Evidence of meeting #122 for National Defence in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was satellites.
A recording is available from Parliament.
Chief Executive Officer, Calian Group Ltd.
I'm not aware of us having direct communication with the CSE on that today.
Conservative
Cheryl Gallant Conservative Renfrew—Nipissing—Pembroke, ON
Do you have any regular communications with any of the cybersecurity organizations within government, such as CSIS, for example?
Chief Executive Officer, Calian Group Ltd.
As Calian, we provide cyber services, so in that context, yes, we have discussions with the government on cyber. In the context of the use cases or anything that we're committed or under contract to do, there are discussions around the cyber requirement for those.
There's ongoing dialogue, but it's generally specific to a topic or a contract that we have today.
Liberal
Chad Collins Liberal Hamilton East—Stoney Creek, ON
Thanks, Mr. Chair.
Welcome to our witnesses.
Mr. Ford, I'll start with you. At the beginning of this study, I asked witnesses about the politics of space in terms of the relationship between some of our commercial sector suppliers and those we rely on. You've emphasized that our allies have integrated their commercial sector into their defence strategy. I think you've both touched on the whole issue of the increasing reliance on the private sector. There are tremendous benefits that come from that in terms of cost savings. It drives innovation. I think it's important that we have those partnerships with the private sector.
If I look, though, at the issue of Mr. Musk and the politics of some of the positions he has, whether they're related to Taiwan or to Russia...some in the media, some in government positions, some in the U.S.... A NASA administrator just called for an investigation into the claims that Mr. Musk has been in regular contact with Mr. Putin since 2022. It's a sticky situation. There's the increasing reliance of the government on the private sector, and when the private sector has these political positions that may not jive with the government, there's an issue. There are security issues there.
Can I get your response on how governments, whether they're Canada's or allies' governments, deal with an increasing reliance on the private sector, when the private sector entity may have different positions from ours from a security perspective or otherwise?
Chief Executive Officer, Calian Group Ltd.
That's a great question.
In my viewpoint, number one, I think it speaks to the requirement to make sure we have a sovereign capability with regard to Canada. Number two is that I think the parameters of that relationship have to be very well documented up front and understood going into this, so we don't get into a situation in which we're talking about a use case where something has happened and we say we don't understand why this is happening. That relationship with industry being well documented up front with regard to how we're going to work together, not just today but for many years, is critical at the outset of the meeting, not 10 years into the relationship.
With that, regular governance around the relationship with regard to how things are being run is critical. There is a check-in with regard to what is being done and if you are aligned with regard to the service you're getting per the instructions for the agreement on the contract.
Liberal
Chad Collins Liberal Hamilton East—Stoney Creek, ON
Mr. Reid, the same question goes to you.
I also forgot to mention that Mr. Bezos has been called out this past weekend for not providing an editorial opinion as it relates to endorsing a candidate in the U.S. election. Some are claiming that it's tied to his space activity with Blue Origin and former president Trump.
Can you comment on those sticky situations that exist as it relates to the politics of space?
Chief Executive Officer, Mission Control Space Services Inc.
I'm also not going to state a position about my political leanings in this room.
As Mr. Ford said, I think that potentially there are ways where we can build in elements of a contract and requirements around control flow within an organization. Mr. Musk seems to maintain a lot of control over, say, Starlink—he's going to turn it off, turn it on.
I think there are ways that if a Canadian company was providing a communications service or a robotic service or something else in space, and the government was procuring that as one of the customers, again, ideally as a service, I think there are ways the contract can say that we have the ability to make these decisions—not you as an executive, not you as a board or an individual person. Again, there are also differences between Canadian publicly traded companies like Calian and Mr. Ford, and SpaceX, where this is completely privately owned, we don't know who the investors are, and we don't know what that control looks like.
I would certainly echo Mr. Ford's comment that it's a further argument to have domestic space capabilities. Otherwise, then, we are also beholden to Mr. Musk if we want to launch Canadian satellites. We currently are, as he essentially has a monopoly, so let's find a Canadian rocket company that's going to launch from Canadian soil with Canadian defence satellites and at least set ourselves apart from that question.
Liberal
Chad Collins Liberal Hamilton East—Stoney Creek, ON
That's a great suggestion.
Mr. Ford, very quickly—I think I have less than a minute—you've talked about procurement a number of times, and we just went through a very exhausting procurement study. You've talked about some of the things our allies are doing to improve that situation.
Is there anything to learn from them as it relates to procurement related to space?
Chief Executive Officer, Calian Group Ltd.
That's a great question.
For me, I think the key thing as a customer is if we can continue to work with the government on the requirement and what it is you're trying to accomplish, then let us come and tell you the best way to do that based on current innovation and looking ahead. I think, for me, it's having that opportunity to become a customer and having the requirements, and not feeling the pressure, frankly, to define the solution. I think industry is more than capable of defining the solution. What we need to do is work with you on what the challenge is that we're trying to resolve, then come back to you with ideas on how to do that. Fundamentally, without putting the pressure on government to feel like you have to tell us how you're going to build or design the house, we can work with you once you actually have a clear statement of requirement, to speed up that process.
Liberal
Louis-Philippe Sauvé Bloc LaSalle—Émard—Verdun, QC
Thank you, Mr. Chair.
Gentlemen, it's too bad we only have a few minutes to talk again, as I had a lot of ideas while I was listening to you.
Earlier, I mentioned that the city of Montreal was a hub for the aerospace industry. I also remembered that Montreal was an artificial intelligence hub. So I would like to use the two minutes we have left together to reflect with you out loud, for the benefit of the government, on the development of an aerospace development strategy.
How could the government develop an industrial strategy that benefits not only from the presence of the aerospace industry and artificial intelligence in Montreal, but also from that city's French character? This element could enable us to have closer relations with our European partners and their businesses.
I'd like to hear from both of you.
Chief Executive Officer, Calian Group Ltd.
From my viewpoint, this is the opportunity and why I'm excited to be here today. We have a moment right now. The government's talked about its commitment to AI, space, the national space council, aerospace and defence spending.
I think there's a unique opportunity right now to work with industry in a consolidated fashion to look at how we best leverage this amazing country we live in and the skill set that exists across this country. I have people in Saskatoon, Ontario and Quebec. I am ready to basically invest in making sure that they're ready to go to help meet these challenges.
From my viewpoint, your question's a good one, and I'm excited to be here. I think we have a unique opportunity, because all of these things are coming at us at the same time. We're excited about the space council if it can work on addressing this issue. How do we look at all of those things you mentioned, like AI, space and defence, and take a concrete step ahead in a consolidated fashion so that, as industry, we're not trying to ascertain what the priority of the day is?
Liberal
NDP
Lindsay Mathyssen NDP London—Fanshawe, ON
I have to pick up where I left off in terms of an explanation and whether or not you agree with the percentages and, if you want to put forward those numbers to the committee, that would be great in terms of those profit margins. I am concerned about how that relates to the space-related contracts that you now hold, and that was my secondary question.
However, to maybe work it into the two and a half minutes that I have, we were talking about the monopolization of space and the separation from where government needs to go. We heard in our outsourcing study here in this committee that there were a lot of programs that were designed specifically by Calian for the furtherance of outsourced programs, and it was a design of their own. In terms of that monopolization of one company, how does the Canadian government further protect against that monopolization, specifically as it exists where we're constantly outsourcing to specific companies that are then writing their own contracts to further their own profit margins?
Chief Executive Officer, Calian Group Ltd.
I would say that we do not write our own contracts to further our profit margins. We run many contracts, and we do that in the spirit of the contract that we're given.
The procurement process is quite clear with regard to companies not participating in requirements that they're going to compete on later on, and we've backed out of many RFPs where we did not bid because the team was involved with requirements.
The way this works right now from our viewpoint is that the system works in that contract. It does not allow the monopolization and, in the same spirit, it puts specific barriers in place so that, if you are working on the requirements, you are not allowed to bid on the follow-on piece. From my viewpoint, we have not had that issue.
NDP
Lindsay Mathyssen NDP London—Fanshawe, ON
I may be ruled out of order. We'll see.
I would argue that the Liberal government announced a $144-million contract to expand health services to be responsive to women and gender-diverse military personnel, then one week after that budget, your company posted a call for applications for OB/GYNs on the new women's initiative. Then you posted an application under job responsibilities: listing, review, update and rewrite the Canadian Forces' women's health program.
Just in response to the question to which I asked for your response, that's where that comes from.
I did want to ask another question—
Liberal
The Chair Liberal John McKay
Thank you for your question. That's it for your two and a half minutes.
You have five minutes, Mr. Bezan.
Conservative
James Bezan Conservative Selkirk—Interlake—Eastman, MB
Thank you, Mr. Chair.
I welcome both our witnesses. Thanks for being here.
Mr. Ford, you come with a unique perspective. You have 14 years now at Calian and 14 years in the Department of National Defence and materiel. With that perspective, when you're talking about the RFPs getting outdated too fast, how do we fix this? How do we make this work, to do things like NORAD modernization and put the Canadian mark in space from a national defence perspective?
Chief Executive Officer, Calian Group Ltd.
To be honest with you, private industry has a lot of the same issues. I don't think there's a need for government. There's always so much to get done, and there are only so many resources and so much time to do it. From my viewpoint, number one, just prioritize the things that need to happen in some logical order here.
Right now, I think we have to recognize that, with capacity challenges, there's only so much you can do in parallel, so what are the things we need to move forward to the front of the line? Get focused on those, get those done, and then move to the next wave and then to the next wave.
As industry, I think we are ready to go with regard to having those discussions. We are cognizant that the Department of National Defence is under incredible pressure with regard to the reality of the pace of operations, whether it's climate change or Ukraine. I think, from my viewpoint, if we can look at what's on the table, prioritize that first wave, get the right resources in behind it and procurement and commitment to make dates with regard to what needs to get done by when, that's a starting point. Right now, there's just—
Conservative
James Bezan Conservative Selkirk—Interlake—Eastman, MB
If you look at GPU and where all the investments are and all the different projects and explorations that are taking place on different procurements, NORAD modernization, I think, would rise to the top of that, as would making sure those over-the-horizon radar systems are put in place, as well as the High Arctic over-the-horizon radar's position.
You're saying that by the time we release the RFPs, they're already out of date, so do we employ AI to do procurement and write these RFPs? What needs to change?
Chief Executive Officer, Calian Group Ltd.
From my viewpoint, if we look at the NORAD modernization programs, again, with our allies in the U.S. specifically, sitting down and looking at what initial capabilities we need to get up sooner, and the prioritization of those, would be a start.
The procurement process itself is how we actually get that in place as soon as possible. That, I know, is not always easy, because of the procurement rules, but I—
Conservative
James Bezan Conservative Selkirk—Interlake—Eastman, MB
From a Canadian perspective on your Canadian industry, I know that maybe you're not based in the radar system itself that might be used in over-the-horizon radar, but what about commonalities? The U.S. is moving ahead. Canada seems to be lagging behind. What about off-the-shelf solutions? This is very developmental in a lot of cases, but what about making use of the same types of programs and infrastructure the U.S. is using?