Evidence of meeting #87 for National Defence in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was companies.
A recording is available from Parliament.
9:25 a.m.
Conservative
David Yurdiga Conservative Fort McMurray—Cold Lake, AB
Okay. I'm really having trouble with your last name.
In your remarks, you mentioned “increased NATO credibility with funding and support for multi-national projects”. Can you expand on adequate funding and what multinational projects you are referring to?
9:25 a.m.
Head of the Canadian Delegation, NATO Industrial Advisory Group, As an Individual
The project I was referring to, as reinforced by Minister Sajjan earlier, was the AWACS replacement project. This is an absolutely critical project. At one of the first meetings of the NIAG I attended, a little over three years ago, I would say that at least three other countries figuratively yelled at me—they didn't really yell at me—about Canada's withdrawal from the AWACS program.
I am hopeful that the statement by the minister that Canada is in on that replacement project will lend support and credibility. Also, you will have heard and read many times that there has been a plea in all of the summits of NATO for countries to increase their percentage contribution to NATO, their percentage defence budget, and so forth. Recent changes in the Canadian National Defence budget I believe will do much to assuage that concern within NATO.
March 22nd, 2018 / 9:25 a.m.
Conservative
David Yurdiga Conservative Fort McMurray—Cold Lake, AB
Thank you for that. It's a big concern for all members that we adequately fund NATO.
My next question is also for you. What is the relationship between NATO and NORAD? Is there any way to strengthen the relationship between NATO and NORAD? Also, how does the newly created PESCO in the U.K. fit into this whole organization? Can we tie that in somehow? Is there co-operation among all three groups?
9:25 a.m.
Head of the Canadian Delegation, NATO Industrial Advisory Group, As an Individual
To my knowledge, there is no specific co-operation between the three groups. That does not mean that there isn't; it just means that I have no knowledge of there being co-operation between them.
9:25 a.m.
Conservative
David Yurdiga Conservative Fort McMurray—Cold Lake, AB
Thank you.
My next question is for you, Mr. Verreault. Did I say that correctly?
9:25 a.m.
Director for Canada, Military Systems Operation, GE Aviation, As an Individual
Daniel is fine.
9:25 a.m.
Conservative
David Yurdiga Conservative Fort McMurray—Cold Lake, AB
Okay.
What is GE's relationship with NATO, and how does the co-operation between the two entities serve the interests of both parties?
9:25 a.m.
Director for Canada, Military Systems Operation, GE Aviation, As an Individual
Pardon me; I missed the beginning of your question.
9:25 a.m.
Conservative
David Yurdiga Conservative Fort McMurray—Cold Lake, AB
What's the relationship between GE and NATO? How does that work?
9:25 a.m.
Director for Canada, Military Systems Operation, GE Aviation, As an Individual
We obviously are a supplier to many “weapons systems”, I'll call it, to be general, in terms of air force and navy. We have a few direct NATO contracts, but our business is primarily through shipyards, ship designers, and aircraft manufacturers. From a NATO point of view, my participation was agreed to by GE in order to help Canada, in order to be an active participant in what Canada does at NATO, due to my several years here in Ottawa previous to GE and today. We are pleased to continue to provide my expertise as required.
9:25 a.m.
Conservative
David Yurdiga Conservative Fort McMurray—Cold Lake, AB
Following the official opening of the newly upgraded Winnipeg testing, research, and development centre, what other major projects are being developed in Canada to enhance research and development of the aerospace technology?
9:30 a.m.
Director for Canada, Military Systems Operation, GE Aviation, As an Individual
Indeed, we've invested a significant amount of money to establish a large test centre in Winnipeg. We'd like to invite you to visit. It is a one-of-a-kind, world-class engine testing centre. The facility can do both commercial and military engines. We're just finishing the test for the GE9X engine that will power Boeing's triple 7X, the largest turbo engine in the world in the market, and most likely the largest in our lifetimes due to the market.
We have a large facility in Bromont, Quebec, where we make blades and vanes, and now we've established a centre of excellence for instrumentation and robotics. Again, it's manufacturing solutions for robotics. We carry within the GE family the lead for these advanced manufacturing processes. In these very advanced technologies, one must have deep pockets in order to advance the science and the know-how.
We are pleased that we have received a Government of Quebec financial contribution, and also a federal government financial contribution, primarily in Winnipeg, where WD has been very active in helping us grow the talent pool.
Finally, we just acquired a Canadian company that specializes in powder for additive manufacturing. The 3-D manufacturing additives manufacturing will change industry, how industry makes things globally across all industries. Being on the ground floor regarding advanced manufacturing will give us a significant advantage, from the Canadian point of view and from a university research point of view also.
9:30 a.m.
Conservative
David Yurdiga Conservative Fort McMurray—Cold Lake, AB
I am curious; there are challenges throughout Canada in regard to getting qualified people to fill these positions in the high-tech field. Are you finding any challenges to getting the people you need to do the jobs you have?
9:30 a.m.
Liberal
The Chair Liberal Stephen Fuhr
We'll have to hold it there and yield the floor to MP Blaney.
As a reminder to members, we still have Mr. Hill on the phone. He is probably more than willing to participate.
MP Blaney.
9:30 a.m.
NDP
Rachel Blaney NDP North Island—Powell River, BC
Hello, everybody, and thank you so much for being here. I enjoyed your presentations.
I have a couple of questions. I'm going to leave it open to all three of you to respond about what we heard a couple of times, especially in Janet's and Daniel's presentation, on some of the challenges we have to opening up industry. I appreciated what you said about taking a rather active approach rather being inactive or passive. Instead of waiting for companies to ask, it's getting the information out to Canadian companies. You talked about the challenges we have, because we are so far away, and the time zone issue.
Both of you said a little bit about solutions. Can you tell us what some of those solutions are? How can we engage with industry to build up those relationships?
9:30 a.m.
Head of the Canadian Delegation, NATO Industrial Advisory Group, As an Individual
The first thing that I would say with regard to this is that I'm a very old engineer, but I am very hopeful of the benefits of technology. The NATO personnel are moving into their new headquarters across the street, hopefully as we speak. I am advised that the technology is built into that new headquarters, which will help with this. Even this morning, I received an email as I was coming here from one of the companies that is participating in one of the studies. Their advice to me was that they will have to be just essentially an observer in that study, because they cannot make that physical outreach all the time. That's a factor.
I think the decision to have another trade mission, essentially, to Capellen this year is something.... I do feel that companies need to go several times, just as they need to deal several times with anyone else with whom they want to do business, whether it's in Canada or abroad. That ongoing support is important.
9:35 a.m.
Director for Canada, Military Systems Operation, GE Aviation, As an Individual
It also requires knowledge of the events that are taking place, and this knowledge must be shared with technical experts. It's not a given when a sales or marketing person receives an email about the widget being redesigned to make this available to the technical expert who works on the second floor.
There's a lot of awareness needed to make sure that the right people are in the room at the right time.
One of my proposals, in fact, is to have the various agencies and departments involved push the information using different tools, like the ISED tools as an example. It's broad and it reaches the IBMs all the way down to the small IT companies. We know how small Canadian IT companies can have a significant influence in the world, especially the last couple of days.
It's pushing the information. It's not an expensive investment. It's having access to the data, which we have, and pushing the information on a regular basis. Then if there are questions, call Janet and I for these answers. We'll be pleased to assist.
Again, very micro studies are being done, resulting in big decisions.
9:35 a.m.
Head of the Canadian Delegation, NATO Industrial Advisory Group, As an Individual
In support of what Daniel was saying, I would also add that Lieutenant-Colonel Martin Bedard in Capellen is making efforts to get NATO requirements and NIAG study information put on to “Buyandsell” Canada.
I'm sorry, Martin, I interrupted you.
9:35 a.m.
Honorary Chairman, NATO Industrial Advisory Group, As an Individual
I'd like to answer this question, and I hope my answer will address something that was said earlier about how NIAG can improve awareness of procurement possibilities, which was a question asked in French.
Actually, it's not a NIAG function to warn you of procurement possibilities. That is the function of the national delegation. I'm going to come back to this question: how do we get industry more involved? I believe industry will be involved if their number one customer is interested. Of course, their number one customer is their national ministry of defence. If I look at the more successful nations in the NATO environment, there is an extremely close relationship between national industry, the national delegation, and the MOD in the capital. Indeed, those three meet constantly.
The role of the NATEX is to provide what's actually going on in the agency doing the procurement, or the state of the procurement. None of the really important decisions are made in the agency. They're made in NATO headquarters by the various committees where the national delegation sends representatives. All the funding decisions are done by the investment committee representative. If Canadian industry doesn't know their investment committee representative and they're not in a dialogue, they will be in no position to influence the financial decisions on any project.
So I would say to you that if you want to help Canadian industry, you must make sure that the industry, national delegation, and MOD—three points—are very closely coordinated. This brings me back to the point that your NAD must push for this to happen. If your head of procurement isn't pushing that NATO is important, then national industry won't think that NATO is important.
That's something that I think goes beyond NATO, if you like. It's very much in the capitals, and Parliament should be pushing for the national MOD to push for it as well.
I'm going to go to the nitty-gritty of time zone distance. We are all aware—
9:40 a.m.
Liberal
The Chair Liberal Stephen Fuhr
Mr. Hill, unfortunately I'll have to leave it there. We might be able to circle back on that issue.
I'll yield the floor to MP Fisher with a last seven-minute question.
9:40 a.m.
Liberal
Darren Fisher Liberal Dartmouth—Cole Harbour, NS
Thank you, Mr. Chair.
Thank you, folks, for being here.
Mr. Hill, thank you as well for being here on the phone.
It's clear that a lot of us are interested in the Canadian companies and the way they bid, and their success in bidding on NATO contracts. I represent Dartmouth—Cole Harbour in Nova Scotia, which is of course home to Ultra Electronics, General Dynamics, Lockheed Martin, and IMP. Of course, we have Halifax shipbuilding across the harbour, and we cut the steel in Dartmouth.
Janet, you touched on the barriers—proximity, the 8 a.m. phone calls, and so on—in your opening comments, and then you expanded a little bit with Mr. Robillard on some of those barriers for Canadian industry. With regard to bidding and winning, I won't necessarily get you to repeat all the barriers you spoke about, but in comparison with other NATO countries that are applying for these contracts, with regard to fairness and level of input within NATO, we rank pretty high; we punch above our weight class, and we know that. How are we in comparison with the other countries? Taking into context the barriers that you spoke about, how do we rate with regard to our success? I'll ask Daniel after that for a GE perspective.
9:40 a.m.
Head of the Canadian Delegation, NATO Industrial Advisory Group, As an Individual
There is an old quote that says there are lies, damned lies, and statistics. We have a report from the Department of National Defence that shows some statistics about how much business Canadian companies are doing at different agencies. It's a well-compiled report; it's based on solid data. What it doesn't do—because nobody has quite figured out how to do it that I know of—is address when a Canadian company has a subsidiary or an office in Stuttgart and they win a contract through that office in Stuttgart. We have examples of exactly that.
When we look at the report, as my granddaughter would say, “we want more better”, but we don't actually know what we're asking for, because we don't know the quality of the data that's there. We can only say that we want to do more, because we think that we have good products, good services, a good reputation, and that we should be involved in that.
9:40 a.m.
Liberal
Darren Fisher Liberal Dartmouth—Cole Harbour, NS
Daniel, do you want to make a quick comment from a GE perspective? I have a couple more questions that I want to squeeze in before the end of my seven minutes.
9:40 a.m.
Director for Canada, Military Systems Operation, GE Aviation, As an Individual
Janet is absolutely correct, but from a macro point of view I'll give you some examples. There are 65,000 companies registered at the NSPA, and only 700 are Canadian. Of the share of contracts in 2016, Canada received 1%. If you add a few contracts for errors in accounting or that were missed, maybe we're at 4% or 5%. At the NCIA in Brussels, 850 companies are registered to do basic order agreements, which is daily business with the NCIA. Of these 850 companies, only 26 are Canadian. From the get-go, we are significantly missing opportunities.
9:40 a.m.
Liberal
Darren Fisher Liberal Dartmouth—Cole Harbour, NS
Are we partnering up as subsidiaries to some of those European companies that might be getting those contracts, as Janet suggested? Are we in the subsidiary business?