Minister Joly speaks on Sweden (Saab, Lockheed, Fighter Review and the Defence Industrial Base)

Minister details talks with Saab, Ericsson, and ABB. Confirms meetings with Nokia and Lockheed

Minister Joly met with media today to discuss her ongoing trips to Sweden and Finalnd. The Minister met media after attending the steel cutting ceremony for CCGS Imnaryuaq at Helsinki Shipyard.

Minister Joly has been in the region since Monday, along with Stephen Fuhr and now Anita Anand in an effort to bolster relations with our Nordic partners.

The Minister reaffirmed that this trip is about diversifying our trade and security relationships while also working towards building relations to the EU. She highlighted Finland and Sweden as two key partners that Canada has identified as open to business and codeveloping deeper ties.

The Minister also highlighted how Canada was the first NATO country to ratify both Finland and Swedens ascension to NATO, as well as the value of having more Arctic states as members of the alliance.

Minister Joly also gave us an update to who she has met since she has been abroad. This includes Prime Minister of Sweden Ulf Kristersson, Deputy Prime Minister and Minister for Business and Industry Ebba Busch, and Minister of Defence Pål Jonson.

We already knew about her and Fuhrs meetings with Ebba Busch and Pål Jonson but not her meeting the Prime Minister, something im a bit surprised wasnt mentioned beforehand.

Although its good to remember Jokys former role as Minister of Foreign Affairs, where she has already previously met many of these officials in that capacity, so the relationship is already there. It's a very useful association to have, especially in her new role as Minister of Innovation, Science and Industry.

She also confirmed meetings with several key business leaders including those of Saab, AstraZeneca, Ericsson, and ABB. The Minister highlighted the Canadian operations of many of these companies. She highlighted ABB, who currently employees over 3000 Canadians across 33 locations, and their recent $100 million investment in Montreal to expand their R&D capacity.

She also higlights recent investments from Ericsson and AstraZeneca and the desire to see more, for those of you who want to know. There wasn't much here, just efforts to promote Canada's advantages, especially amid the United States recent decisions on Pharmaceutical tariffs, cuts to health-based R&D, and anti-vaccine policies.

Of course the Minister also spoke on her visit to Saab. This of course isnt her first conversation, to those who follow me the Minister met with several companies including Dassault, Boeing, Lockheed and Saab at the Paris Air Show.

She highlighted that this is a followup, both to see facilities first hand and discuss in more details what companies like Saab are capable of. The Minister also rightly highlights the scale of Canadas plan to reach 3.5% of GDP spending on defence.

Its one of the few times I hear Ministers mention how, as the world's nineth largest economy, Canada will be spending billions over thr coming years to reach that marker, and how that can be leveraged as a form of economic diplomacy.

It feels like a minor, very common sense thinking but you would be surprised how often the scale of spending seems to be missed by people and media. So I am happy to see it highlighted.

So, what did Joly see at Saab? Well she saw Gripens, more specifically she called out the E variant, which was very specific but got a kick from me. She also discussed Globaleye, highlighting several times the obvious Bombardier connection.

To this degree the Minister doesn't speak much on the platforms themselves. She deviates to the fighter review, and speaks on her role in it.

She is there to look at options and investigate the potential economic benefits of other platforms. She is there to hear proposals, see facilities, and report back.

One thing I want to note is that during this whole conversation the Minister only brings uo Saab and Lockheed. She confirmed that she will be touring Lockheed facilities in the coming weeks as part of the review.

No mention of anyone else, whoch I found parculiar. No mention of meeting Dassault in Paris for example. I also noticed that, similar to recent comments from Mcguinty there is an effort to put this as a mostly DND review, and almost downplay her role in the process.

Mcguinty was first to push the DND as the final authority on everything, despite the fact it really isnt in this case. Now we have Joly doing similar, despite ISED and her very clear role in the review, and her influence on the decision, there feels like a renewed effort to highlight the DNDs role.

Of course if it was up to the RCAF this review would have been done two days after it was announced, one to write that theyre keeping the F35 and a second for the Prime Minister to read it.

So this new effort to make this seem like not just a DND choice but a CAF choice is of my interest personally. It very much feels like a narrative push, although I might be looking to deep into it, and maybe they just decided to follow the CAFs lead.

The rest of the mention of the review is pretty straight forward, with a focus on sovereignty, economic benefit and job creation listed as the main deciding factors on the review. That isnt anything new to what we know.

No timeline either. Although it looks like we will be pushing the review into September with everything else. Another thing to add to the September announcement pile I guess. I only hope for my sake they space out a bit.

The Minister also spoke on the Defence Industrial Policy, and gave a bit more clarification on things. One thing that is new to the conversation is breaking down the Policy into short, medium and long term goals.

Obviously any policy eill take this approach, but the way the Minister spoke felt more like individual phases over a unified policy. She speaks to a release ‘in thr coming months’ related to the policy. Ive been told something is coming in October related to it. That seems to be the idea that something is coming October.

The Minister speaks on the steps already taken such as giving the BDC a new mandate to support comoanies looking to expand the Defence Industrial Base, working with Natuonal Research Canada and Universities to expand R&D related to defence and dual-use technologies.

She also, for the first time officially, talks about expanding the CSA mandate to include more work and cooperation on defence-related activities. Thats a big one for me, especially as Canada works to build out our space-based and space-related infrastructure.

I really need to do a proper posting on Space and the current space projects, because there are many. There is also a new space-related trade in the works that should be announced soonish. Thats another key piece to the puzzle that is currently missing.

Thats stuff for another time though, amd we won't cloud the discussion here. She also spoke on making sure Canada's quantum strategy is aligned with defence industrial goals and outcomes.

The Medium term, from the sounds of it, is tied to the budget. Joly teased a little bit that the budget would include new measures related to expanding and supporting the Defence Industrial Base.

One potential area im looking at is expanding the Flow-Through-Shares system. Those of you in mining and energy know this system already (is my Sudbury showing?) and it's something that the Liberals have previously promised to expand on.

For those that don't know, Flow-Through-Shares allow corporations to transfer their exploration expenses to investors, who can then deduct these costs from their taxable income. In exchange, the company raises capital by issuing shares at a premium since investors gain valuable tax benefits.

Its a common system in the resource industry but one that could also provide a new, accessible market for defence startups to raise capital, something that they currently struggle heavily with.

Raising capital is hard for Canada's defence industry, extremely hard, especially as financial institutions, for many years, have been extremely adversive to supporting the defence industry.

So providing the defence industry access to this system, which has already been promised to be expanded, feels like a very easy win that could be done through this budget.

Thats one idea at least. I am sure many have been bouncing around, but it seems at the least we can expect some new measures to bolster the Defence Industrial Base in the gall budget. Perhaps that is what everyone is talking about for October?

Anyways, that covers the Ministers time in Sweden. She was also in Sweden today for the Steel Cutting ceremony for CCGS Imnaryuaq. The Minister will be meeting with:

• Finnish President Alexander Stubb

• Minister of Economic Affairs Sakari Puisto

• Minister of Foreign Affairs Elina Valtonen

• Minister of Defence Antti Häkkänen

While she is in Finland as well as executives from Nokia and Patria, as I previously reported. The Minister makes clear that the focus of her efforts in Finland are regarding shipbuilding. She was very excited to speak upon Davies recent acquisitions of Helsinki Shipyards and Gulf Copper in Texas.

The Minister also spoke to another long-sought desire of the government, the export of naval vessels abroad. She spoke to the idea of exporting Icebreakers to other countries, already a likely reality with Canadian yards jumping on the USCG Arctic Security Cutter but also to exporting other designs, such as those in use by the Navy.

There has long been a desire of the Canadian government to expand upon the NSS yards by securing export abroad. This is something that the navy has spoken about recently with a Canadian-desgined Corvette and the potential for it to be exported abroad.

Of course the three major Canadian shipyards are all taking a leading role in the Arctic Security Cutter, with Seaspan recently announcing its own team, including partnerships with Rauma in Finland and Bollinger in the United States to promote the MPI design and Davies recent acquisitions of Gulf Copper being directly tied to its bid to jump on ASC.

So this is one area where perhaps the opportunity does clearly exist, however limited to some degree that Icebreakers are in their export potential. It is very clear the Federal government sees a path to Canadian dominance in the Icebreaker market, certainly many here believe it is now set in stone.

Overall, Joly spoke candidly on what happened and what was going on. There was a lot we already knew, but I believe we are starting to see where things are going, amd the direction that the federal government is taking on the industrial side of things.

The fighter review is still in the works. There will be tours of Lockheed. We will be getting new measures in the fall budget related to the defence industrial base, and several organizations are being given new defence related mandates in the short term to help quickly try to bolster the base.

Conversations with officials in Sweden and Finland went better than I expected. They were comprehensive, detailed and focused on key priorities I wanted to see. While defence focused, Joly also spend a considerable amount of times promoting Canada and her benefits to other key industry leaders in Sweden and Finland.

I would call this delegation a success, with the hope that more comes from this in the coming months. Again I would like to see something like a 2+2 meeting in the future with officials from Sweden and Finland. I would also like to see more work done with Denmark and Norway.

The Danes came here this time around, so it only feels right to return the favour eventually! I dont think anyone can complain about whats happening, nor about how things are going. There is always a chance things faulter, yes. That is always a concern when trying to fundamentally create a new, expanded economic and security relationship.

The use of economic diplomacy, at a time when European countries are reeling from the effects of the War in Ukraine, American tarrifs, and a realization that the current supply chains running through potential adversaries like China are no longer stable is the right move. The only thing I can hope is that the right industries are being promoted, and judging from the last few days those priorities feel aligned well to what I would want to see.

There is the policy front. That is something that will have to change. There is also the urgency to get Projects of National Priority moving, including energy and critical mineral infrastructure. That needs to move faster than now.

However it is all one step at a time. This is an importsnt phase, even if it wont change things alone. There is going to be many more conversations to come, and the process will not be fast. That is something we have to come to accept and work around.

However I feel confident that the right steps are being taken, and the pathways are open. That is all I ask for right now, and currently I am happy there. I only hope this sense of urgency stays focused and clear.

You get one chance to make these things work. There is no better opportunity than now, and I doubt it will come again anytime soon. I only hope those innpoerr understand that the clock is ticking.