2013 Canadian Aerospace Summit

Speaking Notes for The Honourable Diane Finley, PC, MP
Minister of Public Works and Government Services

Ottawa, Ontario
October 17, 2013

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Good morning. I am very pleased to be here today. Thank you, Hélène (Gagnon), for that warm introduction and I’d like to take this occasion to thank you for your work over the last year as Chair of AIAC. And congratulations to you and Bombardier on the recent launch of the C Series aircraft.

And I also want to acknowledge Yves Robins who is here representing Dassault Aviation. Both Bombarbier and Dassault are sponsors and we appreciate their support.

Jim, it’s great to see you again. I met with Jim Quick just last week and we talked about the great work AIAC and its members are doing to help us refine our defence procurement strategy.

As you know, I am relatively new to the Public Works and Government Services portfolio. However, I can tell you that I am not new to the aerospace industry.

Frankly, much of what I am working on now in this department—making procurement processes better and engaging the private sector more, to name just a couple of things—I was working on from the “other side”—the private sector side.

That was 25 years ago. Needless to say that much has changed since then—whether economically, within your industry and within the Government of Canada. Over the decades we have seen the aerospace industry transform, certainly in terms of technology.

I’d also point out, having been a rare female at the table many times a quarter century ago, that the playing field has levelled and this is an industry that is now encouraging and engaging more participation by women. That’s a good thing.

The theme of this summit—Engage in Change—is therefore one that I happily embrace. These days, the ability to embrace change is a hallmark of success, no matter where you work.

Engaging in change is certainly what the Harper Government has been doing for the last several years.

We have been working hard to change the way government operates and to change the landscape for businesses operating within Canada. We are also working hard to change the way we carry out government procurement.

Standing here, I feel in many ways that my career has come full circle. I am very happy that my new role affords me the opportunity to re-connect with your industry.

And there are significant projects that the aerospace industry and our government are working on together to make sure we are getting the equipment that is right for our men and women in uniform and provides the right benefits to spur Canadian jobs and economic growth.

Our government is in the process of looking at options to replace our CF-18 fleet. This is centred around a Seven-Point Plan that is designed to ensure we have the right information to make an informed decision.

While this review is thorough, we want to make sure that it does not drag on and create uncertainty that makes it difficult for many of you to make important long-term business decisions.

As was stated in the Speech from the Throne, we are committed to completing this as quickly as possible.

We are also moving forward on our commitment to replace the Canadian Armed Forces fixed-wing search and rescue aircraft. This process is on track.

Officials from my department and National Defence have been formally engaging with the industry on the best approach to deliver the fixed-wing SAR capability and this engagement will continue until the final Request for Proposal is made public.

I want to take this opportunity to thank those who attended plenary sessions or one-on-one meetings with government representatives, or submitted discussion papers. Your engagement is an important and valued part of this process.

Canadians who know their history know that the aerospace industry has a long and storied past in our country—from the development of the small planes that, with their intrepid pilots, helped open up our vast country, right up to the modern-day visionaries who have positioned Canada as a global leader in space and aerospace innovation.

Aerospace is the second most research-intensive industry in Canada. Furthermore, the Canadian aerospace industry ranks fifth in the world in overall aerospace production and third in civil aircraft production.

That is why it is not surprising that you are working at this conference to find ways to innovate, transform and excel. That is why I am very pleased our Government is helping Canadian companies to innovate and commercialize their new products through the Build in Canada Innovation Program.

Earlier this year, we made this program permanent and added an exclusive military component. This program is designed to help businesses move their innovative products and services from the lab to the marketplace.

It really is a partnership where successful bidders have their pre-commercialized innovative products and services purchased by the government and tested within government departments. The users then provide exactly the kind of feedback needed to support the step to commercialization.

The first sale to the Canadian government is an important step, which brings Canadian businesses one step closer to moving their innovations into domestic and international markets.

This is good news for Canadian workers, for entrepreneurs and it’s good news for our economy, too.

We’re also cutting red tape in ways that can help industry be more competitive. You may be aware that PWGSC has embarked on an initiative to reduce the size and scope of the list of goods under the Controlled Goods Program and to align it with the United States.

As you know, this is a registration and compliance program that regulates access to sensitive but unclassified controlled goods and technologies in Canada, and it facilitates access to the important U.S. defence and security market.

I am pleased to say that the proposed Controlled Goods Schedule will see more than half the items currently on the Schedule de-listed.

The proposed changes are being made in line with U.S. export control reform, and are also being driven by the 2012 Review of Aerospace and Space Programs and Policies by David Emerson, which, as you will know, called for a review of domestic control regimes to ensure that they are not unnecessarily restrictive.

The amendments will also ensure that the list is always aligned with the U.S.—now and in the future.

That means predictability for Canadian business and continued access to the U.S. defence market.

Making it easier for you to do business in Canada is good, but making sure that Canadian military procurements benefit the Canadian economy and create Canadian jobs is crucial to making sure that Canada’s aerospace and defence industries can continue to prosper.

Yesterday’s Speech from the Throne reconfirms our commitment to bring forward a defence procurement strategy as expeditiously as possible to ensure the Canadian economy is benefiting from our military procurements.

My predecessor, Minister Ambrose, outlined many of the key pillars of our defence procurement strategy in a speech to many of you and your peers earlier this year. And while some of the faces have changed, our plan and our commitments to you have not.

We are working diligently to bring forward a defence procurement strategy to better support jobs and economic growth of Canada's defence and manufacturing related industries.

As you know, this new defence procurement strategy that we committed to in Economic Action Plan 2013 is based in large part on the recommendations in the “Canada First: Leveraging Defence Procurement Through Key Industrial Capabilities” report.

That report, as you know, was done for us earlier this year by special advisor Tom Jenkins, Chairman of OpenText.

I’ve already had the pleasure of working with Tom and I can tell you, Canada is lucky to have him working with us, side by side, when it comes to improving the way we leverage our military procurements. 

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 why aren’t we?

To help us get this right, we have looked to industry for your advice and input, and heard what you had to say.

Our strategy will be guided by a set of Key Industrial Capabilities, or what we call KICs, that are to be 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.

We are studying the six initial KICs identified by Tom and his panel to guide our strategy.

They are:

• Arctic and maritime security;
• protecting the soldier;
• command and support;
• cyber-security;
• training systems; and
• in-service support.

He also recommended these six particular KICs undergo a process of ongoing refinement over the medium and long term.

As we look to renew the KICs, we will be seeking the input of the aerospace industry, including the input that we expect to receive shortly from AIAC on in-service support contracts.

In order to leverage the benefit to Canada in military procurement, our government will use value propositions to rate and weight the benefit to Canada in a company’s bid.

Using KICs as the lens through which value propositions will be developed, we will continue to explicitly integrate, where appropriate, the benefit to Canada as part of our assessment of best value—rather than choosing the lowest cost compliant bid which does not necessarily contribute to the overall good of our nation in this process.

Bids for government business will be rated and weighted on their commitment to investing in Canada. We're looking for companies willing to invest in skills and human resources; to reinvest in capability and infrastructure;

Companies with plans for long-term supply chain development that include sub-contracting opportunities for small and medium enterprises;

Companies willing to increase commercial work and provide access to intellectual property for Canadian firms that enable them to pursue follow-on business sales, and exports.

Simply put, we will do business with companies who bring jobs to Canada.

On top of all of this, our government will also improve our military procurements by carrying out early engagement with industry, publishing a roadmap of long-term planned purchases from DND and having the statement of requirements reviewed by independent, third-party advisors.

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.”

As the Jenkins’ panel states in their report: “it is in the national interest to have a strong domestic defence industrial base, one that goes well beyond the basic capability of maintenance and repair to the actual sovereign production of key goods and services.”

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

Aerospace stands among Canada’s most vital industries. It is a major incubator of new ideas that employs 66,000 women and men in highly skilled jobs and generates $22 billion in annual revenues.

As David Emerson’s report on the aerospace industry so rightly noted, yours “is a strategic sector in every sense of the term.”

It is an industry our government is proud to partner with in support of jobs, growth and economic prosperity.

That, ladies and gentlemen, is the bottom line.

Thank you.