Defence industry rep says Canada on ‘hamster wheel’ of red tape as ammo contracts fail to materialize

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The Canadian government’s efforts to boost ammunition production among domestic firms is caught in a “hamster wheel” of red tape, the president of a defence industry association warns.

The Liberal government announced in early April a commitment of $9.5 billion over 20 years to accelerate ammunition production in the country. The push will also replenish the ammunition stocks of the Canadian military that had been depleted because of weapons donations to Ukraine.

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Former chief of the defence staff Gen. Wayne Eyre, who retired on July 18, said several months ago the plan would involve some “quick hits” on ammunition production to signal the Liberals’ new defence policy was being taken seriously.

But Christyn Cianfarani, president of the Canadian Association of Defence and Security Industries, points out the initiative is mired in red tape. No major contracts beyond those that were previously anticipated have been issued.

Even if industry wanted to bankroll an increase in production of ammunition on its own, the companies wouldn’t be able to get loans from banks to do that because they have no signed orders from Canada, she added.

“The file appears stuck in a hamster wheel of bureaucracy, red tape and impediments,” Cianfarani told this newspaper. “Put simply, the government’s processes still haven’t caught up with the grim reality of Russia’s invasion of Ukraine.”

National Defence spokesperson Cheryl Forrest said efforts on new contracts were underway. “Work is still ongoing to sign contracts with our industry partners,” she said. “More precise details will become available as these efforts progress.”

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As of 2024, the department and Canadian Armed Forces have been authorized to make an immediate investment of $520 million into the acquisition of ammunition and explosives, Forrest noted. That money will be spent over a five-year period to replenish depleted ammunition stocks.

She noted that the department was working with Public Services and Procurement Canada, which manages the Munitions Supply Program, to secure the capability for supply of critical ammunition and small arms.

Jeremy Link, a PSPC spokesperson, stated that, since April, the department had awarded five ammunition contracts, all to General Dynamics-Ordnance and Tactical Systems Canada, for a total value of $85.5 million. All five contracts were for variations of 84-mm ammunition, he added. Such ammunition is used in the Carl Gustaf anti-armour system employed by the Canadian Army.

Last year, this newspaper reported that Bill Matthews, then deputy minister at National Defence, blamed Canadian industry for failing to come through with supplying ammunition and related material in the aftermath of Russia’s 2022 invasion of Ukraine.

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Instead, Canada dipped into existing stockpiles to provide Ukraine with much-needed ammunition or has dealt with U.S. and foreign firms to provide munitions. In some cases, it has gone through Canadian-based firms, but those companies then acquired the ammunition from foreign sources.

But industry officials pushed back against Matthews’ claims, pointing out that National Defence and PSPC with the munitions program had bungled keeping up with ammo purchases and making sure stockpiles were properly maintained.

In 2022, then-defence chief Eyre also pushed for companies to switch to what he called a “war footing” so weapons and ammunition production could be ramped up both for Ukraine and to replenish Canadian military stocks.

In response, defence industry officials privately noted Eyre didn’t seem to understand that companies couldn’t ramp up production without government contracts in hand since large-scale manufacturing required upfront purchasing of supplies and material.

Cianfarani told this newspaper she was recently in Paris for the Eurosatory defence show and there seemed to be a sense of urgency there to turn commitments into signed contracts. “The impression I got was that our allies don’t think Canada will meet the mark for ammunition production,” she added.

David Pugliese is an award-winning journalist covering Canadian Forces and military issues in Canada. To support his work, subscribe: ottawacitizen.com/subscribe

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