Defence Production Sharing Agreement
Before I ask questions, could I have only two clarifications? You mentioned that Canada generates $1 billion in defence sales in the United States every year. Is it $2.8 billion or $1.8 billion? At the last meeting in Ottawa, Canadians expressed displeasure with the progress made to date, as the short-term goal of filling the void created by cf 105 stops has not been fully achieved and is unlikely to be fully achieved. Canadians hoped for great objects that would satisfy national pride and be important enough to prove to the public that production sharing will work. For example, this year, there are four aircraft programs in the United States, such as the F-18 and C-17 programs. These four budgets alone will overshadow the entire Canadian budget, the procurement budget and the overall defence budget, which is why it is very important for us to maintain access to the U.S. market. The Committee thanks Andrei Sulzenko for his significant contribution to the development of this report and Jonathan Fortier, Veronique Nadeau and Mary Boland of PWGSC for their contribution to their design and production. In Sweden, purchases of defence-related products fall under the jurisdiction of the Defence Equipment Agency (VMF) under the responsibility of the Ministry of Defence. Meanwhile, since August 2010, responsibility for aiding export sales in the defence sector has been transferred to a new agency, also under the direction of the Swedish Ministry of Defence, the Defence Exports Authority (FMX).
This prioritization of arms exports is largely due to the fact that, for many companies in the Swedish defence sector, export sales account for 85-90% of turnover. The country does not have an explicitly issued defence industrial policy and does not currently have a formalised list of protected industrial capabilities. Canada has long had a policy wherers of large defence contracts must spend dollar spending on valuable contracts – often awarded to foreign firms – in Canada and to support Canadian industry. The government`s Industrial and Regional Benefits (IRB) policy, often referred to as offsets, provides that BRIs can be subcontracted for acquisitions themselves or indirectly through contracts that have nothing to do with outsourcing. The BRI policy was updated in 2010 to further boost premiums to bring Canadian businesses into the value chain. The expected return on investment in a defence acquisition strategy includes good Canadian jobs in the short term. However, the most important in the long term is the number of high-growth companies created. The most important for the selection of IABs should be the acquisition requirements defined in the CFDS.
It is highly unlikely that a specific industrial defence capability could be developed in Canada if there is no national supply requirement. Jim Hart: I think the members of the commission know that I support each of these initiatives. I wonder about a person who is not there, a visit to Colorado Springs and NORAD, and if that is still something that is being considered. I think that would be valuable, with the ballistic missile defence program that the United States is asking Canada to participate in. The strategy also gives the Ministry of Defence an important role in leading the way in new specific technologies. In doing so, it recognizes the need to participate from the outset in multinational development and production programs, as is the case with participation in the Joint Strike Fighter program. Sweden has traditionally had a strong industrial base for domestic defence.