CANSEC Conference

Speaking Notes for The Honourable Rona Ambrose
Minister of Public Works and Government Services and Minister for the Status of Women

Ottawa, Ontario
June 1, 2011

Check against delivery

Thank you for that warm welcome everyone! And thank you David for your kind introduction. It truly is my pleasure to be here today.

Before I begin, I’d like to recognize His Excellency Matthias (Delegation of the European Union to Canada), His Excellency Shashishekhar (from the Embassy of India), His Excellency Eudaldo (from the Embassy of Spain) and His Excellency Georg (from the Embassy of the Federal Republic of Germany).

And, I would like to introduce my highly respected team, Deputy Minister François Guimont, Associate Deputy Minister Andrew Treusch and Assistant Deputy Minister Tom Ring.

They’re working hard with you and me at Public Works and Government Services Canada on many issues, including military procurement.

I’d also like to introduce Roseline MacAngus, Ryan Schmidt and Michelle Bakos—this is the team that makes me look good!

Firstly, I’d like to salute the members of CADSI for being strong voices for the Canadian defence and security industries.

The annual CANSEC exhibition offers a great opportunity for all of us here to see the latest trends and developments in the defence and security industries and to look to the future of this important business sector.

Through your hard work, these industries have grown and prospered, contributing significant benefits to our country’s economy and employing thousands of hard-working Canadians.

Over a year ago, the Prime Minister appointed me responsible for the Department of Public Works and Government Services. Being re appointed by the Prime Minister to this portfolio is a privilege and demonstrates his confidence in the work that has been accomplished over the last year and a half. This work wouldn’t have been possible without the collaboration between government and industry.

We have a solid record working together, and we can be proud of what we have accomplished. From the outset, it was my priority to work closely with my Cabinet colleagues to press forward on some major military procurement initiatives and issues.

It has been a success!

Last year, after much hard work, I was proud to announce that our government was to acquire the fifth generation strike fighter F-35C aircraft. This gives our air force the equipment it requires to face 21st century threats, while ensuring unprecedented access to subcontracting opportunities for Canadian companies.

We’ve come a long way.

Another great achievement was the announcement of a training contract for 15 new Chinook helicopters. This was awarded to CAE Inc. and supports the creation of high-tech jobs in the Canadian aerospace industry.

I’ve also made it a priority to remove barriers to preventing the success of our defence and security industries. For this reason, I launched a full-scale effort to achieve amendments to International Traffic and Arms Regulations affecting dual nationals.

I’m happy to report that not long after bi-laterals in Washington, the U.S. published an important amendment that replaces nationality-based screening measures with security measures that can be applied to all individuals equally.

This change is an important step in allowing greater competitiveness for our aerospace, defence and security sectors.

Furthermore, this tradeshow marks the one-year anniversary of the announcement of the National Shipbuilding Procurement Strategy, or NSPS, that I made with my colleague Peter Mackay.

I’d like to talk more about how this strategy illustrates our Government’s evolving approach to military procurement.

As you know, NSPS is the largest single military procurement in Canadian history.

Thirty-five billion dollars will be spent over the course of this initiative. We know that this unprecedented investment will create further industrial and regional benefits in communities across Canada.

Beyond providing Canadians with the ships our Navy and Coast Guard need, the Strategy focused on doing procurement in a smarter, more effective way.

First, and most importantly, we decided that new naval vessels would be built in Canada by Canadians.

We all know that Canada's marine industry is a key economic driver and the lifeblood of many communities across the country.

This strategy gave us an opportunity to not only strengthen this industry but also to create and sustain good, long term, highly skilled jobs.

Your contributions at the Government Shipbuilding Forum in 2009, almost a year before the Strategy was announced, were integral as it was developed; in fact, 46 submissions were reviewed from a broad spectrum of suppliers in the industry.

We continued to engage industry as the Strategy developed; in fact, the scope of industry consultation in this endeavour has been unprecedented and this process has taught us the true value of developing real, meaningful partnership relations with industry.

So, I’d like to thank you all for your contributions and input into this Strategy and for your feedback during our consultations. It’s clear that together, we’ve made this happen.

Another area where we have taken an innovative approach with NSPS is in the area of governance and oversight.

We set out to ensure a transparent and arm’s-length process.

Now, I’d like to give you a brief overview of the governance structure we’ve put in place to make this possible.

The key decision-making body for the implementation of the NSPS is a Deputy Minister level Governance Committee chaired by the Deputy Minister of PWGSC.

It includes participation by the Deputy Ministers of the Department of National Defence, the Department of Fisheries and Oceans and Industry Canada, as well as the central agencies.

In addition to that, there is an Assistant Deputy Minister level Interdepartmental Steering Committee that provides ongoing oversight to the work of the NSPS Secretariat, which is the Interdepartmental Working Group implementing NSPS.

The NSPS Secretariat, lead by PWGSC, is the workhorse of the governance structure, looking after the day-to-day running of the process.

This innovative and robust structure safeguards the process and reduces the possibility of complaints and legal action by providing additional layers of validation and oversight, a streamlined issues resolution ladder and enhanced industry engagement.

Furthermore, to supplement the process, an independent validation and oversight firm, KPMG, has been engaged to assist in the development and implementation of the procurement.

KPMG’s participation will also ensure that selection criteria, scoring methodology and processes are reasonable and defendable.

In order to ensure fair evaluations of the bidding yards, First Marine International was hired to benchmark the capability and performance of short-listed Canadian shipyards and to define the target states required in order to efficiently build Canada's large ships.

Knowles Consultancy Services Inc. and Hill International Inc. in Joint Venture have also been hired to be an independent fairness monitor to oversee all steps in the large ship procurement process.

Their reports are clear that the process has been run in a completely fair manner.

The issues management and dispute avoidance and resolution processes were all designed to eliminate the requirement to engage in lobbying.

Therefore, companies involved in the NSPS implementation have been asked not to engage lobbyists.

It was our intention at the outset to ensure that the NSPS competition would be run through a process that is completely at arm’s length of politics.

The many levels of oversight and reporting I have referred to are in place to ensure that the bidders and various regions of the country can have full confidence in the fairness of the process.

Our Government’s commitment to ensuring fairness, openness and transparency is clear.

Whether shipyards are successful or not will depend 100% on the merits of their proposals.

Most importantly, regardless of who receives the contract, this policy will provide for the creation of thousands of jobs in all regions of the country through the many sub-contracting opportunities.

The National Shipbuilding Procurement Strategy illustrates the suite of changes we’re implementing with regards to military procurement and demonstrates how we’re working to improve it each and every day.

Industry told us that long-term planning and stable funding were essential to business growth, and we’ve followed through with a commitment to both.

We’ve adopted a “Government of Canada Team” approach to defence procurement.

We’re favouring off-the-shelf solutions, and streamlining approvals and oversight.

Finally, as some of you know because you’ve participated in them, we’ve been holding senior-level meetings with industry associations and the CEOs of major companies.

These improvements to how we do military procurement are part of a larger change happening in my department, which is examining the entirety of government procurement, with an eye to many of the same objectives we seek in military procurement.

For example, our government has made innovation a priority, and we’re showcasing a new approach, known as the Canadian Innovation Commercialization Program, or CICP, which kickstarts Canadian innovations.

Its goal is to help Canadian companies take their new technologies, products and services from the lab to the marketplace.

The first round of successful innovations was announced just a few months ago. PWGSC is finding government partners to act as first buyers and test these ideas in order to get on-the-ground feedback to help these new products go to market.

For example, Technology Industries Inc. of Chalk River has prequalified for funding for a Radiation-Detecting Speedbump (Radbump) in which a radiation detector is concealed inside a speedbump to sense the presence of illicit radioactive materials.

Departmental officials are hard at work looking for a government department match for this innovation.

That’s why we’re continuously seeking to improve procurement through innovative solutions.

It’s paying off.

Since 2006, as demonstrated by eight major military procurements, the average procurement time for military contracts has been cut in half.

A good example of this is the acquisition of 17 new tactical aircraft to replace Canada's aging Hercules tactical airlift fleet.

This acquisition took only 18 months to procure, less than half of the target 48 months.

Progress like this is not the result of one person’s, or even one organization’s, efforts.

As recent experience has shown, engaging all the major players is essential to real improvement.

So you can expect to see more of it; the game has changed, and your industry will benefit.

Our goal is nothing short of making procurement simpler where possible, faster where prudent, and more flexible wherever opportunity exists.

Not only this, but when it is possible, procurement by the Canadian government should be leveraged to support the expansion of Canadian industry, the development of its manufacturing sectors, and the creation of jobs right here at home.

Military procurement is one of the key areas where these goals can and should be pursued.

At a time of record defence procurement spending, it is an imperative that Canadian industry and jobs benefit greatly from it.

The Canada First Defence Strategy gave us a road map. Now, we want to ensure that the Canadian economy prospers from it.

It is for this reason that our March Budget stated [and I quote]:

Considerable progress has been achieved in streamlining and improving military procurement processes, including through the National Shipbuilding Procurement Strategy and enhancements to the Industrial and Regional Benefits Policy.” [End quote]

However, we recognize that more can be done in this area. That is why our Government signalled its intention 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.

I’m pleased to report that you will be seeing this quote again in our upcoming budget.

Together, with the help of my Cabinet colleagues who share responsibilities for defence procurement, I will be working to develop such a strategy.

And, I will be doing this in consultation with you, the industries that actually create jobs in Canada through this vital procurement.

Similar to what we have done with NSPS, our procurement spending can and should maximize the global competitiveness of our aerospace and defence sectors.

Time is of the essence, and this initiative will be pursued without delay. I would ask therefore that you begin work as soon as possible to collect your thoughts and proposals for such a strategy.

I would also ask that you try to seek unanimity amongst yourselves as to your suggestions. If each industry present here today proposes something different, the task will become extremely difficult.

I hope to be considering options for a strategy this year, and so you can expect that consultations will begin soon.

As this new commitment demonstrates, the Government of Canada is committed to innovating its approaches to procurement.

Underlining all of this will be our determination to not only support innovation, but to walk the walk by innovating ourselves.

Twentieth-century solutions won’t address twenty-first century issues; we have to invent and embrace innovative approaches.

How can I be sure we’ll succeed? Because we’re determined to streamline processes and engage industry associations like CADSI so it can keep getting better and faster.

My colleagues Peter MacKay, Christian Paradis, Julian Fantino and I intend to work together to continuously improve procurement processes, and we believe that we are on the right track.

The Prime Minister has confidence that I will deliver; I need your help for that, and that’s exactly what we’re going to do.

Thank you.