Federal investment helps Canada maintain strong defence credentials

The Canadian defence and security industry is an essential service and a critical sector in Canada’s economy and a contributor to the GDP. Canadian defence companies are highly innovative and export intensive, creating high-wage and high-tech employment. According to the Statistical Overview Study of Canada’s defence industry conducted in 2018, the Canadian Defence sector contributed more than $7-billion in exports to Canada’s GDP, helping to sustain high-paying technical jobs in Canada. Technology and talent flow back and forth between military and civilian organizations where skills and experience are cross-pollinated. Military research and development have been vital to the creation of now common commercial products, including the microwave, the internet, and GPS, among others. Canada collaborates with countries in creating and selling world-class technology—examples include the development of APAR, an active phased array radar, and SIRIUS, an infrared search and track system. In this modern world, civilian, and military collaboration will continue in the areas of “greening” the Canadian Armed Forces, most notably in the use of “green” fuel for our naval and air fleets and infrastructure development. In 2019, Global Affairs’ annual report indicated that the value of Canadian military exports reached a record high. This included in exports by 54 per cent, and the employment of more than 64,000 people in each and every province. The sector is also preparing for growth into the northern territories. This unprecedented growth is due in part to the success of Canada’s old Industrial Regional Benefits (IRB) Policy, which ensured that every Canadian defence dollar spent contributed to creating jobs and bolstering exports. Multiple companies have had tremendous international success in growing Canada’s export capabilities, which might surprise most Canadians. These companies include L3Harris (MAPPS), which has developed an Integrated Platform Management System; OSI Maritime Systems, which sells an Electronic Charting and Positioning and Internal Navigation System; and, of course, CAE, which trains the global aerospace sector with their world class flight simulators. When we speak of defence and space systems, we are proud of the contributions made by the Canada Arm, developed and supported by MDA Space Missions. These capabilities and exports serve to build Canada’s domestic and international defence credentials and are critical to Canada’s defence and its alliance agreements. The old trade-off that governments used to wrestle with between buying ”butter or guns” has arguably evaporated with the introduction of the IRB and Industrial and Technological Benefits (ITB) policies, which continue to create Canadian jobs and exports and contribute to Canada's GDP. Impact of COVID The impact of COVID on the defence sector will be predicated on how the government intends to continue to fund its military. During COVID, the supply chain largely coped well, with some exceptions including component deliveries and in-service support contracts when equipment sat silent for extended periods. Most of the large capital projects continued to deliver, where large companies executed contingency plans, and large integrators, like the national shipyards appeared to have most of their long lead items and material already in hand. Other companies including Logistik Unicorp in Quebec, pivoted, retooled, and shifted from sewing uniforms to including hospital gowns. During the most-active phase of COVID, the defence sector was also supported by the Canadian Association of Defence and Security Industries, which articulated and effected new positive funding options. How to manage the growing debt incurred while spending on emergency socio-economic support programs will largely determine how the new government decides to invest. Will they apply the lessons of the late '40s and continue spending and injecting complimentary money policies to manage the economy, or will they cut? The defence industry performed well in COVID, and its continued success will require ongoing commitment. The funding associated with projects such as two new polar icebreakers for the Canadian Coast Guard and other imminent procurement decisions, including the Future Fighter Capability project the Canadian Surface Combatant, and the Future Air Crew Training (FaCT) project, and others, will in part determine how the defence and aerospace sector rebound from COVID. The overall growth of the industry undeniably depends on whether the government will continue to invest in Canada’s Strong, Secure, Engaged defence policy. Louise Mercier is a senior vice-president with Rubicon Strategy and a vice-president of defence procurement with Hill+Knowlton Strategies. She is a defence procurement expert who brings almost 30 years experience to understanding the Canadian military acquisition process and was named as one of Canada’s Top 10 Defence Lobbyists in 2018 by Canadian Defence Review. The Hill Times