CANADA: Our side of defence

One company works on projects so secret the Canadian government doesn't want it to talk to the media.

Another company stops bullets and bombs for the U.S. in Iraq.

Another firm finds its software on the classified BlackBerrys of FBI and U.S. military officials.

Ottawa may have the reputation of a government town, but it's also home to Canada's military-industrial complex.

The world's largest defence contractors -- Lockheed Martin, General Dynamics and Raytheon -- have Canadian headquarters here, but they're not the only players. Ottawa-based companies have also muscled in on the action, carving out niches that have turned them into global players.

There are about 200 Ottawa-based companies that currently do business with the U.S. military, according to records, and at least 600 working with the Department of National Defence.

Yet the potential of Ottawa's defence and security sector has barely been tapped, said Tim Page, president of the Canadian Association of Defence and Security Industries.

"If industry were briefed by the military and security agencies on what challenges they face and invited them to help them in solving some of those problems through technical innovation, they might be pleasantly surprised by the depth of capacity residing in the Ottawa community to achieve that," said Page.

$15-BILLION SPENDING PLAN

The local defence and security sector could soon see a major boost through the Stephen Harper government's plan to invest more than $15 billion in the Canadian military. Offshore firms that land the big contracts will be expected to invest an equal amount in the domestic economy. The problem, according to Page, is that the government has yet to reveal where they want those investments to go.

"This is the most exciting time in the defence and security market in more than 30 years," said Page.

Ottawa-based consultant Paul Tonkin, of Tonkin Aerospace, said Canada's military is currently a slave to the whims and needs of the U.S. military; the Canadian military buys most of its supplies from the U.S.

Just last month, the military bought $5.4 million worth of ammunition from the U.S. through a non-competitive contract. The same month, it bought $23.8 million worth of aircraft parts and $6.7 million in guided missiles.

Tonkin, a specialist in ball bearings who has worked on design modifications for the engine and landing gear of F-18s and the Canadian Snowbirds' Tutor jets, said the U.S. could freeze Canada out if things get tough.

"During times of war, they have to make sure they have a good supply. We could be sitting here missing a part and it would be sitting on a shelf in case they need it," he said. "A big part of our defence depends on the kindness of others."

Nationally, the defence and security sector is an estimated $7-billion industry. The impact locally could be around the $1-billion mark, but it's difficult to pin down because most firms do business in both military and civilian sectors.

Ottawa firm ACE Security Laminates is one of the city's success stories. With projected growth at 35% to 38% and revenues projected at about $15 million over the next two years, this 12-year-old firm has planted roots from the Philippines to Brazil to China to Iraq. Its technology for bulletproofing windows is the preferred choice of the Ottawa Police, the Canadian government and the U.S. military. Its product protects windows on the SUVs and Hummers that ferry dignitaries, senior officials and soldiers in Iraq.

The company doesn't make the glass. It makes a film coating that fuses with glass at the molecular level, making windows shatterproof. Bullets, bombs and Molotov cocktails can be shot and hurled at the doctored glass to no effect. While the window pane may crack, it will not shatter.

"We do the who's who of industry, celebrities and defence," said David Hayes, vice-president of marketing and chief information officer for the company.

ACE has 40 employees in the Ottawa-Gatineau region, including a plant in Gatineau that employs 12 people.

Another big local player is DEW Engineering, a firm that does such high-level work for the military that it's not allowed to talk publicly about what they do, said an official with the firm. According to its website, DEW is currently in the midst of a contract to upgrade the M11 armoured personnel carrier fleet for the Canadian military.

SOFTWARE SUCCESS STORY

The company also does work for the U.S. military and other allies. Its core business is to build add-on components for military vehicles to make them safer, lengthen their life or change their capabilities.

The firm has worked on $34 million worth of contracts with the federal government since 2003 and employs between 500 and 999 people, according to Public Works and Government Services Canada data.

Then there's Idokorro, which means whereabouts in Japanese. That company found itself providing software to the U.S. Air Force, the National Guard and the FBI. The software -- originally developed for the BlackBerry, but also compatible with other mobile devices -- allows users to access computer servers remotely.

"We are one of the only companies that does this kind of software," said Paul Dumais, vice-president of product development. "The military is a type of organization that is running 24 hours a day, seven days a week and our software is about increased response time."

The four-year-old company started with four people and now employs 19, but the defence and security contracts make up only 5% of its business, said Dumais.

Military contracts take up a lot more of Lockheed Martin's and General Dynamics' time. The two behemoths anchor Ottawa's defence and security sector.

The General Dynamics lab in Ottawa developed the battlefield communications backbone of the Canadian military, called IRIS. The lab is also developing a targeting system for M-777 Howitzer guns for the U.S. military that allows soldiers to target the guns remotely.

The company, which began as a downtown Ottawa "hole in the wall" back in 1948, is now moving 150 workers to Kanata from its Bells Corners campus as a result of a contract to develop electrical equipment for Sikorsky helicopters.

"We have hired a lot of people to do that work, but in the process we ran out of space," said Bob Fischer, vice-president of business development and government relations for General Dynamics Canada.

Lockheed Martin's lab in Ottawa has developed systems to scramble missiles, catch terrorists trying to attack ports or ships via divers and give authorities the ability to harness copious amounts of information at the touch of a button.

Called the Knowledge Management Framework, this information tool can bring intelligence data, satellite imagery, geographic information and live streaming together. It is currently being used by U.S. agencies and the Ottawa lab is modifying it for the Canadian context.

"It has been demonstrated here to the Solicitor General as well as Defence," said Martin Munro, general manager for Lockheed Martin Canada, which has been around since 1939 and currently employs 250 high skilled workers.

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