Canada could be spending 3% of GDP on defence and could hit the 2% NATO commitment by next year — if Ottawa really wanted to. These were just some of the takeaways from the ‘What Defence Procurement System for 2% of GDP by 2032?’ conference on November 25, 2024. It was staged by the Canadian Global Affairs Institute (CGAI) at the Westin Hotel in downtown Ottawa and streamed online as well. Here are some of the highlights.
Read: Canada plans to hit NATO’s 2% defence spending target by 2032
BY JAMES CARELESS
Duclos Announces L3Harris MAS CF-35A Contract, Defines Procurement Reform
Minister of Public Services and Procurement Jean-Yves Duclos opened his appearance at the conference by announcing that L3Harris MAS will work with the Canadian government and the F-35 Joint Program Office to develop requirements for an F-35 airframe depot, to eventually service the RCAF’s CF-35A fleet.
READ: Canada announces L3Harris for its CF-35A fighter jet airframe maintenance depot
This decision “is an important demonstration of our defence policy commitment to work more closely together and more in partnership with the industry,” Duclos told the CGAI conference audience. “Establishing such an airframe depot in Canada will also help maintain our sovereign domestic industrial capabilities and will ensure that we are well positioned to become a regional hub for the CF-35.”
Speaking later onstage with CGAI President Dr. David Perry, Duclos defined three key steps to achieving procurement reform in Canada. “The first essential piece, which we should never forget, are the needs of the armed forces,” he said. “Second, we have to have better sovereign industrial capabilities to support the needs of the armed forces. It cannot always be that Canada depends on other countries to do that. The third thing is that there is an opportunity to support other sectors in the economy as well. And the last piece is procurement cannot be done in the same risk averse mentality that we have seen over the last decades.”
Hyder Calls for Spending 3% of GDP in Defence
Spend 2% of Canada’s GDP on defence? Why not 3%? That was one of three points made by Goldy Hyder, CEO of the Business Council of Canada, as he advocated enhancing Canada’s national security.
To do this, “we must build a strong defence industrial base right here at home and it starts with a procurement policy that invests in Canadians and Canadian companies, Canadian innovation, and Canadian know-how, the Canadian supply chain,” said Hyder. “Second, we must honor the commitments that we made to our allies to invest 2% of GDP on defence by the end of this decade and then in the decade after, get that investment up 2.5 by 2035 and to 3% of a growing GDP thereafter. Third, we must make Canada more prosperous by enhancing productivity and innovation in dual use areas such as AI, quantum computing and cybersecurity, all of which Canada has strength in. Now, some may ask, can we afford it? And the answer is yes.”
Reasons for Bureaucratic Reticence
During the panel discussion, ‘Developing a Canadian Defence Industrial Strategy’, DND’s ADM of Defence Industry Policy, Wendy Hadwen, provided some candid insights into her department’s reticence when it comes to military procurements.
“I’m sure I don’t need to share with you the reasons why we are not a particularly engaging department,” she said. “Things have gone wrong. There have been scandals, there have been public complaints, and the more that happens, the less risk tolerant the public service becomes.”
Meanwhile, when it comes to the Canadian defence industry’s attitude towards the federal defence procurement process, “I can see an appetite for reliable and predictable channels for information about what our biggest priorities are going to be over the years,” she acknowledged. Fortunately, Ottawa’s efforts to educate the Canadian public about national security threats and the importance of working with allies aligns “quite well” with this industry priority, said Hadwen.
Blair: Canada Spending 2% of GDP on Defence “Settled”
During his appearance at the CGAI conference, DND Minister Bill Blair said that Canada has already committed itself to reaching the 2% GDP spending target — even though the government’s target date for doing so is 2032.
“In July, I went with the Prime Minister to Washington,” Blair said. “We reiterated our commitment made first in 2013 in Wales, but Canada would spend 2% of its GDP on defence. Can I just share with you all, I consider the matter settled.” He subsequently acknowledged that “2032 is a long way off. Let me also acknowledge to you it’s too long a way off.”
As for criticism from US lawmakers that Canada is taking too long to get to 2%? “The answer’s yes, we get it, and we agree, but I could use some help going faster,” Blair replied.” “Just for example, I know that in the next four years, I’m going to be required to spend tens of billions of dollars with US industry, and ideally US industry well integrated with Canadian industry. But in order to spend those dollars, I’ve got to go through the foreign military sales regime. I need congressional approval. And because of some of the rules that have been put in place, it’s difficult to have that strategic relational discussion with those industries that are based in the United States. And so I’ve asked the congressional delegation, [and] I intend to ask the new administration for some help here.”
Topshee: We Need to Buy Off-the-Shelf Solutions
For Canada to hit its 2% defence spending, “we really want to accelerate procurement,” said Vice-Admiral Angus Topshee, Commander of the Royal Canadian Navy, during the final session entitled, ‘What does a path to 2% of GDP after ONSAF look like for the CAF?’ According to VAdm Topshee, “the easiest way to do that is to look for off-the-shelf solutions. The challenge there is that a lot of them, while there are some good ones in Canada, a lot of ’em are from overseas. And I think what we collectively need to do is figure out how we are going to achieve both things at the same time, meet the capability gaps and immediate needs of the three of us up here, but also build and grow the industry in the right places in Canada so that we remain competitive.”
READ: Feature Interview with Vice-Admiral ANGUS TOPSHEE
Referring then to the sorry state of Canada’s existing military equipment and infrastructure, VAdm Topshee then added that “we could be at 2% of GDP next year [if the federal government really wanted to]. All we need to do is fully fund our national procurement envelope, fully fund our infrastructure requirements. All of those are basically — to use the parlance of politicians, ‘shovel ready’.”
