Evidence of meeting #72 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 industry.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Mike Mueller  President and Chief Executive Officer, Aerospace Industries Association of Canada
Christyn Cianfarani  President and Chief Executive Officer, Canadian Association of Defence and Security Industries

5:45 p.m.

Bloc

Julie Vignola Bloc Beauport—Limoilou, QC

Thank you very much.

Ms. Cianfarani, if you could send the committee clerk a written response in relation to the previous question, I would be most grateful.

The following question is addressed to the two witnesses. There is no perfect system; everyone agrees on that. The supply system isn't perfect either. To your knowledge, does the government consult with industries to find out where the flaws are and what needs to be improved? If so, what form does this consultation take? If not, what form should it take?

5:50 p.m.

President and Chief Executive Officer, Canadian Association of Defence and Security Industries

Christyn Cianfarani

Generally, we consult with the government on the areas where it overlaps with industry. For example, within the procurement process there is a part that's called “industry consultations”. They would ask for our feedback: How do you feel the industry consultations happened? How can we improve it? Are there areas where you don't like it or are not getting the right information?

As for the whole process that goes on within each individual department within government, we are rarely asked to comment on their inner workings or on their inefficiencies within that process.

5:50 p.m.

President and Chief Executive Officer, Aerospace Industries Association of Canada

Mike Mueller

I would agree that the engagement hasn't been the best in the past, but we do have a defence industry advisory group where we are starting to have these types of discussions on the overall basis of the procurement piece. We're starting to feed into this. There is perhaps a little bit more of a willingness to have these types of discussions, such as how you modernize some of the procurement, so we're optimistic about some of those things.

Does more work need to be done? Yes. Do we need to see that process evolve and come forward? Absolutely. But there is some positive movement there that I've seen.

5:50 p.m.

Liberal

The Chair Liberal John McKay

Thank you.

Ms. Mathyssen, you have one and a half minutes.

5:50 p.m.

NDP

Lindsay Mathyssen NDP London—Fanshawe, ON

I just want to shift things a little bit, building on some of the answers I've already heard.

You talked about amazing companies innovating, showing leadership and improving on systems where they can. The Department of National Defence is exempt from the federal government's climate change targets. I'm wondering if you could talk to this committee about whether, in terms of that procurement strategy, industry is filling that void itself, how they're having a bigger impact in terms of climate change, or if the government is working together with industry. Is it something that you expect out of the update from the defence policy?

October 3rd, 2023 / 5:50 p.m.

President and Chief Executive Officer, Aerospace Industries Association of Canada

Mike Mueller

I would say that industry is looking at this on its own. It's a big focus of aerospace in particular, net-zero goals, specifically on the civil side, which is good. But again, through the defence industrial strategy, and through the defence policy update, we would expect to see some signals on how we can contribute to that fight also, which is incredibly important.

Again, from an industry perspective, especially on the civil side, Canadian companies are absolute world leaders. I think that with some research and development there are applications that you can share back and forth, which is good.

5:50 p.m.

Liberal

The Chair Liberal John McKay

Thank you, Ms. Mathyssen.

Mr. Kelly, you have three minutes, please.

5:50 p.m.

Conservative

Pat Kelly Conservative Calgary Rocky Ridge, AB

A year ago, the chief of the defence staff and Minister Anand said that we must prepare to be on a “war footing”. Has industry received any further signals about the “war footing” type of procurement?

5:50 p.m.

President and Chief Executive Officer, Canadian Association of Defence and Security Industries

Christyn Cianfarani

We have received signals from other nations.

5:50 p.m.

Conservative

Pat Kelly Conservative Calgary Rocky Ridge, AB

Okay, so that statement was the only one we got in Canada.

5:50 p.m.

President and Chief Executive Officer, Canadian Association of Defence and Security Industries

Christyn Cianfarani

Yes. We are not on a war footing. Our industry has not been put on a war footing, which you would do through firm, government-backed contracts.

5:50 p.m.

Conservative

Pat Kelly Conservative Calgary Rocky Ridge, AB

Okay.

When Canada was at war in Afghanistan, there were successful quick procurements for Chinook helicopters, Hercules aircraft, Globemasters, new Leopard tanks and new LAV upgrades. The issue of war footing, is that an expedient for procurement?

5:50 p.m.

President and Chief Executive Officer, Canadian Association of Defence and Security Industries

Christyn Cianfarani

No. It is the issue that, from the top on down, it was, “Make this procurement happen.” It was a demand and a contract that followed that procured the equipment you're talking about.

5:50 p.m.

Conservative

Pat Kelly Conservative Calgary Rocky Ridge, AB

Okay. So it's simply a matter of—

5:50 p.m.

President and Chief Executive Officer, Canadian Association of Defence and Security Industries

Christyn Cianfarani

If we want it to happen, it can happen. It will take time for the companies to ramp up to production volume, but if we want it to happen, we need to provide firm contracts for production ramp-up.

5:55 p.m.

Conservative

Pat Kelly Conservative Calgary Rocky Ridge, AB

Is that entirely on government to do so?

5:55 p.m.

President and Chief Executive Officer, Canadian Association of Defence and Security Industries

Christyn Cianfarani

Well, yes. It's not going to come out of a commercial industry.

5:55 p.m.

Conservative

Pat Kelly Conservative Calgary Rocky Ridge, AB

I know, but we've had testimony.... That's why it's important that we hear this, because when we asked the question why—because we were incredulous that shell production hasn't been ramped up—the witnesses we had basically blamed industry.

5:55 p.m.

President and Chief Executive Officer, Canadian Association of Defence and Security Industries

Christyn Cianfarani

Munitions are controlled items. The munitions supply program exists in Canada. The rate at which we produce, whether it's training rounds or operational rounds, is a long-term contract with the Government of Canada.

To change that rate or to modify that production line will require a change order from the Government of Canada and an acceptance, if we are to divert ammunition to another country at volume.... It would most likely require—and I'm not an expert in this field—in-depth conversations with the Government of Canada about its own strategic source of supply, which means that we cannot do it alone.

5:55 p.m.

Conservative

Pat Kelly Conservative Calgary Rocky Ridge, AB

Yes, indeed, yet we've been dithering for a year and a half and the government has not yet done it.

5:55 p.m.

Liberal

The Chair Liberal John McKay

Thank you, Mr. Kelly.

Mrs. Lalonde, you have three minutes.

5:55 p.m.

Liberal

Marie-France Lalonde Liberal Orléans, ON

Thank you very much.

Thank you very much for being here today. It's a real honour.

I was looking at some of the notes I have here and at some of the latest initiatives that the Government of Canada, our government, has made regarding the new F-35 fighter jets. I think my colleague made reference to the warships. We're also looking at our decision to support Ukraine within, I would say, the best of our ability.

I heard many times that you talked about the fact that we need the DPU, but there's a war. I heard before from other stakeholders that sometimes.... I came from the private sector before entering politics. I understand the significance and the magnitude from your perspective of having fair contracts signed, but is it also a responsibility of the private sector to look at the possibilities going forward? It's very sad that I'm saying this, because countries are at war. I'm looking at this from a private entity aspect. What are you doing to maybe improve that capacity in the long term?

5:55 p.m.

President and Chief Executive Officer, Canadian Association of Defence and Security Industries

Christyn Cianfarani

Most certainly, I think it is up to industry to put proposals on the table as to how it can ramp up production, which, as I understand it, these companies have done. There have been proposals submitted to the Government of Canada to increase production that require anything from line changes to agreements on production volumes and backstopping it, because governments are our only customer with respect to munitions supply.

We also need to understand that other countries are positioning their industry to make this volume production. For example, France is not going to buy from Canada if it can produce munitions in that order of magnitude. It understands that it will be an investment in its own industrial base to do so and then provide those munitions to Ukraine, as an example.

France is not going to come to Canada unless the Canadian government steps forward and says, “We have a source of supply that we are willing to share with our NATO partners and Ukraine, and we are willing to backstop getting that up to production rate and diverting our operational volumes to another country”—to multiple other countries, for that matter, because the volume of product that would be required would be significantly historical highs.

5:55 p.m.

Liberal

Marie-France Lalonde Liberal Orléans, ON

Thank you very much.

5:55 p.m.

Liberal

The Chair Liberal John McKay

Thank you, colleagues, for your co-operation in maintaining some time discipline.

Ms. Cianfarani and Mr. Mueller, thank you for your testimony. We're very pleased that you were able to adjust your schedules in order to be here and accommodate our unique day, shall we say.

Colleagues, I remind you that next Thursday, it's one panel for two hours with the various representatives of the four departments.

With that, the meeting is adjourned.