Federal program to put focus on made-in-Canada military technology

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The federal government – which has spent more than nine years struggling to build a uniquely Canadian naval helicopter – is plowing ahead with controversial plans to spur the development of more made-in-Canada defence technology.

Public Works Minister Diane Finley used a speech in London, Ont., Thursday to promote the Harper government's plan to grow Canada's military-industrial base and the well-paying jobs often found in the defence sector.

The Harper government has already embraced the findings of a controversial report by high-tech executive Tom Jenkins that calls for Ottawa to build more major military hardware from scratch in Canada rather than going abroad to buy from foreign suppliers. The February, 2013, report was titled Canada First.

The proposal has drawn criticism that the Conservatives are using public funds to pick winners in the private sector – an approach that more laissez-faire advocates say will increase the costs to taxpayers.

On Thursday, Ms. Finley trumpeted a smaller example of this philosophy: a Build in Canada Innovation program – that will soon grow to $40-million a year – where the Canadian government buys inventions from domestic companies, including military contractors, to test their usefulness.

"It's not a subsidy without an intended outcome," Ms. Finley told a London audience. "Instead, it gets to the heart of the matter – by filling a business need and providing a company – maybe even a new, young one – with a first government contract."

The minister offered the example of the Aeryon Scout, a small, unmanned aerial vehicle created in Waterloo, Ont. The Department of National Defence tested the device and, after some improvements, is planning to order more – as are foreigners. "It gets better. The Scout has also been sold to the South Korean Army and the U.S. Special Operations Command, and large contracts have been completed with several Middle Eastern countries," Ms. Finley said.

Ms. Finley lauded Mr. Jenkins's vision Thursday, making it clear the direction he's pointed will be embraced by Ottawa. "His report quite clearly makes the compelling case that it is in our national best interest to have a strong defence-industrial base here at home that can compete with the best in the world."

She pointed out other countries already deliberately steer public dollars into their own domestic military industrial capacity. "Isn't it about time we started to do the same?" she said.

The federal government's troubled experience with building the new Cyclone helicopter, however, has demonstrated the challenges of creating a new chopper for domestic needs rather than buying a premade configuration "off the shelf" from defence contractors. The deal to build the copters was signed in 2004, but the aircraft so far produced do not meet the contracted requirements.

Canada is planning to spend $240-billion over 20 years on defence and security procurement. The Jenkins report recommended Canada devote more military procurement dollars to "developing an original product domestically" or "adapting an existing product to Canada's needs."

Brian Lee Crowley, managing director of the MacDonald-Laurier Institute, said military procurement is broken in this country, but this Canada-First approach will make things even worse.

"In military procurement, fanciful and wasteful industrial strategies today sow the seeds of humiliation, defeat, and dead and wounded troops tomorrow," he said.

"Instead of buying the latest equipment off the shelf from highly competent international suppliers with big economies of scale," he said, "too often we spend more than we need to build capacity from scratch and then find we have no way of sustaining that capacity once our little defence project is done."

Canada First urges the federal government to funnel as much procurement spending as possible into creating leading companies in Arctic and Maritime security soldier protection; command and support; cybersecurity; training systems; and in-service support of military equipment.

Ms. Finley said Thursday that Ottawa needs to build up Canada's defence industry so that it – rather than foreign contractors – can supply more of this country's needs.

"How can we buy off the shelf if we actually don't know what's on the shelf, in particular if we don't know what's on the shelf here in Canada," she said, repeating a statement once made by former Public Works minister Rona Ambrose.

The new Public Works Minister, who was appointed in a cabinet shuffle this summer, made no mention of the troubled Cyclone procurement or her government's plans for reforming military purchasing.

The London address was her first speech in the new portfolio. Ms. Finley is the political minister responsible for Southwestern Ontario.

Mr. Lee Crowley said for instance the shuttering of the Avro Arrow program in the late 1950s had a silver lining. "The reality is that decision probably saved us from the usual costly extravaganza with government backing a good – but not great – Canadian technology at a time when the world was crowded with design bureaus producing similar aircraft."