Fireside Chat on Foreign Defence Opportunities for Canadian Businesses

CCC is Canada’s government to government contracting agency. We’re a Crown corporation based in Ottawa. Our mandate is quite simple. We help Ken exporters sell to international governments. Doesn’t mean we cannot sell to private sector, but really the bulk of our business.
Is to sell to international government and we’ve been doing it quite actively. The last decade we’ve concluded Twenty-six billion dollars of contract over thirty-five countries. So we essentially managed 3 programs, our international engagement.
Is governed through our international prime contractor program where we help companies to sell directly to other governments and by and how do we do this?

We do is we do this by signing as prime contractor. So we would engage with the government.
Before tender, before an RFI on a direct basis, where CCC was signed as government of Canada with legal effect as signed by government of Canada and was subcontract with your business and then will implement a solution. CCC will provide oversight responsible Business Conduct.
And will play a key role along your side in in the delivery of that transaction. We also are custodian to treaty between Canada and United States Department of Defense since 1956, where we provide access, direct access of key companies to the US DoD, the largest defense market in the world.
And lastly, on behalf of DND and Global Affairs Canada, we administer a direct sourcing program to fulfill Canada’s commitment internationally, whether it’s the national disaster, emergency response or supporting Ukrainian against invasion.
And so the decision making is handled by global affairs in DND and CCC managed the sourcing and the logistics.

So the discussion today.
We’ll focus mostly on our international engagement governed by our international prime contractor program where by undertaking a direct contract as a G2G, we facilitate faster procurement, we reduce procurement contracting risk and also we contribute to improve the project outcomes because.
CCC will engage with the exporter alongside and the buyer in discussing a solution. So we have some liberties depending on how the project comes to us in structuring the contract and really improving potential outcome for the benefit of the both the exporter and also the government buyer.
So we have two case studies that would lay the foundation for fireside chat today. And so the first one, Germany CMS 330, you may have seen in the media recently an announcement.
The major contract signed by CCC with the German Navy for the sales of Lockheed Martin, Canada, CMS 330 combat management system. And what’s interesting here, like it, well, it’s a it’s a very significant contract, over a billion EUR.
And Germany, you know, face at times this is a requirement and they couldn’t afford the usual multi-year tender process and they were able to leverage a exemption of the European Union under Article 346, Treaty of the Function of the European Union to justify a direct award under an umbrella contract with CCC for the modernization of their fleet. So I had the privilege with two colleagues of mine to meet the Germans. We were invited by DND as they were in town. That was I think around two years ago.
And they went on for consultation and DND invited us to participate and present. CCC was quite pleased to present what we had to offer and they didn’t know that we existed. They had their liaison with US FMS (Foreign Military Sales) do government to government contracting as well on military surpluses and they require congressional approval which add to the delays and the CCC’s approach is quite nimble. We don’t go to the key Parliament for approvals.
And we don’t won’t carry any backlog as well. So they were quite pleased to learn about the key in version of the US FMS and what we had to offer. So the following day we sent a proposal.
After understanding that you know we could be in a position to support their needs on interoperability combat management, you know systems and the discussion started at that moment until you know eventually the contract got signed. But there were many, many interactions.
Back and forth with the government, there was visiting Canada, but it’s an amazing long term contract that also could open doors for other businesses as well to engage with Germany. On the other example, I’d like to hand it over to Tony.
Tony, you know has championed that that deal. So I think he’ll be best placed to speak about it, but that it speaks up as well to another great successes we had at CCC.
And I really want for that fireside chat to give some practical example of the type of work we do with exporters, with government and how these come about to get a better understanding and help you better navigate, you know, these markets and then find these opportunities.
So Tony, I’d like to hand it over to you if you could give a, you know, speak to this opportunity for Montenegro.

Of course. Yeah. Thank you. I appreciate that. And yeah, this is an opportunity that I I had the privilege of being a part of. I was leading on behalf of CCC. This originated while the contract was signed.
In 2018, this took for all intents and purposes at the at the outset, maybe 3/4 of a year to finalize that. That said, it did take some early massage, so it’s an interesting opportunity because it really showcases our ability.
To work in Europe, even as early as 2018, not that this was the first project that that we had been involved in, but it was an interesting project in that the Governor of Montenegro and specifically Ministry defence had some very critical requirements. First and foremost in in battling.
Wildfires and search and rescue and those services were provided by the Ministry of Defence and we were in a government to government discussion and what’s the reason we wanted to highlight this project that I think is important and probably going to reference it throughout the discussion later is it.
Really showcases different elements of the G2G. First and foremost, we were competing on this project with a European manufacturer for so for all intensive purposes we were we were essentially in their backyard trying to steal that business or Canadian win.
And ultimately spent much of the first part of our pursuit presenting both the technical aspects and the government to government advantages at CCC and one of the advantages that CCC has in so far as the, the, the Government to government mechanism is.
Is we sign commercial agreements. This is unique amongst many of our competitor nations wherein they sign MOU, US FMS in the US is our closest competitor. On the defence side, but they’re strictly defence related and.
And have certain restrictions that that we don’t have that government to government opportunity really created an opening for Bell to be able to enter into discussions with the Ministry of Defence and the Minister themselves.
Ultimately, what happened was, notwithstanding the fact that this was what we would consider a directed procurement that that we were successful in, we were in fact competing and what the Governor of Montenegro did because they had very, very specific requirements and knew that the that the two provided.
Providers both Bell and our competitor had solutions that that could work, that they ran a pricing and availability competition and that aspect of the competition, while not always as formal as it is, is demonstrative of how.
How we’re always in a competitive situation, even when we’re not working in an RFP process, what ultimately was the deciding factor for this success was 22 key ingredients. Obviously, let’s put aside the fact that Bell had a.
An excellent capable solution, but they also had an ability to deliver in a much shorter time frame than our competitor and overlaid on that came the government to government agreement which gave the Ministry of Defence.
The assurance that the contract they’re signing is going to be held in the highest regard because as you can imagine, when CCC signs a contract, because we are putting the Crown’s name on a contract, we take great care and ensuring that we’re signing contracts, we are.
We have a high conviction rate, we’ll successfully conclude and we take great pains to ensure that through our due diligence process because we can’t allow for commercial contracts to become irritants in the bilateral relationship so that they such that they can deteriorate that relationship and unfortunately.
We have had an excellent track record in that regard. So really, what this demonstrates in in so far as this example is, Montenegro was able to move quickly through the procurement process because they had this direct mechanism through the government to government that chose an excellent solution that was made.
Better by having a government to government approach and both the speedy response and the speedy delivery was ultimately the edge that that lent success to both CCC and Bell in this particular opportunity. I’ve always said that that CCC can’t make a bad proposal.
Good, but we can certainly make a good proposal better and that was certainly an excellent example of that here.

Thank you, Tony. So I mean that brings me to our, you know, our first set of questions for that fireside chat. You know, in the case of Montenegro in in Germany, opportunities have arise from the buyer expressing a need. Sometimes the embassy will identify these opportunities, sometimes some.
Partners sometimes, sometimes the partners or sometimes the government will reach out to us directly. We could also be the exporter coming to us with an opportunity. I’d like to get your views in your experience because you’ve been covering so much. You know you’re covering 3 regions right now, but I know you’ve been covering other sectors as well than other than defensive.
Aerospace and insecurity and in your experience, you know where opportunities usually originate from.

Yeah, in point of fact, the, the vast majority of the opportunities that we ultimately pursue originate from our exporters. They they’re the ones that have the broader business development function. They’re much more attuned to the specific sector sub sector that they’re interested in.
And are pursuing markets that they know they’re comfortable pursuing business in and. And so more often than not, and the vast majority I would say the historical average was probably closer to 90%, probably a little higher. We’re coming from our exporter community.
Things have shifted a little bit recently. Not so much that the percentages of have leaned the other way in any significant way, but you could easily see some of those percentages dropping because we are getting a lot of conversation starting from the buyer side.
And that buyer side through directly through CCC in our ongoing pursuits on different files and through our partners, certainly the Trade Commissioner service in in the many embassies and high commissions around the world and that really I think speaks to the moment that we’re all in and like why we’re having this discussion today, the emphasis globally around strengthening defence capabilities, defence and security capabilities is clear to anyone watching to anyone listening and by virtue of that as sort of the bread and butter of what CCC is done.
For nearly eighty years, 80 years this year, we are seeing an uptick in that activity and we are seeing an uptick of interest from the buyer side where traditionally it’s been exporter driven.

So what I hear from you is that you know whether the abortion originate from the exporter or the bio side, I mean the partners and we’ll speak to it a bit later are quite important. Whether it’s the defense attaché, whether it’s the trade commissioners, the provincial partners, they’re quite important in helping to keep that momentum and that file going up.
Until we arrive at fruition and we’re able to close that contract. But when an opportunity comes to you, do you play any role in qualifying, advancing, furthering, testing that opportunity? What type of role do you play?

Critical.
Yeah. So we often liaise with those partners. We will try and get in direct contact with the, the government through our partners and more often than not that’s the that’s the trade Commissioner service we can we can get into a whole webinar on how to use partners and the different tools.
That the government and the provinces have but the biggest part of what we’re looking at is trying to validate the opportunity in so far as the likelihood that CCC can assist, you know, at the end of the day, we want to be involved in every opportunity that we can be. But we’re only going to want.
To really put effort behind those that we can add value, there’s no good value in in trying to insert ourselves in a deal where the G2G can’t possibly help you. But in that early stage where we’re looking to better understand what that opportunity is, what the timelines look like, whether there’s interest in engaging.
On a government-to-government basis and again we are working hand in hand with our exporter. If this was brought through our exporter and if not through our partner, then then a quick purview through our partner just to be able to better understand the project so that we can have a much more informed discussion with our exporter.
Thank you, Tony. I imagine striking the right balance between, you know, fact-finding and not creating expectation until we’re sure that we can, you know, put forward a proposal and also make sure that we work with a qualified exporter is quite important.
Burden in your in your daily job. You know that brings me to another question. You know I hear like my team engaged with a lot of exporters around 800 every year across sectors and I hear feedback where and they also from partners you know that G2G model is it essential?
You know, would these $26 billion we did in the last 10 years ever took place even if a G2G did not existed? What makes the G2G model unique, attractive compared to a traditional procurement process?

And I suspect the value of that G2G could also vary between the market, the level of governance in this market, this very sophisticated market me like I was surprised that Germany was looking at our assistance, but in fact they were because of.
Some pressure points they had compared to other markets like Indonesia, like , you know, Peru, Argentina, Colombia, where the governance, perhaps the market is less sophisticated. With all respect, they may have a greater need because the expertise is perhaps not there for the type of solution you want to acquire. I’d like to pick your brain.
Insight on the value, the uniqueness of that G2G model that we have to offer.

Yeah, that’s there’s no straight line in in international trade and I’m sure everyone on this call that’s involved in this, that resonates. The interesting thing about what we offer on the government basis.
Again, goes back to what I was saying about making a good proposal, better right? And it always starts first and foremost with. Do you have a solution that solves the buyer’s problem?

Again, we’re in an area of unsolicited proposals. We’re not responding to RFPs. We’re responding.
To pain points or what we know are areas that the government is looking at in terms of a strategic plan, whether published or not. And we’re trying to provide a response to that now from a government-to-government perspective, would these opportunities exist?

Of course they would. However, with they’re often looking for in in our participation is if we’re going to go if we the, the government buyer is going to go on a directed basis. How do they ensure that that directed basis is done in the most responsible way and that that is a key aspect of what the CCC government to government.
Function does it. It provides first and foremost speed of procurement. It we we’re able to put an umbrella around these discussions so that the buyer can have a discussion with the technical solution provider around what’s in the art of possible. And that’s because often times what they’re looking for is a very complex.
Solution and they have an objective that they want to achieve and RFPs fail because they have an objective without an understanding of what exists in the marketplace and this gives them the opportunity to, to, to explore a responsible solution and craft it.
Such that it’s there’s an economic and technically feasible solution, but notwithstanding all of that, there’s a there’s a level of discretion that they’re also afforded on the on the defence space. Many of the government’s choose to move on a government, to a government basis, again because of speed, because what they’re looking for.
Is either unique to what Canada has to offer, or is such a level of such capability that again, that’s where the G2G steps in and makes that that opportunity better, but they want a level of discretion wherein they don’t want to advertise everything that they’re buying.
They need the capabilities, but they don’t want to put it in the front page of the paper around all of the specific requirements that they’re that they’re attaining through this procurement and again that G2G offers us some level of discretion around the more confidential elements of the capabilities.
So you have you have this interesting piece where you’ve got the assurance of the Government of Canada because by virtue of US signing that contract, we through our ACT have the ability to commit the Government of Canada. The performance of that, that gives the buyer A level of assurance on the basis that they know we’ve done our due diligence that gives them the access to do a.
Speedy procurement on a directed basis and gives them the freedom to have a broader discussion to land on an opportunity that closely fits what they ultimately need as the objective that they’re trying to achieve while maintaining some level of national discretion for the benefit.
Fit of their national security priorities, and again with that one element that we shouldn’t forget all, although on the defence spending tends to be somewhat less of an issue but more so in today’s environment.
Is the financing element, and when CCC’s involved, certainly in, in my experience on non defence, certainly in infrastructure projects, when CCC’s involved, the banks take a higher appetite, have a higher appetite for participation because we are become a performance mitigant.
To the bank. And so if the bank is going to lend, they want to know that the performance is going to conclude successfully so that they have a valid agreement in place to be able to collect on the loan that they ultimately want to be able to disperse on.
All of those pieces allow for that G2G and allow for our 80 years of the business functioning to be a part of the success of the export of community. That said, I should mention as a caveat.
There the, the number that you quoted is a big number, it is a. It’s a drop in the bucket in terms of global procurement and that speaks to the niche that we are in so far as where our advantages are.
Typically they’re not going to buy straightforward items, and then I’m going to exclude a US DoD that that that’s its own webinar someday. They’re not going to buy landing gear on a government-to-government basis. Most of the governments and certainly Europe, is sophisticated enough to run those tenders with their eyes closed and that’s.
You don’t see us involved in in projects like that. It’s really speaking to the complexity of a problem to the speed of the requirement and in in the environment that we live in today, we have a huge.
Demand to very quickly and very responsibly bolster the defence capabilities, certainly of NATO allies and others, and that’s where the government, to government really today is, is seeing a, an uptick and in response to that that’s in fact why if I could just for a moment why I’m now involved in Europe, where I have not been, I’ve been pulled into Europe and back into the defence space because of what we perceive to be a very active market for the next at least five years. And so I’ve only got a small piece of.
Of Europe, I’ve got 2 colleagues out of a total of 6 in the same role as mine, not the least of whom is Jeff, who’s on a trade mission in the Middle East. And we’re looking at how we can focus our attention on helping obviously Canadian exporters and our allies and partner nations use Canadian capabilities to help bolster their defence requirements.

Thank you, Tony. So I take it that the, you know, uniqueness of the G2G model, obviously as Governor of Canada acting as a prime contractor brings confidence in the balance, secure a ministerial, yeah, a minister that could be hesitant or any level of authority because we can work with any level of authority including the state owned.
But really added weight to the balance in, you know, in in validating, providing that performance guarantee assurances and helping make that determination if there’s an ability, a legal ability to justify a direct contract, having Canada taking care of the entire operation.
Bring Peace of Mind and help make the case and we’ve touched on a number of different elements in the next few sets of questions here and one of it was the friction point, you know what would make a government decide and determine that it wants to go on a direct contract if it has the legal ability to do it. You know, I’d like to get your, you know there. I know there are multiple scenarios and that could happen, but for companies going to a trade mission for companies.
Engaging with the government because they do a site visit using can export money or out of their own funding. They organise a, you know, a site visit and they want to engage with the government. What they should, what should they? What ingredient should they be pay attention to? What they should be looking for to determine whether they could be an opportunity for a potential?

Mm-hmm.

G2G or potential direct contract?

Yeah. So in in the environment that we’re living today, I want to say speed is paramount and that that I don’t want that to deter from the, the, the next point, which is the excellence in in incapability, but.
There seems to be today from the discussions. Certainly, I’m having and my y colleagues are having in in in the same role a need to move quickly and so what we’re seeing is discussions around.
Capability being high, they need an excellent solution. They need aa very capable solution, but they also need capacity, so it would be great that they’ve got the world class solution coming out of Canada. It it’s going to be challenging if we can only produce one.
One of those items, when they need a 10 for example and then and then equal to that is how quickly can they have those capabilities delivered to them. Those if I had to highlight friction points today and more so in the European context.
But again, this will and is spreading beyond just Canada and Europe and you know you touched on some of this code and I’m sure it’ll come up later. But there’s a reason that rearm and Canada and safe and all of those discussions are underway because there’s a huge push for that but.
Need of delivery, excellent capability and capacity to deliver those capabilities in in a sufficient cadence. Those items are really integral and in fact are going to delineate our competitive edge.
In, in a market, for example in Europe, I’m not saying anything that hasn’t been published on paper. You can see it in in their own publication, certainly in in the, the, the rearm fact book. Europe buys European, there’s no hiding that.
But we have an opportunity and we we’re our discussion points have been multiplying over the last couple years because we are adding capability. We’re adding excellent capability, we’re adding capacity and we’re adding speed of delivery in an environment where they’re thirsty for that. And I don’t see that going.
Going away, certainly not in the short to midterm.

And I would imagine to complement what you’re saying, I may imagine that, you know, for government who may not be equipped well, maybe lacking governance, you know, any failed tenders attempt to, you know, refurbish, attempt to modernize, failed attempt, you know, they run a tender, it didn’t work.
Find a thunder again, it didn’t work or there was a scandal. They had to stop the problem was too big. They didn’t have the capacity to do it. They started with the wrong specs. They had to cancel the tender. And I I would think you know these opportunities and these could represent some opportunities for companies to explore engaging discussion.
With the government authorities and explore potential direct award on the G2G. So then we’re they would be off, you know, off lifting any risk to Canada, to CCC and then and then providing the means to acquire the solution.
Also, you know, if any, I mean the defense sector may not be the case, perhaps aerospace to some extent security depending you know what it could be at play here. But you know if there’s any original development banks for instance that already earmarked some funding for a specific initiative.
The government of that country in collaboration with the original Development Bank may prioritize leveraging the funds of the bank with their you know if there’s any favorable you know terms compared to working on a direct basis with CCC. So usually I would think that.
Perhaps we may want to step away from those that are already, you know, bear marked with either, you know, multilateral funding or intergovernmental funding.

Yeah, it certainly becomes more challenging in, in, in the infrastructure space where we come up against development banks often, we tend not to get involved in opportunities that the development banks are funding because they don’t allow for a sole source that’s.
To say that.
We can’t participate in an RFP, but it’s a far more selective and critical decision on where we would advise a client to say, look, there’s an opportunity here where you might want to put in an A second option that includes the government to government. But for the most part where those institutions have governance that.
Doesn’t allow for a directed award. We’re typically not always involved now in the defence space under the right circumstances where we are inserting ourselves or advising that that exports consider inserting us as a second non compliant bid.
And I say non compliant because in most of our proposals we are the lead, I should say, in the entirety of our proposals, we’re the lead in an RFP. You’re submitting your response as the Canadian exporter and then plugging us in as a second option for their consideration under the government to government.
Modality to strengthen or at least give to consideration to that as a possibility that might strengthen them, but yeah, ultimately clothes. You’re right. It’s those aren’t areas we spend a lot of time in now on the other hand and the Montenegro the first opportunity where we were on the four twelves.
That was funded by EDC at the time. That was an opportunity where we had a whole of government approach that was able to land an opportunity and give the Governor of Montenegro 1A1 shop stop.
And with EDC’s review of their mandate within the defence base ongoing and certainly growing, those opportunities are going to start looking a little more attractive. Again, I can’t speak for EDC and I know they’ve had a a long history of not providing.
Financing to lethal defence equipment, we’re doing a lot of work outside of what we classify as lethal defence solutions that that certainly would have EDC looking at those. And then we also have a network of international commercial banks that we use on.
On a multitude of our projects, the 11 interesting aspect in defence, that’s always been true is, is they’re. They’re usually the last ministry that starved for government funds and so tends to be a.
A fruit tile. A fruitful pursuit is the defence sector, aerospace and defence.

Yeah, thank you, Tony. And I mean, you know, speaking about security, we did a lot of work in Border Patrol, public safety, first responder, cyber security is another area of great interest for CCC that could touch on multiple critical infrastructure, touching on different, you know.
Ministries we you’ve touched briefly on you know rearm safe. I know Government of Canada has been quite active at you know engaging concluding you know original arrangement, CETA, bilateral, trilateral arrangement and these two are rearm Europe safe but.
Also with Brazil recently a cooperation defence agreement and there’s Japan, Australia, Norway, Germany, charter arrangement. There’s a number of arrangement taking place to provide ample opportunities for, you know, for more synergies, for more trade.
For key companies, it is. It could be challenging for companies to navigate and determine, you know, where can we go, you know, because there’s so many happening. You know, I hear perception from companies that the European market is pretty close and companies are backed by the government, actively backed by the government, creates unlevel play.
Fear for key companies, we saw the example of Germany was able to use an example of the article of the European Union to justify the sources contract, which is not something that is from common knowledge. I’d like to get your insights on what are they.
The regions or the some of the countries you would see that are quite you know what would likely be more open for G2G, the defence, security, aerospace as opposed to other regions that perhaps we are we have not been very successful in the past I think for companies looking at doing trade missions.
For companies that are very active, you know at CANSE and other like MSPO and other trade conferences, understanding some of the regions or the countries I think would be very helpful.

Yeah. So that’s an interesting aspect of certainly the world we live in it at CCC my, my, my immediate response is there’s no black and white response to this. I’m a firm believer that certainly in in terms of a government to government.
An opportunity it’s its right time, right solution and Brazil, you raised Brazil and I’m glad you did. It’s actually a perfect example. I I’ve spent the last four years proactively in in South America.
Last four to five years and Brazil has always been hands off. They don’t do G2G they don’t do directed awards and now we have this relationship that is slowly being established and that’s specifically on the defence.
Security sectors and not all of the broad sectors and that’s fine from my perspective that’s a you know we beachhead with a defence strategy and hope that relationship grows beyond that Europe again you mentioned Europe.
We have up until the last handful of years been somewhat reactive to Europe because for the most part it is a region in the world where they’ve prioritized buying European solutions again, right time, right place.
And now we have there. There we’ve made the decision to put in extra bodies, myself included, to focus proactively on pursuing opportunities in in Europe. And again it’s in response to a need. And so for the most part, there are.
There are a handful of countries that I’m I’ve come across on the non defence side that don’t have a straightforward government to government or directed award path on the defence space. There’s always the opportunity.
To consider a G2G for national security requirements, or sorry, a directed award for national security requirements, the government the government just gives the buying government a higher level of confidence in using.
That national security priority as a reason to pursue that procurement on an on an expedited fashion, which is what it would be on a directed and government to government based approach. But ultimately it’s the political will and we are now living in an environment where.
Many of the regions where or countries Brazil being one example, Europe being the other example of region versus country, where we haven’t been proactively focused or proactively successful.
Those are those are changing because again right time and Canada has a lot to offer in the government, the government and the right opportunities makes it far more appealing for that government to choose that Canadian solution.

The, you know, the defense space brings also some complexity in terms of in in market access, we have export control, we have ITAR regime with the US. So does working with CCC for credit exporter would export in a jurisdiction that is subject.
ITAR or export controls. Would it make a difference? Would it help?

I mean you may have run into some experience and I know there’s some challenges when you have multiple end users. It’s always better to submit an application for each end user and make it as clear as possible.
Is there any advantage of working with CCC to increase your chances of successes with ITAR export controls?

I’d love to say yes, but the truth of the matter is no so. So ITAR is certainly outside of any access or influence that we can. We can provide an end is one of the first.
Points of discussion we have certainly is, you know, do you have any ITAR controlled items in the solution that we should be aware of? And then the export controls in ITAR is mostly a US based restriction, export controls being the Canadian.
Arm that that refuse what we can and cannot export from Canada. I’d love to say we have a direct door in there and can direct that, but ultimately we don’t decide on what export controls will permit or not permit, we might be able to get at least a signal check and I would certainly encourage any exporters looking at items that they believe might fall into that purview to have those discussions to look at whether or not they fall into that trap. But to say that we can move that, no.
The long winded answer of a short no is we don’t have any influence over that. That is a protocol of security that is governed by big government.

Thank you, Tony. You know, I’d like to move the discussion to you know how, what are the advice we can provide to companies to position them for successes. And I think you know we were also as a segue to the friction points, you know one thing that is always key is to look at what are the government priorities, upcoming priorities that are not yet ready for tender and that have not yet made a RFI stage. So the government has not yet formal formally committed to procure a solution but they did made it a priority and then so I like I like to get your read on the global trends that you are seeing that you’re seeing in terms of the, you know, the headline areas of government spending because that helps companies navigate, you know, their solutions fits within some of the, you know, priority spending in such market then I mean.
Definitely they should look at considering position themselves in exploring a potential engagement with these government.

So I think the carve out that you mentioned is important, most governments not all most governments have a strategic plan of procurements that they’re that they’re going to execute on over the next one to three to five years.
That said, in terms of headline sub sectors or domains that we’re definitely seeing an uptick in discussion the some of the immediate stuff is ordinance ammunition weaponry.
Solutions to protect the soldiers in the field in in the theatre of operation. Those are areas that are of critical need. These are discussions that are ongoing.
Many of the governments that we’re talking to are looking for capabilities to both bolster their inventory, but also to establish their own capacity within their own countries. Those are items that are that are definitely of immediate need. Some of the other areas expand to some of the technology. So drones are a common conversation. Unmanned aircraft, unmanned vessels, unmanned vehicles, the autonomous space.
And adjacent to that, the AI elements therein are certainly becoming far more prominent in in terms of discussions and capabilities that that a variety of nations are re looking at.
Space is going to be a really interesting place easily for the next five years. The domain is shifting. It’s no longer the last frontier, it’s it seems to be the next frontier.
The capabilities in Canada are impressive. The need is huge and it’s both active and defensive capabilities that they’re looking for and that same vein critical infrastructure protecting critical infrastructure as well as.
Military infrastructure in general and that in general is some of the discussions I’ll be having. I’m travelling at the end of this week and some of these are the discussion points that were are going to be a party to that and cybersecurity.
Cyber is a is a huge element that’s growing in the in the security space and it’s again adjacent to all of the defence capabilities. So just to just to you know there there’s the typical capabilities of what most people think of in, in the theatre of operation.
What you would typically see in a battlefield and these emerging themes in space and AI and in autonomous vehicles or vessels and then the electronic warfare and cyber security elements that that sort of.
String along through and alongside all of those requirements.

Thank you, Tony. The, you know again on the same topic of pushing companies for successes, we talk about a bit about the timing. You know I see a lot of companies restoring for trade missions. I as myself I’m sitting on a number of working groups.
To look at the outcomes of trade missions to help better tailor these trade missions for the benefit of companies, I’d like to get your views about, you know, engaging, exploring direct contracting G2G, you know, what’s the best timing?
How much effort does it require for a company to put their chance, you know, on their side and really increase their chance for success?

Yeah. So I’m going to answer that and expand on it because there there’s an element that I want to touch on, but just in in so far as the media question, you want to get on A G2G track sooner than later, if you believe that a government to government agreement is a.
The path that is likely to lead to some success and obviously we can have that discussion our team and ad yours cloud can have that discussion around trying to explore around what that opportunity is but sooner than later the closer you get to an RFP, the lower the likelihood that we’re going to be able to influence.
Wins the buyer’s decision in in so far as changing from a tendering process to considering a directed approach and some of the elements that we discussed earlier should be a trigger. How is there a priority for this are they behind?

In in terms of both addressing their own capabilities or commitments that they have, I mean in, in, in so far as NATO is concerned, you saw the pressure that the US was putting by escalating the discussion around people meeting or the nations meeting their 2% requirement and that requirements growing and it it’s clear all of the nations are taking that responsibility seriously for obvious reasons. Those are those are certainly triggers where you want to have a discussion around whether your solution.
Could benefit from a G2G and then think about whether or not you’re providing a solution. That’s typically an RFP. You know, it helps if you’ve got a solution that’s unique. If you’ve got a, it helps. If you have a solution that is.
Doesn’t have much competition and you’ve got a competitive edge that allows your buyer to consider that and that competitive edge doesn’t necessarily have to be in, in terms of the actual technical solution, but in terms of the overall commercial solution. So I mentioned earlier.
Buyers are very keen to see capabilities and capacity growing within their countries and what we’re in more and more discussions around how can we bring not just the technical solution that this company offers but a presence and so.
That really sort of bronze the discussion around what should exporters be thinking about when they’re going into these markets? And I think one of the critical elements is looking for strong partners in that market.
And then look to see what you can incorporate in that market to make that proposal something that is of benefit to both your firm and ultimately as we view it, Canada, as well as the buying nation because again they’re they want to know that.
They’ve got capability within their own borders so that that, that one item I think is is critical to consider.

Yeah.

You touch on the you know NATO spending requirements. You know if NATO was a you know an upcoming let’s say that they thy list some of their key spending up upcoming spending for the year on party programs but these are not yet up for tender.
Do you see an opportunity for a country to take on behalf of NATO, a NATO member, take on behalf of NATO the acquisition portion on a direct basis with CCC? Because I don’t believe CCC could do a direct G2G with NATO directly. I’d like to to get your thoughts on that.

There we don’t have any success to point to. But again, maybe because I’m an eternal optimist or I’m just a dog with a bone right time, right place. So short answer. Claude, you’re right that there is no direct path to it.
But we’re not in normal times today, and I’ll and I’ll give you a quick example. I I met with a Swedish delegation in in May. They’ve, as most of us know, recently ascended to NATO.
And while this doesn’t specifically address the question of whether they’re buying on behalf of NATO, Sweden is going to make decisions that address their immediate requirements and they’re less concerned about EU procurement and NATO procurement because their primary objective right now is to ensure that they’re.
Own defence capabilities are brought up to speed and the discussion I had was pretty frank. They were clear. They’re behind on where they should be and they’re looking at CCC in the government to government mechanism as a way to expedite that capability requirement. But more importantly, it speaks.
To the moment that we’re in now and what I think is many of these governments looking at the regulation landscape and saying I have, I have a responsibility and that responsibility is to ensure that I’m a capable Member of this, this alliance and that I can defend our.
Citizenry and they’re dispensing with some of the more administrative or or bureaucratic elements to ensure that those capabilities arrive on shore in in the shortest time possible.

Thank you, Tony. We’re 5-6 minutes before the end of our session today. I’d like to answer one questions from the chat and perhaps hand it over to you with a a group question on partnership and also company qualification.
And before I do that, so there was a question from our participants on ITB. So does G2G contracts can qualify for ITBs and I mean ISED you know is best place for to answer that questions but we have been engaging with ISED.

Our understanding is that there’s an indirect benefit for, let’s say we work with a subsidiary in Canada who was awarded a contract they need to spend to meet their ITB applications and working with CCC.
And I believe Lockheed Martin in Canada could be the case, could help offset some of the ITB obligations. I know there’s some work to be done on the ITB to modernize it. I’m not Privy to where it stands right now, but I think there will be, there will likely be more opportunities in the future, but that would count towards some credits for ITB.

In terms of partnership, collaboration and also company qualification, obviously at CCC, depending on the programs that we manage and today’s discussion is really focused on international engagement or international prime contractor program, what are the type of qualifications the company?

Should have to be able to engage with us so that we can join forces in discussion with government authorities and I believe there’s a qualification at the company level but also on the opportunity and then furthermore on the on the country that we’re targeting.
Because some country or some jurisdiction are more difficult than others and what are the type of partnership collaboration that CCC would leverage to ensure the success and we mentioned briefly at the onset of our discussion today.

So I’m going to use the question to answer it a little differently. I was looking through the list of participants and saw a huge list. It was. It was an excellent turn out and there’s a lot of names that that I didn’t recognize. That’s not to say.
Say that I know every company in Canada, but I think it pointed to a fact that there’s probably at least a fair number of SMEs on the call, which is excellent. One of the things I want to point out, and something I’ve seen both from being on this side.
Being a party to trade missions, outgoing trade missions as well as on being on the trade Commissioner side and organizing and receiving trade missions and this is true of any investment when you’re looking at international trade and trying to decide on these markets.
I wouldn’t spend. I wouldn’t spend 5 days in the market. You weren’t prepared to spend five years in. We have had a very unique relationship with the United States that’s allowed business to move at a speed that’s not typical of what we see.
The outside of that region and I’ve seen oftentimes companies coming on these missions getting inundated and very excited by these opportunities as they should.
And then having trouble digesting that intelligence in terms of what are actionable next steps and then and then more so are we as this exporter prepared to commit?

The financial wherewithal of our company to a five year endeavour in order to be able to successfully conclude a contract because you’re going to need that time to establish a network, established partners work with the network that Canada has that the provinces have the Trade Commissioner service in the country.
But more importantly, or equally importantly, are the strong partners that you can develop in the country and the Trade Commissioner service is really well positioned to be able to point to the right folks in, in market. That could be a conduit for that.

Because what you want to do is be working with companies that understand that market better than we ever will. They’ve lived that market, they’ve done business in that market and they are far more often the path to success almost every opportunity.
I want to say almost because I’m. I’m worried if I say every opportunity somebody’s going to prove me wrong. But every opportunity is successfully concluded because that Canadian exporter is working with a local partner in country that that understands the dynamic.

From A CCC perspective, sorry, Claude, just really quickly we have our own due diligence. We need to know that obviously you’ve got the financial capability and capacity to withstand the size of the contract you have. If you have $1,000,000 company chasing $100 million deal we’re going to struggle with that.

Big.

You know you have to consider at the end of the day that notwithstanding the fact we need to see technical managerial competence, we need financial capacity to handle the size of that deal because we cannot put the crown at risk in in so far as signing contracts for the sake of signing contracts and so.
A strong commitment to the market a financial strength and capacity, undertake the project certainly delivers on both a commitment and the ability to successfully deliver on that.