Government Operations Committee on April 8th, 2022

[VAdm (Ret'd) Mark Norman]

Yes. Thank you, Mr. Johns.

I think this is one of the key areas where there are some best practices amongst our allies and our friends that we could learn from. Your question goes right to the heart of the distribution and, ultimately, I would suggest, the dilution of authority and accountability as it relates to procurement in general, especially when we're talking about these larger complex programs.

In my experience, and certainly from my observation since I've retired, despite the statements and attempts to tighten things up, at the end of the day the results are not necessarily any better despite the rhetoric. I think this is an area where Canada could learn. I think there is a real opportunity for a more unified and simplified approach to procurement.

Ultimately, if we did it right, if we really put our minds to it, we could make a big difference. As I said earlier, that would both help the end-users get the equipment they need quickly and ultimately also address the issue of accountability to the taxpayer.

[Gord Johns, NDP, Courtenay—Alberni, BC]

Can you expand on that? You talked about our allies and other countries. I know that both Australia and Britain have a single minister for defence procurement. We're really grateful that you're here, because I think the committee really needs to hear from you about best practices and what we need to do to fix the way we're doing business right now when it comes to procurement.

[VAdm (Ret'd) Mark Norman]

Those are two really good examples. Another could be the French. The French have a slightly different model. Their defence industry is completely integrated into their economic strategy. They consider defence spending as an element of economic and industrial development. They also have a very integrated relationship and a single point of accountability as it relates to procurement.

I think that's really a direction that we need to move in. I don't know exactly how it should be set up. I'm not going to offer a silver bullet, because I don't think there is one, but I do believe that we need to move away from this highly distributed approach where nobody, really, is ultimately accountable. They're accountable for certain aspects of it, but where they intersect and overlap is actually where we're putting rubber on the road, so to speak.

[Gord Johns, NDP, Courtenay—Alberni, BC]

You touched on the political involvement. Can you provide some thoughts on how we can improve the transparency and oversight while also ensuring that we're fulfilling our roles in the political lens versus the government officials lens?

[VAdm (Ret'd) Mark Norman]

The government officials, I believe, should be there to manage the machinery of the process. Notwithstanding a lot of challenges, which is a whole other discussion, I believe they're doing the best they can in the circumstances. Where we start to see the interface with the political, and where it is unhelpful, is when it starts to affect, ultimately, some of the larger decisions that then affect the timeliness and potentially the budget or the broad capabilities that go into these major programs.

When the political processes delay decision-making, that costs taxpayers money. Even just for inflationary reasons, they cost money, but a number of other drivers result in the fact that with these programs, the later they are, the more they ultimately cost. Even if it's not just about costs, it's the capability that's supposed to be delivered in a timely fashion and that's not getting to the women and men who need it.

[Gord Johns, NDP, Courtenay—Alberni, BC]

Are there really good examples from our allies where they have an efficient system of understanding roles and responsibilities and have strong transparency, accountability and timely decision-making?

[VAdm (Ret'd) Mark Norman]

There is no perfect system. Every one of those allies, if you were to ask them, would offer you lessons learned from their own experiences.

I think the two examples that you provided in your opening question are very good places to start. As we look at Australia specifically, this is a country that has fundamentally revolutionized the way they do business over the last 20 years or so. They still have major challenges, and they would be the first to admit it. Not every one of their programs is perfect. But I think that is a really good place to look for some best practices.

[Gord Johns, NDP, Courtenay—Alberni, BC]

Super. Thank you so much.

[The Chair, Conservative, Robert Gordon Kitchen]

Thank you, Admiral Norman.

We will now go to Mr. McCauley for five minutes.

[Kelly McCauley, Conservative, Edmonton West, AB]

Thanks, Mr. Chair.

Admiral Norman, it's great to see you. I want to start by thanking you for your many decades of service to our country.

I want to touch quickly on the fact that the government and all of us have been talking about the need for new submarines. How would you see that roll out for Canada? It's obvious that we cannot make them here. Hopefully, we're not going to get in a process of delaying for decades while we try to figure out how to make them here. Which country should we be looking at—Japan, France...?

[VAdm (Ret'd) Mark Norman]

Let me respond initially by somewhat challenging the premise of your question. We could build them here. I am not advocating that we should, however. I think this goes back to—

[Kelly McCauley, Conservative, Edmonton West, AB]

How could we build them? I'm sorry. I'm not doubting you. I just want to learn, because from everything I've heard, we do not have the capacity to build them here.

[VAdm (Ret'd) Mark Norman]

We would need to dedicate the capacity and would need to develop some very specific skills associated with the manufacture of the pressure hulls, but there are similar technologies used in the offshore oil industry and elsewhere that could be migrated to that.

What I'm trying to say is that it's not a categoric statement that we could or could not do it. We could do it if we chose to do it. The question really is whether it makes sense for us to do it. That's where I believe the answer is probably no, just because of the level of effort required to develop those capabilities for what would be a relatively small production run of submarines.

With that said, now we get into the conversation about what the potential options are. The good news is that there is a variety of viable options out there that could potentially address Canada's requirements, which are still evolving. It will be important to know exactly what type of capability we're looking for but, fundamentally, a number of our allies are capable of delivering these capabilities—the French, the Germans, the Japanese—who have not yet exported a submarine, but are starting to show interest in the possibility of doing so. There are also the Swedes, among others, but those to me would be the key players in that discussion.

[Kelly McCauley, Conservative, Edmonton West, AB]

On the T26, the Canadian surface combatant, how do you see that playing out? Obviously, it has been delayed, delayed, delayed. Do you think we should continue with the program as it is proceeding right now, which we all know is massively over budget and massively delayed? Do we see it to its end? Do you think we should, perhaps, stop at three and re-evaluate?

What are your thoughts on that, please? I don't want to paint you into a corner. I would look for general thoughts based on your experience.

[VAdm (Ret'd) Mark Norman]

I appreciate the question. It's legitimate in the context of your work as a committee and where we find ourselves.

The global combat ship, as it is generically referred to, was intended to be exactly that. It was intended to be a ship that could be modified for multiple users, and those users would benefit from the advantages of common design, global supply chain, etc.

In theory, that was the idea. What we now have are three customers—Canada is potentially going to be the bulk of the combined fleet user—and most of the capabilities are now separating in terms of individual users' requirements. Those advantages are not necessarily playing out the way they had been initially imagined.

As it relates to the program and whether it should or shouldn't proceed, here's the problem. The first of the Halifax-class frigates was commissioned in 1992. I was a member of the crew. According to the Ontario vehicle registration requirements, a vehicle 30 years old or older is eligible for historic or vintage plates. The Halifax is 30 years old this year, with a projected life of another 10 years or so until we have these ships up and running. I would say it would only make sense to change plans if you could actually deliver a similar capability in less time.

We find ourselves now in a place where, despite a lot of noise and a lot of rhetoric, the most viable path to the future is the path we're currently on. That presents a number of challenges, which are well documented and openly discussed. Throwing the baby out with the bath water, so to speak, at this stage would be a mistake.

[Kelly McCauley, Conservative, Edmonton West, AB]

Thank you.

[The Chair, Conservative, Robert Gordon Kitchen]

Thank you, Admiral.

We'll now go to Mr. Jowhari for five minutes.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Thank you, Mr. Chair.

I'll be splitting my time with MP Bains. Mr. Chair, if you could flag us at two and a half minutes, we can switch.

Thank you to both witnesses for joining us today. We appreciate your testimony.

I'm going to start with Mr. Choi.

To quickly clarify, in your opening remarks you talked about how the cost of the CSC program should be included in our defence spending. Can I get a quick clarification from you? Don't you consider that already part of the defence spending?

[Timothy Hiu-Tung Choi]

I'm not sure which part of my opening remarks you mean. I think it was more about different ways of calculating the costs of these ships. Of course, it's already calculated in the defence spending over time. It's included in the “Strong, Secure, Engaged” budget plan for the next 20 years, so it's all in there.

I think there must be a misunderstanding.

[Majid Jowhari, Liberal, Richmond Hill, ON]

No worries. It could be me.

In one of your previous articles, you stated that competition between the liberal and authoritarian world order is taking place on the oceans. You mentioned that Canada needs to prepare for that world [Technical difficulty—Editor] in your point of view?

[Timothy Hiu-Tung Choi]

Sorry, the audio lagged for a moment there. Can you repeat that?

[Majid Jowhari, Liberal, Richmond Hill, ON]

How is our national shipbuilding strategy facilitating the preparation of what you suggest we should be preparing for because the next war will be fought on the oceans?

[Timothy Hiu-Tung Choi]

Yes, that's right.

As I mentioned, western shipbuilding capacity is fairly limited. The Americans—the biggest of them all—are already stretched to their limits, in terms of both shipbuilding and maintenance capacity. Literally anything that any of us can do to help contribute to those numbers is absolutely vital to ensure that China's massive shipbuilding rate is kept in some degree of parity to our collective coalition and allied partners, whether that's in Europe, East Asia, Australia and the rest.

When I say that we need to do our part in contributing to the liberal world order's naval capacity, it's not about us doing it on our own, but in conjunction with everyone else with whom we have very strong foreign policy interests and ties. Everything we do here with naval shipbuilding has a diplomatic component and a foreign policy component. That is something we should leverage and point out more in our diplomatic discussions with our allies.

This goes back to the question of whether we can build these ships faster without risking boom and bust. One reason we're taking so long to build these ships and why they cost so much is that we want to prevent the shipyards from going bankrupt at the end. One way to solve that is to build more ships of different kinds, not necessarily CSCs. There are many other types of vessels that the western powers can use, even if they are cargo ships that can help carry troops and supplies back and forth. It could be more replenishment ships, supply vessels and repair vessels.

No one says that NSS has to begin and end with the ships that were begun back in 2010. We can expand the order, much as Elinor Sloan noted in the last meeting. The Brits have their new shipbuilding strategy, which takes a more comprehensive, nationwide look at what is needed across all sectors, from the federal level, provincial, municipal, private and commercial.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Thank you, Mr. Choi.

[The Chair, Conservative, Robert Gordon Kitchen]

Mr. Jowhari, you have a minute and a half left.