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Innovation Canada: A Call to Action
Special Report on Procurement



The main current and planned purchases for the Canadian Forces include the maritime helicopter project, the F35 Joint Strike Fighter, Arctic/offshore patrol ships, frigate life extension, strategic and tactical airlift fleets, medium-to-heavy-lift helicopters, medium-sized logistics trucks, joint support ship, tank acquisitions, armoured vehicle acquisitions, and land combat vehicles.

One of the areas identified by the Expert Panel as meriting particular attention in its Review of Federal Support to Research and Development is the use of federal procurement to support business innovation. Procurement can be important in promoting business innovation because it is a complementary demand-pull instrument with greater direct business impact than supply-push programs. This view has been reinforced during consultations with stakeholders and in discussions with policymakers in other countries.

The Panel has also focussed on procurement because of the unique and unprecedented opportunity of using the federal government's expenditure of $240 billion (publicly stated amount) on defence and security to increase the technological capabilities of Canadian industry. In this connection, the Government of Canada made a commitment in Budget 2011 to develop "a procurement strategy, in consultation with industry, to maximize job creation, support Canadian manufacturing capabilities and innovation and bolster economic growth in Canada."

As follow-up to this commitment, the Minister of Public Works and Government Services has asked the Minister of State for Science and Technology to task the Panel, in consultation with the business community, for advice specifically on better leveraging of the government's defence procurement spending in order to help achieve these objectives. There is therefore an opportunity to develop a defence industry strategy that takes advantage of major equipment purchases, while at the same time putting in place a complementary, more broadly based, long-term system of support for small and medium-sized enterprises (SMEs) seeking to integrate themselves into global value chains.