Impact of COVID-19 on the Ottawa Defence and Security Sector

May 12, 2020
2.5 mins | 592 words
By: Steve Onions

Steve Onions

Ottawa has a wide range of defence and security companies. The list includes multi-nationals with local offices – firms that provide strategic advisory services to the federal government – and companies that span the entire supply chain of hardware manufacturers, software developers, system integrators and augmented staffing and professional services. These organizations cover the traditional domains of air, land and sea and the emerging one of cyber. 

These 300+ companies employ thousands of people, typically with higher-paying positions in the engineering, manufacturing, supply chain and project/program management professions. While some of them have been able to pivot to the new normal of working from home, others have implemented various mitigating strategies to protect their workforce, whose role requires them to be at their place of work physically. 

Over the past month, I’ve had a chance to talk with leaders from many of these companies and a common theme identified was that the federal government must focus on keeping the major defence procurements moving as much as possible, including issuing procurement documents on schedule. To this end, a significant achievement was the recent designation of industries in the defence supply chain as “essential.” 

An inherent characteristic of defence procurement is the slow rate of progress. In this case, it is a benefit, as while some industry sectors (for example hospitality and retail) experienced an immediate impact, the fact that it takes longer to “turn the ship” means the status quo in the short-term. 

The world-wide suspension of trade shows (for example, CANSEC, Farnborough, Eurosatory) will make itself felt 6 to 12 months down the line as these events traditionally prime the pump for defence business development activities to fill the order book pipeline. 

My Opinion 

In response, the industry should look to utilize newer tools such as video conferencing for replacing the traditional faceto-face aspect of defence sales and marketing. It is unlikely that we will be able to hold events in the remaining part of the year – adjusting is critical. 

The considerable stimulus and support package announced by the government to support small and medium-sized businesses, as well as impacted employees, will put pressure on departmental budgets, and often, high-cost defence procurements are an easy target for cutting. However, firms must balance immediate needs with the long-term security of Canada, and our ability to meet our commitments to the international community, for example, NORAD and NATO. 

Projects already funded through Strong, Secure and Engaged (SSE) must be kept on track. The Government of Canada should identify key projects which not only contribute to our security but also provide tangible benefits to the supply chain companies through the Industrial and Technological Benefits (ITB) Policy. 

The men and women of the Canadian Armed Forces (CAF) will be called upon to provide vital relief and assistance internally for the foreseeable future. Still, they will need to meet challenges when the world returns to the “new normal.” When that time comes, it will be imperative that our military personnel don’t find themselves under-equipped for any future missions, either abroad or at home. 

 


Steve Onions is the Senior Sector StrategistDefence and Security at Invest Ottawa. Steve is a dynamic, results-oriented, ex-military manager with many years of progressive experience in the aerospace and defence industry. 

If you or your business has insights or challenges, specifically in the defence and security sector(s), do not hesitate to connect with Steve at [email protected]. Our Global Expansion team is actively engaged with industry and are collecting and sharing insights back to our partners at all levels of government. 

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