THE STANDING SENATE COMMITTEE ON NATIONAL SECURITY, DEFENCE AND VETERANS AFFAIRS
EVIDENCE
OTTAWA, Monday, April 13, 2026
The Standing Senate Committee on National Security, Defence and Veterans Affairs met with videoconference this day at 4 p.m. [ET] to examine and report on defence procurement in the context of Canada’s commitment to increase defence spending; and, in camera, to examine and report on the impacts of Russia’s disinformation on Canada.
Senator Hassan Yussuff (Chair) in the chair.
[English]
The Chair: Honourable senators, this is the Standing Senate Committee on National Security, Defence and Veterans Affairs. I am Hassan Yussuff, senator from Ontario and the chair of your committee. I am joined today by my fellow committee members; I will invite them to introduce themselves.
[Translation]
Senator Youance: Suze Youance, Quebec.
Senator Carignan: Good afternoon. Claude Carignan, Quebec.
[English]
Senator White: Judy White, Newfoundland and Labrador.
Senator McNair: John McNair, New Brunswick.
Senator Cardozo: Andrew Cardozo, Ontario.
Senator Ince: Tony Ince, Nova Scotia.
Senator M. Deacon: Welcome. Marty Deacon, Ontario.
Senator Kutcher: Stan Kutcher, Nova Scotia.
Senator Dasko: Donna Dasko, senator from Ontario.
The Chair: Thank you kindly, colleagues.
Today, we are meeting to continue our study on defence procurement in the context of Canada’s commitment to increase defence spending. We have the pleasure of hearing from two panellists of witnesses today.
For the first panel, we welcome Roman Shimonov, Founder and CEO of Roshel —Smart Armoured Vehicles; and by video conference, Tim Nohara, Founder and CEO of Accipiter Radar Technologies Inc. Thank you both for joining us today.
We will begin by inviting you to provide opening remarks, to be followed by questions from senators. I remind you that you have five minutes for opening remarks. We will start with Mr. Shimonov, who is in the room. I welcome you, sir, and the floor is yours.
Roman Shimonov, Founder and CEO, Roshel —Smart Armoured Vehicles: Thank you. Good afternoon, Mr. Chair and honourable senators. Thank you for inviting me to attend this committee to speak to your study of defence spending and procurement.
As background, Roshel is one of Canada’s fastest-growing global defence companies manufacturing armoured vehicles for law enforcement, military and commercial clients worldwide.
Headquartered in Brampton, Ontario, Roshel holds the largest market share in the cash-in-transit armoured vehicle segment and has been the top global supplier of four-by-four armoured vehicles for three consecutive years. We have worked to vertically integrate our supply chain from raw materials to finished platforms.
Senators, Canada imports hardened ballistic steel even though we have raw materials and workers ready to produce it here in Canada.
In 2026, Roshel acquired a Swedish ballistic steel intellectual property, or IP, and through our new venture with Algoma, we established a Canadian Centre of Excellence for Ballistic Steel Production to build a new, sovereign capability in Canada using Canadian mined, milled and processed steel.
Roshel is committed to manufacturing specific high-hardness ballistic steel grades to meet all National Defence and Coast Guard needs, as well as those in the mining and agriculture sectors.
When it comes to defence procurement, I wish to acknowledge that this committee in your 2017 report called on the government to increase spending to 2% of GDP by 2028. Your committee was correct, and now Canada has achieved the 2% target two years early.
I also wish to acknowledge the commitments in the new Defence Industrial Strategy to build Canadian sovereign capabilities and support Canadian companies in expanding exports, including through the SAFE program in Europe. Canada is the only non-European member of SAFE, which is great.
Senators, Canada is finally progressing with the creation of the Defence Investment Agency, led by Minister Stephen Fuhr and CEO Doug Guzman. This is also a positive step toward more agile procurement, as the government aims to spend 5% of GDP on defence by 2035.
We, in the Canadian defence industry, are pleased to see the Buy Canadian Policy. As the Prime Minister said over the weekend in Montreal, “With our new Buy Canadian Policy, when the federal government spends, we will select Canadian suppliers by default.” We look forward to seeing the government follow through on this commitment.
Senators, I must say that Roshel has been proud to supply over 2,200 armoured vehicles to Ukraine, more than any other company in the world and all made here in Canada. While Canada has procured over 500 vehicles from Roshel for Ukraine, we have yet to sell to the Canadian Army for our own troops, including those in Latvia. Zero sales in Canada. We aim to change this with the Light Utility Vehicle and Domestic Arctic Mobilization Enhancement project, or DAME, and deliver 100% Canadian product.
Senators, the Canadian Army’s Light Utility Vehicle project is among the most significant near-term procurement decisions Ottawa will face, and Roshel is best positioned to deliver it. What distinguishes Roshel is not just a proposal on paper but a combat-proven platform already in active service. Equally compelling is Roshel’s commonality advantage in parts and service. Fleets in the field are only as capable as the supply chains that sustain them.
Roshel’s vehicles share components, systems and service infrastructure across its entire product family, the kind of coast-to-coast supportability grounded in Canadian manufacturing with Canadian facilities. It is not something a foreign OEM can replicate.
The Domestic Arctic Mobilization Enhancement program requires a vehicle capable of operating across Canada’s Arctic. Roshel’s answer is built in Canada, for Canada. Roshel will manufacture the ExtremV amphibious all-terrain vehicle domestically, not import it, not badge engineer but build it here with Canadian workers supported by Canadian supply chains, including tracks manufactured by our partner Soucy in Quebec.
Beyond the vehicle itself, Roshel offers full lifecycle integration, customization to the Canadian Armed Forces’ operational requirements, indigenous technical support and a service and maintenance network that does not depend on a pipeline for parts running through a foreign country.
In a country as geographically diverse as Canada, from the Arctic to the Prairies, from the Rockies to the Atlantic Coast, self-sufficiency is not a commercial advantage — it is an operational necessity.
Senators, I will end my presentation with four recommendations:
One, given the establishment of new agency and the scale of planned defence spending, there is a clear opportunity to establish a joint House-Senate committee to oversee defence procurement consistent with this committee’s 2017 recommendations.
Two, urge the defence investment agency to produce an annual report for Parliament on its operations, including challenges and successes.
Three, the Canadian Army has been working on the Light Utility Vehicle, or LUV, procurement since 2013. Surely, we can move faster. We urge the government to speed up procurements by identifying through a request for information one or two Canadian bidders that meet or exceed the requirements of the Canadian Armed Forces. Test the products up front, creating jobs today rather than five years from now.
Four, urge the government to report annually to Parliament on how it is supporting Canadian defence experts through partnerships and SAFE programs, including jobs created, contracts secured and upcoming global opportunities.
Thank you.
The Chair: Thank you, Mr. Shimonov.
Next, we will hear from Tim Nohara. The floor is yours, sir. You have five minutes.
Tim Nohara, Founder and CEO, Accipiter Radar Technologies Inc.: Thank you, senator.
Good afternoon, everybody. Thank you for the opportunity to appear before you today and provide witness testimony as part of your study on defence procurement.
Accipiter is a proudly Canadian-owned, dual use, high-tech company based in Niagara, who took Cold War defence surveillance know-how and spent the last three decades inventing, developing and rolling out smart surveillance networks in North America for public safety, aviation safety and security and environmental protection applications.
Our advanced solutions help our government, energy companies, airports, marine ports and law enforcement protect Canadians, their property, and even birds from harm.
In support of our new Defence Industrial Strategy, the DIA, DND, ISED, Public Safety and PSPC can quickly leverage and apply our Canadian, commercially developed smart surveillance networks and know-how to quickly address critical military and sovereign objectives in an affordable manner that will also fuel Canadian economic growth; in other words, true dual use with shared infrastructure.
I thought it would be helpful to one, provide the Committee with a real-world example that illustrates where Accipiter can help; two, convey the procurement challenges we’re presently experiencing; and three, provide two recommendations that will allow Canada to seize the opportunity before us.
Securing Canada’s borders is one of the key elements of the Prime Minister’s efforts to ensure our national security. This is a huge task. For example, the border extends over 2,000 kilometres along the Great Lakes and St. Lawrence Seaway alone, and is open and undefended.
This invisible border is crossed thousands of times daily by law-abiding citizens, but is also believed to be the biggest source of drug, gun and human smuggling between Canada and the United States. And while large container ships broadcast their locations, smaller pleasure craft, snowmobiles, when frozen over, and drones do not.
Today, Public Safety Canada and the Canadian Coast Guard are both effectively blind to illegal activities involving pleasure craft, snowmobiles, when the water is frozen over, and drones.
This large gap in Canada’s ability to detect activity along its 2,000-kilometre water border — distinguish between legal and illegal behaviour, and direct response assets such as vessels, vehicles, and aircraft to secure our border — should concern us all.
In just one week, Accipiter could turn on its existing smart surveillance network for Public Safety and the Canadian Coast Guard, which would immediately cover 10 hotspots along this border. Within two years, we could easily expand this persistent radar infrastructure across the entire Great Lakes and St. Lawrence Seaway for only 10% to 20% of the cost of the Gordie Howe International Bridge.
This relatively small investment would close this critical border security gap with smart-decision support, force multiplication, information sharing and interoperability; while, at the same time, start paying for itself by helping to drive an economic boom in AI, autonomous vehicles and smart shipping. The deployed infrastructure can be further expanded to the East and West coasts and the Arctic to support DND and the Canadian Coast Guard.
What is stopping DND, ISED, and Public Safety Canada from quickly accessing and deploying our smart surveillance network technology?
The answer is simple.
One, they barely know that we and other small, innovative, Canadian commercial companies exist, with ready-to-go, dual‑use solutions and technologies; and two, PSPC’s and DIA’s procurement policies are not very well suited for procuring mature, innovative solutions from small Canadian companies.
It should not be easier for a small Canadian company to do business in the United States than in Canada.
I’d be pleased to offer two recommendations for fast-tracking procurement from small, Canadian, dual-use companies to address Defence Industrial Strategy objectives: Thank you, and I look forward to answering your questions.
The Chair: Thank you, Mr. Nohara. We’ll proceed to questions. Colleagues, our guests will be with us until 5 p.m. today. As always, we’ll do our best to allow members to ask their questions. Four minutes will be allotted for the questions. I ask you to keep your questions succinct in an effort to allow as many questions as possible.
[Translation]
Senator Carignan: My question is for Mr. Shimonov.
I’m surprised. I understand that the company has not sold any armoured vehicles in Canada. I saw that they are called Senators. That’s an interesting name. You haven’t sold any in Canada, except through the CCC, and those ended up being supplied to Ukraine.
Yet, at an announcement, you were in Stockholm with Minister Joly and Secretary of State Fuhr. They therefore know about your product and promote it outside Canada, particularly in Europe. However, here in Canada, you can’t sell any armoured vehicles. I don’t understand. Can you explain that?
[English]
Mr. Shimonov: Our company is selling successfully to the United States despite all the challenges in the relationship between Canada and the United States. We’re selling to the United Kingdom, they’re our third-largest customer, and historically the United Kingdom sold to Canada. Roshel —Smart Armoured Vehicles have become the seller of Canadian products to the United Kingdom when it comes to four-by-four vehicles. We’re selling to the Czech Republic, Germany, and France; we’re the largest supplier to Ukraine. Mexico just recently chose Roshel —Smart Armoured Vehicles as the main supplier of their vehicles. Colombia, Chile, Costa Rica, South Korea. Yet, how many vehicles were sold in Canada to the Canadian Armed Forces? Zero. We never were even close to giving a quote.
Today the Ottawa Police just received Roshel’s Senator armoured personnel carrier, or Senator APC. We have sold to the NRC. We have sold to different agencies in the United States, including the FBI. The recent deployment to the moon, Artemis II, the entire Cape Canaveral was protected by a Canadian-made Senator vehicle. Even the U.S. selected Roshel —Smart Armoured Vehicles as the sole supplier for armoured vehicles because of the unique position we have when it comes to quality, price and technical specifications. Ukraine is in a real war and had the freedom to choose vehicles from any other country, and they selected a Canadian-made Senator armoured personnel carrier vehicle. Despite the fact that we haven’t even once quoted a vehicle to the Canadian Armed Forces.
Senator Carignan: Why?
Mr. Shimonov: Because the light utility vehicle program, the qualification process has been going on since 2013. We are in 2026, and they haven’t even identified what they need. Our recommendation is very simple. Don’t wait. Take the qualified vendors. Ask them to sell two, three vehicles, and 10 vehicles. Ask the qualified vendors to give it for free. We will be happy to give the vehicles for free for them to test and come back and say which vehicle is better, which one is disqualified, and which one is perfect. We have no doubt that once we deploy one or two or a few vehicles to the end users, they will say this is what we want. Our vehicles are 100% Canadian made. The Ford Motor Company of Canada Limited invested $3.5 billion into its Oakville facility. The drive train is coming from Oakville, steel is coming from Algoma Steel, which has a ridiculous surplus of steel, and we’re importing ballistic steel from abroad. We’re selling to our allies, but not to ourselves, and this is the situation that we hope will be addressed.
Senator Cardozo: Thank you for your presentation. I had a chance to see your vehicle at the armoured show here. Since you call it the “Senator,” I asked if we could rent it for a weekend and try it out, but you denied that. Anyway, I don’t hold that against you.
Talk to me about the use of an armoured vehicle. It’s not a tank. It’s an armoured vehicle. It seems to me when we’re in battle, isn’t a tank better than an armoured vehicle? What is it good for? Sometimes, we see armoured vehicles being used in countries against their own people, in cases with demonstrators and protesters. You mentioned providing guards to Cape Canaveral, and to me, that would be a good use of it. If there is an armoured vehicle being used by the U.S. Immigration and Customs Enforcement agency, or ICE, in Minnesota, I would say that’s not such a great use. Talk to me about the use of the vehicles.
Mr. Shimonov: That’s a great question. Vehicles have different purposes. The Senator APC, or any other four-by-four light vehicle, does not replace the tank. The tank is supposed to be on the front line. It is an offensive piece of equipment. We produce support vehicles. Those vehicles evacuate injured people, and they deliver supplies and equipment.
When you want to deliver or to evacuate people from a combat zone, you don’t need to use a $30-million or $40-million vehicle or tank, in this case. That is heavy and expensive, burns a lot of fuel and doesn’t do its job because it’s much heavier, so the off‑road capability is not the same. Also, of course, the price is not the same. When it comes to threats, in today’s reality and we learned it in Ukraine, a $300 drone can take down a $30-million vehicle the same way as a $500,000 vehicle like the one we are offering, so it is not instead of, it is in addition to.
As for ICE, ICE is a part of the Department of Homeland Security. We are not selling to specific end-users. We sell to the U.S. government, and the U.S. government has given Roshel a blanket purchase agreement for five years, under which they can buy from us. They performed global market research, and they selected Roshel as the best-positioned company, and there is no need to waste American taxpayers’ money to go to tender every time they need vehicles. They identified Roshel and selected us as the best supplier, and we signed a five-year purchase agreement, so we’re selling hundreds of vehicles in hundreds of millions of dollars to different departments and mostly the U.S. government. We don’t tell them where or how to use those vehicles.
For Canada, the U.S. is an important partner, and we are getting a lot of pressure from the U.S. to have our production to be based in the U.S., because being a Canadian company, we pay taxes here, we create jobs here and support the entire supply chain in Canada, but we’re mostly getting orders from U.S. taxpayers. This is a gap that we look forward to addressing by being a Canadian company that needs to sustain its existence here, justify the existence here and to continue and support and develop the industrial base and allow Canada to be independent when it comes to its ability to support and create this defence industrial base that Prime Minister Carney is talking about a lot. We hope to see the results soon as well.
Just to summarize, those vehicles transport troops, they transport personnel, they evacuate injured people, they bring ammunition, water and fuel, they do cable laying and do a lot of things to support the troops and their closest allies. Our company does not sell to companies or to governments that are not Canada’s closest allies. We work strictly in accordance with all Canadian regulations. For every single vehicle we sell, we get a permit. We can’t decide to sell to anyone. We don’t sell to resellers. We sell only to the government, or if it’s government to government, we will do that. We are extremely selective about who is using our vehicles. It is important to us that only good guys will use our vehicles.
Senator Cardozo: Quickly, in terms of drones, are you concerned about a large number of drones, for example, approaching your vehicles at the same time? It’s easy to take out one drone, perhaps, but if 20 or 30 come, what are your thoughts?
Mr. Shimonov: The drone threat is probably one of the biggest threats that we have, and we don’t have a solution because there is no moment when you know that you have 100% secured the product. It doesn’t exist. There will always be a fight between the threat and the protection. That’s why we are heavily invested in the ballistics deal. We are heavily invested in this segment and lightweight materials, but we are privileged and honoured to have an exclusive and unique ability to test our vehicles in combat zones. When Canada donates hundreds and millions of vehicles to Ukraine, the knowledge and IP that we’re generating are significant, and the ultimate beneficiary can be the Canadian end user. We don’t need thousands of Canadians to die to gain the knowledge that we gained in Ukraine. This is one of the most important things that we were able to do as a Canadian company, which is to generate an IP or a vehicle that is proven. Around 2,200 vehicles have been used in a combat environment. We are now offering this to knowledge to be utilized to support our troops. Because, today, everything looks peaceful, but tomorrow, we might need the vehicles. If it takes another 30 years to finalize the contract, we will be in an extremely challenging position.
Senator M. Deacon: Thank you to both of our guests and their teams for being here today. I do have some questions, but I just want to dive into something you talked about. We have to be candid, and are trying to get to the bottom line to understand this procurement challenge. You described, I think, close to 14 countries that you have relationships with and some of the issues of building in Canada. Is it your thinking, the thinking of your team, that at some point, Canada wasn’t really looking closely at Canadian-made items and that that might be a big factor here?
Mr. Shimonov: A hundred per cent, yes. I’ll give an example.
Senator M. Deacon: Thank you.
Mr. Shimonov: When we go to different military defence trade shows, we see other countries at the government level actively promoting their defence companies. This didn’t exist in Canada. It was in bad taste to say something positive because then government representatives would look as if they’re biased or they’re promoting.
China is a great example, or Russia. They are promoting their companies at the governmental level. It gives them a huge advantage.
I can give you a ridiculous situation where we received a contract from the Canadian Commercial Corporation, or CCC, financed by the Canadian government to support Ukraine, and Export Development Canada, or EDC, couldn’t provide the insurance because they didn’t do any defence programs. They were not allowed to do that. We see the change already. We see how CCC now is taking a more active and extremely helpful position. They’re helping us in many countries, but it wasn’t like that up until recently, and we want to see the continuation of this effort, but I think the government needs to understand that by promoting their defence companies, they’re creating jobs and they’re making Canada more independent. Unfortunately, it will take time to build this infrastructure and the philosophy and DNA of promoting companies because there is nothing bad in supporting companies that follow all of the rules in addressing and supporting all of the priorities that the government set.
Senator M. Deacon: Thank you very much for that. For both of you. I don’t want to leave out Mr. Shimonov and Mr. Nohara. There are lots of things going on and growth and development. We see air warfare changing profoundly in Ukraine and Iran. Things like small drones present a challenge for radar and work. I’ll go to Mr. Nohara first. Can industry keep up with these changes that we see play out in real time, and are you able to adapt when these changes happen between even the order and the delivery of a product?
Mr. Nohara: Excellent question, senator. The short answer is, yes. In effect, we’re doing it here in Canada. We’re doing it at Montréal-Trudeau International Airport, and we are keeping up in real time with the changes that we’re learning overseas.
I would echo Mr. Shimonov’s concerns about buying Canadian; only I would amplify it in a much larger way. We’re small companies, and the Defence Industrial Strategy must include small companies. You can’t have an industry without the multiplicative number of small companies supporting bigger companies and dealing with innovation of any type.
We’re not even known to the defence establishment, so the small companies are literally missing in action. Never mind the fact that, yes, we can keep up with these drone capabilities — and, in fact, we are — but they don’t even know we exist.
When the purchasing agencies, even on larger procurements, talk about supporting Canadian companies, they set thresholds of something like $125 million for a procurement. For drone detection technology, we’re in the hundreds of thousands of dollars. For radar, with many sites, we could be in one or two million dollars, so we’re not even on the radar — pardon the pun — as far as buying Canadian. It’s only after the much larger, big acquisitions, like the 2,000 vehicles to Ukraine. But even there, it appears that the Canadian positioning is still challenged.
But the short answer is yes, at the surveillance and technology levels, we have all of the capabilities from the Cold War available to us. They have been applied in commercial dual-use applications. Now the transition needs to go in the other direction. Since we haven’t been investing in defence technologies for quite some time in Canada — that’s why we’re experiencing these defence industry problems — we now need to take technology that comes commercially, which has kept up in commercial applications, and now immediately give production capability to DND and the Canadian Coast Guard, which falls under domestic security.
Senator M. Deacon: I will continue in round two. Thank you.
Senator Kutcher: Thank you both for being here. Good to see you again, Mr. Shimonov. I have the same question to both of you. I just want to note that Senator Carignan congratulated you on naming your vehicle “Senator,” but I want to point out that these are smart-armoured vehicles. Right?
I just came back from Ukraine. I asked about your vehicles, and they are highly lauded by everyone I spoke to who is associated with military or particularly medical evacuations, which are a huge issue.
Also, they are battle-tested, which is essential because you can’t create a product and think it’s going to work; you have to actually test it. So, thank you for leading in that.
You both mentioned the challenges in the procurement process. If you can help us to be more specific, could each of you choose two things and say what specific things need to be different now so that we can ensure that we can mention those?
Mr. Shimonov: Thank you, Senator Kutcher. Congrats on your award in Ukraine and for everything you are doing for the Ukrainians. Thank you.
It’s very simple. We don’t need to reinvent the wheel. There are already mechanisms that work for other countries, and the U.S. is a great example. In the U.S., when they need a certain product, there is a specific budget that is allocated to test new things. It’s not something that they are committing to. For example, with the light utility vehicle, we’re talking about billions of dollars that the Canadian government is going to spend. Rather than spending and giving the entire amount to a company that will be selected in many years, take a small portion — a small piece, a tiny piece — and test it. Send it to the troops and get the feedback.
Based on the feedback, it will be very clear which company is better and which is not. We are promoting it because we know that we’re much better. We have combat experience. We have the Canadian content. We have the raw materials from Canada. We have everything the government is talking about, but by the time this contract will be finalized, I’m not sure if we will have the same capabilities, the same capacities and the same priorities to support the contract. That’s because it might take some time. It’s very hard to justify for Canadian companies that are getting their content from abroad to continue being there.
Canada is the best country to build the vehicles. We have the best access to skilled labour. Speaking of drones, we hired over 200 refugees from Ukraine. Some of them came injured. They came with unique knowledge and expertise. They built drones that they used to build in Ukraine. They are now building them here. We can use this technology. Send it to the troops with zero investment needed. This is a great example.
Second, with the Arctic vehicle program, the threat is real. Russians are much closer to us from the North. If we took the time to start thinking and then qualifying and doing the entire process, which is amazing and important, it would work, but we can’t take the time. By the time we will take the time to do this process, it might be too late.
Senator Kutcher: With regard to field testing, Mr. Nohara, what would you add to that?
Mr. Nohara: Thank you, senator. Yes, I would add two things. The first is that Canada needs an appropriate web-based registry for small Canadian companies to enable them to register their unique, ready-to-go goods and services in relation to DIS priorities, which also facilitates that small company industry to provide briefings directly to relevant governments leads to inform them of the mature, ready-to-go Canadian capabilities.
In the small industry case, fewer than 200 people, the government doesn’t even know we exist, so, we have a Canadian on the large scale, but the broad industry is made up of hundreds and thousands of Canadian companies that can contribute to the capabilities, but we’re not registered anywhere. The registry could also be used by the Defence Investment Agency and Public Services and Procurement Canada officials whenever procurement is being considered to determine if one or more small Canadian companies offer those desired capabilities. Finally, to create a registry, which should be quick and easy — 30, 60 or 90 days. It must be marketed so that the small Canadian companies who haven’t sold in the defence industry for a decade or two hear about it and actually register. That’s the first one.
The second point copies good, standard practices used by other nations and certainly the United States. As a small Canadian company, we are successful in selling to the Americans, which is — as you can imagine — exceptionally challenging, but they do want the best. If you offer the best, they will go beyond their Buy America requirements to enable that.
They have a small business administration that is geared for accessing innovation. As we know, innovation and quick changes come from small companies. The second recommendation is to set aside a substantial budget for small business procurements. Maybe individual order values of less than $10 million. Something small. It’s only to be used for small Canadian companies, for example, companies with fewer than 200 employees. So, set aside a special pot of money for special use with small Canadian companies as a set aside.
If the registry, which was that first recommendation, indicates that there is only one small Canadian company that can satisfy a particular requirement — and indeed we fit that description in our smart surveillance networks — the U.S. sole-sources to us because we fit that description on a North American scale. Then the solicitation could be sole-sourced with an advance award notice making sure you didn’t leave anybody out, saving unnecessary work, time and money for all concerned.
Senator Ince: Thank you to all our guests. Mr. Shimonov, I have a question for you. Can you expand on your comment about the materials that we have in this country, building the materials, and so on? I’m curious. Do we have the capability to refine those materials in our country right now? I ask because it’s my understanding that we don’t have that capability.
Mr. Shimonov: Canada has everything except certainty, because when you have certainty, you can invest, you can buy, you can bring and you can make it happen. That’s the case if you have certainty.
Just recently, we received an award in Europe for a contract that is funded by the European Peace Facility. Twelve companies were qualified. Three companies made it to the very end. Roshel received the award with 100 points out of 100: a Canadian company versus European companies. The companies that came in second and third received 64 and 62 points out of 100. This competitive advantage we have as a Canadian company is because of the supply chain. It’s because of the proximity to the supply of the OEM drive trains. It’s because of skilled labour and many great things we have in Canada.
Algoma is a great example. Algoma Steel is the only sheet metal manufacturer and plate manufacturer in Canada.
They exist, they have the legacy, they build all the rails across Canada. That’s critical infrastructure for Canada. They can produce up to three million tonnes of plates, but produce today only one million because of the United States’s tariffs. So we have steel, and we have thousands of people without jobs who are waiting and eager to go back to work. But no one can support them by giving them certainty, by giving them the future and the orders.
At the same time, we have a product that is being procured with a huge advantage by European, U.S. and Latin American companies. Meanwhile, we have been working since 2013 to qualify work. If we got this work today, we would be able to bring hundreds of people back to work this year, and we can deliver vehicles this year, not in 10 years. We’re not asking for any advantage. We’re not asking to sell a vehicle that costs more. In fact, our vehicles are more cost-effective. The drive train is produced in Oakville. We have everything as a country, and this is just an example of one industry.
I’m sure that this can be applicable and can be mirrored to any other industry as well.
When it comes to the programs that I’m referring to, I’m automatically looking at other opportunities as well. Canada is going to spend billions of dollars on a submarine program and on different programs that eventually companies from abroad that will sell to Canada. If they won’t have the offset requirements, if they won’t have the ability to produce in Canada, they will produce it elsewhere because they have no choice. This is exactly what we are trying to do. By getting the infrastructure ready, we’re not just addressing today’s need for this specific program, but we can serve foreign companies that will have a reason to build it in Canada, using our own raw materials and labour, and keeping the money in the country; not sending it elsewhere.
Senator Dasko: Thank you witnesses for being here today. Mr. Shimonov, I want to drill down a little bit more in terms of what you said about your company and the experiences that you have had.
Are you saying that the Canadian government specifically discriminates against Canadian companies and does not want to hire Canadian companies because they are Canadian? Are you saying that?
Mr. Shimonov: No, I didn’t say that.
Senator Dasko: I’m just asking.
Mr. Shimonov: I don’t think they intentionally discriminate. I think the system, which is based on clerks defining the technical aspects for end users, is overcomplicating simple processes and simple things that need to happen without the need for it to take years to qualify. Time is money for Canadian taxpayers. We have DND army people coming and qualifying vehicles for the Ukrainians. It’s great that we support Ukrainians. I’m all for it. I’m the biggest supporter of Ukraine. But when we see how our own people are questioning, why don’t we get those vehicles? Why we support the Ukrainians, but we drive old cars —
Senator Dasko: If I may, you’re saying that the process is because they have set out specifications that are different from what your company offers is that —
Mr. Shimonov: No, we are exceeding the specifications. There is not a single requirement that we’re not meeting. We are 100% compliant.
Senator Dasko: Have you participated in a Request for Proposal, or RFP, put out by the Government of Canada?
Mr. Shimonov: That is the problem: there is no RFP. The RFI has been happening since 2013. We are still in the RFI, request for information and process. They qualify certain companies. Then, for some reason, after another year, they said we will qualify more vendors, but we are still in RFI. I would love to go to the RFP process.
Senator Dasko: Is this a standing offer list then?
Mr. Shimonov: Not yet. No. Still gathering the preliminary information. I would love to go to an RFP. I’m not asking for any preference. All we ask is to shorten and move the time frames to the left.
Senator Dasko: You were saying it’s in the specification stage where you’re being left out? They make specifications that you don’t fit is that it?
Mr. Shimonov: I don’t know the answer because we don’t have a dialogue with them. There is no one to talk to. There is no one to ask what is going on. Every year, there is an army outlook. The most recent one was last week, and they said that they are planning to conclude the RFP by 2029.
Senator Dasko: So they can choose companies because it’s under a certain threshold of value. Is that how they set it up?
Mr. Shimonov: Not as far as I know, no. They qualify by how many vehicles are used by the armies of other NATO members: at least 100 vehicles. This is one of the criteria. There are certain criteria, and we meet and exceed all of them. We’re 100% compliant with all the requirements. Requirements, I don’t think, are the issue.
The issue, I think, is in the procurement process, where it takes time.
Senator Dasko: The government has purchased these vehicles from other companies?
Mr. Shimonov: No, it’s an RFI process. It hasn’t been concluded.
Senator Dasko: So the Canadian government hasn’t purchased any vehicles from any suppliers whatsoever.
Mr. Shimonov: No.
Senator Dasko: Therefore it’s a category issue, not a discrimination against Canadian issue?
Mr. Shimonov: It’s not discrimination because the process itself, the first stage of the RFI —identifying the requirements to go to the RFP — is still in progress, and it has been since 2013.
Senator Dasko: Okay. So, I understand. We bought none of these from anybody.
Mr. Shimonov: Correct.
Senator Dasko: Okay. Mr. Nohara, you used the term “small companies” quite a bit in what you said. What is the threshold for a small- versus medium-sized company?
Mr. Nohara: Thank you for the question. In terms of the technologies we think — based on presentations from the defence department that they are interested in — fewer than 200 people. It could be 100 people, but something small. That’s where there is a lot of innovation, system engineering, software development, AI, all of the underlying technologies, and rapid prototyping. There are big programs and big platforms, like the armoured personnel carrier we are hearing about, like the F-35s. Then there is everything else. Everything else captures a very large number of participants who are presently missing in action because they are small.
Senator Dasko: So you’re saying the Government of Canada purchases nothing from small companies, but they all survive on an international market?
Mr. Nohara: Sure enough, or they move to the United States. After the Cold War, in the early 1990s, I started Accipiter. I left Raytheon in 1994 to create Accipiter. Our focus was to take our know-how from the surveillance industry — that we learned with space, airborne, ground and naval surveillance systems — and bring that to homeland applications, like air traffic control, drones flying beyond visual line of sight, search and rescue, and maritime domain awareness. For the last 30 years, that entire industry was dismantled, but has been doing great dual-use development, while producing all kinds of innovation. The things we take for granted with our smartphones and with AI, and you name it. Well, they have been active, but for commercial or dual-use purposes. That industry — those hundreds or thousands of companies, like my own here in Niagara, we have mature products to meet the Defence Industrial Strategy requirements, but we’re not even known, and we’re not known because there have not been procurements at that level.
The Chair: Senator Dasko, you’re out of time. You’re over a minute. Thank you. We’ll come back on the second round.
Senator White: Thank you very much, both of you, gentlemen. Very insightful presentations — shocking, actually, when you look at the information provided. My question is a bit more specific, and it’s for Mr. Shimonov, and it relates to the Arctic-capable armoured vehicles in that most of the Arctic has Indigenous and First Nations Peoples. I’m wondering if you could talk about how Indigenous Peoples were consulted and/or helped. If you could talk about that, I’d very much appreciate it.
Mr. Shimonov: Thank you for the great question. So when it comes to the Arctic, one of the most challenging objectives is the climate, obviously. Vast territories to sustain, to support. It’s not just about selling the product, but also supporting the product. When it comes to Arctic, we partner up with a company called ST Engineering from Singapore. We got the IP of the ExtremV. It’s a tracked vehicle that is based mostly — the track system is coming from Montreal from a company called Soucy. Rather than reselling the product — we don’t believe in that — we got the IP to produce it in Canada using the raw materials from Algoma. Algoma is very diversified, and they are very engaged with Indigenous communities.
At the same time, we will also need to support this vehicle, not just in provinces but in northern territories as well. This is where engagement with Indigenous communities is vital.
We’ll also have several engagements with different communities where our supply chain is also taking part with the companies that are part of Indigenous communities. This is all a part of the Industrial and Technological Benefits Policy, where we have one of the highest scores when it comes to Canadian content, community involvement and a whole bunch of other criteria that we take into account to ensure that we’re not addressing just a specific opportunity, but rather creating a strategic partnership with the government, and obviously with the communities where the ultimate beneficiary is not just the end-user but the community as well.
[Translation]
Senator Youance: My question is for Mr. Nohara and concerns the size of businesses.
Even though you are a small company, you said you have the capacity to respond to a Canadian strategy. You also talked about the need to move to the United States in the early years of your operation.
What guarantee does your company give the Canadian government that your devices and systems sold in Canada will not be controlled by foreign interests or governments, whatever they may be?
[English]
Mr. Nohara: Thank you for the questions.
First, I want to correct a misunderstanding or a translation. We have no plans to move to the United States. We’re a proud Canadian dual-use company, all Canadian-owned intellectual property. We invent on demand and have very large patent portfolios, but we commercialize as well.
The challenge in the United States is selling. When you commercialize and have good products, you need to sell them to keep your people employed and to keep the machinery and production employed.
Selling in Canada has been very difficult. That is even more exacerbated for small companies like ours. We have to work harder to sell into the United States. We’re successful because, again, we tend to find niche areas where our solution sets can excel over competitive solution sets. In some cases, there are no competitors.
It’s just a question of being able to get our mature product to market. For guaranteeing the Canadian government, we’re here to stay. We are focused on the commercial and dual-use side.
We can immediately bring to bear our technologies for key elements of the Defence Industrial Strategy, including the surveillance piece of the Defence Industrial Strategy by enabling organizations like the Department of National Defence and the Canadian Coast Guard, who operate within the borders of the country, as well as on the coast and in the Arctic. We can support and enable all of them.
What we need is for Canada to recognize who is here. Most of them are unknown. Canada will not know about them if they don’t put some effort toward providing a registry for those small companies, marketing it, and at the same time, putting in place a set-aside for much smaller acquisitions to enable — using good business practices that are used around the world, and certainly south of the border — small companies to play alongside large ones.
[Translation]
Senator Youance: My second question is for Mr. Shimonov and follows up on Senator Carignan’s question.
Canada has donated your vehicles to Ukraine. Given their quality, it also donated some to Haiti. Can you tell us more about the maintenance and the whole smart side of these armoured vehicles, using Haiti as an example, if possible?
[English]
Mr. Shimonov: Haiti is the most challenging country to support vehicles in the world because they don’t have any workshops. It’s all under constant threat. Despite that fact, we were able to support hundreds of vehicles that were donated mostly by the United States. The United States bought the vehicles from us. None of the vehicles for Haiti were purchased by the Canadian government, for the record. We support them successfully.
In Ukraine, it’s easier because they have the network. They have more skilled labour than in many other countries. That’s an advantage. It’s not about selling the vehicles. It’s being able to support them throughout this lifecycle. This is what we offer to the Canadian government as well, to support them coast to coast to coast.
The Chair: Thank you.
Senator McNair: Like many of my colleagues, I’m dumbfounded by what I’m hearing today. We’re here to congratulate your efforts in creating successful companies with a complete lack of engagement by DND. This is mind-boggling.
Mr. Nohara, you mentioned the fact is that your company is not known to DND. Can you talk about some of the efforts you and your company have made to try to get your foot in the door or on DND’s radar to return your pun?
Mr. Nohara: Thank you for that, senator.
Let me first roll back time maybe to try and answer that question fairly.
I would say up until about 2015 we were very active with DND through their Defence Research and Development Canada, or DRDC, agency. In fact, we were a darling of DRDC.
At that time, the Department of National Defence wasn’t really purchasing for defence purposes, so the application of DRDC was redirected to focus on law enforcement, border security, search and rescue and homeland applications. Accipiter was very active on the homeland side, and had a great relationship with Defence Research and Development Canada.
What happened after 2015 is that priorities changed to public safety and border security. Border security came out of 9/11. It was the Great Lakes, the Canada-U.S. border and the St. Lawrence Seaway, which was a key piece of almost 15 years of cross-border R&D product development innovation. That’s where we developed our smart surveillance networks from. That was a binational effort on both sides of the border, but it was public safety led. It was RCMP led.
The transition is that we now have the Defence Industrial Strategy. Now it is DND who is moving. It’s how do we inform DND proper, if you will, about the capabilities and the commercial dual-use capabilities that have survived not everybody, but many, in the commercial world? How do we make ourselves known to them? In that context, certainly we have tried to meet your committee, and we also briefed the House of Commons security border management committee last fall. Committees are certainly two places to start.
We have lobbyists, if you will, who are trying to introduce us. That is more recent. We have attended major events hosted by the Canadian Defence Department or the Canadian government in Ottawa and elsewhere. Mostly, those are about receiving the vision that they have and not about engagement in order to play.
There have been many other stakeholders. Funds, for example, might flow down through FedDev Ontario provincially, maybe even down to regional, to colleges and universities. There is quite a bit of what I would call R&D flow moving along, which is good. But it takes years to go from research and development to proven, commercial dual-use technology that can support the military and the coast guard today. That’s where we play, and we don’t have any engagement at that level.
Senator McNair: Thank you.
The Chair: This brings us to the end of our time with this panel. I would like to thank Mr. Shimonov and Mr. Nohara for taking the time to meet with us today. We greatly appreciate your contribution and the time you took to share your knowledge with us.
If you have any written material you wish to share with the committee, we would appreciate it if you would forward this to us. It will be entered into the committee’s final report. We will figure out what is needed and how to incorporate that. I appreciate your frustration, but you can see from committee members that we are equally frustrated in understanding that we have two successful companies that are trying to do the right thing in regard to the needs of our country and are not recognized for doing so.
We are pleased to welcome Pierre Pyun, Vice-President, Government and Industry Affairs, Bombardier; and Cameron Chell, President and CEO, Draganfly Inc. You each have five minutes for your opening remarks.
[Translation]
Pierre Pyun, Vice-President, Government and Industry Affairs, Bombardier: Honourable senators, thank you for the opportunity to speak to you today.
[English]
Bombardier is a leading aircraft manufacturer, headquartered in Montreal, Canada. We employ directly more than 12,000 Canadians in our Canadian operations. They are proud to participate in the Canadian aerospace industry and contribute to making it one of the most pre-eminent, advanced technological sectors in Canada, and a leading aerospace hub on the international scene. They are also proud to have the opportunity to support Canada’s national security objectives. We build aircraft from our Canadian operations, which provide customers around the world with powerful, time-saving and productive machines, but also help countries in their defence capabilities. I’m pleased to appear before this committee today to discuss Canada’s Defence Procurement Strategy and Defence Industrial Strategy.
Bombardier has existed in Canada for nearly 85 years. Innovation is in our DNA, and we’ve proudly developed and received certification for 30 aircraft programs in 30 years, to the highest performance and safety standards. We have indeed established a strong working relationship with Transport Canada.
Bombardier contributes $7.4 billion to Canada’s GDP on an annual basis, and we support close to 50,000 jobs across the country, including our direct employees. That number is over 12,000 direct employees in Canada.
Bombardier’s success is made possible by a robust network of more than 1,500 Canadian suppliers from coast to coast, demonstrating that the company is at the heart of a thriving national aerospace ecosystem.
Our expertise in business aviation also allows us to contribute to airborne defence. An important pillar of our company is to leverage our portfolio of the Challenger and Global families of aircraft with our unparalleled engineering and maintenance expertise to offer business jet solutions for defence missions.
We have decades of experience in this space. Bombardier is known to be a collaborative and flexible partner. We have built long-term partnerships with governments and militaries worldwide, and joined forces with the world’s most advanced mission system providers and integrators.
Bombardier delivers multi-mission, long-range, high-performance aircraft platforms used for different defence-related solutions and other types of specialized solutions, including intelligence, surveillance and reconnaissance, airborne early warning and control, signals intelligence and electronic warfare, medical evacuation and other humanitarian missions.
We are extremely proud that the Government of Canada has recently purchased six Global 6500 aircraft for multi-role missions, including medical evacuation. The National Research Council also purchased a Global 6500 made in Canada to operate as a test bed for Canadian defence-related research development.
Bombardier business aircraft are chosen around the world for defence missions. For example, we are currently working on a project in Germany called PEGASUS for signal intelligence aircraft based on our Canadian-made Global 6500. We have relationships in Sweden, including with Saab for the GlobalEye, which is an airborne early warning solution. We have several relationships in the U.S., including the L3Harris company, who selected the Global 6500 as a platform for airborne early warning called AERIS. Their system is based on our aircraft.
We have a strong relationship with the U.S. Army for next-generation intelligence, surveillance and reconnaissance, or ISR, aircraft. It is a program called High Accuracy Detection and Exploitation System, or HADES. We have a strong relationship with the U.S. Air Force as well. We have delivered nine Battlefield Airborne Communications Node aircraft to the U.S. Air Force. There are several other examples. Switzerland operates a government transportation aircraft, a Global 8000 from Bombardier and also a medical evacuation aircraft — just to give you an example, but there are several other examples.
We also have a worldwide support infrastructure, not only for our civil customers, but also for our government and military customers as well.
[Translation]
Bombardier welcomes Canada’s first Defence Industrial Strategy, and we look forward to working closely with the federal government to bolster our country’s sovereign defence capabilities.
We’re convinced that Bombardier has even more to offer Canada in the coming years. Very few countries have the ability to design, build, certify and maintain aircraft with the highest performance and safety standards. This is a strategic capability that we should all be very proud of.
Canada has a growing need for long-range surveillance aircraft, such as airborne early warning aircraft. This program currently exists in Canada. We firmly believe that our made-in-Canada Global 6500 aircraft is the right choice for this important mission. Two world-class defence companies, Saab and L3 Harris, are bidding on this contract using the Bombardier Global 6500 platform, and we strongly urge the Canadian government to choose a solution based on the made-in-Canada Global 6500 aircraft.
We welcome the Defence Industrial Strategy released earlier this year and the investments announced to strengthen defence industrial capabilities in Canada. The key to achieving that vision and those objectives will be in the implementation. It will take input from the entire ecosystem: the government, the Armed Forces, industry, the academic community and others.
Thank you for your attention. I welcome any questions you may have.
[English]
The Chair: Thank you. Next we’ll hear from Mr. Cameron Chell. The floor is yours, sir. You have five minutes.
Cameron Chell, President and CEO, Draganfly Inc.: Honourable chair, members of the committee, thank you for the opportunity to appear here before you today on behalf of Dragonfly Inc., a Canadian drone technology company with over 25 years of experience. We have supported public safety, critical infrastructure and military operations. We are proud to be a Canadian company that has successfully navigated and secured procurement relationships within the United States Department of War ecosystem, which is one of the most rigorous and competitive procurement environments in the world.
I am here today to, hopefully, be of service by sharing our experience and insights with the committee, with the aim of being a part of helping ensure the success of the new Canadian Defence Industrial Strategy.
Canada is not short on innovation, and it is certainly not short on talent. What we must address, however — decisively — is our ability to mobilize that innovation into scaled, deployable national capability. Because in defence, weapons can win battles, but industrial capacity wins wars and ensures sovereignty.
We are at a pivotal moment in global defence. Modern conflicts, from Ukraine to the Red Sea, are demonstrating that warfare is no longer defined solely by large platforms, but by scalable, rapidly deployable, continuously replenishable and inexpensive systems. Autonomous systems, drones, and digital command networks are no longer emerging technologies; they are now core battlefield infrastructure. Critically, success is not determined by who has the best single system; it is determined by who can produce, adapt, deploy and sustain capability rapidly at scale. It is determined by who can produce them the fastest, the cheapest and adapt the quickest.
This is where Canada has a profound opportunity. This can be Canada’s strategic moment, in my opinion, the gap is procurement versus capability. Canada’s defence procurement system has historically been optimized for large, multi-decade programs, risk minimization through process and incremental acquisition. However, today’s threat environment requires speed over perfection, iteration over static requirements and capability delivery over process compliance.
Working within the U.S. defence procurement system, it is our experience that the key difference is not funding alone — it is alignment created by the U.S. government that is between themselves, the operators and the industry to rapidly deploy new capabilities, learn from it, adapt and then scale. It is this new reality. If Canada is to meet its defence commitments and assert leadership among its allies, there are imperatives that we see as strategic priorities relating to procurement and the Defence Industrial Strategy.
First, recognizing Canadian industry as a strategic asset. Canada must treat its domestic defence and technology companies, in my opinion, not simply as vendors, but as extensions of national capability, critical components of our sovereignty. Our industrial strength and strategy will define our sovereignty going forward. This means faster and innovative contracting pathways, training industries like we train our CAF members, continuously providing programs to bid, build, demonstrate, scale, fail, change, adapt and do it again, recognizing procurement as a strategic weapon. Invest in innovative procurement initiatives and people and allow procurement to have failures, then learn and innovate how we can become a global standard, helping create a deployable industrial capacity as a strategy.
We need to build for scale from day one. We must provide, in my opinion, a path for industry to move beyond pilot programs. This includes contract awards that are granted immediately upon the success of pilots. The MINERVA example is great. A lot of people want to participate, and there is an end goal that, at the end of that goal, there is no contract. What incentive is there for Canadian industry to really get in and take risks, to really get in and innovate for Canada when we know that, at the end of the MINERVA process, we’re going to be waiting a couple of years to find out what happens? And in that time, everything on the battlefield will have changed.
Provide finance mechanisms to scale if pilots are won. If innovative companies win pilots, how do we finance them into being scalable manufacturers? The innovation and talent that we have in this country are abundant, but the support to scale into a manufacturing industrial base is lacking. Without scale, capability is only theoretical in this new world.
Three, we need to build an ecosystem: Industry having direct engagement with operators, meaning war fighters. My engineers — the team I get to work with — need to work directly with the war fighters. What I believe is required now is decisive alignment between policy, procurement and industry. If we get this right, Canada will not simply meet its defence obligations; it will become a critical contributor to allied security in a rapidly changing world. Most importantly, we will ensure that Canada’s capability is not just developed here but developed here for everywhere, scaled and relied upon where it matters most.
Thank you. I look forward to your questions.
The Chair: Thank you. Colleagues, now we’ll move on to questions. Mr. Chell and Mr. Pyun will be with us until 6:12 or so this evening. In that time, we will do our best to allow each member to ask their questions of the witnesses. Four minutes will be allotted for each question, including the answer. As always, I ask you to keep your questions succinct and identify the person you are asking your question to.
[Translation]
Senator Carignan: Thank you very much. Mr. Pyun, you say you have strong relations with the American army, but I don’t hear strong relations with the Canadian army. I find that odd, because Bombardier is a Canadian company. How is it that Canada is choosing Poseidons for surveillance when you offered to adapt the Global 6500, which has a much longer range? The Global can travel 12,500 kilometres, as opposed to the Poseidon, which can only do 5,000 to 6,000 kilometres. To me, it seems inescapably logical to go to Bombardier. How do you see the government allowing Canadian companies to develop a highly competitive product and then, without a call for tenders, choose an American product that is not at the end of its life, but halfway through? That seems to be at odds with what we’re hearing in terms of political discourse.
Mr. Pyun: Thank you for the question.
I would like to make three points on that.
First, the landscape in Canada has changed dramatically, to be quite frank. Defence investments have been announced, given the government’s target of spending 2% of GDP on defence, which aligns with the NATO commitment. It has also committed to reaching 5% of GDP by 2035. The context has changed enormously.
For the first time, there is a defence industrial strategy. In the past, our defence success has been achieved outside of Canada — in the United States, Europe and elsewhere. However, the context has changed. Our relationship with the Armed Forces is getting closer and closer. There is a dialogue and a desire on the part of the Armed Forces to have a dialogue earlier in the process. We recognize that, in order to develop sovereign capabilities, these dialogues must also take place upstream. They must not be too late in the process, otherwise it will lead to solutions that come off the shelf.
I won’t comment on the Canadian multi-mission aircraft project because we’ve turned the page. We want to focus on the future to see how we can work with our own Armed Forces, including the Royal Canadian Air Force, to meet their future needs.
Second, you mentioned the capabilities of our business aircraft. We are seeing a very clear trend in the market right now. The Armed Forces are becoming more interested in the performance of business aircraft as the airborne systems become smaller and smaller. They are also interested in the performance of business aircraft as platforms for carrying out defence missions. Our planes are flying higher. We’re talking about 40,000 and 45,000 feet. They fly faster. Our Global 8000 was certified by Transport Canada last year. It flies at slightly below the speed of sound. We’re talking about MACH 0.95. The Global 8000’s range is 8,000 nautical miles. This means that two points on the planet can be connected without the need for a fuel stop. These benefits become very attractive for the Armed Forces to conduct defence missions. That’s the trend we’re seeing. That is why Bombardier has decided to focus on defence as well. Prior to the launch of Bombardier Defence, we were rather reactive. We now want to be proactive in the face of this clear market trend.
Third, developing sovereign capabilities will require a cultural shift. Appropriate processes will also need to be put in place to get that engagement with industry earlier on. We support the framework put forward in the Defence Industrial Strategy, which is build, partner and buy. However, if the solutions don’t exist in Canada but we want to develop that sovereign capability here, we will have to put processes in place to enable the industry to take action, make investments and put those capabilities in place. It requires a change in culture and process. However, I think there is a desire and an openness to do so. We are ready to work with the government to support these efforts.
[English]
Senator Cardozo: We are doing a study on procurement, and my question is about technology.
There are some who will tell you that the arrival of drones and the rapid advancement of this technology is changing the battlefield completely. I’m wondering if tanks, LAVs, ships, submarines, maybe planes and jets are, almost, yesterday’s technology. These little, low-cost drones, as Mr. Chell talked about, are scalable and can be produced rapidly. Are they an enormous threat to the equipment that we have been using for years? Can they not all be blown up in minutes using drone technology? Why are we spending billions of dollars on jets, tankers, ships and frigates, which can be blown up in seconds by just about anybody who has a drone with a little bomb on it? Mr. Chell, I would ask you to start and then Mr. Pyun.
Mr. Chell: I think very large, single — I’ll call it — precision systems that are procured still certainly have their role and do provide overall dominance for Tier 1 or leading nations. However, if Ukraine is any example, anything with four wheels and a track is now at risk for sure and can be targeted very easily.
You have certainly seen some movements within the U.S. strategy. Light tanks are all but disappearing and gone now from procurement. They are still moving forward with heavy tank systems.
As it relates to frigates and sea power, I think we’re seeing a move to very strong defensive positions on that type of equipment, and there is rapid advancement now to counter drone technology on those ships. We are also seeing offensive ships — ships that take an offensive posture or can even provide blockades — that are now being armed with fewer systems that are homogenous or domestic to that particular system and actually being armed with drones. You have ships that are dual use, just like drones at one time were dual-use drones. You have dual-use ships that now have Sea-Can containers of drones that have multi-hundred-mile strike capability, where they were a simple cargo ship previously. The entire structure has to be re‑examined.
Make no mistake about it: The very expensive, large systems still provide dominance, but they do not provide sustainability in terms of a battle, as we’re seeing in Iran right now.
Senator Cardozo: Thanks. Mr. Pyun?
Mr. Pyun: Thank you for the question.
I think it’s clear, when you look at the future of warfare deterrence and all of that, it’s most likely going to be a combination. It’s increasingly a network approach that we’re talking about, not looking at the assets individually but as part of a connected network that may include manned aircraft, unmanned aircraft and other types of systems.
In my view, I think it will be a combination. It depends on the missions. For Bombardier, our bread and butter is long-range capability, for sure. The aircraft that we have designed and manufacture are long-range, long-endurance aircraft. That will be our space.
In our view, when you look from a deterrence point of view at the vast territory — especially the North — that Canada has to cover, you need those long-range capabilities to complement other capabilities that you will need. I think you’re right; conductive warfare, if you look at what is happening in Ukraine, has evolved extremely fast, and we need to adapt.
If we look at some of the solutions that we have supplied to other countries through our partners, such as airborne early warning, I think the need is still there. We look at demand all over the world, not only in Canada, but in Europe and Asia, for that kind of capability, such as deep sensing, long-endurance aircraft or surveillance. The demand is there for sure, so it will be a combination.
I was reading an article in Foreign Affairs by a former U.S. official, Ms. Seileen Mullen. She expressed some concern around the erosion, even in the U.S., of industrial capacity. There is currently a lot of focus on what we call neo-primes, the technology companies getting into the defence space. You have companies like Anduril Industries, Shield AI and other companies. Then you have the large incumbents, the large U.S. defence contractors like Boeing, General Dynamics, et cetera. She is making the point that you need all of that. One part will not replace the other parts. I think you need capabilities all across the board.
Senator M. Deacon: Thank you.
Chair, I would certainly like to first inform the committee that a relative of mine is employed with Mr. Chell from Draganfly, who is testifying here on behalf of drone leadership. I wanted to let you know that. I did consult with the Senate Ethics Officer about this. Out of an abundance of caution and to avoid any risk of impropriety, I will not be asking Mr. Chell any questions. I do thank you very much for being here today.
So, over to you Mr. Pyun. Thank you so much. I would like to get some more details. You talked about this earlier on the GlobalEye partnership with Saab. Is this all conditional on Canada buying the Gripen fighter jets and the GlobalEye aircraft? If the partnership does go forward, will Bombardier be producing these planes for all of our NATO allies who order them?
Mr. Pyun: Thank you for the question. Our partnership with Saab goes back several years ago on the GlobalEye. We have been working with Saab for many years. Essentially the model that we have adopted, which is similar to other defence projects we are involved in, we supply the base aircraft, so the Global 6500 is assembled in Toronto. We have a brand new facility at Pearson Airport. That’s where all the global aircraft models are assembled.
For defence purposes, we take aircraft — we call them green, so not completed but certified to fly — from our Toronto assembly line, and then they are sent, depending on the project, somewhere else for modifications. We provide engineering services and data support and all this to make the modifications. Sometimes we do the modifications ourselves, depending on the project.
In the case of Saab, they are sent to Sweden. Then, in Sweden, our partner makes the modification and system integration to deliver the end product, the GlobalEye.
I should also point out we are on another solution that is also competing for airborne early-warning programs, including here in Canada. It’s with L3. It is a system integrator. They have selected the Global 6500 as their base platform. They have a product called the AERIS X aircraft, actually. Just recently they won a procurement in South Korea. South Korea has an airborne early-warning aircraft program, and they selected the L3 solution with our aircraft. The GlobalEye has been delivered to a few countries, like the UAE. France and Sweden have ordered those aircraft.
In terms of whether it’s connected to the Gripen, we’re really focused on our relationship with Saab and the GlobalEye, which is a long-standing relationship. I think you would have to ask Saab whether there is a connection or not. We’re not really in the fighter jet business, so our focus has been on the GlobalEye.
They are exported, fortunately, as well. I think Saab has made some public comments around doing more of the work on the GlobalEye here in Canada going forward, for the Canadian market, but also for the export market.
Senator M. Deacon: Thank you very much. Let me, if I could, dive in there a little bit. Thank you for that clarification. I’m going to shift a little bit to the supply chain thinking about the product.
We’re in this tariff game. We didn’t choose it. Nobody ordered it up. We are certainly dragged into a trade situation. I’m trying to understand, in particular, around tariffs on aluminum and steel. How have you had to adjust and find stability when delivering on orders with somewhat long-time horizons?
Mr. Pyun: It’s a good question. We do have an integrated supply chain for our aircraft. So all our aircraft models are assembled in Canada and completed in Canada, so between Toronto and our Montreal operations. However, when you look at the bill of materials or the components going into the aircraft, they come from different jurisdictions, including from the U.S. We have a very strong presence in the U.S. The U.S. has a prominent aerospace industry.
By the way, it is, I believe, their only major manufacturing sector that shows a substantial trade surplus with the world. It is in the order of $75 billion U.S. dollars every year, so the U.S. aerospace and defence industry is hugely successful.
All this to say that when you look at the tariff regimes in the U.S., there are exemptions currently in place for aerospace and for aircraft, so our aircraft are going into the U.S. market tariff-free.
Now, with respect to parts, it’s a bit more complicated. Parts that are dedicated to aerospace, by and large they are exempted from the various tariffs. However, for parts that are more generic and fall under different tariff lines, it’s complicated, so there could be a tariff applicable to those parts.
By and large, we have been able to navigate through all this.
Senator M. Deacon: Thank you.
Senator Kutcher: Seeing as I don’t have a relative who works for your company, Mr. Chell, I will ask you a couple of questions. I certainly agree that we’re living in a different threat environment and that we have a long-standing inability to support at scale in Canada not only in your industry but in numerous industries as well. It seems to be a common Canadian condition.
I just got back from Ukraine, where I learned more about drones in one week than I have learned to date in the last year, including what it’s like to be on the receiving end. It is not pleasant.
But I have learned that drones must be proven on the battlefield.
Mr. Chell: Yes, sir.
Senator Kutcher: Surveillance attack and defence, each of these issues evolved exceedingly rapidly.
How can Canadian companies get this battlefield experience? Second, given that there are such rapid changes in UAVs that occur as a result of those experiences, could a product be obsolete by the time it gets to the battlefield if the recruitment process is so slow, as we have experienced it? Are there any solutions that you would put into place to mitigate against that problem?
Mr. Chell: Thank you for your question, sir. Thanks for your visit to Ukraine. Draganfly has been boots on the ground in Ukraine since 2022. The majority of our particular types of drones are designed from our experience in those contested areas in Ukraine. We believe that some of the engagements that we have — one in particular with the U.S. Department of War — have been a direct result of not just that design work, but also the understanding of the concepts of operations that we have brought to that customer, not just in terms of their confidence that we have had some experience with it, but actually insights that we have been able to be of service and provide.
Without overdisclosing, I can tell you that we do have an engagement within the Department of War, where we’re building manufacturing capacity on U.S. foreign bases. Those are the actual manufacturing of Draganfly drones by service members. We are training them how to do that. We are training them how to do maintenance. We are training them how to modify.
Currently in theatre in Ukraine, as I’m sure you know having been there, a drone will iterate every 10 days. It’s completely obsolete in 10 days. How do you provide a mass of drones through the types of procurement systems we have today that have to change every 10 days?
An active brigade can go through as many as 180,000 drones per month. We have been very fortunate to be part of helping design a very unique supply chain system with a particular, sizeable special forces area with the Department of War, where they are manufacturing on base. But then we’re actually manufacturing back on continent, so they have the scale, and we’re updating, as they are updating. Then, as they have a requirement or if they have an immediate procurement need or if they see a requirement coming for an immediate deployment of large scale, then we ship. We are actually integrated into their supply chain.
We’re doing that with two different brigades within the U.S. right now. It’s a bit of an experiment. But we’re very proud there is a Canadian company that was able to win that.
Senator Ince: Thank you. I have two questions; one for Mr. Chell and one for you, sir. Mr. Chell, I’m just wondering, is your company considering diversifying in terms of not just air drones, but anything under water or anything like that?
Mr. Chell: We are not going under water. That does require an incredible specialty that we’re not equipped to manage at the precision that a fighter would require at this time. However, surface vehicles like drones, for sure. We’re active in that space now, more providing air drone capabilities to surface vehicles, but we have autonomous systems today that can work for service vehicles. We have active pilot engagements involving that. As my client and colleague from Bombardier pointed out, everything is connected now. Everything is a system, so everything is a piece of information and data connecting to another device. Autonomy is really the superscale of what we’re in. Air drones are the pointiest end of the stick. Surface vehicles and ground vehicles are next. Then, under water vehicles, and in less than five years, it will be humanoids.
Senator Ince: Over the past five years, how many successful and unsuccessful bids for Canadian defence procurement projects have involved Bombardier?
Mr. Pyun: Our relationship with the Royal Canadian Air Force has been around multi-role aircraft, so the Canadian government operates a fleet of Challenger aircraft. A few years ago, we supplied two Challenger aircraft to replace older Challenger aircraft. Then, more recently, in December of last year, we announced a contract to replace the Challenger aircraft by the Global aircraft. In my opening statements, I alluded to that. That project is the Airlift Capability Project —Multi-role Flight Service, so they would be used for medical evacuation and so on and so forth.
We made a reference to the Canadian Multi-Mission Aircraft project. At that time we did not bid because there was an RFP. It was a sole-source contract that went to Boeing. I said we kind of turned the page, but if you go back to a few years ago, we were calling for an RFP for that so that the Canadian solution that we were proposing could be considered. But the government decided to go sole-source, so essentially, that gives you our activities in Canada over the last five years.
I should just maybe add to that. Recently, we announced a contract with the National Research Council Canada, or NRC, so NRC will be working closely with the Canadian Armed Forces using the aircraft that we’re supplying. It’s a Global 6500. There will be modifications made to the aircraft to test and develop the defence systems on the aircraft. We are very excited about this because we feel it’s going to help our position. The Global 6500 has been a platform of choice around the world for defence applications in Canada, so this strengthens the positioning of aircraft in Canada to also become a platform of choice for defence applications here.
Senator Ince: Thank you both, gentlemen, for all the work that you do. Thank you.
Senator Dasko: I would like to ask you, sir, about Bombardier’s production in Canada and with respect to military production. What percentage are you producing now that is military oriented versus non-military activity?
Mr. Pyun: As I explained, our business is intertwined because the assembly lines for the aircraft are the same, so we take aircraft from the commercial assembly lines, and then modifications are made for defence applications. But last year, we generated around $1 billion U.S. dollars from our defence activities, so we delivered around 16 defence aircraft. In total, Bombardier delivered 157 aircraft last year, and 16 of those, around 10%, were for defence applications. It generated around $1 billion U.S. dollars of revenue. Bombardier generated around $10 billion U.S. dollars of revenue in total last year, so around 10% came from defence. As our CEO said on the earnings call regarding the 2025 results, a few years ago, we thought it would take more time to reach $1 billion U.S. in revenue from defence. We reached that faster than we anticipated. Last year there were orders totalling 24 or 25 aircraft for defence. I think the prospects are quite good. The demand keeps expanding in defence.
Senator Dasko: That’s partly because of Canada’s larger commitment, too.
Mr. Pyun: Absolutely. The 24 orders, last year, included the Canadian aircraft, indeed.
Senator Dasko: Did I hear you correctly when you said you do all of your production in Canada? You must do some in other countries as well?
Mr. Pyun: We do have facilities elsewhere for parts production. In the U.S., we have two manufacturing facilities. We have manufacturing facilities in Mexico as well, but the final assembly and the completion of the aircraft are all done in Canada for all our aircraft models. You have input coming from different places.
Senator Dasko: Thank you.
Senator Kutcher: I’d like to follow up with Mr. Chell. Yes, your products are battlefield-tested. I have two questions. What percentage of the products the Canadian Armed Forces procure are actually battlefield tested? Any idea about that?
The second thing is: We have heard that there are many barriers to rapid and efficient procurement in Canada. Mr. Pyun, you can chime in on this one. In your opinion what are the top two or three things that Canada can do to remove those barriers going forward?
Mr. Chell: Thank you for your question. In terms of medium or smaller businesses, or those smaller technology companies, which I would put us in the category of, if we think about the size of Bombardier compared to a company like ours, I think the first thing is meaningful challenges that have contract awards at the end. It’s great to have this construct of MINERVA and BOREALIS coming out, which I want to applaud the Canadian Armed Forces and the Department of National Defence for. However, the distinct difference between what is happening in the U.S., which is proving to be successful, and what is happening in Canada is that, in the U.S., there is a prize at the end. There is a goal. There is a contract. What is interesting about that contract, in the first of what they call the gauntlet, which Draganfly was downselected for, none of those machines are going to hit the battlefield because they are not battlefield tested. But the U.S. defence department still supports the production of those so that industry learns how to build battlefield equipment. They are training industry like they are training their war fighters, and I believe we need to do the same. I think there have been some great steps taken forward in that direction.
The second thing we need to do is to have industry interact directly with war fighters — with the operator, if you will. The greatest experience we get when we’re in Europe or Ukraine or other places we embed is actual experience with the operator. That the equipment is a great piece of equipment, but if you have a backpack that doesn’t work in the Arctic because you have gloves on that are too big, it doesn’t help. Getting that experience doesn’t just help us be better manufacturers, but it also helps us build trusted relationships. Trust on the battlefield is everything. If we can convey that trust right back into the industrial base, that “Oh, my gosh. This is a Canadian product, and I know the people that built it.” That’s the type of relationship that I believe will help us be successful.
Finally, we need a financing mechanism to help not just innovate great products. We innovate great products in this country. There are a lot of programs out there to innovate. There are, seemingly, very few programs to move to scale. How do we become a manufacturer? You did identify that in your first opening question. Those are the three things that I think we should be focusing on. I do want to throw out full kudos to the Defence Industrial Strategy and the posture that we have been afforded recently with the Canadian Armed Forces and their enthusiasm for this type of environment. We appreciate it.
Mr. Pyun: To build on what Mr. Chell was saying, when we look at defence investments going into innovation here in Canada, in my view, there is some distance to go.
I think in the U.S. the spending on innovation in defence is 15% of their total defence spend. I think in some European countries it’s around that percentage as well; 15% to 20%. I think in Canada — I haven’t seen reliable stats — but it’s less than 5%.
I also commend the Defence Industrial Strategy because it’s one of the pillars to increase investment in innovation in defence.
But I completely agree that, currently, we need pathways to commercialize new technologies. I think our traditional posture with respect to supporting innovation across all sectors has been more a push kind of approach, or a supply-side policy.
Procurement can be leveraged to create demand as well, so like a demand-side kind of policy, like a pull approach. I think, in defence, you need to link up the two because, otherwise, you invest in the technology, and you’re not sure whether your own Armed Forces will be actually buying the technology that you’ll be investing in.
I would also add that in many domains the Canadian market is not a huge market. You need support for exports as well. That support needs to be really considered upstream. Published last year, the Strategic Defence Review of the U.K. made that point. Exports have to be considered upstream.
When you determine which areas you are going to be investing in because you want to develop sovereign capabilities, mind you, Canada cannot be the jack of all trades. We will need to be very shrewd in selecting areas where we have competitive strengths; I would argue aerospace is one of them, where you want to leverage that and keep on building on that. But you’ll need scale as well, and that’s where exports come into play.
If you decide to invest in this, you will need — right from the get-go — to use every channel and lever to support exports as well. In my view, it’s going to make Canada more relevant and dependable internationally if we have technologies to support our allies as well.
I think the pathways to commercializing innovation and defence need to be developed. I think there’s a recognition that there is some work to be done in this area because our procurement system has been more geared toward buying off the shelf and not getting involved in more developmental-type projects.
To also respond to your question, we made some recommendations on how to improve the procurement process based on what we’ve seen around the world.
For instance, the RFP documents tend to be very lengthy in Canada. I think there is a tendency to be overprescriptive in terms of design requirements; whereas in some other countries we’re seeing more performance-based and outcome-based requirements, giving more scope and latitude to suppliers to innovate as well, as long as you meet the overall objectives. That’s one area where we see room for some work here in Canada.
Also, we’ve seen some models; you would call these standing offers in Canada. But we see in other markets, including the U.S., for large-scale and sizeable pieces of equipment, the use of an Indefinite Delivery, Indefinite Quantity, or IDIQ, contract. They’re similar to standing offers for indefinite duration, indefinite quantity contracts. You have a framework contract from which you can pull every time you place an order. I’ll leave it at that. Otherwise, I think it is more innovation partnership models, as I was explaining.
Senator Cardozo: Mr. Chell, could you share with us more about where you see drone technology being in two or three years? My sense is it has grown enormously in the past year, literally. Where do you expect to see it in the next two to three years?
Mr. Pyun, your last comment about the RFP process, could you tell us whether things are improving with the new agency and the new priority that we have?
Mr. Chell: Thank you for your question.
Certainly, the drone industry, I’ll address the question in two quick ways. To speak to Mr. Pyun’s comments about where we specialize, I think drones in the Arctic is a specialty wherein Canada can become a world-class player and have a significant export market.
The Arctic has the harshest environment in the world. So drones are more relevant in that environment to give you operational capability than anywhere else. I think you will see these low-cost drones taking on more and more sophisticated missions as the supply chains become more and more secure and lower cost.
I think autonomy will play a greater role across all drone systems and communications will be key. Every drone will be connected. Of course, if you’ve got airborne drones that can be relatively long range, certainly not long range in terms of what Bombardier does, but then they just don’t become surveillance hubs, but they become communication hubs. They also become strike and defensive at the same time.
I think you’re looking at an interconnected world of air, ground and surface drones that can really perform mass precision strike, surveillance and defence at a cost that’s sustainable.
I think you’ll continue to see commercial types of equipment used in those environments hardened.
Senator Cardozo: Thank you.
Mr. Pyun: To respond to your question, yes, we’ve seen changes and improvements. The examples of the recent projects that we announced with the Canadian government, the global aircraft for the Royal Canadian Air Force to replace the Challenger aircraft, it was one of the first projects done through the Defence Investment Agency, the DIA.
We’ve seen the velocity at which they negotiated this contract with us, and I would say the same for the NRC defence research aircraft as well.
The Chair: This brings us to the end of our panel discussion. Thank you, Mr. Pyun and Mr. Chell, for taking the time to join us today and sharing much of your knowledge. We greatly appreciate the time you have spent with us today.
If you have any other points you wish to share with us that we didn’t ask you about, you can certainly write and send it to the clerk of the committee. We’ll be happy to consider that as we produce our report in the end.
Colleagues, this is our final item for consideration this evening.
For the draft report of the committee’s study on the impacts of Russia’s disinformation on Canada, I propose we move in camera to discuss this item. Are members in agreement for doing so?
Hon. Senators: Agreed.
(The committee continued in camera.)