Evidence of meeting #39 for National Defence in the 45th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was companies.

A video is available from Parliament.

On the agenda

Members speaking

Before the committee

Robitaille  Assistant Deputy Minister, Procurement, Defence Investment Agency
Hadwen  Assistant Deputy Minister, Policy-Industry, Department of National Defence
Kaminska  Director General, BOREALIS Joint Program Office, Defence Research and Development Canada, Department of National Defence
Hembroff  Associate Assistant Deputy Minister, Industry Sector, Department of Industry
Folkes  Associate Assistant Deputy Minister, Department of Public Works and Government Services
Brandao  Senior Director, Policy and Engagement, Defence Investment Agency

Stephen Fuhr Liberal Kelowna, BC

Thank you very much.

We are all very aware. Steel, aluminum, auto and softwood are the ones we hear about over and over in the House because it's true that those sectoral tariffs are very damaging to our economy.

On defence procurement, where we can.... I'll use both steel and aluminum as examples. Steel is a good example. We're building armoured vehicles here. We're building ships here. We need a very specific type of steel for that, and we're trying to get some of our big steel producers to pivot. It's the same with aircraft aluminum. We have De Havilland. We have Bombardier. We have some big aircraft manufacturers here. We're trying to see whether there's an opportunity for them to source some of their material from Canada. Again, the aluminum they need may not be exactly what's being produced.

The bigger opportunity is the buy Canada strategy, which is all the building that we're going to do across the country—and it's significant. The Government of Canada will be buying Canadian materials: steel, aluminum and lumber. That's probably the quickest relief you'll see for the aluminum sector. There may be others.

I know the government's also looking for other markets for our aluminum. I think the U.S. will come to terms with the fact that they need us for aluminum. I hope that happens sooner rather than later.

Mario Simard Bloc Jonquière, QC

I totally understand that, and I agree with you. As a sovereignist, I can say that we need to develop local consumption strategies. If there were a buy Canadian policy, even though I am a sovereignist, I would be strongly in favour of that kind of strategy.

That said, we have to be aware of the realities in various economic sectors. What I'm saying is that, when I read this document, I get the sense that you don't understand the dynamics of the aluminum sector. What's happening in that sector right now is that primary aluminum is being produced and but it is not being processed in Canada and Quebec. Most of the aluminum that Canada uses is exported to the United States. We don't even have a mill. You need a mill to produce sheets of aluminum.

Tomorrow morning, you want to use aluminum for defence initiatives, but you don't have the industrial structure to do that. That's my concern. There will be an agency that will be ready to coordinate relationships and contracts with small and medium-sized businesses, but it doesn't seem to be aware of the industrial infrastructure that currently exists in certain sectors of activity.

That's why I'm telling you that, before the agency is set up, we need to take stock of our strengths and weaknesses. It's the same thing in the mining sector. It takes years to get a lithium mine up and running.

So that industrial infrastructure is not going to be in place overnight. I don't know what form it will take, but it seems to me that the challenges will be spread over a number of years. You have a slightly idyllic view of things. I'm not saying this to annoy you, it's just the impression I get. You have a slightly idyllic view of the supply chain in Canada right now.

Stephen Fuhr Liberal Kelowna, BC

I understand what you're saying, but let me add a couple of things. This is like it is with our need for steel for armoured vehicles or icebreaking ships when we don't necessarily have that type of steel here. This is analogous to what you're describing. We have aluminum, but it's not the type we can use, so we send it someplace else.

In the second hour, there will be somebody here from ISED. The reason I bring that up is that there's something called the strategic investment fund. This fund of money is to help companies pivot. If what was working before these tariffs came in is not working now, and we need to change the way they do things so they can compete and get into procurement in Canada, this is not my department. However, this type of money does exist out there to help companies specifically do these types of things so that we can keep everybody working here in Canada.

5 p.m.

Liberal

The Chair Liberal Charles Sousa

Thank you, Mr. Simard and Mr. Fuhr.

Mrs. Gallant, we are going to you for five minutes now.

5 p.m.

Conservative

Cheryl Gallant Conservative Algonquin—Renfrew—Pembroke, ON

Thank you, Mr. Chairman.

Through you to the secretary, you spoke of technological advancements at the “speed of relevance”. What steps has your agency taken to implement NATO's rapid adoption action plan? As you know, RAAP is the NATO collective strategy designed to close the gap between rapid commercial technology cycles and slow military procurement timelines. That aims to integrate the dual-use technology you spoke of into the allied armed forces within 24 months. What steps have you taken there?

5 p.m.

Liberal

Stephen Fuhr Liberal Kelowna, BC

We're picking up our pace here at home with regard to how we procure things in Canada. As you know, we've signed up to SAFE, which is another NATO initiative. The good news about SAFE is that not only is Canada the only non-EU country that's involved in this—other than the EU ones that are in it—but it gives us access of up to 80% of procurement.

5 p.m.

Conservative

Cheryl Gallant Conservative Algonquin—Renfrew—Pembroke, ON

Okay. I thank you, but that's not a part of RAAP, which is getting things going faster.

Could you provide one example of procurement that has adopted this strategy to close the gap between the rapid technology cycles and the slow procurement process of the military?

5 p.m.

Liberal

Stephen Fuhr Liberal Kelowna, BC

Right now, as you may know—I'm sure you've looked at the DIA's website—we have eight procurements. We will be getting all the procurements. We don't have them yet, so we're working with the procurements that we have. As you heard from the people who were here—I watched a committee meeting on Monday—I would argue that we're moving quickly.

5 p.m.

Conservative

Cheryl Gallant Conservative Algonquin—Renfrew—Pembroke, ON

If you've held any prize-based competitions for the SMEs you spoke of, how has your agency optimized pathways for integrating new technological products into military settings for technology adoption?

5 p.m.

Liberal

Stephen Fuhr Liberal Kelowna, BC

In this document, you'll see BOREALIS and DISHs. Those are probably the pathways that you're talking about. Those are DND initiatives.

The other problem is that we're too slow. Before, slow meant “late and expensive”. Now it means “late, expensive and irrelevant”.

There are a host of things in this document. Not all of them are DIA initiatives. I would say DISHs and BOREALIS are very good examples of how we're going to bring technology.... We're going to have to do all sorts of things. We're going to have to make sure that we have an evolving supply chain, because technology is changing so quickly.

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Conservative

Cheryl Gallant Conservative Algonquin—Renfrew—Pembroke, ON

What has your agency been doing to de-risk new technological products to be battle-ready?

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Liberal

Stephen Fuhr Liberal Kelowna, BC

We buy things off the shelf, and we spiral develop them. We get them quickly—the ones that exist. We make sure that they have extra power, cooling and space so that we can spiral develop them moving forward.

As an alternative, we could do it the old way, which is to buy something, reiterate it a million times, “Canadianize” it and wait 10 years to get it. We're not doing that anymore.

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Conservative

Cheryl Gallant Conservative Algonquin—Renfrew—Pembroke, ON

Do you de-risk it by buying it off the shelf?

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Liberal

Stephen Fuhr Liberal Kelowna, BC

That's one way we can de-risk it.

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Conservative

Cheryl Gallant Conservative Algonquin—Renfrew—Pembroke, ON

Other than drones, what example would you give?

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Liberal

Stephen Fuhr Liberal Kelowna, BC

Do you want to jump in, Mr. Robitaille?

Vincent Robitaille Assistant Deputy Minister, Procurement, Defence Investment Agency

Yes, we could speak about that.

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Conservative

Cheryl Gallant Conservative Algonquin—Renfrew—Pembroke, ON

No. We'll have answers from you in the second hour.

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Assistant Deputy Minister, Procurement, Defence Investment Agency

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Liberal

Stephen Fuhr Liberal Kelowna, BC

Strategic partnerships are a good example of that. We have a strategic partnership with CAE for future fighter lead-in training. We have a strategic partnership with MDA Telesat. The whole point of getting involved with companies early on is to let the experts of these companies help us figure out how to go quickly, not make mistakes and not waste money. Those are two good examples of that.

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Conservative

Cheryl Gallant Conservative Algonquin—Renfrew—Pembroke, ON

What steps has the DIA taken to build the capacity to have critical minerals extraction done in Canada?

5 p.m.

Liberal

Stephen Fuhr Liberal Kelowna, BC

Right now, that's with natural resources. Today, we're a special operating agency inside PSPC. We will be a stand-alone agency, as we all know, but critical minerals aren't on our plate yet. I suspect they will be, but they are not there now.

5 p.m.

Conservative

Cheryl Gallant Conservative Algonquin—Renfrew—Pembroke, ON

Has the DIA provided a timeline with budget allocation amounts on the procurements you're responsible for to show what the DIA is going to contribute toward what NATO is asking all members for—5% by 2035?

5 p.m.

Liberal

Stephen Fuhr Liberal Kelowna, BC

Our 2% was sanctioned by NATO—

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Conservative

Cheryl Gallant Conservative Algonquin—Renfrew—Pembroke, ON

We know about the 2%, but we have no plan before us for the—