National Defence Committee on Oct. 29th, 2024

[Kevin Ford]

To your point, there are satellite networks being launched today that are opportunities. The government's made an investment in Lightspeed with Telesat. I think we could look at those opportunities with things that are already committed and how to, again, from a dual-use perspective, actually use those with regard to that versus creating something net new, and look at our allies with regard to what's in place.

If the urgency is now, which I think it is, it's a matter of what we can use that is either up in space or about to be ready in space to handle some urgent operational requirements, and then, in the longer term, build in the other capabilities for additional launch capability and other new satellites that are going to be required in the longer term.

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

If we're looking at longer term, especially from the standpoint of what's important in Arctic sovereignty and protecting the threats that are coming at us over the top of the globe, what role can Canadian industry play in making sure that we have the right assets and infrastructure in space?

Is it more low-earth orbit satellites? Is it more ground-based north warning systems? Is that going to be archaic within the next year or two, never mind today? What about the complete amalgamation of various platforms, whether they're unmanned or not?

[Kevin Ford]

From an opportunity perspective, this is the opportunity, because we have opportunity to create all of it. We have companies like Calian that can do a lot of the ground infrastructure, and companies like MDA and Telesat that can build the pieces. You've got companies like Mr. Reid's company that can actually bring an AI component to it. That's the opportunity. All of it's relevant in the Canadian industry construct. There's really nothing we can't take on and build with the right framework and governance around it.

Mr. Reid may want to comment on that with regard to the capability.

[Ewan Reid]

By having an understanding of what the Canadian government's and the Canadian Armed Forces' needs are in the longer term and having that stated, industry can position itself by going out as a start-up. We can raise capital and say, “Look, we know the government needs this, so we're going to go out and raise that capital and we're going to build that capability,” and then ideally find a way to sell it to the government, so that we're not waiting for an RFP in a very long time frame but are launching a capability and saying that it's up there. One of our many customers could then be the Canadian government, procuring that particular service.

In the case of my company, maybe it's an onboard AI that's telling you right now that there's a dark ship and this is where it is, or this is where a forest fire is, or whatever the application is. Maybe we have other customers as well, and maybe other government departments.

[The Chair, Liberal, John McKay]

Unfortunately, we'll have to leave it there. I apologize again.

Madam Lambropoulos, you have five minutes.

[Emmanuella Lambropoulos, Liberal, Saint-Laurent, QC]

Thank you, Chair.

Thank you, Mr. Ford and Mr. Reid, for being with us today.

I'm going to ask two questions, and each one is for each of you to answer. We can start with Mr. Ford and then move on to Mr. Reid.

In your view, how can the Government of Canada help promote Canadian companies outside of Canada? What opportunities do you think are already there that we're missing out on when it comes to being able to promote you outside?

[Kevin Ford]

I would love to see the opportunity to have the government promote Canadian industry. The best way to do that is to buy the solutions here in Canada and then become advocates and become the customer that says, “We're not talking about concept. Here's the reality of what they've done for the Canadian government.”

From my viewpoint, it's a matter of buying local and then looking at how you then help us on the global stage with regard to becoming that customer reference that so many customers look for to say that it's not just vapourware; it's actually something that's operational today.

[Ewan Reid]

From my perspective, one of the many great things about Canada and our Canadian government is that we do have a fair system, and that's awesome. We sometimes apply that broadly, when we're thinking about the international context. In my opinion, the Canadian government can pick favourites in terms of picking Canada over foreign companies. That's how it can support Canadian industry. We see that in other nations, where a nation will work with its domestic industry and will be going out to meetings. They will be going to business development meetings and partnering with the industry to help the industry sell to other governments.

In Canada, we have a tendency to say, “Well, that's not fair. We're picking a favourite here.” The thing is, if that Canadian company is the only Canadian company doing it, it's already maybe selling it to the government, as Mr. Ford said. Why not then take it a step further? Go out and meet with other countries and say, “Hey, we can provide this to you. You're a partner. You're an ally. You need this capability as well.”

That would be really good. From my perspective, I feel like we're not really seeing that.

[Emmanuella Lambropoulos, Liberal, Saint-Laurent, QC]

I have a follow-up question to that question. Have either of you been invited by NATO to one of their...? It showcases sometimes some of the technologies that are being made in different countries. Have you been invited to those, and what was your experience, if so?

[Kevin Ford]

From my viewpoint, we have been in contact with NATO for programs like the DIANA innovation program. Around space specifically, I'd have to check, but I don't think so, yet. Right now, it's been more around some of the AI capabilities that are required in theatre.

We have had discussions with other organizations, like the European Space Agency. It's a customer for us today, for example. We do have a presence in that region with satellite companies. Many of the companies are based in that area. We have a presence there as far as customers are concerned, but as far as NATO, specifically, I don't think we've had a detailed discussion, yet, on that topic.

[Emmanuella Lambropoulos, Liberal, Saint-Laurent, QC]

Thank you.

I have a last question. Would you say that the biggest barrier to getting contracts with the federal government is the lack of communication between industry and the government, or would you say there are other obstacles that are bigger, and which ones are those? If they're not bigger, which other obstacles that you haven't already mentioned would you want to mention here today?

[Ewan Reid]

Intellectual property can be a pain point, and that can come in different ways. We have experienced situations in which we have contracts in place with the Canadian government. There are various encumbrances placed on intellectual property that make it hard for us to commercialize that further or even raise external investment, because there's this encumbrance on the intellectual property. That's another consideration.

[Kevin Ford]

I don't think so right now. I've been in government as well. I've been on both sides of the fence. I know how hard it is to write RFPs and get through the process.

I want to echo that the procurement process should support a timely delivery of innovation. We all have to collectively look at what role we can do better and what role can industry do better in the context of that goal. I think it's critical.

Right now, we've talked about this. I've been doing this a long time. We've been talking about this for 30-40 years. It's been around defence. What are we doing to give us timely access to innovation? That is something we all have to keep talking about with government and industry—how to find mechanisms to do exactly that.

Thank you.

[Emmanuella Lambropoulos, Liberal, Saint-Laurent, QC]

Thank you to both of you.

[The Chair, Liberal, John McKay]

Thank you, Ms. Lambropoulos.

There's been a really good conversation, and I'm sorry to have to bring it to an end.

Before I do, the U.S. Department of Defense occasionally takes a position in a company just because it wants to see how the technology is going to develop. I'm given to understand that the Canadian Department of National Defence cannot do the same thing.

Do you think that's a problem?

[Ewan Reid]

It would be interesting if government could take a more flexible and active kind of investment approach in critical technologies. We've benefited from significant R and D funding through contributions, but I feel there are times where that could move more quickly. The evolving and changing needs of the Canadian Forces could potentially be met by coming to industry and saying, “We need this, and we need it right now,” and working with industry in a different way from, say, traditional procurement. It could be an equity investment. It could be something else where money is flowing and the capability is being developed. Subsequently, it's provided to the Canadian government, but without that long pull of procurement.

[Kevin Ford]

For a publicly traded company, that's a challenge for us. I do believe in the spirit of that with regard to investing in innovation and investing in Canadian companies that are here. It's not that there's no investment. There is investment in Canadian companies. There is investment between different programs. It's just a matter of ensuring that we can continue to compete against other nations that are continuing not only to invest but to pick up their pace of investment in areas such as space.

I want to reiterate that we are getting support from the government. We just need to continue to find those priorities and the pace of innovation with regard to ensuring we meet the future needs of the government.

[The Chair, Liberal, John McKay]

Thank you again, both of you. It's been a really interesting conversation.

With that, we will suspend and resume with our next panel as soon as possible.

[The Chair, Liberal, John McKay]

Colleagues, it's five o'clock. I call the meeting back to order.

We have two witnesses with us for our second hour. From Galaxia Mission Systems, we have Mr. Gharagozli, chief executive officer. From Global Spatial Technology Solutions, Inc., all the way from Boston, we have Mr. Kolacz. Thank you both for joining us.

Each of you has five minutes for opening statements. Then, colleagues, I think we will have to shrink the time for questions a bit, because I don't think we'll get through in a timely fashion.

Maybe, since Mr. Kolacz is farthest away, we'll call on him for his opening statement.

I'll try not to interrupt you, but if you could keep it to five minutes, that would be helpful.

Thank you.

[Richard Kolacz, Chief Executive Officer, Global Spatial Technology Solutions Inc.]

Good afternoon, everyone. Thank you for the opportunity to present at this committee.

My name is Richard Kolacz. I am the founder and CEO of GSTS, which is a maritime artificial intelligence company that relies on data from various space assets to develop solutions that support global maritime risk and threat assessment, as well as the optimization of the global supply chain.

Our goal is to become the Nav Canada of the oceans, ensuring maritime safety, security and supply chain resilience for Canada and the world, since 90% of the world trade moves by ship.

My primary activity in space was leading a team that developed the world's first dedicated global maritime monitoring satellite network, which was designed and built in Canada in response to U.S. national security presidential directive 41. This directive, issued after 9/11, was to develop an unclassified system to monitor all the ships in the world all the time, to detect risks and threats from sea.

Upon being invited to the committee, the first question I asked myself was, what is the committee looking for?

As you know, the study mandate issues are as follows.

Number one is to identify the current state of Canadian defence capabilities and programs. As I have been out of uniform for a while, it was clear to me that these could best be detailed by members of the Canadian Forces.

Number two is to identify the international agreements and partnerships related to space defence. Again, this is a question best answered by those in government negotiating said agreements.

Number three is to identify the impact of advancements in space on Canada's sovereignty and national security. This is a question to which I felt I could contribute. Here are my views on the third point.

The assets in space are indispensable to our national security, commerce and sovereignty, and our reliance on them will continue to grow. Space assets are used from coast to coast to coast to support communications and manage resources. Satellites are used to monitor the weather and the environment and to detect threats. GPS signals are used for all financial transport and location services.

New developments in space technology, reducing costs and increasing capability mean that there will be many more commercial assets in space, providing much more capability that Canada will definitely use for commercial, civil and defence applications.

Space is critical for Canada's economy, sovereignty and security. My comments will focus on the protection of these and upcoming assets.

What form should this protection take?

Defence against physical harm or destruction of space assets is one element. If such an event were to occur, we are likely escalating to a very bad situation very quickly, and there will be many issues to address.

The other defence to consider is a defence against non-physical interference in the data from satellites or the control of the satellites themselves—cyber and data manipulation attacks. These attacks are ongoing all the time. We see the impacts across multiple sectors in Canada.

To me, the occurrence of this type of activity, which is ongoing today, is much more probable than the act of intentional physical damage. The damage from these events can be as severe as physical asset destruction and would have a major impact on our economy and sovereignty.

My inclination would be to focus on protection solutions to deal with these issues.

How should one do this?

This can be completed through improved satellite data encryption solutions, such as quantum key encryption, which is being developed in Canada today. Asset protection can also be supported through the use of AI signal and data monitoring to determine if attacks are under way, indicating that alternate systems should be used or flagging the data as compromised. At GSTS, we do this to detect vessel pattern of life anomalies, which indicate a risk or threat.

Space defence is a multi-layered, complex activity. It needs to cover a range of threats, from physical destruction to the much more subtle disinformation and deception tactics. It is not possible to cover all aspects by oneself.

Canada frequently does well by focusing on a specific capability, developing a niche expertise and offering that to our allies as part of a comprehensive, multi-layered space defence system shared amongst all. AI-based analysis of satellite-generated anomalies is a low-cost, high-value capability that Canada could offer as a meaningful contribution to a collaborative space defence network.

Thank you.

[The Chair, Liberal, John McKay]

Mr. Gharagozli.

[Arad Gharagozli, Chief Executive Officer, GALAXIA Mission Systems]

Good afternoon, Mr. Chairman and honourable members of the committee. Thank you for the opportunity to speak about the critical topic of space within Canada's defence domain.

My name is Arad Gharagozli, and I'm the founder and CEO of Galaxia Mission Systems, a Canadian manufacturer of intelligent satellites. We are headquartered in our beautiful Nova Scotia. At Galaxia, we are building advanced space-intelligence platforms designed for both defence and commercial uses. Our satellites process data directly in orbit and are blended with artificial intelligence to provide real-time insight and autonomous monitoring of the earth. Our approach is transforming space intelligence and driving innovation that benefits both national security and critical infrastructure. Space technology is critical to our national defence. Space assets enable intelligence-gathering, communication and precision navigation, which are all vital for protecting sovereignty, enhancing our war-fighting capabilities and securing Canada's critical infrastructure.

The deployment of space-based technologies is happening faster than ever, but traditional, long-cycle space missions cannot meet the fast-paced demands of modern defence needs. To remain competitive, Canada must adopt more agile and responsive space capabilities and minimize the time between identifying a gap to deploying solutions into orbit. The rise of new space businesses is key to meeting these challenges. Smaller, more agile businesses can deliver novel solutions and services faster and more cost-effectively, allowing Canada to respond rapidly to evolving defence needs.

The U.S. space priorities framework underscores the need for resilient and responsive space capabilities, which parallels Canada's growing need to enhance its space operations. The framework stresses that, as space becomes a contested domain, it's about protecting space assets, fostering innovation and strengthening national defence through public and private collaboration. Canada must do the same by developing independent launch capabilities, investing in new space companies and ensuring seamless integration between Canada's defence and private sectors. This means using domestic procurement vehicles to propel national companies, which will expand Canada's space capabilities, grow our expert portfolio and create space sector jobs here at home.

The Canadian Space Agency has been a vital leader in this area, supporting innovative solutions in the scientific and commercial space markets during early stages of research and development. Many of these applications expand into the defence market with strong dual-use capabilities. We must expand our support to the Canadian Space Agency to ensure it remains competitive in responding to our domestic space growth needs.

We must also modernize defence procurement programs to accommodate the new space economy in its supply chain, specifically in the form of prime contractors. This means increasing the frequency of projects in contract formats, ensuring the long-term evolution of the industry, job security and innovation sustainability. Establishing the national space council is a positive step, as was creating the 3 Canadian Space Division, but we have more work to do.

Current long-term, bureaucratic procurement processes create barriers for new Canadian space companies, restricting innovation and slowing progress. Streamlined procurement mechanisms will enable the private sector to engage with government projects and contribute cutting-edge technologies. A space-independent Canada with robust defence capabilities is essential for our long-term security and economic growth. By embracing new and emerging space companies, we will build a strong space sector right here in Canada, supporting both the commercial and space sectors. This can be achieved if our public procurement process is ready to adopt the new ways of innovating that our allies already have. Accelerating the growth of our new domestic space companies, adopting updated defence procurement policies and streamlining communication channels will also allow a flow of information to identify gaps and allow the private sector to respond swiftly.

Lastly, space is complex and costly. We must increase support to the Canadian Space Agency to ensure that research and development in essential space capabilities continue to grow. The day we build a space-independent Canada by maximizing the use of our domestic talents and skills to push the boundaries of what's possible in space is the day Canada will become a future-ready nation with strong defensive and commercial capabilities that will reach beyond our borders.

Thank you.

[The Chair, Liberal, John McKay]

Colleagues, I don't think we're going to make it through with full rounds, so we'll shrink the first round to five minutes and go from there.

Mr. Stewart, you have five minutes.

[Don Stewart, Conservative, Toronto—St. Paul's, ON]

Thank you, Mr. Chair.

Thank you to the witnesses here today.

Are DND and government procurements frustrating?

Don't everyone laugh at once.

[Voices]

Oh, oh!