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?Alberta Llub Northeast Alberta Information HUB Aerospace Technology, Defense and Unmanned Systems Status and Future Opportunities Submitted by: Denean Tomlin, President 115 1925 18th Ave NE Calgarv, AB T2E 7T8 -a­ Phone: 403.710.0982 LI Ln??!?nd Email: [email protected] Alberta l lUB .... Where ?opportunity comes to life devon --- ------- ---------------- ----- --- ------- llPage Western Canadian Defence IndustriesAssociation The Western Canadian Defence Industries Association (WCDIA) is a notfor-profit organization that advocates, educates and connects. It represents the industry in BC, Alberta, Saskatchewan and Manitoba by promoting activities, connecting individuals and creating networking opportunities and events (including national industry conferences such as WestDej). The role ofWCDIA is tofacilitate the development ofthe Aerospace, Defence and Security industries in Western Canada. WCDJAfocuses on increasing the businessgrowth of its members, supporting the diversified development ofthe region's economy, and enhancing Canada's security through education, networking, and advocacy. This study was prepared on behalfof WCDIA by: Steve Banks, Triske/e Logistics Michael Ede, Vectors West Bruce Gilkes, EDGE Strategy & Analytics Penny Leach, HDGE Strategy & Analytics Denean Tomlin, President, WCDIA I I I . I I I I 11 !, ,, 1, ' 2[Pagc CONTENTS Executive Summary Chapter 1- Review mandate and process Chapter 2- Understanding the Alberta HUB Region Chapter 3- Understanding the Aerospace Technology, Defence and Unmanned Systems Industries Chapter 4- Opportunities and Recommendations Chapter 5- Challenges and Recommendations Chapter 6- Engagement and Roadmap Chapter 7: Alberta HUB Value Proposition and Marketing Messages Appendices 3IPage EXECUTIVE SUMMARY The Alberta HUB Aerospace Technology Defense Project evaluated the assets and capabilities within the Northeast Alberta Information HUB {Alberta HUB) region to determine the potential of attracting and generating new economic activity related to the Aerospace Technology, Defence and Unmanned Systems industries (ATDUS). ln addition, work was undertaken to identify opportunities and challenges to determine how to enable companies and institutions in the HUB region to build commercial relations with players in the ATDUS industries, Commissioned by the Alberta IIUB to conduct this analysis, the Western Canadian Defence Industry Association first identified the principal assets and capabilities in the region then vetted each through three filters: Opportunities under Canada's new Defence Strategy, which calls for new equipment and an expansion of the Canadian military as well as a reduction in its carbon footprint; Canada's defence procurement strategy-the commitments that are being made to purchase this new equipment and lastly, through Canada's Industrial and Technological Benefits (1TB) framework. The 1TB framework ensures that Canada benefits through military procurement by way of linking procurement to both direct work related to the purchase of the military equipment and/or indirectly, to the growth of Small and Medium Sized Enterprise {SMe) and public institutions such as colleges, universities, and research institutions. Assets and capabilities within the HUB include the Cold Lake Air Base where extensions of the life-cycle of both the CF-18 Hornet and the CH-146 Griffin aircraft will bring new maintenance activity to the base. New activity will also be generated through Canada's new defence policy which calls for unprecedented private sector involvement with extensive refurbishment and "greening" of the existing Department of National Defence (DND) infrastructure. Longer term, the base will undergo significant infrastructure development in support of Canada's new fighter jet. This study also suggests that local procurement activity in relation to Alberta's four Canadian Forces Bases is over $1DM annually and this requ'res further study to best exploit opportunities within the HUB. Other assets and capabilities relevant to the study include ln noTech ALBERTA, a scientific, engineering and technological research and testing facility that supports technology advancement. The HUB's colleges arc also particularly relevant to the ATDUS particularly if they cluster to establish an Aircraft Marntenanco éngincer Program (both maintenance and avionics and related technician programs) and a Commercial Pilot Program. Lakeland College, in particular, is offenng programs in piloting drones which yields some areas of opportunity regarding Autonomous Systems, one of the niche areas of Alberta's aerospace and defence sector. It may be feasible to link the use of drones at Lakeland College with the Beyond Visual Line of Sight {BVLOS) initiative. Connecting to over 20 organizations, this initiative will validate BVLOS technology. All post-secondary and research facilities in the HUB have a particular focus on renewable energy-an important area of specialization that is top of mind for many defence contractors. 41Page fhe road ahead Involves creating a value proposition for the region that highlights capabilities in a manner lhat attracts attention from defence contractors, the Government of Alberta, Western Economic Diversification and Industry, Science and Economic Development (ISED). "Deal flow" will only happen with engagement with these parties. Given the location of the Cold Lake Air Base, the region has a distinct driver of economic activity and a "differentiator" relative to other areas of Alberta. Ideally, moving forward would include a unified strategy with all relevant stakeholders in the region including the City of Cold Lake, the Cold Lake Air Base, the surrounding communities, and the Indigenous groups in the area, particularly the Cold Lake First Nations given the impact of the Weapons Range on its traditional territories. Thus, this document is the sta, t of a project and the start of a process. Given the stakes associated with Investment in defence procurement in Canada and the need to create receptor capacity for offsets associated with some very large military programs that are in the range of billions of dollars; the differentiator created by the Cold Lake Air Base and Weapons Range; the interests of the City of Cold Lake in leveraging the Air Base; and the need to address Canada's Truth and Reconciliation Calls to Action for Indigenous Peoples, all provide multiple compelling reason to plan for building an ATDUS strategy. While the need for diversification of an economy based on the languishing oil and gas sector was posed as an underlying reason for this study, it is more likely that insufficient attention has been brought to bear on the sleeping giant- i.e.: defence procurement. The decision to undertake a study of this nature will place the Alberta HUB ahead of other regions in exploring how to pivot the economy to high tech and a knowledge-based economy. /Is it appears, lhere Is another sleeping glanl in Canada as Calgary has now taken the lead on innovation. As measured by the number of filed patents, Calgary now surpasses the likes of Ottawa and Waterloo in patents filed per capita. This rise has happened without the fanfare that accompanied the ascent of the country's previous tech HUBs in Ontario. Unlike other tech HUB booms there is no other central character such as Blackberry dominating the science. Rather-it's a multitude of players driving the creation of new technologies both through competition and cooperation. This is the roadmap for Alberta moving forward - the convergence of technologies across sectors within the context of collaboration. SI Page SUMMARY OF RECOMMENDATIONS • Opportunities related to Canada's defence policy and procurement strategy-Yearly equipment procurement is rising from $6B to $10B per year, and the Future Fighter Program ($14B) will see significant construction activity in the HUB. There are a number of original equipment manufacturers (OEM's) located on the airbase that will be very significantly impacted by these procurements and it 1s critical that the HUB understand the direct and in direct opportunities associated with new procurements. It is recommended that the HUB create an Engagement Strategy with Peraton, L-3MAS and Raytheon. These OEMs will be involved with the extension of the F 18 through maintenance, activities and potential radar upgrades. • There will be opportunities for Small and Medium Sized Enterprises {SMEs) regarding the infrastructure changes, land remediation practices, conversion to green energy and potentially other defence procurements (such as marine projects) that could provide unique opportunities for small and medium businesses in the HUB. Engaging with them will be a critical step for the HUB. It's recommended that this opportunity could be advanced significantly if the HUB proceeds to develop an inventory of small businesses in the region. This would not only help to engage SM Es with opportunities at the Base it would also allow the HUB to identify capabilities for potential technology development through the development of clusters or consortiums that could be built with the HU B's colleges and research entities. It needs to be noted that 15% of all defence procurements are now required lo target SM Es. • Opportunities related to local Defence Procurement Approximately $10MM per year is spent on local procurement by the four Alberta military bases inclusive of Cold Lake. It is recommended that efforts should be taken to better capture this opportunity. As a first step, it is recommended that the HUB needs
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