National Defence Committee on Nov. 18th, 2014

[VAdm Mark Norman]

I'll go class by class, but before I do, I'd like to address the second half of that latter question because it's common to all classes.

Again, the key to transitioning through these gap periods is to maintain competency. The way to maintain competency is through focused training that includes traditional classroom training but also the increased use of simulation, and ultimately and most significantly, it involves assuring that our folks get as much time at sea as they possibly can.

What we're doing is exactly what I indicated in response to a previous question. We've re-engineered how we manage the experience levels of individual sailors. Unlike previous systems, where we would look at an entire crew, we now look at individuals and assure that they get the opportunities they need. They can be moved from one class to another as required to get that experience.

As it relates to the specifics of individual capabilities, as you alluded to in your question, the first I would speak to is the command-and-control capability for a group of ships. That capability has truly evolved over time. It really comes down to having the space and the technology in the ship to support the command-and-control functions. We made a conscious decision at the front end of the Halifax-class modernization to basically upgrade four, the first four—Winnipeg was one of those ships—to mitigate that gap, because we knew the gap was going to happen at some point before we had a replacement capability.

We're quite confident that this gap will be filled with that capability. As I said, we're getting great results out of the modernized Halifax class.

[The Chair, Conservative, Peter Kent]

That's time. Thank you, Mr. Bezan.

Ms. Murray, please.

[Joyce Murray, Liberal, Vancouver Quadra, BC]

Thank you very much for being here to help us understand your challenges.

I did note in your remarks here that somehow the section around challenges got deleted from the notes, but clearly there are many, and I'm referring to the “Evaluation of Naval Forces” document of December 2013.

Their key findings are these: number 4 is challenges in “readiness”; number 5 is “a reduction in forces capability”; number 6 is “strained Navy resources and...issues”, etc.; key finding number 8 is that the “Navy will be obliged to do less with less”; number 10 is that the readiness direction was changed to address that it wasn't being met with respect to “the required materiel state of ships”; and number 13 is that “Despite the efficiency improvements, there remains a funding gap in maintenance...”. For number 16, I'll get to that one later.

It's a pretty huge challenge that the RCN is facing.

I'm curious. What does it mean when it says that the navy will have to “do less with less”? Can you explain what's being dropped?

We know there have been budget cuts, but there have also been significant planned clawbacks. Those actually account for $3.5 billion over the last four years alone of capital underspend. That's 23% of the capital budget that has been deliberately clawed back. To what degree is that contributing to this set of challenges?

Lastly, in terms of mitigating these problems created by the premature retirement of four of the ships, the gap that you've been talking about—and you've been talking about capacity or training—I will note that in key finding number 16, “the percentage of personnel trained at optimal course capacity was [only] 54 percent,” whereas the target is 90%. Clearly, there is a huge fall-down in training, so that's hardly going to be what is going to address the gap. Could you explain how these gaps will actually be filled when training is so far below its target?

[VAdm Mark Norman]

Thank you. I'll walk through this, possibly in reverse order, if I may.

The first thing I'd like to do is specifically address the reference to the training capacity of the finding and recommendation. I would like to clarify that the CRS finding is that we are operating our training system at less than optimum capacity, not a reference implied or otherwise to the overall quality of the training that's being delivered or the degree to which we're training our people. CRS is saying in that piece of the report that we have a training system that is not operating at optimum efficiency and we have a number of courses that are either being cancelled or zero-loaded, or are not running at full capacity, which is a function of many things, not the least of which is the efficiency of our school board, which is one of the key areas that we're transforming as we go forward.

Why do I say that? I just want to make sure that we're all on the same page. It's not a reference to the overall quality of the training that's being delivered. It's the degree to which we're running either classrooms that aren't full, or we're having to cancel courses because we don't have enough people to go on courses.

[Joyce Murray, Liberal, Vancouver Quadra, BC]

Excuse me, let me just interject. Is part of that problem of training that you don't have the ships available to do the training, which is a much deeper and more systemic problem?

[VAdm Mark Norman]

If I then can transition to the other two elements of your question, first was the issue of resource pressures and the implications, and the second issue was specifically capital expenditures and that kind of thing. The first thing I would say, as it relates to the CRS report itself, is we invited the CRS report. I'm not going to refute anything in it. I stand by the findings. It is indicative of a mature organization that it's capable of opening itself up to internal, and in some cases, external scrutiny.

[Joyce Murray, Liberal, Vancouver Quadra, BC]

My time is very short, so justifying this report is not the best use of time. My question is what are you dropping? To what degree does the targeted underspend explain this laundry list of challenges that RCN is facing?

[VAdm Mark Norman]

We're not dropping anything explicitly or significantly. I indicated in response to Mr. Harris' question that we're at a point right now where we can risk-manage some of this because the fleet is not at its full capacity. In the next couple of years we're going to be returning to full capacity and stand fast the removal of the ships, which have to be retired at some point.

In some cases we're going to reallocate people and a little money from those retirements into the higher priority areas, those being modernized frigates, submarines, and coastal defence vessels as the bridge to the future.

With respect to the capital underspend as you've characterized it, in many cases we were unable to move those projects and those investment opportunities in a timely way and so that money has been reprofiled into the future when we can get at it and use it, and—

[Joyce Murray, Liberal, Vancouver Quadra, BC]

I have a side question. Is the national shipbuilding procurement strategy the reason you were unable to move forward on some of those planned replacements of ships?

[VAdm Mark Norman]

In some cases the underspend, as you've characterized it, is a function of smaller projects that are related to other modernization and capital programs, and those have been reiterated in the recent defence acquisition guide. Those are the key priority investment areas from the RCN's perspective that cover the spectrum of missile systems, underwater warfare systems, boats, tugboats, and things like this that are fairly fundamental to our business. They're all part of a systemic approach to modernization because it's not just one fell swoop.

As it relates to the NSPS programs themselves, they're moving along. As I said, we're optimistic, quite confident we're going to be cutting steel on the Harry DeWolf-class within the next nine months. Sure, we're not where we thought we would be—and you'd have to talk to the chief financial officer as to the specific underspends in specific dollars—but as it relates to the schedule, there is a direct correlation between schedule delays and spending delays.

I'd leave it at that. I'm not the expert in...

[The Chair, Conservative, Peter Kent]

That brings us to time.

We'll now go to the second round of questioning, five-minute slots.

Ms. Gallant, please.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Thank you, Mr. Chairman.

Through you, what arrangements are we making with our allies and NATO partners to mitigate any capability gaps after our ships are retired?

[VAdm Mark Norman]

I'll speak to what I think is the most visible example, the auxiliary oiler replenishment capability. That is an area where we can work and will be working with our allies.

I spoke to the command-and-control gap earlier. The only other gap that I was unable to address, and perhaps I can use this opportunity to speak to it, is the air defence gap. As we've modernized the frigates, we have enhanced their self-defence capability. Where we will have to manage a capability gap is in the longer-range air defence capability that was inherent in the destroyers. I think that is a key area where allies will play an important role as we get to the new capability, which will come in the surface combatants in early to mid-next decade.

In the interim, our closest allies have very capable ships that have enhanced air defence capabilities. We operate with them routinely, and this goes back to the other question about interoperability.

The key, from a Canadian perspective, to having access to that capability is to be able to participate in the complex battle space of air defence, and that's exactly what we're doing on a routine basis. We're therefore able to get into what is a very integrated and distributed air defence situation at sea.

As it relates to the replenishment capability specifically, we are working with key allies to investigate options that cover a wide spectrum, from what I refer to as smart scheduling, which we do on a regular basis and we look to continue to do in the months and years ahead, up to the possible access to a more deliberate and dedicated capability. At the moment we're still in the analysis stage. It's not as positive a story as we thought it would be.

The key thing to understand is that capability is one of the most in-demand and short in supply capabilities across all of our allies, so there is not an affluence of under way replenishment capability amongst our key allies. In fact, they manage it all very tightly themselves. They're prepared to help to a point, but there is no silver bullet, if I may, solution. We are still working on a couple of leads. I have a remit back to the minister in the short term with respect to some of those possible leads.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Russia's been engaging in large-scale militarization of the Arctic, and former Soviet bases are being reactivated. How will the maritime equipment modernization prepare Canada or protect Canada from a Putin-led Russian aggression in our Arctic?

[VAdm Mark Norman]

As I indicated in response to an earlier question, I think one of the key things to take into account, as we move into the Arctic in a more deliberate and sustained way, is that it is not just physical capability in terms of ships. The Arctic offshore patrol ships, the Harry DeWolf ones, are going to give us a significant improvement in the RCN's ability and the overall Government of Canada's capacity to have a sustained presence in the north.

I mentioned Nanisivik as the start of a sustainable support capability in the high north. I think the other key capabilities to your question, which will help in that regard, are other investments that are happening in terms of surveillance, communications, space-based, territorial-based. All of these investments represent what can be characterized as a system of systems approach.

There is no one single solution to the challenges you've characterized. It really comes down to having an integrated network of sensors so that we know what's going on in the high north; having the communications capabilities that are required to operate in high latitudes because those are special requirements—not all communications operate in those high latitudes—and so there are investments required and investments that are planned in that regard; then lastly, having a set of platforms that can either respond if we know something's happening or can be pre-positioned to respond, as in the case of the Arctic offshore patrol ships, long-range patrol aircraft, and other capabilities we have in our inventory now and that are all also undergoing extensive modernization.

[The Chair, Conservative, Peter Kent]

We'll have Ms. Michaud, s'il vous plaît, pour sept minutes.

[Élaine Michaud, NDP, Portneuf—Jacques-Cartier, QC]

Thank you very much, Mr. Chair.

Vice-Admiral Norman, I want to begin by thanking you for your presentation.

You very briefly touched upon some problems with the vessel acquisition process. I would like you to tell us more about the direct consequences of the delays in the joint support ship project on the Royal Canadian Navy. I would like you to explain how you have dealt with those situations and how you intend to deal with them going forward.

[VAdm Mark Norman]

If I understand correctly, you asked me two or three questions not only regarding the acquisition of new vessels, but also regarding decisions related to the retirement of refuellers. Is that right?

[Élaine Michaud, NDP, Portneuf—Jacques-Cartier, QC]

I want you to tell us specifically about the consequences the delays have had on the joint support ship project.

[VAdm Mark Norman]

You mean construction delays?

[Élaine Michaud, NDP, Portneuf—Jacques-Cartier, QC]

Yes.

You can use the simultaneous interpretation to make this easier for you. That way, you can be sure to understand my questions. I have only five minutes, and having to repeat or explain my questions makes things difficult.

[VAdm Mark Norman]

Even in English, I often have to check what exactly I am being asked.

[Élaine Michaud, NDP, Portneuf—Jacques-Cartier, QC]

I just wanted to make things easier for you. Go ahead.

[VAdm Mark Norman]

I only want to give you the best possible answer.

When it comes to delays in the building of joint support ships, as I just explained regarding other acquisition projects, these things unfortunately happen. Project complexity and investments in Canadian shipyards explain the delay of two or three years.

[Élaine Michaud, NDP, Portneuf—Jacques-Cartier, QC]

My question was about the consequences of construction delays. Can you answer briefly, as I have other questions.