I checked the eligibility criteria at https://www.canada.ca/en/department-national-defence/programs/canadian-defence-industry-resilience/eligibility.html. The program funds any corporation incorporated in Canada that runs operations here. No full ownership test required. That greenlights the $355 million nitrocellulose upgrade at General Dynamics in Quebec. It builds the sovereign ammo supply Minister McGuinty announced. National Defence committee hearings last year showed why speed matters. Real production here beats waiting for perfect ownership.
I think that the question to be answered should be: Is Canadian production vulnerable to foreign restrictions or interference? If the subsidiary of a foreign company can be directed to stop slow or modify operations by a foreign government, it should not be considered Canadian.
Agree 100%. Erin's objection is infantile. he is usually much more nuanced, so this is disappointing. To me what matters is capability. Do we as a nation have the capability to do something. That being the expertise, skills, capacity, financing, management etc., that can bring capability to the armed forces. Arguments about head offices are a distraction. Think about this, more work from Canada to GD OTS-C actually makes them more Canadian and helps our armed forces.
Follow the bouncing ownership. Today's example: Canadair.
1944 - govt of Canada takes over Canadian Vickers.
1946 - ElectricBoat (US) buys control.
1952 - merged into GeneralDynamics (US)
1976 - govt of Canada buys back from GeneralDynamics (US)
1986 - govt of Canada sells to Bombardier (CAN)
During that time, Canadair created ...
-- the Tutor jet (Snowbirds), the CL-215/CL-415 scoopers, the Challenger jet, the Canadair Regional Jet (CRJ)
During that time, Canadair built under license ("under license" means manufacturing iis done in Canada and designer gets a license fee ) ...
-- air transports for Canada: DC-4, Bristol Britannia; fighter jets for RCAF: T-33, F-86, F-104, F-5. Canadair even improved the F-86 by swapping in Canadian Orenda engines).
After Canadair ...
-- CL-415 SuperScooper is now DHC-515 by DeHavillandCanada, the CRJ evolved into Bombardier's Global Express line.
Bombardier Global Express 6500 airframes are the basis for SaabAB's GlobalEye AWACS recently purchased by France.
Home-grown Canadian engineering lives on, no matter if it was a subsidiary of a foreign company, or if it was locally-owned: the work was done in Canada.
If the goal is to re-arm CAF and have control of our own defence capabilities, I’d argue “Buy Canadian” is actually counterproductive
What kind of incentive are we creating for Canadian firms? That they should purposely not compete on the international market or hobble their own corporate structure to receive favoured treatment from the government. World war 2 re-industrialization was carried out by commercial firms supporting defence rather than a top down government directed industry spawning out of nowhere. We do ourselves a disservice by assuming that government can act as an investor, a buyer and a capital allocator all at the same time without creating perverse incentives
Absolutely give General Dynamics the funds to build an ammunition production line. However the funds should be transferred as a formal investment, and Canada should own a piece of the company through publicly traded shares. Just like we assisted GM and other automakers in the past.
Thia literally gives Canada a role in the company's governance.
If in an emergency could we nationalize the factories and still keep production ongoing, without the need of the parent company? Then it meets the requirements for made in Canada.
Nice write-up and good news. Erin's comments are dumb. We should absolutely cut off our nose to spite our face. Having an overly narrow "Canadian" content definition will kill every process. Are the jobs in Canada, if yes great =Canadian content. So would we give the contract to a Canadian company and then cancel the contract and start over if they got bought out. Makes no sense and will defintely hurt outside investment in Canada.
What determines that company is a "Canadian Sovereign firm" is challenging - as Policy Hawk has thoughtfully highlighted. Typically governments go beyond just looking at the legal entity's status/structure and consider the net benefits to Canada and how any intellectual property (IP) that is developed is treated e.g. is the IP owned by the Canadian entity and sold/licensed at market rates/terms when exported - even if exported through an international holding company?
So, do we introduce a national security requirement, that mandates that a majority of the directors and senior executives of any company qualifying for these contracts be resident Canadian citizens?
The boardroom is where policy is made, and the executive suite is where policy is put into practise.
I checked the eligibility criteria at https://www.canada.ca/en/department-national-defence/programs/canadian-defence-industry-resilience/eligibility.html. The program funds any corporation incorporated in Canada that runs operations here. No full ownership test required. That greenlights the $355 million nitrocellulose upgrade at General Dynamics in Quebec. It builds the sovereign ammo supply Minister McGuinty announced. National Defence committee hearings last year showed why speed matters. Real production here beats waiting for perfect ownership.
Baby steps
I think that the question to be answered should be: Is Canadian production vulnerable to foreign restrictions or interference? If the subsidiary of a foreign company can be directed to stop slow or modify operations by a foreign government, it should not be considered Canadian.
Agree 100%. Erin's objection is infantile. he is usually much more nuanced, so this is disappointing. To me what matters is capability. Do we as a nation have the capability to do something. That being the expertise, skills, capacity, financing, management etc., that can bring capability to the armed forces. Arguments about head offices are a distraction. Think about this, more work from Canada to GD OTS-C actually makes them more Canadian and helps our armed forces.
Thanks for a fair and nuanced explanation of the factors involved.
Follow the bouncing ownership. Today's example: Canadair.
1944 - govt of Canada takes over Canadian Vickers.
1946 - ElectricBoat (US) buys control.
1952 - merged into GeneralDynamics (US)
1976 - govt of Canada buys back from GeneralDynamics (US)
1986 - govt of Canada sells to Bombardier (CAN)
During that time, Canadair created ...
-- the Tutor jet (Snowbirds), the CL-215/CL-415 scoopers, the Challenger jet, the Canadair Regional Jet (CRJ)
During that time, Canadair built under license ("under license" means manufacturing iis done in Canada and designer gets a license fee ) ...
-- air transports for Canada: DC-4, Bristol Britannia; fighter jets for RCAF: T-33, F-86, F-104, F-5. Canadair even improved the F-86 by swapping in Canadian Orenda engines).
After Canadair ...
-- CL-415 SuperScooper is now DHC-515 by DeHavillandCanada, the CRJ evolved into Bombardier's Global Express line.
Bombardier Global Express 6500 airframes are the basis for SaabAB's GlobalEye AWACS recently purchased by France.
Home-grown Canadian engineering lives on, no matter if it was a subsidiary of a foreign company, or if it was locally-owned: the work was done in Canada.
If the goal is to re-arm CAF and have control of our own defence capabilities, I’d argue “Buy Canadian” is actually counterproductive
What kind of incentive are we creating for Canadian firms? That they should purposely not compete on the international market or hobble their own corporate structure to receive favoured treatment from the government. World war 2 re-industrialization was carried out by commercial firms supporting defence rather than a top down government directed industry spawning out of nowhere. We do ourselves a disservice by assuming that government can act as an investor, a buyer and a capital allocator all at the same time without creating perverse incentives
Absolutely give General Dynamics the funds to build an ammunition production line. However the funds should be transferred as a formal investment, and Canada should own a piece of the company through publicly traded shares. Just like we assisted GM and other automakers in the past.
Thia literally gives Canada a role in the company's governance.
I think the real test is one of self sufficiency.
If in an emergency could we nationalize the factories and still keep production ongoing, without the need of the parent company? Then it meets the requirements for made in Canada.
Nice write-up and good news. Erin's comments are dumb. We should absolutely cut off our nose to spite our face. Having an overly narrow "Canadian" content definition will kill every process. Are the jobs in Canada, if yes great =Canadian content. So would we give the contract to a Canadian company and then cancel the contract and start over if they got bought out. Makes no sense and will defintely hurt outside investment in Canada.
What determines that company is a "Canadian Sovereign firm" is challenging - as Policy Hawk has thoughtfully highlighted. Typically governments go beyond just looking at the legal entity's status/structure and consider the net benefits to Canada and how any intellectual property (IP) that is developed is treated e.g. is the IP owned by the Canadian entity and sold/licensed at market rates/terms when exported - even if exported through an international holding company?
We are very good at announcements, not so good at following up with action. 🇨🇦
We can’t be sweating the past at the moment, it’s time to look forward, I personally have confidence in Carney.
So, do we introduce a national security requirement, that mandates that a majority of the directors and senior executives of any company qualifying for these contracts be resident Canadian citizens?
The boardroom is where policy is made, and the executive suite is where policy is put into practise.