Hon. Andrew Cardozo: Honourable colleagues, I will focus on the supplementary estimates, in particular on the defence spending that responds to the NATO requirement that it be increased.

First, let me thank Senator LaBoucane-Benson for her provision of the information that we have, and Senator Marshall for her usual insightful analysis.

As a member of the NATO Parliamentary Association, I was attending the recent spring conference in Dayton, Ohio, where it was clear we needed to do more in terms of defence spending. But I was also aware of the elephant in the room, the American government, which appears to be intent on undermining the economies of all the other NATO allies. Our opportunity now — our obligation — is to increase defence spending while we build our own economy.

As Senator LaBoucane-Benson noted, budgetary spending will increase by $8.6 billion in comparison to the 2025-26 Main Estimates. She outlined five requests from the Department of National Defence; the first includes a pay raise for those Canadian Armed Forces, or CAF, personnel below the rank of colonel, and that is a badly needed and overdue development. The other four points provide opportunities for manufacturing. They are defence R&D, aid to Ukraine, strategic military capabilities and CAF equipment and infrastructure.

The central point I want to raise today is to encourage the government to make sure that as much spending as possible is made within Canada for R&D, innovation and manufacturing. I’m building on the comments that we heard earlier from Senator Colin Deacon with regards to innovation and manufacturing.

Here are a few facts about the Canadian defence industry in Canada as noted by the Canadian Association of Defence and Security Industries. The industry contributes $9.6 billion to the GDP of Canada, 49% of their sales come from exports, they invest $440 million in innovation annually and they cover 81,000 jobs. The industry is located in all regions of Canada, and is composed of some 580 large, medium and small enterprises, certainly ripe for growing.

Canada’s defence industry produces a range of equipment including light armoured vehicles, rifles and ammunition. Let me highlight just a few specific examples of Canadian-made defence equipment. Roshel Canada produces light armoured vehicles, and is based in Brampton, Ontario. As a side comment, when we look at our challenges facing the automotive sector, perhaps we can look at light armoured vehicle manufacturing to help that sector. Magellan Aerospace produces rockets and flares. IMT Defence produces forged projectiles and specialized machining. HFI Pyrotechnics Inc. produces pyrotechnic products.

My call to the government is that they focus on defence spending as much as possible within Canada to build Canadian industry. Given the tariff threats from the U.S. and talks of the 51st state, I think we need to do three things: buy Canadian wherever possible, build Canadian and invest in Canadian R&D.

Colleagues, you may know that I’ve been recording a series of conversations with Canadians about Canada-U.S. relations. Today, I posted a conversation with Daniel Tisch, President and Chief Executive Officer of the Ontario Chamber of Commerce, my province. Let me quote him:

On defence, our members in the sector welcome the positive signs in the news about defence investment that would benefit Canadian industry, reinforced this week in the PM’s visit to the NATO Summit.

This is quite urgent because there’s a risk of losing that industrial base to other countries that are also increasing their defence spending.

Let me quote from Benjamin Bergen, President of the Council of Canadian Innovators:

The government’s investment in Canada’s defence will be a generationally-missed opportunity if we don’t also ensure that the money is used to build Canadian companies as vendors for our security needs. If innovators know that there are significant government contracts available for made-in-Canada defence solutions, that helps de-risk R&D for companies bringing cutting-edge technologies to market. If we are spending upwards of 2% of GDP on defence, we should not be satisfied with just buying products off the shelf. The government must be collaborating with the private sector players to co-develop the defence systems and technologies for the 21st century. Indeed, that’s what every other leading country is also doing.

Both of these folks indicate that other countries are using defence spending for building their own industrial policy and industry in their countries. We must certainly do the same.

When it comes to buying abroad, we need a quid pro quo approach. For example, take the March 18 announcement of the purchase of a $6 billion over-the-horizon radar system for the Arctic, which we purchased from Australia. We should build a purchase like that of a trade deal. We buy $6 billion from them, and they buy $6 billion of something we produce. That’s a win-win expenditure for both.

While large sums are set aside for major maintenance and repair in the monies put forward, we must focus on manufacturing in Canada. This is key. I want to state clearly that we cannot be just the Maytag repairman of the defence industry; we must strive to be the innovators, the intellectual property rights holders and the manufacturers of defence equipment.

I accept that we do face a conundrum. On the one hand, the new spending to meet the NATO target has to happen soon. We have a tight and important target. On the other hand, we have a once-in-a-generation opportunity to build our innovation and manufacturing sectors and create many well-paying, long-term Canadian jobs. As Prime Minister Carney has said, “We need to build the strongest economy in the G7.”

In closing, colleagues, I encourage departmental officials and ministers, especially those responsible for National Defence, Public Services and Procurement Canada and defence procurement, to go all-out to ensure that we spend these billions wisely, to build the Canadian economy and support good jobs for Canadians.

In this turbulent world, we can make sure that our NATO commitments build the Canadian economy and create good jobs for Canadians. Thank you.