Government Operations Committee on May 26th, 2015

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

No, what I'm saying is the discussions that are ongoing are competitive in nature, and as part of the negotiations I'm not prepared to disclose them at this point.

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

They've already been assigned the contract or the notional contract. What's competitive about that at this point in time? Is there a possibility that it could be reassigned to another contractor?

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

What I've said is it's competitive in nature and commercially competitive information. I'm not about to reveal their competitive information any more than I would reveal your personal data.

[The Chair, NDP, Pat Martin]

I'm afraid, Mr. Byrne, Minister, I'll have to interrupt. You're well over time.

Next, for the Conservatives is Ms. Wai Young, for five minutes, please.

[Wai Young, Conservative, Vancouver South, BC]

Thank you, Minister, for being here today with your team, and for all the extensive information you've provided to us today.

Given that the member opposite has talked a little bit about Vancouver Shipyards, and coming from Vancouver, B.C., I wanted to provide an opportunity to share with this committee and put on the record how truly excited we in Vancouver are about Seaspan and the shipbuilding procurement strategy.

Several years ago I was fortunate to have been part of the announcement and attended when hundreds of people came together in a room to look at the procurement strategy and what that would entail. The excitement in that room was palpable. I noted in your presentation you said there are an estimated 15,000 jobs over the next 30 years and that some 256 companies across Canada are engaging in contracts for over $900 million.

I want to share with you that excitement. Many of those small and medium-sized enterprises are doing a number of different things. Building a scientific vessel is very complicated whether you're in electronics, or steel, or metal, or all of those guidance systems, etc. They were all there. This has had an incredible impact on Vancouver. They have spent the last couple of years rebuilding an underutilized site to get it ready for shipbuilding.

Minister, I think you said that you were there last month. I hope you enjoyed your visit there and the tour. Over the last few years, I've taken advantage of touring those facilities and seeing the true transformation. Anybody who's interested can log on to the Seaspan website. That company is extremely proud of the transformation of the site. They've had to tear down buildings, relocate other buildings, and build a whole new set of buildings because there had to be very large buildings to accommodate the cutting of the steel. They installed the largest crane, they say, in Canada. They had a contest at a local school to name this giant crane that is now part of the Vancouver skyline, but in a nice way. Everybody loves this crane. It's called Big Blue. It's been an incredible transformation to see how our government has leveraged public works to create jobs and strengthen our economy.

Minister, was that a new government strategy? Why wasn't this done previously, because there was no shipbuilding whatsoever in Canada prior to this? How can we continue through your programs, like you said earlier, with the SME program, etc., to do that, and to create even more jobs in the future?

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

When we launched the national shipbuilding procurement strategy three years ago, it was definitely something new that our government brought in because we recognized that we need ships for our military and also for the coast guard. We used to have that capacity to build them in Canada, but we didn't anymore because for years there had been a conscious effort, I believe, to shut down the shipbuilding industry in Canada and send it offshore. We wanted to create those good jobs here. We wanted to have a sustainable industry.

One of the reasons the industry shut down was that in the past, it was boom or bust. Everybody was really busy or there was no work to do. Thousands of people were laid off in the bust years, and then when companies tried to ramp up for a big production, they couldn't find those people because they'd found other jobs.

As we laid out the national shipbuilding procurement strategy, we did it in such a way that what we're trying to do was first of all develop the capacity here to build those ships, and second, to plan the work over 20 or 30 years in such a way that we would have an industry that is sustained over that whole period of time. It will eliminate the boom and bust cycle and create jobs.

People think about ships these days and think it's all welding, when the greatest value in those ships, the most expensive parts, are all the hi-tech stuff: the electronics and navigation systems, the defence systems. I've toured them and it's absolutely amazing to see the technology that's in them and the people in high-skilled jobs who are needed to produce them.

I'm really pleased that we are developing this industry and we're putting in place programs and planning that will support this industry for years to come. Not only that, but the companies have to invest in Canada. The two leads can't just outsource everything offshore. So far in B.C. alone, some $150 million has been spent with local companies as Seaspan has ramped up its operations in Vancouver.

[The Chair, NDP, Pat Martin]

Thank you, Minister, I hate to interrupt you. Ms. Young, your time is concluded. Thank you.

That concludes our first round of questioning, but we still have the minister with us, I believe, for another 10 minutes. That would leave time for one round for the NDP and one round for the Conservatives, if that's agreeable to committee members.

[Some hon. members]

Agreed.

[The Chair, NDP, Pat Martin]

Okay, the next turn then is for Mr. Ravignat from the NDP.

[Mathieu Ravignat, NDP, Pontiac, QC]

Concerns have been raised about the security issues for Shared Services Canada particularly with regard to Bell's involvement. I'd like to know what you have to say about that. Do you think that Bell, for example, has the necessary expertise? How are you ensuring that data is being protected while this transition is going on?

[Liseanne Forand]

Thank you, Mr. Chair, for the question.

As the minister mentioned in her remarks earlier about Shared Services Canada, improving security, security of data, security of information, and cybersecurity are the key benefits we're seeking to achieve through the transformation and modernization of IT infrastructure. That is true of all the initiatives we have under way.

I think the honourable member is talking about our email transformation initiative. The contract for that was awarded to Bell Canada in partnership with CGI and Microsoft in June 2013. Security of data and security of systems is one of the key objectives of that contract. Our colleagues at Communications Security Establishment Canada have stated time and again that email systems can be a vulnerability for IT infrastructure—

[Mathieu Ravignat, NDP, Pontiac, QC]

I'm sorry to interrupt you. Thanks for the context, but I'd like to know what is being done practically to ensure the safety of data.

[Liseanne Forand]

Practically speaking, security has been built in from the beginning through the security clearance of staff and all the facilities in which they're working, as well as right into the infrastructure of the systems. It's had to go through a very rigorous security authorization and accreditation process that was overseen by CSEC. It continues to be a key component of the project.

We have worked very hard with the contractors to make sure that the data is secure. The data centres are located in Canada. The data must be Canadian when it is in place as well as when it is in motion. That means the networking all has to be secured as well.

[Mathieu Ravignat, NDP, Pontiac, QC]

Are you confident that the players at the table, Bell, Microsoft, and so on have a good sense of what our security needs are with regard to data, particularly within the public service and in serving the public?

[Liseanne Forand]

Thank you. That was an excellent point. We have worked very hard, both through the RFP process, as well as with the winning contractor, Bell. We make sure from stem to stern that it is safe and that they understand it.

One thing we've brought in as part of our procurement and building processes is something we call supply chain integrity. We make sure, with respect to every piece of equipment, every piece of gear, that every contractor and every subcontractor is using trusted equipment. We use the security agencies to give us that assurance as we go.

Yes, we believe that we have definitely emphasized to the contractors and to their whole teams that security is absolutely key for us, and we will not approve the email system for use across government until we are absolutely confident it's secure.

[Mathieu Ravignat, NDP, Pontiac, QC]

Canadians will be watching; there's no doubt about it. As you know, there have been events in the past where viruses have caused servers to crash. Hopefully, you've taken that experience into consideration as you go forward.

Let me ask a question of the minister.

A few weeks ago, I asked you some questions about the situation in Phase III of the Place du Portage building, in connection with the presence of Legionnaire's disease-related bacteria. You answered me in the House. You did not deny that there was a problem. You said that the level of risk was low, but you did not address the issue of the delay between when these bacteria were found, and when the public servants who work in these offices were well informed.

Have you examined the situation since? Can you reassure these public servants who, as you know, live in my riding and in the National Capital Region? What have you done to guarantee to these people that, in the coming weeks, they are going to be working in a safe and healthy environment?

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

This is very important to us. The safety of employees is always a priority.

On May 14, Public Works received a health assessment advising that there were unusually high levels of bacteria.

That is why we went through several steps. Since then, all of the tests assure us that

the environment is indeed safe to work in. Testing has always been done on a regular basis, both weekly and monthly, at different levels.

[Mathieu Ravignat, NDP, Pontiac, QC]

My concern isn't so much the fact that there's been an analysis. I commend you for that diligence. It's a matter of the delay in informing the public servants when it did happen.

Have you looked at what happened there?

[The Chair, NDP, Pat Martin]

Mr. Ravignat, I'm afraid I'm going to have to interrupt you. That would be a comment more than a question. We're well over time.

In all fairness, Mr. Guy Lauzon has been waiting patiently for his five minutes. This will be the last round.

[Guy Lauzon, Conservative, Stormont—Dundas—South Glengarry, ON]

Thank you very much, Chair. I'd like to welcome the minister and her colleagues.

Boy, I'm a pretty enthused guy right now. I've heard some pretty neat stuff.

One thing that really caught my ear, and I think you confirmed this, is that because of some changes you've made at SSC, the government is saving $209 million per year. Is that correct?

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

By the time the transformation is complete, it will be $400 million a year.

[Guy Lauzon, Conservative, Stormont—Dundas—South Glengarry, ON]

In other words, every five years there's going to be $1 billion of savings and, Ms. Forand, I think you said it's going to get up to $400 million. In other words, every five years we'll save $2 billion. That is the kind of government that I think we want to have in place, so thank you very much for that. That's music to my ears.

One of the other things, and this is a little personal note, is that my office used to get a lot of calls from people that they couldn't use the websites. I think you mentioned the IT has improved greatly. I'm not getting those comments now. I think your websites in the various departments, all the departments, seem to be more user-friendly. As a matter of fact, I was on one yesterday for Canada 150 and it was really useful. Even I could use it, so that's a good testament. It's nice to hear.

The other thing I heard is about the 256 companies. My riding is a middle-class riding and over the years we've had challenges with employment and now we find that our companies are working. Shipbuilding has nothing to do with my riding—we're between both oceans—but quite frankly, we're excited about that because we're going to get a heck of a lot of contracts, especially from the east coast. There are a lot of fabricators in my riding. You mentioned small businesses. These folks are creating jobs and when another welder is hired at $60,000 to $80,000 a year, that adds to our economy. All of that is good.

As I said, I heard a lot of good things here. You talked about the Miramichi call centre. For the last five years we have had a call centre in our riding and it's like an anchor tenant at a mall. When you have a good government facility like that, it encourages other people to invest, and our community has improved over the last five years as a result. I'm very happy for Miramichi.

I have a question for the minister. Minister, you mentioned there would be 50,000 jobs for the next 30 years for shipbuilding, so probably in the next three to five years we'll be dealing with everybody in the world. We have 38 free trade agreements already and growing. You talked about the ups and downs in shipbuilding, but is there a way that once we do our work we can sell our shipbuilding expertise to other countries? I guess that's what I'm asking, because I would think that after 10 to 15 years we're going to be in pretty good shape.

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

It's going to take a little longer than that, because we've had a decade of darkness where equipment just wasn't bought for our forces, but we're fixing that. It's a long, slow process and there's a lot to be done, but we've achieved a lot already.

We have the LAVs and the CC-130Js, and we have the helicopters. We're going to be taking delivery of the new Cyclone helicopters next month. That's really exciting, since they were cancelled back in the early 1990s, so we'll be able to start retiring the Sea Kings.

It is our hope that through the national shipbuilding procurement strategy and indeed the defence procurement strategy these Canadian companies will be able to continue to work with the Minister of International Trade and his people to develop their export business. People investing in Canada who want to supply the Canadian government will partner with Canadian companies to fill Canadian needs. That will create jobs. Exporting creates jobs. All of that is really good for the Canadian economy because, as you know, our priority is jobs, economic growth, and long-term prosperity.

We can support Canadian business by rebuilding the shipbuilding industry, by supporting them through the build in Canada innovation program where the government is a customer, by making sure that as we do our everyday procurement we make it possible for small business in Canada to do business with government. That's what the office of small and medium enterprises is there for. They've held over 4,000 different meetings, seminars and webinars to help small Canadian businesses learn how to do business with the Government of Canada. As I said, 39% of our volume goes to them now.

All of these things are going to help create local jobs, create exports, which is money coming into the country and not going out. It all works. We're going to end up with not just a strong shipbuilding industry, but we already have a strong Canadian defence services and products industry. In fact, I think we're about number seven in the world or higher and it's going to be even stronger going forward. We're laying those foundations right now for long-term success.

[Guy Lauzon, Conservative, Stormont—Dundas—South Glengarry, ON]

Thank you.

[The Chair, NDP, Pat Martin]

Thank you, Mr. Lauzon.

Thank you, Minister.

On that cheery note, we will conclude the one hour we had set aside for the minister to be with us today.

I'll suspend the meeting briefly while the minister leaves us, and we will resume with the next witnesses.