May 29, 2014, Ottawa, Ontario – The Honourable Diane Finley, Minister of Public Works and Government Services, today outlined at CANSEC 2014 the Government’s progress on implementing Canada’s Defence Procurement Strategy. Minister Finley reiterated the Government’s commitment to working with industry to leverage purchases of defence equipment, encouraging job creation, economic growth and prosperity across Canada.
As a part of the Harper Government’s commitment to the Red Tape Reduction Action Plan, Minister Finley highlighted the amended Schedule to the Defence Production Act, which will cut in half the number of entries on the list of domestically controlled goods in Canada. The Schedule is now aligned with the U.S. International Traffic in Arms Regulations (ITAR) and will significantly reduce administrative and compliance burdens on Canadian businesses. The amendments to the Schedule will support the global competitiveness of Canadian aerospace, defence and security industries by better allowing businesses to operate on the same level as their foreign counterparts with no compromise to national security.
- The Defence Procurement Strategy has three key objectives: delivering the right equipment to the Canadian Armed Forces and the Canadian Coast Guard in a timely manner; leveraging our purchases of defence equipment to create jobs and economic growth in Canada; and streamlining defence procurement processes.
- On June 16, 2014, the first edition of the Defence Acquisition Guide (DAG) will be released. The DAG will help industry identify business opportunities early in the process of purchasing military equipment and services.
- The Controlled Goods List contained in the Schedule (Section 35) to the Defence Production Act includes the goods and technologies that require domestic control under the Controlled Goods Program. The amended Schedule will come into force on June 4, 2014.
- Entries in the revised Schedule have been reduced by 50 per cent, limiting domestic controls to goods and technologies listed in the ITAR (Section 121.1), and goods and technologies of importance to Canada for national security reasons.
“Companies that demonstrate a willingness to invest in Canada through the transfer of intellectual property, the creation of skilled jobs, innovation-related activities and export and international business development will have a competitive advantage when bids for defence and major Canadian Coast Guard procurements are evaluated.”
“As a result of industry and government collaboration, we have approved the amended and reduced Schedule to the Defence Production Act, alleviating some of the administrative and compliance burden for Canadian businesses. These changes better align with defence trade controls in the United States and will help level the playing field for the Canadian aerospace, defence and security industries vis-à-vis the global competition, without compromising national security.”
The Honourable Diane Finley
Minister of Public Works and Government Services
- Defence Procurement Strategy
- Controlled Goods Program
- Amendments to the Schedule to the Defence Production Act
The Revised Controlled Goods List under the Amended Schedule to the Defence Production Act
The Government of Canada has revised the Controlled Goods List, through the amendment of the Schedule to the Defence Production Act (DPA). The Schedule has been in place since 2001 and required updating to align with Canada’s changing domestic security requirements and international obligations.
The amendment of the Schedule to the DPA is part of a series of measures being taken by the federal government to ensure that the Controlled Goods Program (CGP) balances the enhanced security requirements of the 21st century with the needs of Canada’s defence, aerospace, security and satellite industries.
The reductions to the number of entries on the Controlled Goods List will support the global competitiveness of Canadian companies by minimizing the administrative and compliance burdens imposed by government without compromising national security.
The regulation of controlled goods in Canada
The CGP, within Public Works and Government Services Canada (PWGSC), is the federal government’s domestic industrial security program that regulates the examination, possession and transfer of controlled goods within Canada. The CGP falls under the authority of the DPA and the Controlled Goods Regulations. Through the Program’s registration and inspection processes, the federal government works to mitigate the risk of the proliferation of controlled goods and technology, strengthens Canada’s defence trade controls, and supports Canada’s domestic and international security interests.
The revision process
In 2012, members of a PWGSC Controlled Goods Program Industry Engagement Committee, who represent key industry stakeholders in the aerospace, defence, satellite and security industries, raised the importance of aligning Canada’s export and domestic controls with the U.S. Administration’s Export Control Reform Initiative to help Canadian companies remain competitive in the global market.
In response, PWGSC worked with subject matter experts from partner departments to review and propose an amended Controlled Goods List.
Industry and government stakeholders were closely consulted during the development of the proposal for amending the Schedule. PWGSC also undertook 30 days of formal public consultations from November to December 2013 to collect input from Canadians on the proposed amendments.
The majority of stakeholders expressed support for the proposed amendments and especially the removal from domestic controls of non-military items. A summary of the feedback received can be found in the Consultation Report posted on PWGSC’s website.
The amended Schedule
Following the regulatory process, the amended Schedule was approved by the Governor General of Canada through an Order in Council, and will be published in Part II of the Canada Gazette on June 4, 2014.
The amendments remove over 50 percent of the current entries and focus the CGP’s activities on the control of goods and technologies that have national security implications and/or require CGP oversight to meet commitments to the United States. Canada enjoys exemptions under the U.S. International Traffic in Arms Regulations that are underpinned by the CGP. The revised Schedule will alleviate the administrative and compliance burden on Canadian companies, and better align with defence trade controls in the United States. These changes meet Canada’s international security commitments and better position Canadian aerospace, defence and security industries to operate on a level footing with their foreign competitors.
The amendments to the Schedule have no effect on Canada’s export controls. The Export Control List is administered by Foreign Affairs, Trade and Development Canada pursuant to the Export and Import Permits Act.