Pandemic equipment snarls will rewrite Canada's definition of national security needs, say experts

The mad scramble to secure protective medical equipment and ventilators in the midst of a global pandemic has given some of the people who work in the usually tedious world of governmentprocurement an unwelcome excuse tosay, "I told you so."

For years, there have been quietbut persistent demands coming out ofthe defence and acquisition sectors for successive federal governments to develop a list of "strategic industries" that donot have to rely on foreign supply chains as insurance against the kind of procurement panic in play right now.

Those calls were largely ignored. Now, defence experts are saying the COVID-19 crisis is a costly wake-up call.

Canada needs and has needed for almost two decades a 21st century national security industrial plan that focuses on critical equipment and materials that should be produced at home, not abroad.

'Totally negligent'

"We've been totally negligent on that and it is something I have articulated over and over again," said Alan Williams, the former head of the procurement branch at the Department of National Defence.

"It's absolutely critical and if this doesn't wake us to that reality, I don't know what would."

Williams devoted a substantial portion of one of his books, Reinventing Canadian Defence Procurement: A View from the Inside, to the absence of a national security vision of Canadian industry.

"It frankly pisses me off because there's no reason for us not to have done that," he said.

"That should be the kind of thing ministers, the leaders of the country desperately want to do. And why we seem to have avoided that kind of strategic thinking ...It just boggles my mind. It's inexcusable."

'Key' industries geared toward trade, not tragedies

There was a faint glimmer of hope in the initial debate over the National Shipbuilding Strategy a decade ago, when the former Conservative government made a conscious decision to build future warships,Canadian Coast Guard and fisheries vessels in Canada, instead of outsourcingthe work to other countries.

At least in the context ofdefenceprocurement, Canada does havewhat areknown as "key industrial capabilities", including shipbuilding, theproduction ofcertaintypes of ammunition and the construction of arange of aerospace and maritime electronic systems.

Much of the work ofthose "key" domestic industries is, however, geared towardmakinghigh-end components forglobal supply chains. Critics have often said the policy focuses on high-tech innovation and business priorities, rather thanhard-headed national security interests.

Other countries, Williams said, have carved out a space fornational security interests in industrial policy by not allowing other countries to build certain pieces of equipment. The Japanese, for example,have retained the capability to assembletheir own warplanes.

A shift in thinking

The COVID-19 crisis, which has uncovereda potentially deadlyshortage of ventilators andprotective equipment for medical professionals, will push the federal government intoa radical re-evaluationof what we needto be able to build at home to protect the country.

In some respects, that work hasalready started.

Earlier this week, reflecting on the Trump administration's moves to restrict exports of protective equipment, Ontario Premier Doug Ford expressed dismay over how the fate of so many Canadians had been taken out of the hands of the federal and provincial governments.

"I am just so, so disappointed right now," he said. "We have a great relationship with the U.S. and all of a sudden they pull these shenanigans. But as I said yesterday,we will never rely on any other country going forward."

Over the past two weeks, the federal government has announced plans to pour more than $2 billion into sourcing and acquiringprotective medical equipment masks, gowns, face shields, hand sanitizer at home. On Tuesday, Ottawa unveiled a plan to get three Canadian companies to build 30,000 ventilators.

Health equipment may have been outside the normal definition of national security needs until just a few weeks ago but the shifting geopolitical landscape offered another warning sign that was ignored, said procurement expert Dave Perry.

Leaning on China

"This is pointing out the flip side of our globalized world and globalized supply chains," said Perry, an analyst and vice president at the Canadian Global Affairs Institute. "The cold, hard truth is that we're going to be relying on China for critical supplies."

When the coronavirus outbreak ramped up, federal officials should have been aware of the potential peril involved in relying on Chinese factories for so many critical items.

But in the absence of homegrown capability, Canada is at the mercy of panicked nations in the midst of panicked buying.

"The entire world is trying to put through orders from the same sets of factories we're trying to source from," Perrysaid.

"It might be accurate to criticize the Chinese for their response, but in the current context the government has to be cognizant of the impact on our potential ability tosource stuff we really, really need right now from China when there's not a lot of other options available in the short term and when the rest of the world is making the same phone calls."

One of the critical arguments against a homegrown national security industrial strategy has been the cost. It's an argument familiar from theshipbuilding context: taxpayers pay a premium when we taskCanadian industry with delivering solutions, instead of turning to cheaper foreign manufacturers.

Elinor Sloan, a defence policy expert at Carleton University, said she believes the crisis will focus the public's attention on securing thecritical industries and supplies the country needs in a global crisis.

"The trade-off, as we know, is that it can be more costly to build or produce at home," she said. "This crisis may engender a perspective among the public that the extra cost is worth it."