National Defence Committee on April 10th, 2014

[Jack Harris, NDP, St. John's East, NL]

I'll give you an example. Mr. Petrolekas, you mentioned SAR as a priority. How can we be in a situation where we have, for example, record defence spending, yet the Auditor General says we don't have enough aircraft for search and rescue, we don't have enough personnel, we don't have enough equipment, and we maybe don't have enough bases? We have a recent report even from the department itself acknowledging these problems. We also have an Arctic strategy for which at the moment we're incapable of providing search and rescue capability in the Arctic or of even getting there fast enough.

How can that be, with record defence spending and a problem that strikes me as being something pretty significant for a country the size of Canada?

[Ferry de Kerckhove]

George will go into the details, but he said it very simply, and it's what we've written: tell me what you want to do and I'll tell you what you need to do it. I think that's where the general failure on the part of this government is so far in not having spelled it out.

George, do you want to go into more detail on the specifics?

[George Petrolekas]

First of all, to correct a misimpression, right now we are spending less than we did in 2008. We're spending less right now since the inception of the CFDS. We're down to about $17.1 billion, and we were spending somewhere around $17.4 billion to $17.6 billion at the start of CFDS in 2008.

I'll get right to some of your questions, and they're excellent.

First, and here's the linkage to strategy, if it is ultimately in Canada's interest to prevent a thickening of the border and trade with the U.S., and if the freedom of citizens and the movement in trade across that border is primary, then you design slightly different Canadian Forces and a slightly different focus for what your Canadian Forces do from what they do right now.

Equally, when we're talking about threats, threats are not only state threats. There are also environmental threats. What I mean by environmental threats is that ice storms occur, forest fires happen, snowstorms occur, and power outages occur. At -30° in December, I assure you, those are a national crisis in this country.

Therefore, what do we do with reserves that are scattered throughout our communities? Do we better equip them? Do we create the policy conditions for them to be better used by provinces and the like? Those are some of the areas where I would go.

With respect to SAR and the other spending priorities, this is again why I talked about having a defence white paper or some sort of strategic guidance. That way, when you're in a period of economic pressure, you can decide what you're going to focus on. Do I need to spend on tanks, or do I reduce those and then focus my money on fixed-wing SAR and so forth?

[The Chair, Conservative, Rick Norlock]

That's it, John.

That will be the questioning. We're at seven and a half minutes.

Go ahead, Mr. Williamson.

[John Williamson, Conservative, New Brunswick Southwest, NB]

Thank you, Chair. Congratulations on your appointment.

Gentlemen, it's very interesting to hear from you both today.

I've got a number of questions. I think you emphasized the study and focus on the defence of North America. As for the situation around the world, as Mr. Harris was saying, we would be very interested to discuss your views on that another time. We'll try to focus on the task at hand.

Mr. Petrolekas, in a recent article in The Globe and Mail, you wrote that “Afghanistan is far better off than what it was in 2001 by almost every possible metric” and “there is no longer ethnic repression on the scale there once was, health care has improved and there remains a sense of hope.”

That's all well and good, but I'm curious to get your thoughts on how the improved situation in Afghanistan affects the defence of North America. Can you discuss this in regard to the threat we face from terrorism?

[George Petrolekas]

At its most base level, I think no one can dispute the fact that al-Qaeda, which clearly launched the attacks of 9/11 and schemed a number of other attacks afterwards, has been, if not decisively defeated, certainly spread out, and is now on the run. It has morphed into a different kind of threat, if you will, but it certainly does not represent the geographic locus and nexus of planning, capability, and fundraising that it once did. That action in particular, in that limited sense, absolutely has affected the defence of North America.

[John Williamson, Conservative, New Brunswick Southwest, NB]

You both said, “Tell us what you want to do, and we'll tell you how to get there”, in so many words. How should we integrate with NORAD, whether it's in terms of protecting the continent itself or otherwise? How does the relationship with NORAD need to change? I'll leave it at that.

[George Petrolekas]

It's funny. Every time I travel in the States, I always have to tell people that the person who was on duty on 9/11 and triggered the evacuation of North American airspace was a Canadian, and that Canadian fighters routinely will go across the border, as we permit U.S. fighters to cross. We use integrated border enforcement teams on the Great Lakes and in the waterways with the RCMP and the Coast Guard and everything else.

All of those things add back to that strategic goal of having the confidence of the Americans that we are doing our share in continental defence, which is one of the things that makes them treat the northern border maybe differently than the southern border. As I tell my American friends when I'm joking with some of them, and I hope I don't offend anybody, “There are not 13 million Canadians looking for a legal path to citizenship in the United States, and we're not your problem.”

However, with respect to NORAD and to Mr. Harris's point—and I think Ferry and I both have mentioned this—we are a continental resident, and this continent, aside from just parochial Canadian interests, has continent-wide concerns. To Ms. Gallant's point, our computer networks are entirely tied and do not recognize a border. Our hydroelectric facilities and the power grid do not recognize a border. Those things pass transparently across borders, so we both have an interest in that security. We would argue to expand NORAD into even the maritime domain and other domains.

[Ferry de Kerckhove]

I was just going to add that we strongly recommend that we expand it to the maritime issues. In fact, were it not for some of the major sovereignty concerns the U.S. seems to have that are greater than ours, we could even integrate further, but I think we're already on the right track.

In the same way, I'll give you just a quick word on ballistic missile defence, which I have been very supportive of. I think Canada should not be playing à la carte. Canada should be a participant in Europe in the ballistic missile aspect and not have it in North America. I think our interests and even our sovereignty would be better served by joining the U.S. on CBM rather than staying aloof.

[John Williamson, Conservative, New Brunswick Southwest, NB]

You mentioned American sovereignty concerns. What is—

[Ferry de Kerckhove]

Yes. I mentioned that because of the Beyond the Border theme, which is I think a very solid policy of the Canadian government. I applaud the efforts. I teach Canadian foreign policy at the University of Ottawa and I've worked very hard and spend a lot of time with my students on that, because I think Canada is on the right track, and we could go much further if the Americans had this automatic instinct of “I want to be able to cross your border, but you don't cross mine”.

[John Williamson, Conservative, New Brunswick Southwest, NB]

Very good.

How does our sovereignty interest in the north affect that relationship with America? I believe that in your report you note that the Americans insist on American passage, and they question our right to that territory and our sovereignty up there. How does their view differ from our view on that point? Also, importantly, how will that impact any cooperation in the north?

[Ferry de Kerckhove]

I think the famous argument over the Northwest Passage is that we claim they are internal waters for the most part, but for a small part of it, given the distance in it—and America will never recognize it—we've agreed to disagree. One of the aspects that is important to remember in the north is that any activity in the north is more an expeditionary than a conventional kind of operation.

I'll just quote you what the Norwegian foreign minister told me one day when I was fortunate enough to meet him. He said, “You know, we've managed to agree on the delimitation of boundaries with the Russians, and the more military Russians come to the north, the more happy we are.” That is because, first of all, there's so much on the SNR and on SAR and on all these other issues. The more we have to cooperate with, the better it is. In fact, the level of cooperation in the north between those countries is without comparison to the conflicts we have in the south.

The issue of the Northwest Passage will be treated on its own and will stay in a kind of disagreement. We'll agree to disagree for the foreseeable future, but we also have to remember that most of the traffic we're talking about for the future will be in the northeast passage rather than the northwest one. It's the Russians we'll have to deal with, which might be a bit more difficult.

[The Chair, Conservative, Rick Norlock]

Thank you, sir.

Go ahead, Mr. Regan.

[Geoff Regan, Liberal, Halifax West, NS]

Thank you very much, Mr. Chair. Congratulations.

Thank you very much to our witnesses.

Page 45 of your report says:

Though certain projects materialized primarily due to the pressures of the war in Afghanistan, broad recapitalization, particularly of the RCN and less so of the RCAF, has been the subject of incessant delay and the inevitability of equipment rust out.

I can tell you that as a member of Parliament from the Halifax area with a lot of constituents who either have ties to the navy or are in the navy, or who are in the armed forces in other ways, this is very concerning. I'd like to ask you to elaborate on the particular pressures facing navy procurement and the effect you think it has on navy capability.

[Ferry de Kerckhove]

I've been to Halifax; I know the feeling. I feel the pain.

[George Petrolekas]

You know the events of last month in the south Pacific with HMCS Protecteur and the fire. It is a single-hulled ship—and we've known this for a very long time; that ship is older than some of you—so it can't go into half of the harbours in the world because it doesn't meet MARPOL regulations. We've known this. It costs millions and millions in upkeep, and that it caught on fire and is now being towed back and probably can't be repaired should be almost a source of national embarrassment.

I'm not here necessarily to talk about the speed of procurement, but clearly it has taken far too long to replace the joint support ship. The unfortunate thing is that in each iteration where we look to buy the joint support ship, we find we just can't afford it, so we reduce its capability. Then we start the cycle all over again. The problem is that every single year you wait to buy a ship, you lose something in the vicinity of $200 million to $250 million in purchasing power. Delay that over five years, and there goes another ship you might have had. There goes another frigate you might have had. The speed of the procurement process has everything to do with the net effect that we're going to deliver.

However, to go back to two things about the navy, if we have aspirations to having a global presence, those joint support ships are critical because what gives us independence of action as a country is that we can support our frigates or our ships overseas. If we don't want to do that, then we don't have to buy them. It's back to the strategic consideration.

I would even suggest to you that in the foreseeable future, when the French are bringing an amphibious vessel called the Mistral to Halifax, I would strongly advise your committee to visit. It would be, I think, an eye-opener in terms of the capability that Canada could have.

Are 12 frigates enough, given that we also have a cycle of things that have to go into refit every five years? In net effect, what we have at this moment is maybe nine or ten capable frigates. The Tribal class destroyers, also at close to 40 years old, are being tested beyond their endurance. Quite frankly, while they're potentially capable as a training vessel, I don't think they're capable anymore as a war-fighting vessel.

Then you look at a country like Canada in the Caribbean, in our contribution to the counter-narcotics effort, we see it's all being driven by MCDVs. It's not being driven by first-line ships. Why? Because we just don't have enough or ones modern enough—

[Ferry de Kerckhove]

Mr. Chair, can I add a quick comment?

I'll confess to you that in writing this document, we had a lot of consultation with other people, and we've always faced—and I'll be very candid about it—a problem with some of the leaders on the navy's side, precisely because there hasn't been a fundamental political decision as to where it matters. Thus you have the Atlantic side versus the Pacific side. I think it has also had a role in slowing down the process of acquisition. What should we do? What do we need?

That's why it's so critical that we have the political guidance and overarching vision: so that the navy doesn't feel itself somewhere in between and, at the same time, we delay the acquisition that is essential.

[Geoff Regan, Liberal, Halifax West, NS]

You also wrote that, “There is some question whether the NSPS—”

—that's the national shipbuilding procurement strategy, for those who might be listening—

“—will actually be able to deliver 15 warships within its announced funding envelope, informed observers commenting that this might be scaled back to between 10 to 12 vessels”.

You referred to 12 a moment ago, as a matter of fact.

You also likely know that the Auditor General, in his November 2013 report on the NSPS, called the government's cost estimates “inadequate”, “insufficient”, “very imprecise”, and “at most, placeholders”. He said this is because budgets in the NSPS were set early in the options analysis phase and were based on rough estimates.

Could you talk more about navy procurement issues and the resulting affordability concerns in this context?

[George Petrolekas]

I think the Parliamentary Budget Officer has talked about that as well. We did mention that as you delay an acquisition, you lose $200 to $250 million of purchasing power. You just cannot avoid those inflationary pressures, so even though you might have given in 2006—let's just pick a date—$2 billion or $2.6 billion, which seems sufficient to produce that, it's not sufficient anymore.

I think we should also be quite honest with ourselves that part of the NSPS is to build those ships in Canada. There will be a premium of some sort that will be paid in order to start up or reanimate that industry. That's fine, because that's what we're there to do; the development of the nation is part and parcel of it. However, there is an erosion that we have to recognize either in capability or inflationary pressures by year, which diminishes either the capability that you put into a ship or the number of ships that you are going to acquire.

[The Chair, Conservative, Rick Norlock]

Thank you very much, Mr. Petrolekas.

Mr. Leung is next.

[Chungsen Leung, Conservative, Willowdale, ON]

Thank you, Chair, and also congratulations on your election.

The issues that we're discussing today do not seem to be new issues, because I've heard them in the 1960s, post-Vietnam, and I heard them again in the 1980s in relation to the ill-fated Iran rescue.

I think from this level we need to look at security in two ways. Are we talking about internal security—what is within the borders of North America, between the borders of Canada—or are we talking about international security? International security has to do with this messianic complex that we have in saying “Listen, if we make the whole world safe, then we will be safe.” I think that's the U.S. strategy, but we have to also look at security in terms of whether this is for Canadians or whether for our position as a world citizen.

Now, as for our position as a world citizen, we can do one or two things. One is to do what we do well, and that is in areas of disaster mitigation, such as deployment of military assets to solve natural disasters or other man-made disasters. More specifically, it seems that from this tradition of Canada as the smallest of the G-7 powers, we should be looking back to our roots in peacekeeping, but we're also moving into other areas. Are we doing peacekeeping, peacemaking, or peace-building? All these impact, ultimately, on what kinds of assets we want to deploy and what kind of investment we want to make for first-strike capability, combat readiness, and mitigation of human conflicts.

I must say that this whole question of security is like crystal ball gazing. You cannot predict where the next flashpoint will be. We were not able to predict Crimea, we were not able to predict World War I—well, World War I was Archduke Ferdinand—and then we had inklings of Hitler coming on, and we had no idea that the Japanese were going to bomb Pearl Harbour. On that basis, I want to hear your comments regarding the overarching question of security. How do we put the assets into preparing for that?

[The Chair, Conservative, Rick Norlock]

The chair just wants to remind members that this study is the defence of North America, so the question will go ahead, but I just want to try to narrow this down to the defence of North America.

[Chungsen Leung, Conservative, Willowdale, ON]

That's how I framed the question.

[The Chair, Conservative, Rick Norlock]

Thank you very much.