By Kenneth Epps
As a further response to the sorry state of Canada’s defence procurement process, on February 19 the government announced the establishment of an “interim” Defence Analytics Institute (DAI), which will be jointly hosted by the University of Calgary and the Canadian Defence and Foreign Affairs Institute. The Institute’s interim board of directors will be chaired by Tom Jenkins of OpenText Corporation in Waterloo.
There is no arguing with the necessity of the institute’s mandate, “to provide expert analysis to help inform various aspects of the defence procurement process.” Recent concerns with major procurement programs—most prominently the deeply troubling jet fighter aircraft replacement process that remains unresolved—have forced the government to seek informed insight to assist its new Defence Procurement Strategy. Relevant research and expert analysis should be welcomed by everyone supporting reform of a procurement system so prone to failure.
The government-appointed tasks for the DAI include research on the “Canadian defence industrial base” and providing “insights on technological trends in global defence.” While these are well and good, the institute must escape a narrow interpretation of its mandate if it is to prompt and inform public interest in, and debate on, Canada’s defence procurement and military exports. By taking advantage of its interim status, the institute could define its structure and work to include:
- A DAI Board of Directors that better represents all the stakeholders in Canadian defence procurement. Although the institute is intended to be “arms-length” from government, the interim Board is not arms-length from the industry that stands to gain the most from institute activities. Over half the interim directors are industry representatives and the remaining are academics. No one on the interim Board represents civil society or labour or is an independent expert in government procurement. Best practices in corporate governance call for the inclusion of independent views to both challenge insider directors and bring forward new ideas. An institute backed by public funding should reflect these broader public interests.
- The study of the social and political context and impact of defence procurement and spending. The current DAI stated mandate is weighted towards activities that could be applied to any economic sector, such as exploration of new technologies and markets. Yet, defence production is unlike other industrial sectors for at least two reasons. First, the industry is almost entirely dependent on sales to governments – Canadian and foreign. Second, because of their nature, the export of military goods requires authorization by government authorities that does not apply to most exports. Both features demand public accountability beyond that of other industrial sectors. The DAI should broaden its research and analysis to address public interest issues and questions, including the issue of military industry corporate responsibility.
- The promotion of greater transparency in government procurement and military industry exports. The DAI will be well placed to shine light on an industry and international trade that are notoriously secretive. Within Canada the procurement process is confused and confusing. Outside Canada it can be impenetrable and corrupt. And Canadian companies are not above illegal activity. As recently as 2012 Pratt and Whitney Canada (PWC) of Montreal was fined U.S.$75-million by the U.S. State Department for illegally selling military aircraft engine software to China. Although the Canadian government had approved the export by PWC, it took no action against the company. The DAI should press the Canadian government and industry to reveal more detail about military procurement and trade activities.
- The study of global military transfer standards and norms arising from the 2013 Arms Trade Treaty. The DAI is tasked by the government with providing “information on global export market opportunities.” This will include exploration of “non-traditional” export markets outside of NATO and other trusted Canadian military partners. Within new (and old) markets there may be risks that Canadian military equipment will be diverted for use in organized crime or for acts of terrorism, or that governments will use the equipment in human rights violations. Although Canada is not yet a signatory of the Arms Trade Treaty, the treaty will set the global standards for international arms transfers for decades to come. To meet these emerging global standards Canada will need to improve its export control policies and procedures. DAI research and analysis could assist this process.
The establishment of the Defence Analytics Institute could be an opportunity to do more than promote better economic returns for one Canadian industry. Given growing public interest in defence procurement within Canada and concern about the impact of Canadian arms exports without, the DAI could provide a welcome window for the public on the domestic defence industry.