‘Opportunity of a generation’ to spur R&D through federal procurement policies, lobby group says

The head of Canada’s most prominent defence industry lobby group is urging the federal government to revamp its defence procurement strategy as part of its drive to make the country a world leader in innovation.

Christyn Cianfarani, president of the Canadian Association of Defence and Security Industries, says Canada’s defence procurement strategy can be a key contributor to the country’s innovation agenda.

The association represents more than 1,000 companies in the defence and industrial securities sector. Ms. Cianfarani is pushing for a “made in Canada” defence industrial policy, which she characterizes as combining the government’s innovation goals with meeting the requirements of Canada’s military.

“We would articulate as a country the kind of jobs we want to have – generally speaking, high wages and high-quality, innovation-driven jobs,” she says. “That’s marrying the innovation agenda with the kinds of products we’re going to need for our armed forces.

“It’s also determining what kind of industry we want to have that will have that capability. For example, what do we want to create, sustain and grow – that all ties into a ‘made-in-Canada’ defence industrial policy. Then you use the tools that you have at your disposal to make that outcome happen.”

“Innovation” has become a key buzzword for the federal Liberals, who even changed the name of the former industry portfolio to innovation, science and economic development. Navdeep Bains, the man in charge of that ministry, recently called on Canadian industry to beef up its spending on R&D in an effort to make the country more competitive on the world stage.

Mr. Bains is not the only one pointing out Canada’s weaknesses in this area.

The Science, Technology and Innovation Council, an independent body that provides policy advice to the federal government on technology-related issues, releases yearly reports outlining Canada’s performance in research and development, talent resources and business innovation.

Its State of the Nation 2014 report praised Canada for its knowledge base but noted the country lacked momentum in business innovation.

Relative to its size, for example, studies show Canada is home to globally renowned scientists who are in the top one per cent of the most cited researchers in their respective fields.

When it comes to innovation, however, the country lags behind other developed nations such as the United States in terms of aggressiveness in R&D investment.

One of the tools Ms. Cianfarani believes can help change that is the Industrial and Technological Benefits policy announced in the federal government’s Defence Procurement Strategy in 2014.

The ITB policy requires companies putting forth bids on military projects to outline a clear “value proposition” in the form of how many jobs and opportunities they will create. In addition, the policy can require bidding companies to transfer R&D or intellectual property, major drivers of innovation.

Ms. Cianfarani says the policy will allow the federal government to drive the kind of innovation and jobs it wants.

She says defence procurement can be an ideal mechanism to spur innovation because it’s a sector that isn’t subject to as many trade agreements as other industries.

“To our understanding, Canada is the only G-7 nation without a defence industrial policy,” she says. “While we will be looking to other countries, or we suggest looking to other countries as models, we definitely want to make sure that everyone understands that a defence industrial policy would be a ‘made-in-Canada’ one. While there are other things to learn from other nations, it would definitely be something that the industry and government need to do to work together to make uniquely for Canada, because we are a unique country.”

Canada should take a closer look at Australia’s policy, she suggests, since that country provides a good comparison point in terms of its similarity to Canada in size and culture.

Ms. Cianfarani says the capital region has the potential to be a key focal point of the country’s innovation strategy.

“Ottawa has about 300 defence and security related companies,” she notes. “I think most people would be surprised to learn that. It’s got a highly skilled workforce, and many, many world-class technology firms. (The Ottawa region) is very well known – from design and complex systems engineering to even robotics. So, there’s a lot of innovation that’s happening in the region.”

She adds the entire region should make a concerted effort to band together.

by Lucy Screnci

“We certainly want to make sure we foster this kind of cluster development at all levels – local, regional and national – and from what we understand, Invest Ottawa is actually doing quite a great job at understanding defence is a strategic sector for the city of Ottawa.”

Ms. Cianfarani said she is keen on continuing this conversation with industry partners and the government.

“We’re talking about that now because we have an opportunity of a generation in front of us.”