Government challenges small businesses to innovate

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  July 20, 2020 | Local, Aerospace, Naval, Land, C4ISR, Security

  Why it is time for smart protectionism

  Put simply, Canadian governments have a responsibility to practise smart protectionism where the risks to Canadians' personal security and national security are high. Free trade is good economics. Protectionism is bad. Global supply chains are efficient. Favouring domestic goods, services and industries is inefficient. Canada has long adhered to these orthodoxies. And most of the time it makes sense to do so. However, through the COVID-19 pandemic, both the public and private sectors have seen weaknesses associated with heavy or total reliance on foreign sources and global supply chains for essential goods, notably personal protective equipment (PPE). As of June 2, for example, the Government of Canada had ordered close to 122 million N95 masks from international suppliers, yet 12 million had been received and 9.8 million of those failed Canadian standards. We are learning the hard way that foreign sources cannot necessarily supply the products we need in the time, quantity or quality required during a national or global emergency. China, as the dominant global producer of many of these PPE supplies, has become the focal point for an emerging debate around domestic control over certain goods, technologies, and services. A recent report from the Henry Jackson Society in the U.K., for example, has argued the “Five Eyes”—the U.S., U.K., Canada, Australia and New Zealand—are far too reliant on Chinese sources for all kinds of strategically important goods, and that this is a threat to the national security of those countries. The Canadian Security Intelligence Service, too, has warned that Canadian companies that produce certain critical technologies are vulnerable to foreign takeovers by entities with agendas hostile to Canada's interests. This is not just an issue with China, though. In Canada, we like to believe that in national or global crises we can rely on the U.S. or other allies for help. Canada, in other words, would be at or near the front of the line with allies. The COVID-19 pandemic, and the behavior of the U.S. and European countries, suggests this is naive. Italy, a founding EU member, requested and was denied face masks from the EU's stockpile at the peak of their COVID-19 outbreak. In April, a presidential executive order gave the U.S. Federal Emergency Management Agency the power to “allocate to domestic use” several types of PPE that would otherwise be exported. U.S. produced masks bound for Germany, a close American ally, were reportedly diverted back while in transit. Ultimately, Canada was exempt from the U.S. order, but this episode should tell us that global emergencies can lead to “home front comes first” attitudes, even among our closest allies. Fundamentally, the issue comes down to one of efficiency versus necessity. Sometimes, in some areas of the economy, security of supply is more important than efficiency. While this thinking is new to most companies and governments in Canada, it is not new to Canadian companies working in defence and national security. The Canadian defence industry has long highlighted the need for focused sovereign production and control in key national security capabilities—in part to ensure security of supply—as our allies in the U.S., Europe and elsewhere have been doing for generations. The argument has fallen largely on deaf ears. There seems to be a greater aversion in Canada to any kind of protectionism than among our more pragmatic allies. There is also a belief that Canada can always rely on obtaining critical supplies from the U.S., owing to both our close trading relationship and bi-lateral defence agreements dating from the 1950s that purport to establish an integrated North American defence industrial base. Canada puts too much faith in these beliefs, to our peril. While we can still hold free trade and integrated global supply chains as the goal, we also need to recognize that this view of the economy does not always serve our national interests. Put simply, Canadian governments have a responsibility to practise smart protectionism where the risks to Canadians' personal security and national security are high. Christyn Cianfarani is president and CEO of the Canadian Association of Defence and Security Industries (CADSI). The Hill Times https://www.hilltimes.com/wp-content/uploads/2020/07/072020_ht.pdf

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  February 11, 2022 | Local, Aerospace, Naval, Land, C4ISR, Security

  Defence Department failed to spend $1.2B in funding last year, most due to delays

  OTTAWA - New figures show the Department of National Defence failed to spend more than $1.2 billion of its allotted budget in the last fiscal year, th...

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  December 7, 2018 | Local, Aerospace, C4ISR

  Ottawa earmarks $20M to rejoin NATO airborne surveillance program

  Murray Brewster · CBC News The Liberal government has budgeted up to $20 million in this fiscal year to rejoin NATO's Airborne Early Warning and Control System (AWACS) program, reversing a Conservative-era budget cut in the name of alliance utility and solidarity. Defence Minister Harjit Sajjan and other senior officials recently appeared before a House of Commons committee to talk about the country's return to the long-standing alliance programme, which sees more than a dozen nations cost-share the operation of E3-A surveillance planes. New documents, released to CBC News under access to information law, show Canada has agreed to a partial return to the program through operations and support. It's a compromise decision that leaves the country's aerospace companies partly out in the cold — and one expert is questioning whether the reasons which led the former government to drop out of the program still exist. One of the major complaints voiced about the program behind closed doors in Stephen Harper's government had to do with NATO's reluctance to deploy the sophisticated surveillance aircraft on missions to Afghanistan and Iraq. The aircraft eventually were used for those missions, but not without considerable debate and what some Canadian officials saw as foot-dragging on NATO's part. 'A tough sell' Defence expert Dave Perry said that, going forward, the Liberals will have to justify this particular reinvestment more carefully. "If they don't actually use them in an operational context when it matters, then it's going to be a tough sell," he told CBC News. National Defence defends the decision to jump back into the program, saying in an email that "several things have changed, causing Canada to re-evaluate the relevancy" of its participation. A major factor is the introduction of the Liberal government's new defence policy, which emphasizes the need for better surveillance and reconnaissance. Canada had been part of the AWACS program for decades. When the Conservatives pulled the plug they cast the decision in economic terms, saying it had "little direct benefit." The planes were deployed in Europe and occasionally on other operations. The debate within the Harper government was over the logic of paying for a defence system that doesn't contribute directly to the defence of North America. "Accordingly, it is debatable whether it is appropriate for Canada to carry nearly 10 per cent of the programme, given that it is one of the two NATO members on the North American side of the Atlantic Ocean, and, as such, would benefit considerably less from AWACS than the 26 members on the European side," reads a March 22, 2016 internal government briefing note. NATO AWACS aircraft currently fly surveillance missions in support of reassurance measures in eastern Europe ordered after Russia's annexation of Crimea. The program is also providing "tailored assurance measures" for Turkey because of the crisis in Syria and is watching out for terrorist movement in the Mediterranean Sea. "I think time will tell, and it will depend on whether these aircraft are actually used," said Perry, an analyst at the Canadian Global Affairs Institute. "If they're not used, then it will be a struggle to justify Canadian participation, however good it is for wider burden-sharing within the alliance and support to allies." Business opportunities The internal briefing note shows the decision to quit in 2011 cost Canadian defence contractors the right to bid on hundreds of millions of dollars in work related to the modernization of observation planes, known for their distinctive radar domes. Rejoining the plan will allow Canadian companies a finite set of bidding opportunities, a National Defence spokeswoman said. "Canada did not regain access to AWACS-related industrial benefits for modernization and upgrade when it re-engaged with the program," said Jessica Lamirande in an email. "However, Canadian industry has regained eligibility to compete for contracts related to the operations and maintenance of the AWACS." The briefing shows Canada is, in some respects, being treated like a new member of the plan, which means Ottawa pays for operations and support of the aircraft "while the fleet modernization will continue to be the responsibility of the programme's current 16 members, who will retain all of the industrial benefits associated with the programme." Prior to the Liberal government's decision to return to the program, officials held out the hope that rejoining might "restore Canada's ability to bid on such contracts." Conservative defence critic James Bezan described the government's approach as a "half-measure" and said rejoining AWACS became necessary after the Ukrainian crisis. "They're not spending as much as we were and we're not getting the full benefits of industrial contracts," he said, noting the Commons defence committee pointed out that Canada was not getting everything it could out of NATO contract opportunities. "The Liberals are always late to the table and that's what we're seeing here." https://www.cbc.ca/news/politics/awac-nato-surveillance-ukraine-1.4931098