Government Operations Committee on April 5th, 2022

[The Chair (Mr. Robert Kitchen (Souris—Moose Mountain, CPC)), Conservative, Robert Gordon Kitchen]

I call the meeting to order.

Welcome to meeting number 13 of the House of Commons Standing Committee on Government Operations and Estimates.

Today the committee will be continuing its study on air defence procurement projects and its study on the national shipbuilding strategy.

The committee will be considering each study separately. The study of air defence procurement projects will be discussed during the first hour, and the study of the national shipbuilding strategy will be discussed during the second hour.

Those witnesses discussing air defence procurement projects will make an opening statement of three minutes maximum at the start of the first hour. After that, the rest of the hour will be taken up with questions from the members.

Those witnesses appearing as part of the national shipbuilding strategy will make an opening statement of three minutes maximum at the start of the second hour. After that, the rest of the hour will be taken up with questions from the members.

The committee has expectations that all witnesses will be open about any potential conflict of interest they may have. This is to ensure that the committee can fully understand the context of the testimony it is about to receive. If you feel that your testimony may be coloured by a previous or current interest, I invite you to disclose this during the opening statement.

Today's meeting is taking place in a hybrid format pursuant to the House order of November 25, 2021. Members are attending in person in the room and remotely via Zoom. Regarding the speaking list, the committee clerk and I will do our best to maintain a consolidated order of speaking for all members, whether they are participating virtually or in person. I would also like to take this opportunity to remind all participants at this meeting that screenshots or taking photos of your screen is not permitted.

Given the ongoing pandemic situation and in light of the recommendations from public health authorities, as well as the directive of the Board of Internal Economy on October 19, 2021, to remain healthy and safe the following is recommended.

Anyone with symptoms should participate by Zoom and not attend the meeting in person. Everyone must maintain two-metre physical distancing, whether seated or standing. Everyone must wear a non-medical mask when circulating in the room. It is recommended in the strongest possible terms that members wear their masks at all times, including when seated. Non-medical masks, which provide better clarity over cloth masks, are available in the room. Everyone present in the meeting must maintain proper hand hygiene by using the hand sanitizer at the room entrance. Committee rooms are cleaned before and after each meeting. To maintain this, everyone is encouraged to clean the surfaces such as their desks, their microphones and their chairs with the provided disinfectant wipes when vacating or taking a seat.

As the chair, I will be enforcing these measures for the duration of the meeting, and I thank members in advance for your co-operation.

We will continue our study on air defence procurement projects.

I would like to welcome the witnesses and invite them to make their opening statements. We will start with Mr. Huebert and then hear from Mr. Nossal and then Mr. Shimooka.

Go ahead, Mr. Huebert.

[Dr. Robert Huebert, Associate Professor, Department of Political Science, University of Calgary, As an Individual]

Thank you very much. It's indeed my privilege to be here before the committee to talk about a critical issue.

The first point I would like to leave with the committee is the fact that we are heading into a new security environment in which air power is going to be increasingly important. We are leaving behind the type of environment in which we were able to have us operate in areas of air superiority. We will probably be fighting with enemies that match us or in fact have superiority. That, then, makes it implicit that we have a procurement policy and a capability that go beyond just simply providing the forces with the capabilities they need; they also must have the capability of being able to replace that capability, as it probably will be facing losses going into the future.

The second point I would like to introduce into our considerations is the fact of understanding the overall procurement policies of Canada. We have at least two major pathologies that we have not yet been able to deal with.

The first pathology relates to the lack of information. There is so much of the process that is closed to outside observation, of course, that it's very difficult for us to make intelligent observations and corrections in terms of any types of difficulties in it. There are lifelong exclusions from sharing of information, and this makes a critical evaluation or an ability to compare to what our allies do very difficult for the outside observer.

The second point is that our air procurement process is dominated by political decisions. As we have seen from the issues surrounding the Sea Kings, the F-35s and the C-17s, the involvement of the Prime Minister and his highest level of governance to influence the overall determination of these decisions ultimately is, for many outside observers, the major determinant of whether or not a project is done fast, as was the case of the C-17s, or is done agonizingly slowly, as we saw with the example of the Sea Kings.

I would end my comments by just observing that the period in which we had the luxury of basically having an air capability that we bought in 1982, and then not thinking about it in serious methods until 2022, is over. We will need to think nimbly, we will need to be thinking fast and we will be needing to think in terms of the greater international security environment.

Thank you.

[The Chair, Conservative, Robert Gordon Kitchen]

Thank you very much.

Now we'll go to Mr. Nossal.

[Professor Kim Nossal, Professor Emeritus, Queen's University, As an Individual]

Thank you very much, Mr. Chair.

Thank you for inviting me to discuss the question of defence procurement objectives, and in particular the inefficiencies in the defence procurement process in Canada. In my short three minutes, I want to talk about one factor that Professor Huebert has already referenced, and that is politicization—the efforts of a political party, in government or in opposition, to use a defence procurement project for purely partisan political purposes, to score political points for themselves or against their opponents.

In my view, there's no better example of the corrosive effects of politicization at work than the 25-year process that's been used to replace the CF-18 Hornet fleet. I don't propose to rehearse that sad story here, although, if you'd like, I'd be happy to submit a formal account to the committee. Suffice it to say that the games that were played with the CF-18 replacement over the years were deeply embarrassing. They were paradoxical in the sense that MPs seem to believe that votes will follow their gamesmanship on defence procurement, but every piece of evidence we have is that Canadians will never cast their votes as though defence acquisition matters.

The games were certainly self-defeating, in the sense that playing political games with defence procurement guarantees that what you sow in one Parliament, you're going to reap in a subsequent Parliament.

Finally, they were costly. Playing games always increases not only the financial costs but also other costs. They diminish our defence capabilities, they diminish our reputation and they do a disservice to taxpayers.

When I look at the 25-year process to replace the CF-18s, there are a number of recommendations. First, follow defence procurement rules. They're generally sound and they're flexible enough. Second, be completely honest about costs. Try to explain to ordinary Canadians how a full life-cycle costing in defence works and why it's so difficult. Third, explain as fully as possible the government's thinking about a weapons systems. Finally and most importantly, resist the temptation to play political games with defence procurement.

One of my first research projects, after I was appointed a professor at McMaster in 1976, was a study with Mike Atkinson. It was on the process by which the Liberal government of Pierre Elliott Trudeau chose the CF-18 Hornet to be Canada's fighter. Fast-forward 44 years: When I retired from Queen's University in 2020, the RCAF was still flying those Hornets. The process remains unfinished, partly because of the political games.

In sum, then, I'm hoping that you as a committee will take a critical look at the CF-18 replacement process and recommend to your colleagues that we need to change the norms about the acceptability of politicizing defence procurement projects in Canada.

Thank you. I look forward to the questions of the committee.

[The Chair, Conservative, Robert Gordon Kitchen]

Thank you, Mr. Nossal.

Now we'll go to Mr. Shimooka.

[Richard Shimooka, Senior Fellow, MacDonald-Laurier Institute, As an Individual]

Thank you very much for having me. I really appreciate the opportunity to testify on these two studies, which are of vital importance for the national security of our country.

My personal area of research is understanding the nexus between strategy, procurement and politics, not just in Canada but also internationally, and that will be reflected in my remarks. In my view, one of the major issues facing Canada is that we are far too beholden to our own context and we fail to look beyond our borders to see threats or to learn from the experience of our allies.

This past decade has underlined the importance of air power and modern warfare, including in the Azerbaijan-Armenian conflict, as well as the ongoing war in Ukraine. They underline the need for the air force's likely acquisition of the F-35 and the army's ground-based air defence program, or GBAD.

The latter is essential to protect our soldiers from air threats on the battlefield, such as unmanned aerial vehicles, which have proven so deadly in modern conflicts such as the one in Ukraine. However, it will likely take eight years or more for Canada to field a response. By comparison, the United States developed and fielded several systems to address this threat, including one in under three years' time.

GBAD is part of our country's underwhelming track record for responding to major threats in a timely manner.

Canada's approach to defence procurement has tended to be very platform-centric, which seems to supersede other considerations, including changes to the strategic or technological environment. This is particularly problematic, given the challenges facing program delivery. This means that Canada will often prepare systems that will have limited utility for newer challenges that may emerge.

In addition, many of the public debates around defence do not correspond to a military reality. Much of the public and political discourse over the CF-18 replacement revolved around issues that are more than decades old. Most modern western militaries have long since settled such debates and are addressing much more relevant and current challenges.

The platform-centric approach also means that Canada is highly focused on single capabilities to deal with multi-faceted challenges. That approach may have worked in the past, but is less effective in the new technological and threat environment that emphasizes multiple systems operating synergistically.

Defining features of military platforms today are their sensors, data processing and connectivity, which reflect the changes to how our society now organizes itself. Our military procurement approaches need to better address this reality. For something like the army's GBAD program, how we address the air threat should start to focus on foundational enablers, such as networking and data links, before addressing sensors and missiles.

I'll cut off my comments here. I look forward to your questions, and I'm willing to go into any specific area in much more detail.

Thank you.

[The Chair, Conservative, Robert Gordon Kitchen]

Thank you very much.

I appreciate all of you being so precise and quick in your comments.

We are now going to questioning, and we're going to start our first round of six minutes with Mr. Paul-Hus.

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

Thank you, Mr. Chair.

Good afternoon, gentlemen. Thank you for joining us today to discuss this very important topic.

My first question will be for Mr. Shimooka.

We are now talking about the F–35 file, and the government is saying that a dialogue is currently being established with Lockheed Martin.

Can you tell us how you think that dialogue will unfold? What is your view of that?

[Richard Shimooka]

There are two basic possibilities for where this can go. The most likely of the two, which is what happens with virtually every single program at this stage, is that the negotiations with the U.S. government.... I should be very clear here, we don't negotiate with Lockheed Martin. We negotiate with the U.S. government, because the way the structure for the joint strike fighter program operates is that the U.S. government operates the program and we negotiate with them the delivery time and cost. Our costs are the same as what the U.S. government would pay, so the U.S. government in some ways acts as an agent in this scenario.

We do not negotiate with Lockheed Martin. That is a pretty critical point.

In this path, the Canadian government will negotiate with the U.S. government. We will then identify when our deliveries and other aspects of the program will start to occur. This should not be a very long process, given that the U.S. government is very tight about what it can offer. It will then start deliveries, or the program will proceed. We'll have a finalized contract.

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

So you're saying that there are currently negotiations with the government and that technical details are not being assessed. So for example, there are no discussions currently about whether it is a standard block IV aircraft or not. The discussions are not there yet.

Is that step already done?

[Richard Shimooka]

There's limited capacity in this sense because basically we are one of many partners and the path by which we can acquire the aircraft is very much determined by what is available. There's very little room for us to negotiate. The costing is basically set unless we do some modifications to the aircraft, and we're not really looking at major ones and that's okay. We're going to get block IV aircraft in this case because there is no block III aircraft remaining, or there are no slots to procure the aircraft at this time as a block III. It's now block IV going forward.

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

Okay.

[Richard Shimooka]

There's a second possibility. I think this is what the Minister of PSPC highlighted, which is highly unusual and very unlikely but it should be raised: if negotiations do not pan out we would go to the second bidder. This has never happened before for a major defence project, and is of concern among many, because that would basically push us to go to the second bidder, which was Saab, and commence negotiations there.

This would be highly unusual. I think that raises significant concerns, given what we know of how the assessment for selecting the F-35 within Canada went, and what we know from other countries as well.

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

Thank you very much Mr. Shimooka.

Mr. Huebert, my next question is for you.

Is the Strong, Secure, Engaged defence policy adapted to hypersonic missiles?

[Dr. Robert Huebert]

The answer is no. You can go through what they're talking about in terms of NORAD modernization. That's the major effort that we see in terms of trying to respond to the entire northern missile threat, which is predicated on responding to an ICBM threat not a hypersonic. Hypersonic requires a different set of sensor capabilities. It also requires a different type of response capability from anything that is mentioned within “Strong, Secure, Engaged”.

“Strong, Secure, Engaged” goes as far as to recognize that the geopolitical environment is changing and particularly changing in the northern aspect, but beyond that, in terms of any direction that it provides for any negotiations in terms of this capability, it's not included.

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

Thank you, Mr. Huebert.

I now come back to you, Mr. Shimooka. You said Canada had the worst possible procurement system. Can you explain why that is?

You also said that the Americans were better than us in that area. In what way are they better?

I ask that you give a brief answer, as I have less than a minute of my time left.

[Richard Shimooka]

Absolutely.

When I made that statement in a Hill Times piece, my view was that Canada often takes an inordinate amount of time to deliver major systems. The part I think is really problematic is the time that we take compared to our allies, the United States being one. Oftentimes, they're comparable but you have to realize that we're often acquiring off-the-shelf systems, systems that have already been completed. They require minimal modifications in order to get them into Canadian service, whereas if you look at our allies, the United Kingdom or the United States, they take the same amount of time but they're often basically developing systems right off the ground. A system does not exist, and they're basically developing it, feeling it, testing, evaluating and putting it into service in the same amount of time.

A good example was what I was talking about before with the army's air defence program. It's going to take eight years from 2017 to 2025 for Canada to field an air defence system. By comparison the American government in 2015 realized that air defence threats were a major threat towards their soldiers and they put in a program called M-SHORAD. That took three years from the identification of the threat, to development, to the fielding of that capability and putting it into service.

If you look at the range of Canadian procurement programs this is a common thread: it takes us much longer just to acquire systems that already exist, that are already in service and are ready to go.

[The Chair, Conservative, Robert Gordon Kitchen]

Thank you, Mr. Shimooka, I really appreciate that. If you have anything further that you would like to add, please put that in writing and submit that to the clerk. We will distribute that among the committee members.

We will now go to Mr. Bains for six minutes.

[Parm Bains, Liberal, Steveston—Richmond East, BC]

Thank you, Mr. Chair.

Thank you to our guests for joining us today. My first question will go to Mr. Huebert.

Russia's war against Ukraine now creates new security concerns for Canada's Arctic territory. When asked about the capacity for the F-35s to operate in Arctic conditions, a recent witness told the committee that several other Arctic nations are currently using them for Arctic missions. Do you have any concerns about the F-35's Arctic capacities?

[Dr. Robert Huebert]

None whatsoever. Where we can learn, clearly, is the theatre in which the Norwegians began to operate. Norway was one of the very first countries to go with the F-35. Richard can correct me, but I believe it was either block I or block II. That was acquired by the Norwegians, and they have had complete success. There have been no reports of any difficulties in terms of Arctic conditions. They had to do certain modifications in terms of running on ice-covered runways and technical aspects. These are all issues that can be shared with us.

Other countries, of course, have looked at it in terms of gathering the F-35. The Danes took about two years to decide. They actually weren't going to go for a fixed-wing fighter. After the Ukrainian war started in 2014, they decided that, yes, they needed to go to fixed-wing. They took about a one-year or one-year-and-a-half process to decide on the F-35s. They will be preparing to be able to operate off Greenland at a future date.

Of course, the most recent of our northern friends that went for the F-35s are the Finns. Once again, it took about two or two and a half years for them to decide. They've co-operated closely with the Norwegians to ensure that any of the difficulties of operating in cold environments, of being able to ensure that you can take off and land on ice-covered runways, are taken care of. The expectation, and what all three of our friends and allies tell us, is that there's absolutely no problem that is not solvable.

[Parm Bains, Liberal, Steveston—Richmond East, BC]

Thank you for that.

I'm going to switch over to you, Mr. Nossal. On July 16, 2010, the Harper government announced that it would spend $9 billion to acquire a new fleet of 65 F-35s in an untendered, sole-sourced contract. Upon being elected in 2015, our government decided to commit to a new competitive bidding process. Do you think this was the right decision?

[Prof. Kim Nossal]

I think the problem for the sole-source decision of the Conservative government was that it wasn't really explained very well. A number of other of our allies have gone sole-source. The Australians, of course, went sole-source. That was largely because of a decision made by the United States back in the mid-1990s. The decision was that essentially the United States would operate only one fighter aircraft in the 20s and 30s, and that would be whoever won the JSF. That was, of course, the F-35.

There was a logic behind the Conservative government's choice of the F-35 as a sole-source. I personally think they got it wrong in the sense that they never fully explained to Canadians why sole-source made such sense. The Liberal government, or the Liberal leader during the 2015 election campaign, promised that the government would, in fact, not buy the F-35.

The process since 2015 has been, in my humble estimation, a nice reflection of the games that have been played. My proposal to the committee is essentially to take a look at that process, with the possibility of trying to avoid gamesmanship in the future.

[Parm Bains, Liberal, Steveston—Richmond East, BC]

Just in terms of fairness, was that new process fair to the applicants?

[Prof. Kim Nossal]

I suppose so, in the sense that there's a huge logic, as most of the witnesses who have appeared before this committee have suggested. There's a real logic to the F-35, and thus an illogic to some of the other contenders. That's one of the reasons that so many of the other contenders simply said that they were not going to be part of this process.

[Parm Bains, Liberal, Steveston—Richmond East, BC]

In a recent CTV news article, you expressed that one benefit of the past 12-year process has been to reduce the level of political interference in military procurement. Can you tell us a little bit about that?