Nancy Southern, CEO of ATCO, speaks during a panel discussion at the Canadian Club in Toronto, on May 27.Cole Burston/The Globe and Mail
Prominent Canadian business leaders with interests in the defence industry are calling for a major reinvestment in the sector in Canada, arguing the country can boost its prosperity and security in tandem by making the most of its existing skills and resources.
At an event hosted Tuesday by the Canadian Club Toronto, the chief executive officers of aerospace giant Bombardier Inc. BBD-B-T, Alberta-based energy and engineering company ATCO Ltd. ACO-X-T, and major Canadian pension fund manager Ontario Municipal Employees Retirement System (OMERS) urged the new federal government to seize on a moment of national unity to jumpstart Canada’s lagging investment and innovation in the sector.
Rebuilding Canada’s domestic defence industries could be the “best way to kickstart the economy and get productivity and prosperity back into our concepts and thinking,” said Nancy Southern, ATCO’s chair and CEO.
Prime Minister Mark Carney’s government should get to the table quickly with businesses, labour groups, investors, military experts, academics and the Bank of Canada to outline a plan, then “send us all away to figure it out,” Ms. Southern said.
She added that “we don’t have any time to waste. We’ve been navel gazing for the past 10 years.”
Each of the three companies represented at Tuesday’s event could play a key role – and have much to gain – if Canada ramps up defence spending.
Bombardier makes military-grade aircraft. ATCO operates Arctic radar stations and supplies services for military operations, while OMERS and other major Canadian pension funds have been under pressure to invest more in domestic infrastructure.
Bombardier CEO Éric Martel said Canada has clear advantages when it comes to building a stronger defence base.
“First of all, we have the skill set,” including schools that churn out well-trained engineers with specialties such as aerospace, as well as skilled trades, he said. If Canada succeeds, “it’s going to be job creation in the country, and they’re good jobs.”
The assembled CEOs also noted that Canada has fallen short on its defence commitments by tens of billions of dollars. Even though Canada has outsourced the purchase of most of its military and defence equipment to the U.S., its underspending on the NATO and NORAD alliances have drawn rebukes from President Donald Trump.
“It’s not just Trump’s pointing this out that should activate Canadians. We’ve let down our allies everywhere. We’ve let down our country everywhere,” said OMERS CEO Blake Hutcheson, who oversees a $138-billion pension fund manager that invests 19 per cent of its assets in Canada. “We’ve got to show up.”
Mr. Hutcheson said that OMERS is “all in, in Canada,” and all else being equal would like to invest more in the country, but said Canada’s major pension funds have to be mindful of the risk and reward of any investment and of having enough diversity in their portfolios to protect pensioners.
In Tuesday’s Throne Speech, the federal government announced that Canada will participate in the European Union’s ReArm Europe initiative. EU defence ministers have formally approved the creation of a €150-billion ($234-billion) loan facility for joint weapons procurement, part of a larger European effort to scale up defence production in response to geopolitical risks.
Bombardier’s Mr. Martel said he is confident that the funding to build up Canada’s defence capabilities will flow once the right conditions for investment are in place.
“The capital exists in Canada. It’s a question of willingness and priority and deciding to say this is what we’re focusing on,” he told reporters after Tuesday’s event. “We’re going to get it done.”
A sharper focus on economic priorities from Canada’s new government has been a welcome signal to Canada’s business community, said Goldy Hyder, president and CEO of the Business Council of Canada.
“We have seen – very early days – a high degree of engagement with the business community,” he said, but cautioned that “this is not about the short term. It’s very much about getting it right for the long term.”
But, Mr. Hyder added, “the opportunity’s there to do that with this government and with this Prime Minister.”