DPR – Include an Industrial Strategy

by David Perry and Tom Ring

Frontline Defence
Vol 13, No 3 (2016)

The Liberal Government has finally announced plans for public consultations on the Defence Policy Review, as promised during last year’s election campaign.

It was encouraging to note the accompanying consultation paper’s statement that “a strong and vibrant Canadian Defence Industrial Base” is an important part of Canada’s security. Also encouraging was the reference to some elements of the Defence Procurement Strategy a key policy initiative launched in early 2014 by the previous administration designed to improve the procurement process, while also generating better domestic economic benefits.

Establishing a strong partnership between the Government and the Canadian Defence Industry should be an ongoing priority for the new Liberal Government given the opportunity for a review of defence policy to complement the government’s job creation and innovation agenda.

Why is such a partnership important? Job creation is a major consideration. According to the most recent Statistics Canada data the total jobs impact of the defence sector is 63,000. But beyond jobs, there are also opportunities to stimulate innovation and to develop capabilities in sectors of strategic importance to Canada’s defence and security interests. All of these will also contribute to the Government’s economic agenda.

The need for partnership is particularly vital to bolster exports. Companies that work in support of Defence objectives are unique as Government’s are frequently their only customer. Companies looking to sell abroad are usually asked if they sell to their own military. If the answer is no, they face a tough sell… literally.

Other countries get this. The recently released Australian Defence White Paper reinforced the already strong Aussie acknowledgement that only through a close partnership would that country’s strategic interests be achieved. The development of newly required technologies and innovative practices needed to address new and emerging threats makes the partnership between the Government and companies in the Defence sector critical to addressing a country’s future security

It took almost 5 years of reviews, independent assessment, international comparisons, industry engagement, policy development work and quite a bit of internal to Government horse trading to finally reach consensus on the Defence Procurement Strategy. One of its goals is to leverage the exceptional circumstances that are being created by the planned investments in Defence spending (more than $200 Billion over the next 20 years) and thus capitalize on this unique opportunity for Canadian companies in the defence sector.

To that end, the government needs to go further than its tepid statement in the consultation paper that the Canadian Defence Industrial Base is ‘important.’ Canadian companies provide a critical link between Defence spending and helping the Government achieve its economic goals.

The Government should use the Defence Policy Review to fully examine all elements of the Defence Procurement Strategy, to see what is working and what needs work. Two years in there are real questions about whether it is being fully implemented. Little evidence of progress on the commitment to improve our ability to analyze the defence industry and its impact on economic growth exists. No progress has been demonstrated on streamlining the procurement process. And Government officials have privately expressed concern about the effectiveness of DPS decision making. If the government supports the Defence Procurement Strategy these deficiencies need to be addressed.

Beyond that, the new government has not clearly indicated support for the strategy. Having spent five years working in collaboration with industry to develop and implement a major change to how Defence procurement is managed, the industry needs clarity on the Government’s plans for the future of its relationship with Government and how the procurement process will work.

Canada has a defence sector that will be an important part of its economic recovery and will provide careers and sustain families for decades. Don’t think so? Ask the thousands of welders and other skilled trades and professional workers, or their families, in Halifax, Vancouver, and southern Ontario and elsewhere across Canada. A more strategic alignment between defence policy and the Canadian defence industrial base could lead to even greater economic returns for Canada.

Tom Ring is a Senior Fellow at the University of Ottawa’s Graduate School of Public and International Affairs
Dave Perry is the Senior Analyst of the Canadian Global Affairs Institute.

Image: CADSI

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