Government Operations Committee on March 25th, 2022

[The Chair, Conservative, Robert Gordon Kitchen]

Excuse me, Mr. Smith, but unfortunately we have time restraints. If you could provide the committee with a written answer to that question, it would be appreciated.

Thank you.

We'll now go Mr. Paul-Hus for four minutes.

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

Thank you, Mr. Chair.

Mr. Page, my question is about polar icebreakers.

A contract to build a polar icebreaker was awarded to Seaspan. It was withdrawn in 2019 because the project was not progressing. Last year, the government suddenly announced it would have two polar icebreakers built.

Given the experience we have had in this area, do you feel that the announcement is political? Is it realistic?

[Simon Page]

Thank you, Mr. Chair, for the question.

The Government of Canada has decided to have two polar icebreakers built. The announcement also mentioned where the icebreakers would be built. At Public Services and Procurement Canada, we have the processes in place to ensure that these priorities are met.

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

Do you think it can be done, given that for 10 years it has not worked? Nothing has been done for 10 years, and now we are told we are going to have two. It seems ridiculous to me.

Does Canada have the capacity to do this, especially since we still don't know if the Davie shipyard will be part of the strategy, which is one of the conditions?

Given the urgency of having resources in the Far North, would there not be a case for doing business abroad for the construction of polar icebreakers?

[Simon Page]

Thank you for the question.

For our part, we run the procurement processes for both polar icebreakers. One process is more advanced than the other, the Vancouver yard. We are already monitoring all the steps that are associated with that project, so...

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

I'm sorry to interrupt you. That answers my question, Mr. Page.

Vice-Admiral Baines, my next question is about the Asterix supply ship, whose conversion contract was a result of the last decision of the then Conservative government. I think that was a very good idea.

It's already been almost seven years since we've had the Asterix, and the lease term is 10 years.

Since we don't have the supply ships yet, which are under construction, do you think the Royal Canadian Navy should buy it, as was planned, at the end of the 10‑year period?

[VAdm Craig Baines]

Mr. Chair, Asterix has been incredibly useful to the navy during the period of the contract, which is five years and which we're in right now. She's allowed our sailors to maintain the very important skills they need to do replenishment at sea. She's also had a major role in fuelling our ships from a training perspective and while doing deterrence operations around the world.

I would say to you that this capability has been an excellent addition to the RCN while we transition and look forward to the joint support ships in the future.

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

Do you think we will keep it at the end of the lease?

Would the Royal Canadian Navy like to keep the Asterix?

[VAdm Craig Baines]

Mr. Chair, this will be entirely a government decision based on the capability that it wants the Royal Canadian Navy to have going forward.

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

Mr. Chair, do I have any time left?

[The Chair, Conservative, Robert Gordon Kitchen]

You have 30 seconds.

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

Given the state of our submarines, should we think about acquiring submarines as soon as possible in order to ensure our sovereignty?

[VAdm Craig Baines]

Mr. Chair, I'm very pleased to be able to report that we've stood up a Canadian patrol submarine project to replace our Victoria class submarines. We're very much looking forward to that process, identifying the requirements that Canada needs for the future and then proceeding very rapidly to find a replacement for the Victoria class.

[The Chair, Conservative, Robert Gordon Kitchen]

Thank you, Admiral Baines.

We'll now go to our third and final round—

I apologize, Mr. Kusmierczyk. I totally forgot.

You have four minutes.

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

Thank you, Mr. Chair, no harm, no foul.

I want to focus my first question on the relationship between the NSS and economic development and jobs.

I was delighted to hear Mr. Smith talk about Hike Metal, which is a shipbuilder in Wheatley, not far from Windsor. They had a contract of close to $80 million to build 10 search and rescue ships.

This had a huge impact on that community. The president of that company, Mr. Ingram, was quoted as saying that it “had an immediate impact on an industry that was dying in Canada.” Those were his words.

That really helped to revive the market for small and mid-sized shipbuilders and communities. That contract not only supported the existing 2,500 employees, but it also created 10 new jobs in that community of Wheatley.

Can you talk about how the NSS has contributed to Canada's economy? How has it impacted jobs across the country?

[Simon Page]

Mr. Chair, maybe I'll start, although this is probably a better question for ISED with respect to numbers and specific figures.

There were some figures mentioned in my opening remarks. I mentioned, for instance, that since the NSS started, there have been over $20 billion in benefits to Canada's gross domestic product and over 18,000 jobs created across the three pillars of NSS. We definitely have figures that are more specific that cover every province. Every province has seen and been impacted by the influence of NSS.

On specific companies, sometimes we talk about the large shipyards. We're very well aware of the work they do, but the example you mentioned is one of many examples of smaller shipyards and smaller communities across the country being positively impacted by the work the national shipbuilding strategy generates, again, across the three pillars. Sometimes we tend to forget the sustainment and refit pillars, which impact many shipyards across the nation.

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

I appreciate that answer.

As you know, oftentimes when we talk about economic benefits, we tend to focus on the shipyards themselves and the communities they're located in, including the three strategic shipyards, but we can also talk about downstream impacts. I'm thinking of the land-based testing facilities, let's say, at Shearwater, Nova Scotia, and elsewhere.

Is it correct that when we're looking at economic benefits we have to look even downstream and beyond where the shipyards themselves are located?

[Simon Page]

Mr. Chair, that is very accurate. We need to look downstream. We need to look deeper in the supply chain. Beyond the shipyards, large and small, there are very rich and active supply chains that contribute to the national shipbuilding strategy and the construction of vessels.

This includes the example you mentioned: infrastructure. Many of the projects that are under way now come with specific infrastructure requirements, and those infrastructure requirements will also generate their own benefits through their own supply chains.

[The Chair, Conservative, Robert Gordon Kitchen]

Thank you, Mr. Kusmierczyk.

Now we will go to our third and final round. We will go to Mr. McCauley.

If you want to go a little bit shorter than the four minutes, by all means do.

[Kelly McCauley, Conservative, Edmonton West, AB]

Like that's going to happen.

Gentlemen, quickly, perhaps PSPC and Mr. Smith, would you be able to provide us with a breakdown of what the cost savings are going to be for the seventh and eighth versions of the AOPS from removing all the military hardware? Could you provide a separate breakdown for that and a separate breakdown for the added costs for what it's going to cost to adjust it to a Coast Guard design, please? If you could provide that to the committee later, that would be wonderful.

Mr. Smith, you were commenting—and you were cut off—about the operability of the AOPS and the future Coast Guard version of the AOPS in the Arctic. It sounded like you were saying that after September the Arctic would be closed to operating up there. Could you fill us in a bit better on that, please, on what date range it can operate in fully up there?

[Andy Smith]

Mr. Chair, just to be clear, when I say limited in the Arctic, that's specifically and only with respect to the two AOP ships. The Coast Guard will continue to have icebreakers that will—

[Kelly McCauley, Conservative, Edmonton West, AB]

The AOPS and the ones you're going to receive.

[Andy Smith]

Okay. Understood.

Mr. Chair, having said that, we haven't even taken delivery of them yet, and that won't happen until 2026, but it is envisioned that we would be operating in the Low Arctic because, notwithstanding that they have proven their ability to transit the Northwest Passage, from a Coast Guard mission accomplishment perspective, we would see them operating in the Low Arctic and between the—

[Kelly McCauley, Conservative, Edmonton West, AB]

In the Low Arctic...?

[Andy Smith]

In the Low Arctic, between the dates when the ice is out, say, in late April until late September—