Science and Research Committee on June 11th, 2026

[Aslam Rana, Liberal, Hamilton Centre, ON]

Thank you.

You have also said that Canada should keep working closely with NATO allies while relying on our own procurement tools. What does that look like, in practice, for the dual-use and defence research sector, and which tools should the federal government be leaning on right now?

[Dana O'Born]

Thanks for the question. I'll just jump in and take this one, if that's okay.

I think that opportunities attached to NATO are very interesting. Many of you in the room are aware of COVE, which operates out of Halifax as the NATO DIANA base. Opportunities that are coming out of that program give companies an opportunity or advantage to get inside the NATO network. We're seeing that slowly climb up. I can't recall the stat precisely, but I believe, in the last NATO DIANA challenge, there was an overrepresentation of Canadian companies, which, of course, is a good thing for us.

The other thing we saw in the news—I think it was two days ago—is that the Minister of National Defence is heading to Japan and taking a number of Canadian companies with him. We applaud exercises like that and think they're really great. We want to make sure that slate or roster of companies is, certainly, Canadian-headquartered or Canadian-based.

Those types of exercises, I think, are very helpful. They should be a bit more expanded; it shouldn't just be the same companies time and time again. Once a company has an opportunity to do that with a minister, they get into a kind of pattern or routine. This has done a lot for the core defence companies. In an instance such as with James's company, if the Minister of National Defence called and said, “Do you want to go to Japan next week?” he'd probably say, “Okay.” Different opportunities for bringing different types of dual-use companies into the mix are very helpful.

[Aslam Rana, Liberal, Hamilton Centre, ON]

Thank you very much.

Mr. Pyun, Bombardier contributes $7.4 billion to our GDP and supports more than—as I think you mentioned—60,000 jobs. When the firm works on defence and dual-use research with partners, such as the NRC and Saab, how do you ensure the intellectual property developed here in Canada remains in Canada?

[Pierre Seïn Pyun]

Thank you very much for the question.

I mentioned that we export the bulk of our production. Over 90% of our production is for the export market. Our R and D base and manufacturing base are largely in Canada. The patents, the IP that we develop, are maintained here, and they are commercialized in Canada.

Of course, we have supply chains across North America. We have thousands of suppliers in Canada, in the U.S. and in Mexico, so it is an integrated value chain.

I think it's important as we develop our defence industrial base that in some areas, maybe not in all areas.... We cannot be jacks of all trades, necessarily. However, there are areas—I would concur with what my colleagues have mentioned—in which Canada has competitive advantages, and I think we should focus on those areas and make sure that we remain on the top of global value chains.

Certainly, in our space, very few countries I've mentioned have the capabilities to develop aircraft from A to Z. This is an area in which we feel we should be investing and making sure that we preserve and commercialize IP here in Canada.

[Aslam Rana, Liberal, Hamilton Centre, ON]

Thank you.

The National Research Council is acquiring the Global 6500, and Saab has proposed using the same aircraft for Canada's airborne early warning and control capability.

That puts Bombardier at the centre of two major dual-use investments. What does Bombardier's role look like in each of those partnerships, and how do they fit into Canada's Bombardier defence strategy?

[Pierre Seïn Pyun]

What is really common between those projects is that they have the same platform. Also, in December, the Canadian government signed a contract with us to acquire Global 6500s.

To be candid, until recently our success in defence was largely outside of Canada. I mentioned some examples with projects in Europe and the U.S. However, things are changing with the contracts that you mentioned and the additional contract that I mentioned, which we signed in December. It is the case that the Global 6500 is the common platform. We're focused on the platform, and we work with system integrators. Actually, the 6500 has become a platform of choice for many defence applications around the world—

[The Vice-Chair, Conservative, Tony Baldinelli]

I'm going to have to stop you there, but perhaps someone else can follow up on that.

I'll go to my Bloc colleague, Mr. Blanchette-Joncas.

You've got six minutes.

[Maxime Blanchette-Joncas, Bloc, Rimouski—La Matapédia, QC]

Thank you, Mr. Chair.

Welcome to the witnesses who are with us today. My first question is for the Bombardier representative, Mr. Pyun.

Mr. Pyun, when Canada purchases strategic capability outside the country rather than at home, what does it lose in terms of R and D, ownership of IP, skilled jobs and even the supply chain?

[Pierre Seïn Pyun]

In my opening remarks, I spoke to the fact that Canada has a highly advanced ecosystem, and we are certainly an integral part of that. When you look at the size of the Canadian market, you see just how extensive the domestic ecosystem is. What's more, the ecosystem is highly developed, with a number of colleges and universities.

I argue that we should leverage that ecosystem. Certainly, the synergies between civil and military aviation are tremendous. Historically in Canada, civil aviation has been connected to military aviation. Now the defence industrial strategy is an opportunity to rekindle that connection, which other countries have. Many technologies in civil aviation originated in military aviation, including composite materials, fly-by-wire systems and heads-up displays. A number of systems developed for defence purposes were then brought over to civil aviation.

Our approach is to deploy our civil aviation expertise in military aviation. Certainly, that opportunity is emerging in Canada right now, from what we are seeing.

[Maxime Blanchette-Joncas, Bloc, Rimouski—La Matapédia, QC]

Thank you.

Mr. Pyun, few places in the world can say they manufacture airplanes from nose to tail. Canada—mainly Quebec, where 60% of its aerospace industry is based— can make that claim, as can Toulouse, France; Seattle, U.S.A.; and Brazil.

What can the ecosystem we have here teach the government when it comes to the defence industrial strategy?

[Pierre Seïn Pyun]

As an industry player, we see college and university partnerships as crucial to the success of the ecosystem and the aerospace sector when it comes to defence applications. Certainly, our recommendation is to leverage that network to meet defence needs as well. That was reflected in the defence industrial strategy and in measures taken in recent months. While it may not be true for all sectors, there are definitely strengths in aerospace that can be harnessed to meet defence needs, as I said.

There's the labour problem. Labour is crucial. One of the keys to Canada's success has been the pool of skilled workers here. However, continued investment is needed to address the growing demand, and access to labour is something the industry is concerned about. That's why our partnerships with colleges and universities to build that skilled workforce are paramount to the success of the defence industrial strategy.

[Maxime Blanchette-Joncas, Bloc, Rimouski—La Matapédia, QC]

Your point is well-taken, Mr. Pyun.

Do you think Canada should use government procurement more to develop its industrial and technological capability? Does it use that tool enough?

[Pierre Seïn Pyun]

We see that the government is moving towards that, with the defence industrial strategy, the buy Canadian policy and other measures it has announced. The idea is to leverage public procurement not just to meet defence needs, but also to drive economic development and homegrown innovation. It's a tool that's leveraged by jurisdictions all over the world. It's encouraging to see the government moving in that direction. As far as we're concerned, buying more Canadian products and services in certain sectors, while still purchasing things from abroad and promoting partnerships with other countries are not mutually exclusive objectives. All those things can be done at the same time. With the growing level of investment in defence, it's not a zero-sum game.

[Maxime Blanchette-Joncas, Bloc, Rimouski—La Matapédia, QC]

Mr. Pyun, you mentioned Saab's GlobalEye solution, which is built on the Global 6500. What role could Bombardier play in the GlobalEye solution? How could Quebec, specifically, and all of Canada, generally, benefit?

[Pierre Seïn Pyun]

The GlobalEye aircraft itself is based on a Bombardier model built in Canada, the Global 6500, which we manufacture using our supply chain in Canada, but also elsewhere. We're in talks with Saab to lead the aircraft modification process, here in Canada, and system integration. It's going to generate economic benefits, but it will also create more jobs for Canada on a net basis. The details have to be worked out with Saab and possibly other partners. I think we're going to see opportunities for other partners in Canada to play a role.

[Maxime Blanchette-Joncas, Bloc, Rimouski—La Matapédia, QC]

That's great news.

What's your main recommendation to build long-term defence industrial capacity in Canada?

[Pierre Seïn Pyun]

I think my fellow witnesses talked about that.

It's good to see in the defence industrial strategy that there's a pillar around R and D. Canada wants to augment its R and D investment in defence by 85% in the years to come.

Overall, we're starting from afar, because if you look at the U.S., for instance, 15% of their defence spending is in R and D in defence. In Canada, I haven't seen reliable stats, but I believe it's around 5% or maybe below 5%. We have some distance to go, but we are encouraged by the build-partner-buy framework. For the build part, if the technology doesn't exist in Canada, I think there need to be ways to commercialize technologies. It's been an issue and a challenge for Canada.

[The Vice-Chair, Conservative, Tony Baldinelli]

Thank you for your comments.

We're going to begin the second round of questioning with MP DeRidder.

You have five minutes.

[Kelly DeRidder, Conservative, Kitchener Centre, ON]

Thank you, Chair.

Thank you, everybody, for coming today.

Ms. O'Born, Kitchener Centre is Canada's innovation capital, with many companies that are developing innovative technologies for both civilian and defence applications. The survey you mentioned today identified almost 430 Canadian companies developing dual-use technologies, yet few are supplying the Canadian government.

Why is there such a significant gap between what Canadian firms are capable of providing and what government is actually procuring?

[Dana O'Born]

Isn't that the big question we're all here to answer today?

I think it's a number of things. Obviously, it's exposure to the Canadian government and just sort of understanding. There is a new generational tone that we have not seen, as a result of geopolitical tensions and this focus on Canada. As a reminder for all the members in the room today, the council was founded 10 years ago by Jim Balsillie, a veteran of the tech ecosystem in the region.

To answer your question more specifically, I'll lean on my colleague's comments from earlier today, which I've written down here: “We have been Canadian when no one was looking.” We're at this new juncture of the economy in which we really need to double down on our Canadian strategies, our plans and our investments and think those through. I don't think it's enough to say, “Let's put some money into a Canadian company to see how it grows”, and if they have a sale globally, that's a single marker of success.

There are so many organizations that have stepped up to the plate. We saw this during COVID, and now we're seeing it again in the defence space. On dual use, I think it's particularly interesting, because so many civilian applications can have military applications as well.

[Kelly DeRidder, Conservative, Kitchener Centre, ON]

Thank you.

You've noted that many Canadian firms are finding greater success selling to foreign governments. I have a couple of examples. Right in Kitchener are Alchemy and SkyWatch.

What are the long-term implications of that trend going to be for Canadian sovereignty, industrial capacity and defence readiness?

[Dana O'Born]

We're not going to build our capacity here in Canada; we're not going to build our capabilities, and we're not going to build our defence industrial base. That is the antithesis of what we're trying to accomplish with the defence industrial strategy.

[Kelly DeRidder, Conservative, Kitchener Centre, ON]

Thank you.

Mr. Yurichuk, your testimony today about innovation, ownership, IP, manufacturing and supply chains being “Canadian, Canadian, Canadian, Canadian” from coast to coast to coast was incredibly impressive. You manufacture not only what we need but a really important way to keep our troops safe, which is proper gear.

You did mention in your testimony that you think the problem is with procurement. I agree. Right now there's this buy Canadian narrative, but we're not really buying Canadian in a lot of sectors, yours included.

I'm going to ask you a question that probably keeps you up at night.

Why do you think the government is choosing to procure with Logistik Unicorp, which is owned by an American private equity firm, instead of a company that is Canadian from coast to coast to coast like your own?

[James Yurichuk]

That's a great question.

During this low-power-mode military time that preceded us, I don't think folks really looked out and got into market much. We're seeing a huge ramp-up right now, but they only knew what was right in front of them, and often that had to be in Ottawa and it had to be in these hallways here. That's how they're known, but it's so much more than that.

We saw at CANSEC that there are many companies raising their hands right now, and we have to activate these different companies. We have to get pen to paper. It took us six months to get the DIS out, and we're still rolling it out, but we have to start getting these contracts out in a meaningful way for Canadian companies, because they're all leaning forward right now, and there's a runway.

[Kelly DeRidder, Conservative, Kitchener Centre, ON]

Thank you.

I have time for one more question, so I'm going to ask it of you, Mr. Perry.

Recently a new AI document was put out by the minister. I'm sure CCI has reviewed it by this point. Do you guys see a strategy or a plan that's going to get us to where this document says we're going to go?