-time NATEX position in Brussels, Canada's share of the wallet should increase. Results in one year would demonstrate progress, and consideration should then be given to increase the number of NATEX positions based on a cost-benefit analysis. Just as a data point, I should note that France, with five NATEX positions embedded at NATO, is doing very well indeed.
A communication plan should be developed and implemented to increase industry's awareness of NATO procurement processes and opportunities. The webinars and NATO visits being organized by Colonel Bedard are an effective way of marketing NATO to Canadian companies. These, in my opinion, should be more frequent and definitely advertised more broadly.
Trade associations such as CADSI and AIAC are currently being used to reach their membership. One suggestion, perhaps, is to offer to all companies listed in the ISED Canadian company capabilities guide the opportunity to receive NATO solicitations and emails generated by our Canadian delegation in Brussels and Capellen. In short, push information to as many Canadian companies instead of waiting for companies to ask.
Finally, as a member of NIAG, we are encouraging Canadian industrial experts to participate in our studies that are used to develop or update STANAGs, the NATO standards. These standards often form part of the statement of operating requirements included in solicitations. In addition, participating in standards setting with the NATO sponsors could lead to better success in the future, because overall a lot of this depends on the relationship with she or he who is responsible for a certain piece of the business. This would then lead to better success in future procurements.
I'll stop here. I'd be pleased to answer any questions you may have.
Thank you.