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As the Carney government tries to breathe life back into Canada’s military and its industrial base with a new federal agency, it’s being told it needs to make the distinction between defence procurement and defence production.
The contrast in language may be subtle, but from a public policy and political perspective it would be a radical shift in mindset for a country that has divested itself of many aspects of the arms industry and has been reluctant to embrace and promote those sectors that remain.
The distinction is critically important as the Liberal government prepares to unveil the long-promised defence procurement agency.
In a nutshell: defence procurement is about the government going out and buying military kit on the open market; defence production is about the government ordering and managing the construction of necessary military kit for national security purposes within the country.
When you listen to Prime Minister Mark Carney talk about rebuilding the defence industrial base and empowering Canadian sovereignty, it seems he’s talking about switching from defence procurement to a more of a defence production mindset. But that has not been made explicitly clear.
Whether the rest of the government and more importantly the public understands the distinction remains an open question.
The mandate of the new agency will be defence investment, but there are fears among former federal officials and defence analysts that it could simply be a reshuffling of the current bureaucratic and departmental deck chairs.
They say they’ve seen no evidence that politicians and even the general public are thinking about and planning for the worst-case scenario, which is what defence production is all about.
“I do think that Europe has got there, at least some European countries have got there,” said Wendy Gilmour, a Canadian, who was until recently the assistant secretary general for defence investment at NATO.
She noted how Poland and Denmark have made conscious decisions to build back their defence production capability, something she thinks “Canada is still looking at.”
The government has promised to meet NATO targets by spending an additional $8.7 billion on defence by the end of March. CBC’s senior parliamentary defence reporter Murray Brewster breaks down the obstacles in the way to meeting the target.
“Yes, we want a military, but we have a deterrence mindset that says we’re going to do just enough to prevent our having to actually use it, which is a great goal, but perhaps not realistic in today’s environment.”
Gilmour said there are legislative tools already on the books, notably Canada’s Defence Production Act, which could be harnessed in an emergency. But she added the law hasn’t been exercised in decades, mostly because Canada has taken a multi-department approach to buying defence equipment since 1969.
“I am both hopeful and cynical at the same time,” said Gilmour.
“I am hopeful based on what the prime minister has said and based on some recent statements by ministers that there is a clear intent with respect to defence investment to build capability in the Canadian forces. I am less, I would say, optimistic on the defence production side, because what I hear coming out of government is more about addressing economic opportunities in Canada.”
As part of his pitch to Canadians in the last federal election, Carney said it’s unacceptable that Canada spends 75 cents of every dollar on military purchases in the United States. He pledged to diversify and buy Canadian where it makes sense.
Jordan Miller, a corporate executive and defence analyst, said in a new report for the Canadian Global Affairs Institute that Canada it will have to embrace defence production in order to reduce its dependency on other countries.
It will also, he said, have to prioritize industrial sectors within Canada for investment, much as it did during the First and Second World Wars.
Miller said he doesn’t believe the country has to go as far as it did during those perilous times. The federal government will, however, have to take a more active hand in managing its defence industrial base.
“This isn’t about car factories shutting and producing nothing but armoured vehicles and tanks,” Miller said.
In this day in age, Miller said, defence production is about defining a bunch of industrial priorities and the federal government sending the right signals to the defence companies about what it’s willing to buy. It also needs to incentivize companies to stockpile parts and munitions for emergencies.
That is a radical shift from the current system of procurement where the government asks for bids and it takes a decade — sometimes a generation — to get a new system delivered.
“The idea that we can just buy and that’s the end of it, I think is quite short-sighted,” Miller said.
Shipbuilding only current defence production project
The only military program currently in a defence production mode is the National Shipbuilding Strategy, guiding the construction of the navy’s Arctic offshore and patrol ships (AOPS) and the new River-class destroyers.
Last summer, Carney signed a joint strategic defence and security partnership with the European Union, which opens the door for Canadian companies to participate in the $1.25-trillion ReArm Europe program.
And as part of the discussion related to some upcoming major purchases, notably submarines for the navy and fighter jets for the air force, bidders are pledging to help rebuild Canada’s defence production capacity.
Both TKMS, in Germany, and Hanwha Ocean of South Korea have made the construction of submarine maintenance facilities in Canada important aspects of their bids.
Simon Carroll, president of SAAB Canada, which is quietly hoping Ottawa reopens the fighter jet program to include both the Gripen-E and the F-35 in Canada’s air force inventory, is offering to share intellectual property rights to help the country build up its capacity.
“I think for all programs, the IP is key and particularly in the current government’s intent with regards to creating sovereign capability in Canada, having a part of that IP or all of that IP will be important,” Carroll told Radio Canada recently.
“For upcoming projects in the future such as the airborne early warning capability, we would look to do something very similar for the GlobalEye platform that, again, already has a certain level of IP in Canada because the aircraft is built by our Canadian partner, Bombardier.”
Source: cbc
