Evidence of meeting #11 for Government Operations and Estimates in the 44th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was williams.
A recording is available from Parliament.
Liberal
Anthony Housefather Liberal Mount Royal, QC
Mr. Chairman, Mr. Williams wanted to respond to something, but I do not want it to be part of my time. He wants to respond to something Professor Leuprecht said. So I'm asking you if you're giving him the time outside of my five minutes.
Conservative
The Chair Conservative Robert Gordon Kitchen
Mr. Housefather, this is your five minutes, so you have the floor and can control who you would like to answer this.
President, Canadian Global Affairs Institute, As an Individual
I think the way you framed that is bang on.
Shipbuilding in particular and a lot of aspects of procurement are essentially a series of trade-offs in order to make the least bad decisions, not ones that are inherently perfect, and that stretches across the entire continuum, including things like deciding who is going to be the prime contractor. There are lots of different models suggested, and there are two different considerations, with pluses and minuses involved in all of them.
To go back to some of my opening comments, one thing we've consistently seen is that we tend to sacrifice schedule and speed of delivery to satisfy other considerations, whatever they may be. We need to think about ways in which we can put more emphasis on sticking to a schedule, because it has knock-on implications for a lot of other things like capability, affordability and so on. As well, there are ways we can look at to make more investments up front in human or physical infrastructure or other things we've already talked about that could potentially accelerate those schedules.
I think we've unfortunately too often been penny-wise and pound foolish. We are in this, and if we want to see it successfully delivered, then as a country we should be looking to making national-level decisions to have this program of work move forward as expeditiously as we can make it.
Liberal
Anthony Housefather Liberal Mount Royal, QC
That's understood, and I agree completely with what you just said. I'd like to come back to you on that. For example, I think it's less a question of changing the organizational structure than of making investments so that we have enough manpower to actually deal with all of the things we're asking to be dealt with, or organizationally changing it so not all of those things need to be dealt with and we move faster in a more expeditious way.
Would you say that's essentially correct?
President, Canadian Global Affairs Institute, As an Individual
I think that's definitely one way to look at it. I am not of the opinion that making an organizational structure change solves all these problems. A lot of them are competing priorities of government, and fundamentally you have to decide the order of precedence of those priorities. Just smooshing everything together into one organization doesn't deconflict competing priorities.
We also have to keep in mind that we would be trying to achieve that kind of reorganization when, as far as I can tell, we are in the middle of the largest procurement program today, without anything future being added, that we have seen since the Korean War, and I think there would absolutely be a cost of doing a reorganization like this when we are in the middle of a program this overheated already.
We may want to do that, but I think we need to have our eyes open about the trade-offs involved in making that decision.
Liberal
Liberal
Anthony Housefather Liberal Mount Royal, QC
Mr. Williams, if you want that time to clarify, please go ahead.
President, Williams Group, As an Individual
Christian's comments were absolutely incorrect. I have no conflicts of interest. I have no clients that are involved with the CSC. For him to even suggest that is unconscionable.
Conservative
The Chair Conservative Robert Gordon Kitchen
Now we will go to Mrs. Vignola for two and a half minutes.
Bloc
Julie Vignola Bloc Beauport—Limoilou, QC
Thank you very much.
I will just make a comment.
In a previous life, I was a teacher, and I had to plan everything from A to Z. I couldn't forget anything, and that sometimes also included the cost of activities. When I hear comments, on both sides, I am under the impression that there is no happy medium. It would seem that, either we move very quickly and make purchases elsewhere at a lower price, or we go very slowly, which leads to much higher costs, but which makes better accountability possible.
Transparency is necessary, but it seems to me there could be a happy medium, something effective, because we are talking about taxpayers' money, and not about the desires of one or two companies. Taxpayers' money is used for the defence of their territory and territorial sovereignty. That is important.
That being said, two shipyards are currently qualified. Would it have been good for there to be a third one earlier in the strategy's implementation to make the process efficient and more fluid?
The question is open to everyone.
President, Canadian Global Affairs Institute, As an Individual
I would start by saying that part of the justification for the announcement of adding a third shipyard two and a half years ago was to increase the capacity available to deliver all of these ships to the navy and the Coast Guard. I think additional capacity is still needed. There's an awful lot of work to do.
There is a trade-off decision to make in doing that, in that it will complete all the work faster, which means that the long program of work that was originally envisioned—in the beginning for one shipyard, and then it has turned out to be two—will be completed sooner if there isn't follow-on activity. However, adding that extra capacity to provide for icebreaking services at a time when we need to be more concerned than ever, I think, about the security, safety and defence of Canada through our Arctic.... I hope to see that decision come to fruition quickly.
To your comment about the extremes and finding a middle ground, I don't think there are really any options available to Canada where we can cheaply, quickly, and with no trade-offs still buy ships through another mechanism. I have enough confidence in government that if those easy routes existed, we would have chosen to exercise them in the last 12 years.
I think all things about this are tough. It's a question of which trade-off decisions you want to make and how you do your cost-benefit analysis, because there are no simple solutions.
Conservative
The Chair Conservative Robert Gordon Kitchen
Thank you, Mr. Perry.
If Mr. Williams or Mr. Leuprecht would like to respond—
President, Williams Group, As an Individual
I don't think it's one or the other. I think if you understand the process—
President, Williams Group, As an Individual
—and you follow the process through the front door, then you can do things smartly and quickly—
Conservative
The Chair Conservative Robert Gordon Kitchen
Order, please.
Mr. Williams and Mr. Leuprecht, because of time restraints, we will not be able to follow up. If you have a response to that question, I would ask that you respond in writing and provide that to the clerk, and the clerk will distribute that throughout the committee.
We will now go to Mr. Johns for two and a half minutes.
NDP
Gord Johns NDP Courtenay—Alberni, BC
Thank you.
Mr. Perry, can you talk about how the shipbuilding industry has been affected by supply chain issues and global inflation, especially with the restart of the global economic engine from COVID?
President, Canadian Global Affairs Institute, As an Individual
Shipping everything takes more time and is much more expensive. That cascades through the entire supply chain for any industry, including shipbuilding. Any time you have to move things from overseas, you're dealing with higher prices. I don't think we fully understand yet how consequential the impact of inflation—which in the consumer economy is at a 30-whatever year high—is if you apply it to shipbuilding.
Beyond that, though, it's things like the inefficiency in conducting these hearings like this, rather than in person, that have manifested themselves over the last two years in shipbuilding, and in all other forms of procurement. We have been managing these from the Government of Canada side through Teams meetings, which I think quite simply are nowhere near as efficient as meeting in person. I don't think we really fully understand it, but there's definitely an impact of having done that for the last 24 months.
NDP
Gord Johns NDP Courtenay—Alberni, BC
That's great feedback.
To go back to my earlier question around capacity, the government doesn't really have a strategy around expanding and building capacity in small rural communities like Port Alberni, where we have a good company, Canadian Maritime Engineering, that wants to grow the shipbuilding sector, and they know it would help to support demand. The PBO cited that if there are more shipyards, the costs will come down, especially if they're in rural communities like Port Alberni, where the cost of living is much lower than in Vancouver, Montreal or Halifax.
Can you speak about the importance of policy as well? There was a 25% tariff that discouraged companies from building ferries outside of Canada. The government got rid of it. That money could have been building floating dry dock space. Can you speak about the importance of both policy and critical investment in these areas?
President, Canadian Global Affairs Institute, As an Individual
I think we need to try to get better alignment in terms of both the policy framework and infrastructure investments. I think there are a number of opportunities where we can choose to invest more money in some of this essentially national infrastructure. The same kind of logic about making other wider societal infrastructure investments applies here. If you can spend a billion dollars now that will have a $2-billion impact over 30 years, to me that's something worth considering.
In terms of accessing that wider human talent pool, if you go to more facilities, there's a trade-off in efficiency and project management. You have to weigh it, but I think the existing shipyards certainly don't have enough staff on the blue- or white-collar sides, and as we move to a third shipyard with a whole other basket of projects, that's only going to get exacerbated. That's fundamentally Canada's problem to address, irrespective of which shipyard employs people.
Conservative
The Chair Conservative Robert Gordon Kitchen
Thank you, Mr. Perry.
Mr. Johns, you got your six seconds back on that.
We'll now go to Mr. Lobb for five minutes.