Government Operations Committee on March 27th, 2014

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

I want to focus in, Minister, if I can. I have a limited amount of time.

[The Chair, NDP, Pierre-Luc Dusseault]

I see, Mr. Byrne—

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

The F-35 seems to be exactly in that same mode. You say that it does not exist. that it's just terrible to place an order on a project that doesn't exist—

[Diane Finley, Conservative, Haldimand—Norfolk, ON]

I did not say that.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

—yet we have this gap that needs to be filled by 2020. There seems to be a disconnect here.

[Diane Finley, Conservative, Haldimand—Norfolk, ON]

That's not what I said.

[The Chair, NDP, Pierre-Luc Dusseault]

I am going to have to cut you off and give the floor to Mr. Adler for five minutes.

[Mark Adler, Conservative, York Centre, ON]

Thank you, Minister, and all your officials, for being here today. I commend you for all the hard work that you've been doing. The Canadian people will be very grateful when all this is said and done.

I do want to focus on some of the comments you made on the build in Canada innovation program. In particular, I want to quote something you said, “We're pleased to have received excellent feedback from entrepreneurs, who now have greater opportunities to sell and export their innovative products while creating jobs for Canadian workers.”

Could you please share with the committee what the goals and objectives are of the build in Canada innovation program and perhaps elaborate on some of the benefits of this program?

[Diane Finley, Conservative, Haldimand—Norfolk, ON]

The build in Canada innovation program is run through our office of small and medium enterprises. It's not a subsidy program; it's an opportunity for Canadian companies to trial their products through a buy-and-sell arrangement with government departments, which will then put the products through their paces, see if they're relevant, see how they can be improved, and give that feedback to the companies so that they can take their products from the demonstration stage to a marketable stage. It helps our departments find out what's available out there and what can help them be more efficient and more effective. It helps the Canadian companies, because they get live testing of their products in a real-world situation.

That's good for them to improve their products, but it also gives them the advantage when it comes to doing export business. If they are trying to sell to a foreign government, it's a whole lot easier if they can say that they've already sold to the Canadian government. We've seen a number of companies that have applied to this being hugely successful with it. There have been several quotes. We launched the fourth round of calls for proposals in November; it closed in January. We're going through them now.

This time we have additional funding for the program. We've made it permanent. Previously it was sort of a pilot. I know the word “pilot” is an official term in government. It was a trial program, shall we say. We've now made it permanent. We've added extra funding to it and specifically a military component, because our military is the biggest spender of Canadian dollars in terms of tangibles. They have such a wide range of needs. The focus is going to be on products that protect the soldier. If you recall from the Jenkins report, this is one of the key industrial capabilities that Canada has. It gives us a competitive advantage around the world. We want to build on that strength. That's why we partner with Canadian companies to further increase their skills, their product line, their quality, and their ability to export, because exports from Canada create jobs here in Canada, and that's good for everyone.

[Mark Adler, Conservative, York Centre, ON]

You talked about the military. Are there any specific target areas for innovation other than the military?

[Diane Finley, Conservative, Haldimand—Norfolk, ON]

We're also looking at health care and other areas where the products could be of use to the departments such as Environment. I saw one product that is dramatically improving the ability to assess an oil spill on land, for example. It's really fascinating technology that exists only in Canada. It's getting a leg up because of the work it's doing in partnership with Environment Canada.

[Mark Adler, Conservative, York Centre, ON]

Thank you.

[The Chair, NDP, Pierre-Luc Dusseault]

I will now give the floor to Mr. Martin for five minutes.

[Pat Martin, NDP, Winnipeg Centre, MB]

Minister, I'm still not quite clear about your answer on this newspaper article regarding the most recent delay. Could you please be a little more clear in your remarks? All through your remarks you've been talking about your responsibility to the taxpayer, etc. Well, we have an obligation to the taxpayer to tell them whether or not we are buying these planes and how much they will cost. They should know that before the next federal election and not afterwards.

As it stands, Canadians are being asked to buy the world's most expensive pig in a poke, sight unseen, with no competition, for an airplane that's not even certified yet. It's more political than operational on the face of it.

[Diane Finley, Conservative, Haldimand—Norfolk, ON]

When it comes down to the facts, we want to make sure we do not have a pig in a poke. We want to make sure we are being responsible with taxpayers' money. To do that, we have to make a responsible decision. The only way to make a responsible decision is to gather all of the facts. No decision has yet been made. I repeat, no decision has yet been made.

[Pat Martin, NDP, Winnipeg Centre, MB]

Minister, you have staff in Washington right now working with the American military, Canadian Armed Forces personnel. You have contracts being awarded in Winnipeg and elsewhere to build components for these aircraft. We have to be forthright with Canadians. Are we buying these things or not, and If so, how much are they going to cost? Nobody has explained to me yet why we need a stealth fighter, period. I don't even know if we're clear on the operational....

Stealth fighters are designed to swoop in on unsuspecting people and bomb them under the radar. Canada is not really in the business of bombing people in their sleep. Are we being honest with Canadians? Why do we need stealth fighters? Could we not get a cheaper version of an airplane that would do the same thing but without the stealth capability?

Those are questions that remain to be answered, and you're now the Minister—I don't envy you—that has to answer these things.

[Diane Finley, Conservative, Haldimand—Norfolk, ON]

My department is responsible for the lead on the procurement, but it is not my department that decides what kind of equipment our military needs. We know it's not a crop duster. It has to be bigger and better than that, but we do not have within our department the technical expertise to determine what the military should be using. We wouldn't be so presumptuous.

We rely on the military to provide us with what its mission requirements are, what it needs to get the job done.

[Pat Martin, NDP, Winnipeg Centre, MB]

How long does that really take? We have ex-armed forces personnel on this committee. Does it really take a decade to describe what kind of aircraft we need? Again, that's out of your portfolio, so I won't dwell on that.

With respect to the buy Canadian policy, can you tell me if there have been any changes to the preferential treatment for Canadian companies since this terrible example with the troop carriers?

Let me just tell you what happened that disadvantaged both Quebec and Winnepeg. We make the best buses in the world in Quebec and in Winnipeg. When the Canadian Armed Forces needed all new troop carrier buses, it put out the tender and awarded it to Mercedes-Benz in Germany, because it was the low bidder, and the difference was $5,000 on a $500,000 bus. We weren't allowed to buy Canadian because there weren't three bidders; there were only two, Quebec and Winnipeg.

Is that changing? Are you now allowed to buy Canadian regardless of how many bids you get?

[Diane Finley, Conservative, Haldimand—Norfolk, ON]

That's a very good example of why we've changed the policy. Instead of having three bidders, now only two are required.

[Pat Martin, NDP, Winnipeg Centre, MB]

Really?

[Diane Finley, Conservative, Haldimand—Norfolk, ON]

There's also the aspect of the value proposition: what response to an RFP is going to provide the best value to Canada? It's not just the price. It's not just the price combined with the technical qualifications, but what jobs would be created. Those would be looked at, but not just in their totality. What's the distribution of them? Are they good quality jobs? Will there be information technology transfer included in it? Will there be long-term benefit? Will there be immediate benefit?

All those factors will be used to evaluate the value proposition, which as I said, could be as much as 10% of the evaluation of the bid. That could be enough to win or lose the procurement.

[Pat Martin, NDP, Winnipeg Centre, MB]

I think we can all agree that, to the greatest extent possible, we want to buy Canadian. It seems Canada is the boy scout here. We always put everything out to worldwide tender, and I don't think we're selfish enough, frankly, in keeping that work in-house in our own country. The helicopters are another example, recently.

[Diane Finley, Conservative, Haldimand—Norfolk, ON]

That's a good argument for the national shipbuilding strategy.

[The Chair, NDP, Pierre-Luc Dusseault]

Thank you, Mr. Martin.

I will now give the floor to Mr. Sweet for five minutes.

[David Sweet, Conservative, Ancaster—Dundas—Flamborough—Westdale, ON]

It's an honour to participate in the committee, and it's great to be here to hear about the good work that you're doing, Minister.

Minister, I have a somewhat lengthy preamble, but I'll get to the question.

In your remarks you mentioned that the Public Works department continues its major pension and pay transformation initiatives, which are replacing outdated legacy systems and centralizing service delivery for pension services in Shediac, New Brunswick, and pay services in Miramichi, New Brunswick.

You mentioned that these transformation initiatives will enable the Government of Canada to save more than $100 million annually, starting in 2016-17. You continued on talking about Public Works leveraging the new pension system to provide pension services for the RCMP starting in 2014-15 and for National Defence a year after. These initiatives will further contribute to our government's plan to increase efficiencies and streamline our operations.

In this regard, I would note that earlier this month the Prime Minister said:

Canada has earned a world-wide reputation as a leader in pension administration, financial reconciliation and the use of technology to better deliver government services....

In the case of pension administration, tens of millions of dollars in annual savings.

The other big transformational project—

Again, continuing along with what the Prime Minister said:

—the new centralized federal pay centre in Miramichi, is even more significant in terms of saving taxpayers money.

Once it is up and running and the start-up costs have been recouped, the pay centre will deliver close to $80 million in savings each and every year.

I am also pleased to announce that the pay centre is on budget and on track to be completed by 2015, right on time.

On time and on budget.

In this regard, I would like to take this opportunity to congratulate the hard-working officials at Public Works who, through their efforts, are modernizing our pay and pension administration system and saving millions of dollars annually for taxpayers.

I'd especially like to congratulate the associate deputy minister of Public Works, Ms. Renée Jolicoeur, who on March 7 was presented with the Public Service of Canada Outstanding Achievement Award by the Prime Minister himself at Rideau Hall. The awards were hosted by the Governor General.

Ms. Jolicoeur is a world-class innovator who has transformed outdated government pension and pay systems into cutting-edge operations that have saved taxpayers money, have provided better services to Canadians, and are envied around the world.

Minister, I was wondering if you or your officials would like to elaborate on these very positive initiatives from your department.