Government Operations Committee on March 27th, 2014

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

One of the objectives here is to help support our Canadian industry. We have a lot of companies in this country that have very specialized technologies and skills and have the potential for huge exports. In fact, 50% of the defence and security work in Canada is exported. We want to support those companies, help them grow, and also help them develop the imprimatur, if you like, for exporting. If they've done business with the Government of Canada, that helps them export to other countries, and that's a good thing, because that's creating jobs and economic growth here while bringing in foreign investment dollars.

[The Chair, NDP, Pierre-Luc Dusseault]

Mr. Côté, you have five minutes.

[Raymond Côté, NDP, Beauport—Limoilou, QC]

Thank you, Mr. Chair. I would also like to thank the minister for finding the time to appear before us.

I am very pleased to be here today. I am also happy to see that a second federal building is being built in the Estimauville sector, in Beauport—Limoilou. Public servants will be relocated there, which will visibly improve things.

Minister, I listened carefully to your speech. I will focus on Shared Services Canada, a completely new initiative that requires a lot of brainstorming. It is not easy to achieve the goals that have been set.

One of the questions I have about the main estimates has to do with the redeployment mentioned in the 2014-15 Report on Plans and Priorities. This report tells us that Shared Services Canada anticipates that its full-time equivalents will decrease from 6,400 to 6,100 between 2014-2015 and 2015-2016. This drop will primarily affect the distributed computing services sub-program, which will experience a drop from 460 to 160 full-time equivalents.

What is the justification behind this significant drop? Are we talking about a program with a set term or a transfer to subcontractors?

[Liseanne Forand, President, Shared Services Canada]

Thank you for your question.

This change has to do only with implementing the new email system. As the minister pointed out in her speech, we are consolidating the 63 existing email systems into one. This project will end in a year, at the end of March 2015. That explains the difference in the numbers. The people in those positions will be transferred to other positions once the project ends.

[Raymond Côté, NDP, Beauport—Limoilou, QC]

Okay.

What is the status of the work related to the email services transformation initiative?

[Liseanne Forand]

The transformation of the email system started at the same time as Shared Services Canada. A year ago, in June 2013, the government signed a contract with Bell and CGI, in partnership with Microsoft. Ever since, we have been working with them on implementing the project. We are conducting trials at the moment. We are expecting to implement the system gradually across the federal service in waves, so to speak.

Shared Services Canada will be the first wave. We always want to test new products ourselves first to know whether they work. In this way, we make sure to deliver a good product to the other departments and partners. Then there will be three waves in the various departments. The 43 departments will migrate to the new email system by March 31. We are at the end of the trial and testing period and we expect to start implementing the system in May this year.

[Raymond Côté, NDP, Beauport—Limoilou, QC]

There is another aspect that intrigues me, and that is linguistic management and services. We see an increase in the actual expenditures from 2011-2012 to 2012-2013, but in the main estimates we see a drop of approximately 15%, down to a total of $68 million.

What will the impact of this reduction be? Are the amounts being transferred somewhere else to support linguistic management programs? Are services being cut?

I am looking at page 2 of the Library of Parliament briefing notes.

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

For us, interpretation services are very important. Our government believes in the importance of bilingualism. In terms of translation, all the departments can use the services of Public Works and Government Services or buy those services elsewhere, from the private sector in particular. There is a drop in this area because there is a drop in demand. People are also going to the private sector for those services. In addition, internal services have improved efficiency by using technology. That is why the total amount has been reduced.

[Raymond Côté, NDP, Beauport—Limoilou, QC]

Should we be concerned?

I am sorry, Mr. Chair.

[The Chair, NDP, Pierre-Luc Dusseault]

Thank you, but I will now give the floor to Mr. Aspin.

[Jay Aspin, Conservative, Nipissing—Timiskaming, ON]

Minister, thank you for taking time out from your busy schedule to be with us today.

I couldn't help but notice that you did not make reference to the national shipbuilding procurement strategy, or NSPS. In his recent report, this is what our Auditor General had to say about the NSPS, in three notable quotes.

First:

We concluded that...[the] NSPS...should help sustain Canadian shipbuilding capacity and capability. In addition, the NSPS should help the government to procure federal ships in a timely, affordable manner, consistent with the build-in-Canada shipbuilding policy.

Second:

We also concluded that National Defence and PWGSC—in consultation with the Treasury Board of Canada Secretariat—are, to date, managing the acquisition of military ships in a timely and affordable manner....

Third:

We found that PWGSC implemented adequate controls, including an effective governance structure, over the selection of the shipyards....We would encourage PWGSC to consider using this approach in other future major capital acquisitions.

This is what the Premier of B.C., Christy Clark, said this means:

Thousands of high-paid jobs, people who are going to be able to support their kids.... I think it's so important because it's not just one generation. It's going to be multiple generations that are going to benefit from this.

Even our beloved colleagues in the NDP are quoted as saying something about it. I quote former deputy speaker and former MP Denise Savoie, who said that she couldn't have better news for her region in terms of good jobs, especially at this time in the economy.

Peter Stoffer said:

...the significant economic benefits of building ships in Canada, including the creation of approximately 15,000 jobs and economic spinoff benefits of $2 billion a year.

Mr. Chair, through you, I would like to ask the minister if she could possibly comment on why the government's national shipbuilding procurement strategy is good news for the shipbuilding industry and also good news for the Canadian economy.

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

For sure it is good news. As you'll recall, we launched our Canada First defence strategy a few years ago. That included a commitment to make sure our men and women in uniform got a much-needed investment in equipment to support them as they defend our values both at home and abroad.

Over the last number of years before we formed government, the military had been starved of equipment. If you'll recall, they even showed up in Afghanistan in the wrong uniforms. If you extend that to the big equipment, the story was even worse. We made a huge commitment to invest in this, and that included the ships, which very much needed replacing.

By this point, of course, having not spent money on big ships, we didn't have a big shipbuilding industry in Canada anymore, so it was time to rebuild it. When we did, it was very cyclical. It was boom or it was bust. The way we've set up the national shipbuilding procurement strategy is that we've planned it out. We've split the work so there will be steady work for many years to come.

On both coasts, where the biggest contracts have been awarded—Irving on the east coast and Seaspan on the west—they're going to have steady work for many, many years. This will create a lot of jobs, high-paying jobs, skilled jobs. That's good for the Canadian economy. It will help our sovereignty, because we'll have control over our own technology and equipment. Our men and women in uniform will have the equipment they need, and it will last a long time.

As you pointed out, the outside estimates have been for 15,000 jobs and $2 billion a year—again, a year—in economic activity. That's really good news for Canadians and for jobs. It's not just the jobs that are created at the shipbuilding yards; both companies are recruiting suppliers right across this country, in towns large and small, in companies large and small, to provide the various components for the ships. That's a pretty broad range of outsourcing they'll need to do. Every region of Canada will benefit from this. It's a huge economic stimulus, but it's something that will give us long-lasting value.

[The Chair, NDP, Pierre-Luc Dusseault]

Thank you, but your time is up.

Mr. Byrne, you have five minutes.

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

Madam Minister, you mentioned that the defence procurement secretariat is in process. It's being enabled now, I assume. There's also the National Fighter Procurement Secretariat that's in existence.

Do you anticipate that the two will be folded into each other once the defence procurement secretariat is established?

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

Our longer-range plan, once we get the defence procurement secretariat set up, is to fold that in, along with the shipbuilding secretariat. This will provide us with greater synergy. We're going to have people working together. They can share best practices, because we're applying the same principles as we used in the shipbuilding procurement strategy to the acquisition of fighter jets and to all of the defence procurement.

Going forward, the new defence procurement strategy will apply, so these people will be able to work together. We'll get efficiencies and we'll get synergy from the experiences they've had.

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

Madam Minister, are you confident that the CF-18s will be replaced in a timely manner? Their life cycle is now relatively soon to expire; I think 2020 is realistically an outside date, even with upgrades.

Can we have F-35s or something else by 2020 if you're not going to procure until at least 2015?

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

We want to make sure that this time when we go forward that we're going to get it right. As you know, it has been many, many, many years that...for failure to deliver as originally expected. We're going to make the decisions as quickly as we possibly can, but we want to make sure that we take the time to make the right decision. That's why we're working through our seven-point plan, to get all of the facts before we make the decision. Then we expect delivery within two years of placing of the procurement.

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

Could getting it right include a potential capability gap of having no air coverage for a period of time?

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

No. We're working very closely with the Department of National Defence to make sure that the men and women in uniform do have the equipment they need until the new equipment comes in. That's our whole goal: to make sure that they get that. But we're also responsible to taxpayers and the way we spend their money. If we don't get it right, then we could see a repeat of the last 10 years. We don't want that to happen. That's why we've engaged third party experts to review the qualifications, the risk assessments, to make sure that we are getting all of the information necessary for a good decision.

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

You're right, Minister. Having the holdups like those we've had with the light armoured vehicles, the trucks, the helicopters, and just about every military procurement within the last 10 years is not acceptable. I would encourage you to try to correct that at some point in time. It has not gone well for the military.

Perhaps you could enlighten us. You said that defence procurement has fundamentally changed now that it's moved into Public Works. What was so wrong with defence procurement prior to your ministry taking it over?

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

One of the fundamental things—and I'm going back much more than 10 years here—is that things weren't getting delivered. Orders were being placed for equipment that was ideal but that didn't exist. That was one of the biggest holdups; there was no clear understanding of what products were actually deliverable and what were hoped for that technologically hadn't been developed yet. If a thing hasn't been developed, it can't be built and it can't be delivered.

This is why right now we're doing the early engagement with industry before we issue an RFP, because we want to understand what exists and what is still to be developed, because that really affects how quickly we can get the equipment.

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

Would you include the F-35 in that category? I was a member of the public accounts committee when officials from this Conservative government sat at the table and vehemently defended a fighter jet that did not exist and that was increasing in cost and that seemed to be increasingly unsupportable. Would you categorize the F-35 in that very same way, as being intended equipment that was non-existent?

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

When the order for the F-35 was placed, prior to our government if you'll recall, it was a very developmental airplane. That was the plain and simple fact. Whether people understood—

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

It's just that a contract was placed.

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

—how much development work was required, I don't know. I would hope they didn't know, because if they did and they made the decision based on that, then it was, let's just say, more than optimistic to expect they could get a developmental airplane produced within the short timeframe that was required in the contract.

What we have to do is to go back and reset it. Let's get all the facts. Let's find out and apply the same principles that we did on the shipbuilding strategy—