Canadian military goods suppliers up in arms over export permit delays
OTTAWA — Back in October, Marin Tanase, the chief executive of Montreal-based Canadian Technology Systems, applied for a federal permit to export his patented bomb-defusing equipment to the Kuwaiti government. It was the final stage in a contract that took him two years to secure.
But by mid-January the order still hadn’t left Canada and Tanase ultimately lost the US$200,000 order. His loss, he says, was the result of an increasingly backlogged export permitting process for Canadian-made military goods — including everything from firearms to night vision goggles to bulletproof vests — that has caused delays across Canada’s $10-billion armaments industry and cost companies millions in voided contracts. Tanase says he’s lost roughly US$500,000 in contracts over the past three years.
Mounting frustrations over the delays has led to calls for Foreign Affairs Minister François-Philippe Champagne to rectify the situation. Companies who spoke to the National Post link the delays with a push by the Liberal government in 2017 to place deeper scrutiny on Canadian arms deals, following reports that Canadian military equipment had been used by a
Saudi-led coalition in a war that killed thousands of Yemeni civilians.
Canadian vendors argue most of their equipment is being exported to allied countries, and typically used for defence-related activities.
For Tanase, the lost order means he is likely to miss out on successive contracts he was eyeing with the Qatar government, which is preparing to spend big on security when it hosts the upcoming 2022 FIFA World Cup.
“It’s frustrating because you’re losing contracts and you’re losing opportunities,” Tanase said. “Two years it took me to reach a contract.”
His company sells what are essentially remote-controlled guns used to disarm bombs with high precision and from a distance.
He has sold the technology into 40 countries, typically to national anti-terrorist units or municipal bomb squads.
Another company, who spoke to the National Post on the condition of anonymity due to commercial sensitivity, said bureaucratic delays had lost them a contract for several pieces of equipment that range in price between US$50,000 to US$300,000.
According to public data, the number of export permits that have not met Ottawa’s selfimposed deadline of 40 days increased in 2018 to 374 applications, up from 228 applications in 2017. That marks a sharp rise from 65 missed application deadlines in 2016.
The delays meant that Global Affairs Canada, who oversees the reviews, missed deadlines on 14 per cent of applications in 2018, up from just two per cent in 2016.
Christyn Cianfarani, president and CEO of the Canadian Association of Defence and Security Industries (CADSI), hopes the Liberal government’s minority mandate might provide an opportunity to rectify the backlog. She has called on minister Champagne to make amends.
“With every change in government there is an opportunity for the bureaucracy to put forward new files that require their attention,” she said. “We’re in that moment where minister Champagne is new, but not new to the trade file.”
Cianfarani said complaints from member companies have been on the rise amid the permit delays. Some contracts worth tens of millions have been delayed; a smaller firm recently lost 10 per cent of its annual revenues due to permitting backlogs, the association said.
“When you’re a very small business, that can mean that you’re on the edge of maybe shutting your doors,” she said.
According to CADSI, only about five per cent of the Canadian armaments industry includes “sharp end” products like firearms and ammunition, while the vast majority sell more general products like protective gear or training simulators.