National Defence Committee on June 1st, 2026

[Mike Greenley]

I think the opportunity for that is there in the defence industrial strategy. If there are capability areas where we sign a strategic agreement with the Canadian Armed Forces or the Department of National Defence so that we can then work together, especially under this new strategic framework that's coming out, then we would have all the potential in the world.

If the capability desired was, for example, swarming UAVs or something like that—some of these more innovative capabilities that we're seeing in Ukraine—then partnering with Canadian industry on that capability and going through an iterative process to develop it and make it operational is completely available to us through these new frameworks that are being established.

[Scott Anderson, Conservative, Vernon—Lake Country—Monashee, BC]

One of the things that's brought up is the aspirational 70% Canadian content. I listened to Secretary Fuhr recently at a trade conference, where he used 80% as an aspirational.

How realistic is it, at the current time, to have 70% Canadian content in our procurement?

[Mike Greenley]

I think we ought to watch the words “70% Canadian content”.

[Scott Anderson, Conservative, Vernon—Lake Country—Monashee, BC]

Well, we're watching and I'm asking a question—

[Mike Greenley]

Correct me if I'm wrong, but it was my understanding that the goal was to shift from 70¢ of every dollar going to United States vendors, which don't have 100% U.S. content—

[Scott Anderson, Conservative, Vernon—Lake Country—Monashee, BC]

It's aspirational 70% Canadian content.

[Mike Greenley]

Is it Canadian content, or is it to move to 70% of the dollars going to Canadian industry?

[Scott Anderson, Conservative, Vernon—Lake Country—Monashee, BC]

Yes.

[Mike Greenley]

Absolutely, 70% of the dollars to Canadian industry over the next decade is a possible thing.

[Scott Anderson, Conservative, Vernon—Lake Country—Monashee, BC]

It's possible, but right now is it realistic? What is the rough percentage right now?

[Mike Greenley]

Right now, it would be low. It might be—I don't even know the number—probably 15% or some number like this. It'll be low. If we procure from Canadian industry in the sovereign areas and more over the next decade, 70¢ of every dollar going to Canadian industry instead of going to U.S. industry is an achievable outcome.

[Scott Anderson, Conservative, Vernon—Lake Country—Monashee, BC]

Sure it is in industrial capacity, but given the nimbleness to be able to switch, the previous question I asked was about being able to match the technologies of the future today because we pretty much have to do that.

[The Chair, Liberal, Charles Sousa]

Thank you, Mr. Anderson. The time is up.

I believe it's qualifying Canadian content of 100%. He's saying if you have 70% partnership with Canadian content, we'll consider that 100% in that qualification.

Mr. Elzein, I know that you had your hand up a few times. Be very quick, because we're running out of time.

[Bachar Elzein]

To go to your first question about the war in Ukraine, we see drones. It is the most visible part of that shift in warfare. The underlying foundation to that is also space. We shouldn't underestimate the importance of space for targeting, surveillance and recognizance, which is clearly cited in the defence industrial strategy, which is something I'm really happy about.

A modern army cannot fight without space, and there's nothing we will put into space, be it launch or satellites, that will be more expensive than the cost of war on Earth. If you have a disruption in the port of Montreal—

[The Chair, Liberal, Charles Sousa]

Mr. Elzein, that's good.

Ms. Lapointe, it's over to you for five minutes.

[Viviane LaPointe, Liberal, Sudbury, ON]

Thank you, Chair.

Mr. Greenley, at the last session, this committee undertook a study on space defence. One thing that really stood out was how much we rely on space-based systems without necessarily realizing it. Many of the services we Canadians use every day depend on satellites and space infrastructure that we may not be fully aware of. When people think about critical infrastructure, we think about roads and bridges and energy systems. We don't always think about space.

How much of Canada's economy and security now depends on space-based infrastructure, would you say?

[Mike Greenley]

It's a significant amount. There are estimates that say that if we lost access to the global positioning system, for example, that would cost the Canadian economy $1 billion every day. It is very significant.

For Canada to really get into our own lexicon that space is critical infrastructure and that space is dual-use, that lets you say, “I'm going to spend money on space as critical infrastructure for observation, communications, global positioning, timing for banks, all these different areas that are dual-use, which means that it can then count towards my defence spending and my 5% target”. Space is a very powerful critical infrastructure investment for the country.

[Viviane LaPointe, Liberal, Sudbury, ON]

Mr. Kolias, you referenced critical infrastructure in your opening remarks. Do you want to add comments to the question I just asked?

[Hugh Kolias]

I think Mr. Greenley did a fantastic job.

Some of the estimates that we've seen are up to 20% of GDP. No one truly knows the vast impact, because even power systems, if they go without timing and GPS—which is essentially electricity—would be a substantial hit to the economy.

[Viviane LaPointe, Liberal, Sudbury, ON]

Mr. Greenley, which space-based capabilities do you consider most critical to Canada's economic and national security? Where do you see Canada's greatest vulnerabilities today that the defence industrial strategy should address?

[Mike Greenley]

Most countries these days, with their sovereignty push, are looking for observation of the earth from space to be able to have monitoring of their territory.

They want communications from space for both broadband, Internet-type services and direct-to-voice, cellphone-type services, so that everyone in the country can have equal access to communications and the ability to operate a business and get an education. Those are extremely important.

Alternative GPS would be an important thing for sovereignty. We just talked about that.

We keep talking about launch, whereby, if you have to wait in line or if any other country reprioritizes their launch systems for their own national interests, and we can't get our things into orbit, then we don't have sovereignty in space. That's critical.

[Viviane LaPointe, Liberal, Sudbury, ON]

Mr. Goel, as a newer company entering the space sector, the defence industrial strategy places a strong emphasis on innovation.

What does successful support for emerging companies look like in practice?

[Rahul Goel]

We have a pretty strong opinion when it comes to innovation. Innovation should be applied in the right domains, perhaps where operational capability is not of significant urgency or where we are exploring a scientific question that humans are not at the forefront of. Launch is a capability that humans have been capable of for decades now. The fact that Canada has not developed it does not mean that the rest of the world has not.

Our priority is to get Canadian assets into space as quickly as possible. There are lives on the line. The economy is on the line. If there's an innovative route that makes this more feasible and quicker to attain, then we will certainly take it, but there isn't. It's rocket science for a reason. The margins are extremely thin. We have a job to do.

There's room and time for innovation. Certainly, every aspect of it is, quite literally, rocket science. From printing our engines in 3-D to robotic manufacturing of our composite pressure vessels, we've been doing this for many years now. There's innovation at every step. We choose to apply it to the manufacturing and to the unit economics but not to the fundamental first principles that actually govern the rocket science behind our capability.

I think we have to be very measured in how we apply innovation. In our case, it's all about first principles and getting that capability up and in orbit as quickly as possible.

[Viviane LaPointe, Liberal, Sudbury, ON]

Where do you see smaller companies having the greatest opportunity to contribute to Canada's defence and security objectives?

[Rahul Goel]

We have the ability to take on the type of risk that larger companies simply do not. In our team's experience and in my personal experience, we work weekdays and weeknights and weekends. We skip anniversaries and birthdays. This is something that's very tough in large companies, but this is the type of commitment that is required, and that has been required, by every company.

We talk about companies like SpaceX. They started in a very similar capacity in a similar way. They had people sleeping in tents on an island in the middle of the Pacific to launch the Falcon 1 rocket in 2008. We look at the Falcon 9 and say, yes, we want to build medium-lift for Canada, but the reality is that so much came before that point to get SpaceX to what it is now, a trillion-dollar IPO. We talk about the Falcon 9 rocket, for example, and 70% of that rocket launch is Starlink satellites. Their internal cost to launch Starlink is $18 million, but they charge customers like us and the rest of the world $75 million. Starlink runs 66% of SpaceX's actual economics. We think of them as a rocket company, but they're a space telecommunications company. They're a space systems company.

We have to be very realistic about the type of capability we're developing. Small companies are the ones that can take on the risk and build up to a point where we can reach that level.