A pending federal policy change is causing an uproar in Canada's defence industry, whose contractors warn the shift could cost business and jobs.
CBC News Network's Power & Politics has obtained an exclusive copy of a strongly worded letter from a leading defence supply company raising the alarm about the planned policy change.
The government intends to stop performing what are called "assist audits" on Canadian companies that are seeking contracts in the U.S., according to the letter.
"Due to budgetary constraints, Public Works and Government Services Canada has shifted policy regarding the conduct of assist audits on behalf of U.S. customers seeking to procure defence-related materials from Canadian suppliers," the letter says.
The policy was initially set to kick in Jan. 1, 2013, but has since been delayed. Industry insiders worry the move could kill jobs and deter business at home and abroad.
"It is highly likely that the position adopted by Public Works will reduce our ability to compete in the U.S. and will cost Canadian exports and jobs," the letter warns. "Further, the loss of funding from contracts in the U.S. will undermine our ability to pursue contracts domestically in Canada and internationally."
Speaking on Power & Politics, Tim Page, president of the Canadian Association of Defence and Security Industries, told host Evan Solomon the assist audits have been an "excellent practice" that costs the federal government only about a million dollars annually but produces about a billion dollars in sales for the Canadian economy.
"So it looks like it's a bit of pound foolish, penny wise," Page said. "The government has a responsibility to look after taxpayers' money and they're looking to find ways of trimming Public Works' budget.
"But in an environment where competition in the defence market is as intense as it is, and where the U.S. defence department has a familiarity and a confidence in the department of Public Works and their conduct of these assist audits, it seems to us that maybe somebody forgot to look at the forest for the trees on this one."
Public Works did not respond to a request for comment.
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