Build Upon Economic Strength of Defence and Security Sector: CADSI

KPMG report bolsters case for Defence Industrial Strategy for Canada

OTTAWA, Sept. 27, 2012 /CNW/ - The Canadian Association of Defence and Security Industries (CADSI) today released Economic Impact of Defence and Security Industry in Canada - a report prepared by KPMG illustrating the significant strength and impact of the sector - at a speech to the Economic Club of Canada by Mike Greenley, Vice President International of General Dynamics C4 Systems and Chair of the Board of CADSI.

"This third party has independently verified what we in the sector, and policy makers in the government, know intuitively," said Mr. Greenley.  "The defence and security industry is vibrant and growing, creating knowledge-based jobs, driving innovation, generating export and tax revenue, and contributing positively to our national sovereignty and security interests."

"Our industry's positive economic position is encouraging," said Tim Page, CADSI President.  "But our contribution can be even greater in all regions of Canada."

CADSI continues to advocate the creation and implementation of a Defence Industrial Strategy, including a whole-of-government policy framework for defence procurement, focused around domestic procurement of Key Industrial Capability (KIC) areas.  Such a strategy would help leverage defence spending to acquire military equipment for our men and women in uniform in a way that strengthens Canada's economy, sovereignty and security interests.  It would also enhance the sector's ability to export and innovate, which remain critical to the sector's competitiveness.

"In a global managed market, government and industry have to work together for success," Mr. Page said.  "Other governments around the world treat their defence and security industries as vital players that are integral to both their domestic economies and their national security interests.  They work closely with them to ensure they are internationally competitive, a process that begins with purchasing from a proven industrial base at home, in cases where it meets the defined military requirement.  Canada should be no less pragmatic in its approach."

CADSI retained KPMG to assess the economic impact of the Canadian defence and security industry, and to develop an economic impact model for future use. KPMG surveyed CADSI members and worked with the Statistics Canada input-output model to arrive at its findings.  Mr. Greenley highlighted several key findings in his speech, including that for every billion dollars spent with Canadian defence and security firms:

• $710 million of GDP is created;
• $1 billion of additional export revenue is created;
• 18,000 jobs are created or sustained in Canada; and
• $428M of tax revenue is returned into Canada.

KEY CADSI MESSAGES TO THE FEDERAL GOVERNMENT

• The Government has committed to rebuild the Canadian Forces via a 20 year investment plan (The Canada First Defence Strategy)
• The Government has committed to do so in a way that "maximizes jobs, innovation and economic activity in Canada" from defence spending (federal Budget 2011)
• The Government's economic action plan calls on the private sector to play the lead role in job creation, stimulating economic activity in Canada and succeeding in export markets (federal Budget 2012)
• Canada's defence and security industries are fully committed to support the government's agenda and have the capability and capacity to make a difference
• CADSI's recently commissioned KPMG study on the economic impact of our sector in Canada confirmed that for every $1B the Government spends on defence and security with Canadian firms:
• $710M of GDP is created
• $1B of additional export revenue is created
• 18,000 jobs are created or sustained in Canada
• $428M of tax revenue is returned to Canada
• In 2011, the sector employed 109,000 Canadians within many of the country's leading industrial sectors and in communities across the country. The sector generated in excess of $12.6B in revenue in 2011
• The sector is capable of creating many more knowledge-based jobs, further enhancing innovation and competitiveness in the economy and capturing significant export opportunities
• This will occur when the Government succeeds in aligning and implementing its CFDS, economic action plan and its Budget 2011 commitments of creating a defence procurement strategy
• Exports are key to the sector's competitiveness and, in a globally managed defence market, our Government's support is essential to achieve the sector's 5 year target of growing export revenues from 50% to 75% of a growing total industry revenue
• Export success, in our world, is also enabled when our own federal government is a buyer of our goods, technologies and services
• It is therefore very important for us that the Canadian government thinks and acts strategically to employ Canadian industry in a meaningful way in Canada's defence procurement plans from the very beginning of the procurement process
• That is why we have called on the Government to create a procurement strategy built around key industrial capabilities that aligns with Canada's sovereign, security and economic interests
• That federal R&D programs, the IRB program and export strategies form key elements of a whole of government approach to maximizing jobs in Canada from defence spending
• To improve the success rate of defence procurements CADSI has also recommended a vastly improved options analysis activity within the procurement process that properly accesses the requirement, industry capability in Canada, project cost, risk, schedule that are part of a Defence Procurement Strategy that aligns with the government's economic and security objectives
• Time is of the essence. Coming up with a plan and executing it after all the CFDS money has been spent won't produce the outcome the Government expects and Canada's defence and security industries are ready to deliver

The following link will lead you to the report:
https://www.defenceandsecurity.ca/UserFiles/File/IE/KPMG.html

CADSI is the voice of Canada's defence and security industries. CADSI represents over 900 member companies who are essential contributors to Canada's national defence and security. The sectors employs 109, 000 Canadians and generated over 12.6 billion dollars to the Canadian economy in 2011.

For more information on CADSI visit:  https://www.defenceandsecurity.ca

SOURCE: Canadian Association of Defence and Security Industries (CADSI)

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