National Defence Committee on Nov. 7th, 2023

[Lisa Hepfner, Liberal, Hamilton Mountain, ON]

Yes, exactly.

[Éric Martel]

Recently in Canada, there's nothing. We haven't done anything. GDMS has, though. Our partner has.

I think one important fact is that the CP-140s right now, the older airplanes in service the country wants to replace, are flying with GDMS equipment, which is renowned and performing extremely well. Taxpayers are spending $2 billion right now to refurbish these airplanes to lengthen their lifespan to about 2035, so I don't understand what the rush is in getting the airplanes sooner.

[Anne-Marie Thibaudeau, Director of Capture and Proposal Management, Bombardier Inc.]

The Canadian government has bought Challenger aircraft recently as well.

[Éric Martel]

Yes, they bought two Challengers.

[Lisa Hepfner, Liberal, Hamilton Mountain, ON]

Thank you.

Bombardier, I understand, has defence contracts with other countries like the U.S. and Sweden. Can you describe to us what the differences in procurement practices are between Canada and some of the other countries you deal with?

[Éric Martel]

That's a very interesting question, probably especially for this committee.

As I said in my introduction, we can compare with other countries because we deal with other countries a lot. As an example, for the same type of airplane, we have an RFP of 35 pages with one country I cannot name. If there is an RFP here, we are expecting hundreds if not thousands of pages, so there's a clear difference in terms of how detailed the specifications are. They need to leave room to the industry if they want to accelerate things. If they take three or four years to develop a specification, there's something wrong. We got 35 pages from that country, which allows us to be flexible. It allows us to have conversations with them and gives us a little bit of latitude and probably the ability to offer a lower-cost solution compared with all the criteria that exist here in Canada.

[Lisa Hepfner, Liberal, Hamilton Mountain, ON]

In 30 seconds, do you have any other advice for how the Government of Canada can collaborate better with the Canadian aerospace industry?

[Éric Martel]

Work with them and, as I think I mentioned, work with us and universities way earlier. We can develop technology. We should talk today about what we need in 10 and 15 years. We have the capability. There are not that many countries that can design and build an airplane. There are probably five or six in the world, and we're one of them.

[Lisa Hepfner, Liberal, Hamilton Mountain, ON]

Thank you.

[Éric Martel]

Thank you.

[The Chair, Liberal, John McKay]

Mr. Savard-Tremblay, you have six minutes.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Thank you, Mr. Chair.

I’d like to check something before beginning. Given the extended sitting, will we each have two turns, one for six minutes and the other for two and half minutes?

[The Chair, Liberal, John McKay]

We will likely have a second round, but it will be a shorter round.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Very well.

Mr. Martel, good morning. Thank you for being here and for your testimony on this whole story, which strikes me as rather incredible. I want to make sure I understood you correctly.

Initially, when this request for information was sent out, it included deadlines, and you stated clearly that you were able to meet them.

[Éric Martel]

Yes, we said we could during the first half of 2022.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

So you indicated fairly clearly that you weren’t worried about delays.

Bombardier has signed several defence procurement contracts with certain countries. Could you tell us a little about those?

[Éric Martel]

Of course.

We’ve been working with the United States, among others, for many years. We have extremely well-known programs. The name “Bombardier” resonates in the Pentagon, because some of our aircraft are used in Afghanistan. They each fly around 5,000 hours a year and have different capabilities. They’re a little different from the ones we’re discussing right now.

We also have a contract with the German army at the moment. I’d like to mention that we have a reputation for fulfilling our contracts on time or ahead of schedule. To this day, that’s the reputation we have in the market, because we work well with our partners. Things are going very well with Germany, and that’s an extremely complex contract involving several aircraft.

We’ve also delivered aircraft to the UK, and we’ll be delivering to Sweden. In addition, we have built four GlobalEye aircraft that are flying in the United Arab Emirates to carry out surveillance and participate in communications missions.

So we have a great deal of expertise. As I said earlier, we have 550 aircraft, we’ve worked with several governments and we’re currently in discussions with several others.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

You mentioned the United States and Germany as examples. Those are hardly featherweights, obviously.

In the countries you do business with, what processes have you seen?

[Éric Martel]

We saw clear processes that were a little less complex, which had sometimes been initiated upstream. Before all that, we had conversations to understand what countries were looking for.

In Canada, there is a process that consists of sending a request for information, which clearly states, in article 1.9, that it will not be used to select anyone. But we never received a call, even though we stated that we were capable of fulfilling the contract, and all of a sudden we learned through the grapevine that someone had been selected without a call for tenders.

In our country, an invitation to tender must first be issued; that’s the law. There has to be an excellent reason not to. Today, we’ve been trying for a whole year to understand why that wasn’t done, and I still can’t see the reason.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

We just learned, at another committee, that a study was conducted by an American firm and concluded that the American company was best suited to fulfill this mandate.

Were you called in as part of this study?

[Éric Martel]

No, never. None of the American consultants who conducted this study and who have an office here in Ottawa called us to find out what we were capable of producing or not.

Mr. Pyun, do you have anything to add?

[Pierre Seïn Pyun, Vice President, Government and Industry Affairs, Bombardier Inc.]

I'd like to say one thing in response to the previous question.

The approach we've seen other countries take, especially those that have a local aerospace industry, is to start by having a dialogue with the industry regarding its capacity. If we're talking about maritime patrol aircraft, France is a good example. It recently awarded two private contracts to Airbus and Dassault to build maritime patrol aircraft based on their platforms.

It's all backwards, here. Canada's industry has to ask for the chance to compete in a process for a project that's Canadian. I just wanted to point that out.

The approach here is very different from that of other countries with domestic industries. Their strategy is to engage locally first.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Most trade agreements even stipulate that exceptions are allowed to deviate from the competitive process for national security and defence reasons.

Canada, however, makes an exception to give a foreign industry a leg-up over its own.

I would think—

[Éric Martel]

We've never seen this before. It's unheard of. I've never heard of another country doing things this way.

[Pierre Seïn Pyun]

What's more, this is a field where Canada has a significant advantage over the whole world, not only in terms of equipment, the airplanes we manufacture, but also in terms of systems. Canada has decades' worth of expertise and investment in a field where we really excel—surveillance, anti-submarine equipment and maritime patrol.

We are active in those areas, and that's why we are calling for a competitive bidding process.