Image credit: Australian Defence Image Gallery

POLICY PERSPECTIVE

A joint publication with:

by William Richardson
September 2023

Table of Contents

• Summary
• Context
• Considerations
• Insights for Canada

Summary

• Australia is working to modernize its defence procurement system, foster new public-private technology partnerships, stimulate long-term domestic defence industrial investment, and build closer cooperation with key partners amidst a dynamic technology environment and deteriorating regional security environment.
• Canada may be able to leverage Australia’s experiences to enhance its own capability development, acquisition, and integration processes.

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Context

• The strategic environment in the Indo-Pacific region is deteriorating. China is pursuing a more assertive approach to achieve its national objectives. However, China is the largest trading partner of 140 different countries and represents a delicate relationship to balance for many.
• Russia’s full-scale invasion of Ukraine has revealed a lack of defence industrial capacity in Australia, Europe, and North America.
• The Australian government’s immediate actions to reprioritize Defence’s capabilities in line with the recommendations of the 2023 Australian Defence Strategic Review include: investing in conventionally-armed, nuclear-powered submarines through the AUKUS partnership; developing the Australian Defence Force’s (ADF) ability to precisely strike targets at longer range and manufacture munitions in Australia; improving the ADF’s ability to operate from Australia’s northern bases; lifting Australia’s capacity to rapidly translate disruptive new technologies into ADF capability, in close partnership with Australian industry; investing in the growth and retention of a highly-skilled Defence workforce; and deepening diplomatic and defence partnerships with key partners in the Indo-Pacific.

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Considerations

• The proliferation of power projection tools has become a key challenge in the Indo-Pacific.
• The ADF and the Australian Department of Defence (DoD) are increasing collaboration on defence procurement. The new approach is designed to facilitate information-sharing, accountability, and trust with Industry to reflect the Australian Government’s prioritization within the Defence Strategic Review.
• Australia’s forthcoming Defence Industry Development Strategy will set out the strategic rationale for a sovereign defence industrial base; more targeted and detailed Sovereign Industrial Capability Priorities; a plan to grow industry’s workforce to deliver a viable industrial base and increase Australia’s defence exports; reforms to defence procurement to support the development of Australia’s defence industry and respond to the Defence Strategic Review; mechanisms to improve security within defence businesses; and a detailed implementation plan. Apart from a decade-old defence production agreement with the United States (U.S.), Canada has never had a defence industrial policy.
• Australia has recently established the Australian Advanced Strategic Capabilities Accelerator (ASCA). Nuturing partnerships with industry and academia, its aim is to connect and streamline Australian defence innovation, science, and technology systems, driving rapid capability development and acquisition pathways.
• In parallel with such reforms, Australia, Canada, and key partners are looking to shorten development, acquisition, and integration cycles. However, capabilities leveraging high technology have elevated development and integration risk, and the less time there is, the greater the risk of failure.
• Interoperability, and increasingly also interchangeability, is crucial to future military Interoperability has human, procedural, and technical or digital dimensions, with digital likely the most important driver of interoperability in the future.
• AUKUS Pillar 2 focuses on the joint development of a range of advanced capabilities by AUKUS partners (and in time others). It is also intended to increase interoperability between their armed forces.
• It is difficult to maintain a constant technical edge within sovereign defence industrial bases. Innovative methods and technologies must be leveraged as new sectors are developed and created.
• Australia and Canada are both wrestling with personnel recruitment and retention challenges.
• The DoD is the largest Australian Government employer of Indigenous businesses. The Defence Indigenous Procurement Strategy aims to drive demand for Indigenous goods and services, stimulate Indigenous economic development, and grow the Indigenous business sector. Equally, the Strategy supports the DoD’s commitment to reconciliation and seeks to nurtur relationships with Indigenous communities.

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Insights for Canada

• Embrace a strategic approach to defence development, acquisition, and integration that aligns with the contemporary threat environment and dynamic technology environment.
• Seek out public-private partnership models that secure long-term domestic defence production investment during peacetime.
• Increased collaboration between the Canadian Armed Forces (CAF) and teams across the Department of National Defence (DND) would help to ensure that the CAF’s realities are better integrated into strategic policy development, while also informing government priorities on a wide range of areas, including international relations, innovation, enterprise-wide digitalization investments, and defence industrial base support.
• There is a larger place for sole-source procurement projects in this emerging era of public-private technology partnerships. Going forward, a new balance will need to be struck between competitive and non-competitive procurement models that serves national strategic interests, as well as cost, efficiency, and interoperability considerations.
• Adopt whole of government and DND/CAF mindsets that are more open to risk. Maintain conversations across government and with the private sector to ensure that ongoing procurement projects satisfy evolving operational needs, and if they fail to do so, show a willingness to ‘fail fast’ and promptly course correct.
• Promote more open relationships with the public and the media that allow for broader acceptance of necessary procurement adjustments, including cancellations.
• Recognize that Canada’s closest allies and partners are on a journey towards technical convergence, where national systems connect seamlessly and automatically with each other through shared networks. This requires common architectures. There is a growing gap between Canada’s awareness of where allies and partners are heading and the speed at which Canada is advancing.
• Leverage the Defence Innovation Accelerator for the North Atlantic (DIANA) regional office in Halifax to increase multilateral cooperation on advanced technologies and interoperability with key partners. Consider potential opportunities for collaboration between DIANA and the ASCA.
• Scarce human resources must be carefully developed and allocated within the CAF. Advanced technologies and international partnerships could also be explored as substitutes for force size. CAF members should be empowered to leverage new technologies for operational success.
• As the international security environment changes, strategic investment in new bilateral and multilateral security partnerships is increasingly important. However, arrangements that undermine sovereignty or freedom of action should be avoided.
• Directed energy systems possess potential to deal with high volume missile strikes. This technology, like quantum computing and artificial intelligence, is evolving quickly and should be given careful consideration.

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