Official Hansard
Mr. Speaker, I will be sharing my time with the member for Riding Mountain. I am pleased to rise today on behalf of my constituents in Beauport—Limoilou to speak to Bill C-40, the strengthening Canada’s defence sector act. Last week, I was back in my riding with my colleagues from Québec Centre and Louis-Hébert. We held a round table with businesses from across the greater Quebec City region. The word that came up most often was “predictability”. Businesses want greater predictability so that they can make informed decisions. I will come back to this theme often in my speech, particularly as it relates to the needs of businesses. Bill C‑40 is built on three fundamental pillars: production, procurement and investments in relation to national defence and national security. One of its aims is to modernize our policy instruments by creating a Canadian corporation for defence investment and expanding the scope of the Defence Production Act to more explicitly address matters relating to national security, services, certain types of infrastructure, investment and economic security. Beyond the legislative provisions themselves, today I would like to talk about something that I believe is essential: the difference between being involved and being committed. There is an important distinction between being involved and being committed. There are many ways to work on a project. One can choose either to be involved or to be committed. Some members may be wondering what the difference is. Let me share a little family anecdote that may bring a smile to their faces. I grew up on a dairy farm. When I was young, my father used a simple analogy to explain the distinction to me. He would tell me that, at breakfast, the chicken is involved, but the pig is committed. I think members can appreciate the distinction I am drawing here. That analogy has stayed with me throughout my life. At its core, being involved means contributing to a project. Being committed means accepting the responsibility to devote the necessary resources, take risks and assume greater accountability to ensure its success. Depending on the circumstances, a government may choose either to be involved or to be committed. With this bill, we are talking about a concrete commitment in three areas: production, procurement and investment. It is a commitment to our defence, our national security and our economic security. How is that commitment being put into action? This bill sets out the financial tools that would allow the government to intervene in various ways to support the development of our defence industry, particularly by providing loans to support industrial projects and strategic investments; making advance payments to make it easier for certain projects to get off the ground; offering financial guarantees, such as loan guarantees, loan insurance or credit insurance; and buying, holding and selling shares and other financial instruments that make it possible to participate in funding certain businesses and projects. Why is that important? It is important because these tools will enable strategic projects to get off the ground, whereas they might otherwise have struggled to secure the funding they need. To fully understand the significance of this change, we need to put ourselves in the shoes of businesses and consider the economic reality they face. All too often, the government issues calls for tenders to procure equipment or specialized services, only to find that there are too few companies willing or able to bid. Why is that? It is because bidding for these contracts often requires substantial front-end investment by businesses, while the predictability of future orders is not always satisfactory. Allow me to provide a concrete example. A Canadian company is hoping to secure a major defence contract. To be competitive, it may have to purchase new equipment, modernize its production line, expand its facilities and recruit and train specialized workers. All of that requires significant investment, often amounting to millions of dollars. We are talking about our SMEs here in Canada. Before making this kind of investment, a company must conduct a thorough financial analysis and ask itself some fundamental questions. Will this investment be profitable? Will future revenues enable them to repay the amounts invested, when it comes to loans? Above all, will the contracts be predictable enough to justify the expense? A company cannot invest millions of dollars based solely on hope. As we know, hope is not a strategy. This reasoning applies to financial institutions as well. Naturally, a bank analyzes the profitability of the project when it lends money to a business. The bank is primarily interested in the business’ ability to repay the loan and its long-term viability. Why? The reason is simple. It wants to ensure that the business will be able to repay its loans. Banks will not lend money to a business that takes on too much debt or manages its debt poorly. That is how financing works in our economy. That is precisely where the tools in this bill can make a difference. It will create predictability to stimulate investment, particularly by allowing loans, guarantees and other forms of financial support that will help reduce some risks associated with investments in the defence sector. This can facilitate access to financing, encourage businesses to modernize their facilities and give them more confidence to develop their production capacity. The goal is not to replace private investment with public investment. Rather, it is about creating the conditions that enable more private capital to be mobilized to serve strategic priorities. In other words, it is about using the government’s financial tools to incentivize investments that might otherwise be delayed or never realized. Just last summer, I met with the owners of a business I used to know that was unable to bid on contracts because it did not have access to bank loans. Today, it can do so thanks to the BDC, a financial tool of the government. This company has adapted and is able to access the market. In Canada, we have tremendous strengths. We have knowledge, with one of the most educated populations in the world. We have innovation through dynamic entrepreneurs, researchers and technology companies. We have the natural resources and strategic materials needed for industrial production. We also have recognized expertise in sectors such as aerospace, shipbuilding, advanced technologies and specialized manufacturing. I am thinking of the Davie shipyard in the greater Quebec City area. Most importantly, we have women and men who have the talent, skills and ambition to grow these industries. However, as we know, having these assets is not enough. We still need to be able to mobilize them, connect them and give them the means to contribute to our national objectives. At the end of the day, our national security also depends on our industrial capacity. It depends on our ability to produce, innovate, procure and maintain strategic skills and technologies here in Canada. I will close with that analogy my father used when I was young: There is a difference between being involved and being committed. Being involved means participating. Being committed means being prepared to invest the necessary resources and take the necessary steps to achieve one’s objectives. That is the lens through which I see the measures proposed in Bill C‑40, which would give Canada new tools to support our defence industry, stimulate investment, and strengthen our national security and our economy. Canada’s ability to defend itself does not depend solely on the equipment we buy. It also depends on our ability to design, manufacture, maintain and upgrade that equipment right here in Canada. Achieving that requires more than just wanting a stronger defence industry; it means giving that industry what it needs to realize its ambitions and grow.
