Best Defence Conference

Speaking Notes for the Honourable Diane Finley, PC, MP
Minister of Public Works and Government Service

London, Ontario
October 3, 2013

Check against delivery

Hello, everyone. Thanks so much for that warm introduction. I’m really glad to be here today to start this afternoon’s session at what has been a great conference so far.

Best Defence is now in its second year, and credit for its success goes to the hard work of the London Economic Development Corporation and the Canadian Association of Defence and Security Industries—who I’ve already had the pleasure of working with in my new role as the Minister of Public Works and Government Services.

Job well done, everyone!

I’m really pleased to see that this year’s theme is focused on excellence in defence systems.

Growing up not far from here, I learned that excellence has a long tradition here in London.

Not to mention, it was here that I earned my MBA, at Western.

On top of that, as Member of Parliament for neighbouring Haldimand-Norfolk, I’m always proud to point out the excellence of this region in military land systems. I also want to mention it is home to a strong entrepreneurial base, including the defence cluster.

So let’s get down to business.

And I mean real business.

For too long, the federal procurement system was slow.

And complicated. It was “much less” open and transparent than it should have been, and made it easy for people who wanted to break the rules.

The good news is that, as I begin my tenure in this department, I do believe that is changing.

To do that, let me start by pointing out that, as Minister of Public Works and Government Services, what I’m hearing from Canadian entrepreneurs and business leaders is in many ways similar to what I heard in my previous portfolio at Employment and Social Development Canada.

“Diane,” they used to say to me, “Show me how you’re going to make it easier for me to grow my business.”

Only now, there’s a follow-up question, too: “Okay,” they say, “so what are you going to do to make it easier for me to do business with government?”

So, the good news is that I think things are improving on that front.  I don’t need to tell you that earlier industry engagement is key. It’s been working—and we’re going to keep it up.

It’s one of the principles of “smart” procurement.

It really does work. And we need to do even more of it than we are today.

By engaging the expertise found in Canadian industry at the beginning of the procurement process, we’re setting better requirements, making things clearer and ultimately getting the right equipment we need, with fewer delays in the process.

And it works in tandem with the other important aspects of “smart” procurement—which include being open, fair and transparent. And that contracts are awarded based on merit.

We’ve made tremendous strides as a department, no question, but easier and better doesn’t always mean faster.

Here’s an example:

A couple of years ago we referred to a particular procurement process that seemed absurd in its length and complexity.

It was in fact a procurement for National Defence to obtain eggs to feed the troops—which is always a good thing to do!

The procurement was a beastly 26 pages in length.

I just learned that that particular RFP just went live two years later—and guess what?

It’s still 26 pages.

That to me is unacceptable given the opportunity to improve the process—and the continued impact that overly complex procurements can have, in particular on smaller companies who want and deserve a crack at the contract, but who simply don’t have the resources to go through the extensive steps.

So, yes, we do have some improvements to make.

But having said all of this, I am confident in the fact that we’ve come a long way—and I want you to know that we’re planning on staying on track.

That includes introducing tougher consequences for when people break the rules.

As most of you know, our Government introduced an Integrity Framework to bring in tough new measures to take action against companies or individuals who have been convicted of criminal offences.

And, we’ll apply it to many contracts already in progress as well.

My point in bringing this up, is that it is our job as the procurement and contract authority to make sure that the process is improved for those who play by the rules and do business honestly. For those who don’t, they lose their privileges.

Now, fire and brimstone behind us, let’s get to the real meat of today’s discussion: procurement, of the military kind.

It goes without saying that our perspective on procurement has evolved in recent years when it comes to defence.

Buying is not only just a thing that we do to stay equipped—it also should serve our national interests.

That’s because defence procurement is more than just good news for our Canadian Armed Forces.

It’s also good news for creating jobs for Canadian workers, for giving opportunities to entrepreneurs, for transforming our workplaces into idea factories.

And it’s good news for our economy, too.

Job creation, economic growth and long-term prosperity: those are our priorities as your government.

And a way that we can continue to deliver on those priorities is by making it easier for businesses like yours to grow, to sell more and to export more.

That’s what I call the Canadian way to greater prosperity.

We want to make it easier than ever for Canadian innovation to germinate and grow.

We want to make it easier for great ideas in the lab or on the shop floor here in Canada to become great products for the world to buy.

That’s why we created the Build in Canada Innovation Program.

This program connects small- and medium-sized enterprises and their pre-commercialized products with federal departments and agencies that can use innovations to meet their needs. It’s not a subsidy, without an intended outcome.

Instead, it gets to the heart of the matter—by filling a business need and providing a company (maybe even a new, young one) with a first government contract.

I’m sure that many of you will nod in agreement when I say that the first question often received by Canadian companies in search of new international contracts—is whether they have sold in Canada or to their own government.   

We recognize that a contract with the government can give a company the legitimacy they need to break into a new market.

Look at the experience of Aeryon Labs Inc., which is just up the highway in Waterloo.

It developed the Aeryon Scout—a very small, remotely operated vehicle that can be used to collect real-time aerial intelligence.

The Department of National Defence tested this device and it recently underwent some improvements. Now, DND is planning to order several more.

It gets better. The Scout has also been sold to the South Korean Army and the U.S. Special Operations Command, and large contracts have been completed with several Middle Eastern countries.

As our Government made clear in the 2013 Economic Action Plan: Canada has a “once in a lifetime” chance right now.

Not only is this an opportunity to create jobs and growth, but also do it while “enhancing Canada’s ability to protect its sovereignty.”

In other words, folks, it’s about ensuring that we have the industrial capabilities right here at home to provide for our troops.

And, frankly, it’s about not being dependent on the industrial base and capabilities of other countries.

Yet as Minister Ambrose herself once said: “how can we buy off the shelf if we actually don’t know what’s on the shelf, in particular if we don’t know what’s on the shelf here in Canada.”

And for the record, I agree with her.

One way we can make this type of progress when we do our military procurement would be to use value propositions.

Value propositions would provide us with the opportunity to signal to potential bidders the specific economic outcomes that we want to achieve through a given procurement.

This may include asking bidders to make commitments to improve, invest or contribute to Canadian industry through things like technology transfer, intellectual property, job creation, export development opportunities or access to supply chains.

These types of commitments will be guided by a set of Key Industrial Capabilities (KICs) that are to be broadly based on the needs of the Canadian Armed Forces, the potential to access global markets and the potential for increasing investments in Canadian research and development.

In plain language, we’re going to look more carefully at what we can do to encourage Canadian business growth and innovation by focusing on maintaining and encouraging a strong defence industry in Canada.

Much of this, as you know, comes in the wake of the recommendations that were in the “Canada First” report, issued earlier this year by special advisor Tom Jenkins.

I’ve already had the pleasure of meeting Tom and I can tell you, Canada is lucky to have him working with us, side by side, when it comes to really digging into the notion of leveraging military procurement.

His report quite clearly makes the compelling case that it is in our national best interest to have a strong defence-industrial base here at home that can compete with the best in the world.

It laid down a challenge to us by pointing out that other industrialized countries are doing this.

So isn’t it about time we started to do the same?

That’s why we will adopt value propositions and weight and rate their value to Canada in terms of job creation, innovation and export potential. 

We all know that there is a connection between defence spending and job growth.

This is underlined by a recent KPMG study. It found that every billion dollars of defence spending creates or sustains some 18,000 jobs and generates $710 million in GDP.

Multiply that figure and scope it out over a number of years and you’re looking at staggering growth possibilities.

That’s what’s at stake right now, right here at home.

Summing up, our Government has been really clear with Canadians through the Economic Action Plan 2013 that we’re going to remain focused on what matters to you and your families: jobs, growth and long-term prosperity.

That includes many things in my department.

It doesn’t evade me that, even in the midst of progress, there is always more work to be done.

I know that many of you in this room have given of your time and talent to help us move forward, particularly when it comes to leveraging our military procurements.

Along with saying thank you—and that I’m still all ears—I’m here to tell you that we’re on course, we’ve listened and we’re getting there.

We’re working hard to find better ways to serve Canadians and to ensure we’re getting the best bang for our procurement buck, every step of the way.

That’s good business for all of Canada.

Thank you. Merci.