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Harper Government Supporting Industry to Better Leverage Military Procurement

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MONTREAL, QUEBEC -- (Marketwired) -- 04/29/13 -- The Honourable Rona Ambrose, Minister of Public Works and Government Services and Minister for Status of Women, today hosted a workshop in Montreal to engage Canadian industry representatives on the Harper Government's commitment to better leverage military procurement to support jobs, and long-term economic growth and prosperity.

"Our Government is committed to supporting the Canadian Armed Forces, Canadian workers, and the Canadian economy," said Minister Ambrose. "Our Government will continue to leverage military procurement, in consultation with industry, to maximize job creation, support Canadian manufacturing capabilities and innovation, and bolster economic growth in Canada."

Participants worked together to identify areas of Canadian competitiveness, as well as trends in global demand and supply in defence-related industries to better leverage military procurement. As highlighted by Economic Action Plan 2013, the Harper Government will expedite analysis of Mr. Tom Jenkins' report, entitled Canada First: Leveraging Defence Procurement Through Key Industrial Capabilities, by selecting a series of interim key industrial capabilities (KICs) to help guide upcoming defence procurement projects.

The Harper Government remains focused on what matters to Canadians-jobs, growth and long-term economic prosperity. It is estimated that every billion dollars in defence and security spending creates or sustains 18,000 jobs and creates $710 million in Gross Domestic Product. The Harper Government is committed to ensuring that military spending supports Canadians and the economy. Canada's defence and security industries employ over 90,000 Canadians, over 42,000 in the province of Quebec alone.

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Background

Improving Military Government Procurement

The Harper Government remains focused on what matters to Canadians-jobs, growth and long-term economic prosperity. It is estimated that every billion dollars in defence and security spending creates or sustains 18,000 jobs and creates $710 million in Gross Domestic Product. The Harper Government is committed to ensuring that military spending supports Canadians and the economy.

Delivering on Commitments

As a part of its procurement renewal strategy, the Harper Government developed a new approach comprising four key elements:

1. Early Engagement: bringing clients and suppliers together as soon as the need is first identified;2. Effective Governance: providing oversight and establishing mechanisms to allow dialogue between suppliers and clients;3. Independent Advice: using third-party expertise and ensuring integrity and fairness; and4. Leveraging the Buy: using procurement as an engine of economic growth, job creation, and socio-economic benefits.



The Harper Government will continue to build and improve upon this new approach.

This new approach was part of the National Shipbuilding Procurement Strategy (NSPS). Under the NSPS, the principles of extensive industry consultations, along with the establishment of a strong governance structure and the involvement of independent third parties, were applied in a comprehensive and innovative way and contributed to the success of the strategy.

Creating Jobs by Building Equipment for the Canadian Armed Forces in Canada

Canada's defence spending aims at providing the Canadian Armed Forces with high quality equipment in order to defend our national sovereignty and vital interests. Simultaneously, these investments can provide Canada with a strong manufacturing base with a capacity for leading-edge technology and innovation. The potential benefits for the Canadian economy are significant.

In Budget 2011, the Harper Government committed to develop a procurement strategy, in consultation with industry, to maximize job creation, support Canadian manufacturing capabilities and innovation, and bolster economic growth in Canada. The Harper Government is making important progress in the development of its strategy for procuring equipment for our military.

In September 2012, Mr. Tom Jenkins, Executive Chairman and Chief Strategy Officer of OpenText Corporation, was appointed as a special advisor to further inform this work. Mr. Jenkins was asked to engage a range of stakeholders involved in Canada's defence-related industries with a view to establishing criteria and a process to identify key Canadian industrial capabilities. Mr. Jenkins released his report on February 12, 2013.

The report frames the unique "once in a century" opportunity presented by major investments in Canada's Armed Forces to create jobs and economic growth, while enhancing Canada's ability to protect its sovereignty.

As noted in Mr. Jenkins' report, many of the most highly industrialized countries have clear strategies to promote their defence sectors. These strategies are based on a recognition that it is in the national interest to have a strong domestic defence-related manufacturing base that produces leading-edge equipment. For Canada, such a strategy can generate high-value exports and supports high-quality jobs for Canadians.

The Harper Government endorses Mr. Jenkins' proposal to use key industrial capabilities as a means of fully leveraging defence procurement projects to support economic opportunities for Canadians. A key opportunity for doing so is by targeting, as estimated by Mr. Jenkins, the $49 billion in Industrial and Regional Benefit (IRB) obligations that foreign prime contractors are expected to accumulate by 2027 to support high-skill and high-value opportunities and jobs in Canadian industries. These opportunities would be selected based on the needs of the Canadian Armed Forces, the potential to have access to global markets and on the potential for increasing investments in Canadian research and innovation. In addition, the Harper Government will actively promote the significant export opportunities of Canadian-produced goods and services.

To better leverage future investments in equipment for the Canadian Armed Forces, the Harper Government will work with industry sectors and stakeholders such as the Canadian Association of Defence and Security Industries (CADSI) to identify areas of Canadian competitiveness, as well as trends in global demand and supply in defence-related industries. Further, the Harper Government will ensure that all major procurements include a plan for participation by Canadian industry prior to approving the project.

This spring, the Harper Government will expedite the analysis of the recommendations made by Mr. Jenkins with respect to selecting a series of interim key industrial capabilities to help guide immediately pending defence procurement projects. The Harper Government will also develop a refined set of key industrial capabilities for use over the long-term and will examine how existing policies and programs can be tailored to support a Government-wide strategy while remaining cognizant of Canada's international trade obligations. At the same time, the Harper Government will reform the current military procurement process to improve outcomes. This will include thorough and rigorous options analyses, a challenge function for military requirements, early and frequent industry engagement, and strengthened oversight with the use of third-party expertise.



Contacts:
Amber Irwin
Office of the Honourable Rona Ambrose
819-997-5421

Media Relations
Public Works and Government Services Canada
819-956-2315



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