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Canadian Association of Defence and Security Industries (CADSI)

Submission — Canadian Association of Defence and Security Industries (CADSI)

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Submitter(s): Page, Tim

Summary: The Canadian defence and security industries contributes over 90,000 direct jobs, $10 billion in output and $5 billion to $7.5 billion in exports to the Canadian economy each year. Despite its already substantial investments in R&D, there exists significant untapped R&D, innovation and economic potential in the industry. Because of the unique nature of the defence and security industries, this potential can only be released by a direct, industry development strategy in which government and industry collaborate in pursuing common technological development objectives to serve Canada's future defence and national security requirements. This is because all developed nations, including Canada, operate a managed defence and security market using the WTO exception to national treatment for defence and security requirements to maximize the economic pay-off to their country from these government expenditures, and to obtain the security benefits of relying on home grown technologies for the defence of their country.

Accordingly the Canadian defence and security industries propose that the government adopt a five point program to fulfill the government's commitment in the Canada First Defence Strategy to use the government's planned $240 billion investment in defence and its other investments in security over the next 20 years to build global excellence and leverage Canada's industrial competitive advantage:

  1. Coordinate the existing, disparate R&D support programs into a synergistic, powerful vehicle to achieve a much more ambitious and targeted defence and security R&D and industry development strategy;
  2. Adopt four key improvements to the SRED tax credit program to increase the productivity of the experimental development feature, to permit tax credits to flow earlier in the technology development cycle where they are most needed, and to coordinate more effectively with the IRAP Program;
  3. Stimulate increased collaboration between individual companies and university research teams on joint research missions through new or refocused university grant programs, improvements to IP policies, and changes to the IRAP program;
  4. Strengthen the ability of the venture capital industry to provide the level of domestic and foreign expert risk financing required in defence and security industries to bridge the "valley of death" between R&D discoveries and successful market penetration, especially for SMEs; and,
  5. Transform the current approach to Industrial and Regional Benefits policy into a powerful engine for funding the development and commercialization of new defence and security technologies and industrial capabilities through a new arms-length commercialization agency.

Full submission: PDF Version