Government Operations Committee on April 29th, 2022

[Filomena Tassi, Liberal, Hamilton West—Ancaster—Dundas, ON]

With the official residences and the ancillary buildings, which are overseen by NCC—you're right about that—we have work to do in this regard. Many of these buildings are in critical or poor condition. Harrington Lake was in critical condition in 2018.

I prefer that we act so that we do not get to that point. These investments are important. Of course, we want to—

[Ben Lobb, Conservative, Huron—Bruce, ON]

Yes, I agree with you, but what about a $750,000 kitchen? I'm sure you've done some renovations over the years. I've done renovations over the years. I've never heard of a $750,000 kitchen. Not even Drake's kitchen in Toronto was $750,000. What do you get for $750,000? Did you check this out yourself to see it?

[Filomena Tassi, Liberal, Hamilton West—Ancaster—Dundas, ON]

I'm happy to follow up with respect to that specific question. As we move forward, we want to ensure that the investments we are making, specifically in official residences, are investments that are responsible, that help us with our gas emissions and greening, that help us with accessibility, that help us with.... Those are important things.

However, I will follow up with respect to your specific question—

[Ben Lobb, Conservative, Huron—Bruce, ON]

I'm running out of time here. I apologize.

One other question I have for you is about where Justin Trudeau is living today, not 24 Sussex but at the Rideau Cottage. My constituents read that it's $600,000 a year that we've spent at his place for the last six years. That's $3.6 million.

Have you checked into what this would be for? This isn't even what they've spent at 24 Sussex. This is at Rideau Cottage. What's going on with that one?

[Filomena Tassi, Liberal, Hamilton West—Ancaster—Dundas, ON]

I think I would turn that over to my officials with respect to expenses on Rideau Cottage.

[The Chair, Conservative, Robert Gordon Kitchen]

Thank you for that. If the officials could submit that information to the clerk in writing, we will distribute it to the committee.

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

[Majid Jowhari, Liberal, Richmond Hill, ON]

Thank you, Mr. Chair.

Once again, Minister, welcome to our committee.

Minister, as you know, over the last few months we've been working on two studies on procurement, with the focus on air defence and national shipbuilding.

We've heard from the department, from the PBO and from industry experts. One theme that stands out is the fact that we are continuously facing some serious hurdles when it comes to procurement of defence equipment.

Based on your experience, and with the updates you are getting and observations you're making, what have been these hurdles over the last decade? How will the new procurement process improve not only procurement but also the project management and oversight and the reporting that's required to ensure that these hurdles are highlighted and that we have a way of managing them?

[Filomena Tassi, Liberal, Hamilton West—Ancaster—Dundas, ON]

Thanks for that question, MP Jowhari.

What I would say is that in “Strong, Secure, Engaged”, the defence procurement is strong for Canada in our strong, secure and engaged commitment. In fact, two-thirds of the projects in “Strong, Secure, Engaged” are either in the implementation stage, near completion or completed. We have a strong record for delivering.

Yes, there have been some obstacles. COVID-19 is an example of an obstacle we had to face that put pressure on supply chains and on labour. I would say that we are moving forward despite these things, and we're going to continue to work hard to ensure that we procure what is necessary for our military.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Thank you.

You talked about “Strong, Secure, Engaged”. We've also heard that there are some investments that are going to be made on NORAD.

There's another aspect that I think we've been criticized about as a country, and that's the lack of proper implementation of cybersecurity. What specifically in PSPC do you see is the role, and for that matter, the role of the whole of the government, when it comes to implementing proper national security, with cybersecurity being in the front of it? What kind of funding allocation has been made, or are you engaged in negotiating?

[Filomena Tassi, Liberal, Hamilton West—Ancaster—Dundas, ON]

I know that this is an extremely important issue. There are so many ways that things are evolving, and there's the threat of attacks. Shared Services Canada works very hard to keep networks safe, secure and accessible for Canadians.

Cybersecurity is actually a shared responsibility with Shared Services Canada, the Communications Security Establishment and Treasury Board Secretariat. We're going to continue to make investments, and you see some of the investments that we've made here. I think that it's really important that we continue to work as hard as we can to keep these systems safe.

[Majid Jowhari, Liberal, Richmond Hill, ON]

I appreciate that. That's the general direction that we should be moving in.

As you know, we are investing in strengthening our naval forces. We are strengthening our air forces with the purchase of 86 F-35s, hopefully. We are also looking at investing, from what I'm hearing, about $1 billion in NORAD modernization.

However, the experts in the market are talking about another aspect, which is cybersecurity. Specifically as it relates to national security and completing that picture, is there any discussion that your department is engaged in on cybersecurity, and not just with our internal network but also as part of national defence?

[Filomena Tassi, Liberal, Hamilton West—Ancaster—Dundas, ON]

I would actually turn that over to my officials.

[Sony Perron]

Thank you, Minister.

In budget 2022, you may have seen an investment toward Shared Services Canada and the Canadian Communication Security Establishment to extend some of the protection that is being provided to the core government operation of around 43 departments to a number of small departments and agencies. The reading of the NSICOP report was that this protection is essential. In order to enhance the posture of the government agencies and departments, these services need to be extended. In the last budget, there was an investment of around $174 million over five years that will allow SSC and the CSE to extend that coverage of five key services that serve as our defence for the core government operation.

As the minister said, there are also a number of investments in the main estimates that will help to improve the posture. This is only about—

[The Chair, Conservative, Robert Gordon Kitchen]

Thank you, Mr. Perron. If you have a further addition to your answer, we would appreciate if you would submit that to us.

We will now go to Mr. Paul-Hus for five minutes.

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

Thank you, Mr. Chair.

Minister, defence procurement has been a problem for several years. As was indicated in the mandate letters, in 2019, your government wanted to unify defence procurement, but that was taken away, and now we don't really know what's going on.

I will give you an example of a major problem. We all want to increase defence budgets to 2% of GDP, as the NATO countries have committed to do. At the same time, we see that money is often spent unnecessarily. Think, for example, of the issue of the construction of offshore patrol vessels. Originally, it was five ships at a cost of $400 million each. Things were going well, so the government wanted a sixth. Suddenly, the cost of each ship went up to $800 million. Now we learn that the total bill has gone from $2.8 billion to $4.3 billion. When we ask what justifies this $1.5 billion increase, we are told somewhat lightly that it must be because of COVID‑19.

Minister, is there any way that Canada can get defence equipment at a good price and stop having cost increases that seem to come out of nowhere and are hard to justify?

[Filomena Tassi, Liberal, Hamilton West—Ancaster—Dundas, ON]

Thank you for that question.

As you know, DND is the client and we are the purchaser, so we will respond to what they ask us to purchase. That's the first part, in terms of why we're buying what.

The second part, with respect to the cost and when sometimes we have overruns, is that there are times when there will be certain delays. Shipbuilding and COVID is a perfect example. I heard from Seaspan about the delays from COVID and the resulting labour shortage and supply chain issues.

These things are going to happen, and of course we always want to be responsible as we move forward. We always want to be monitoring. We want to work with suppliers to do the best we can to ensure the projects come in on budget and on time.

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

Why is it always the taxpayer who has to pay for all the problems?

It is like looking away from the numbers and finding out, a minute later, that the cost of a project has increased by $1 billion.

Take the example of the 15 frigates, which have not even started to be built yet. Initially, the budget was $27 billion. Now the parliamentary budget officer puts the cost of the project at $77 billion, whereas the government's own figures put it between $50 billion and $60 billion. Construction has not even started yet and the figures have already exploded. At some point, someone somewhere is laughing at us.

Are you currently working with the industry more closely to find ways to avoid cost explosions, which taxpayers ultimately pay for? We're not even talking about inflation. With the current inflation, I imagine the numbers will go through the roof again.

How do we get defence procurement to be effective and within the cost estimates?

[Filomena Tassi, Liberal, Hamilton West—Ancaster—Dundas, ON]

Fiscal responsibility and accountability are extremely important to me. As we move forward, of course we have to work very closely with the suppliers that we enter into contracts with.

With respect to the specific cases you've mentioned, I would turn that over to my officials, who can comment specifically.

[Simon Page]

I thank the member for his question.

I would like to add some clarification to the minister's answer by using the example that was mentioned—the Canadian warships.

Yes, we are doing very specific things to contain costs and to stay within the current budget envelopes. We have meetings with the shipyards and with the Royal Canadian Navy to review the situation, because a lot of these costs stem from needs that we must understand. We also have to look at the state of inflation. We must also understand the technology and how often it needs to be updated. There are a lot of things to consider. I can confirm that we have meetings to review these issues.

For example, we are currently holding meetings to refine the design of the models. It is also important to understand that these are unique and first-class models, and we have all learned new lessons from this exercise.

So it's not easy to put into one budget envelope what the costs are going to be, what the timelines are going to be, and what's going to be the most cost-effective for Canada, but we're trying to do that.

Let me add that we are currently in direct discussions with our British and Australian colleagues. They're doing the same project as we are in terms of the hull, but it's very different in terms of the combat systems. We have representatives who visit them and we consult with them. We try to learn as much as possible from their experiences.

[The Chair, Conservative, Robert Gordon Kitchen]

Thank you, Mr. Paul-Hus. We'll now go to Ms. Thompson for five minutes.

[Joanne Thompson, Liberal, St. John's East, NL]

Thank you, Mr. Chair, and welcome, Minister Tassi. It's really nice to see you here.

I worked on the front line for the first three waves of COVID. It's always incredible to me, but I'm now going to ask you about the sixth wave. Could you speak to any funding that's allocated for a continuous wave within this COVID-19 pandemic? Also, with the previous efforts around securing PPE, vaccines and rapid tests to protect Canadians from this and future waves, where are we with existing supplies?

[Filomena Tassi, Liberal, Hamilton West—Ancaster—Dundas, ON]

Thanks, MP Thompson, and thanks for your work.

This is absolutely a whole-of-government approach. We came together because we recognized that the most important thing was the health and safety of Canadians, and this took an effort whereby partners were brought together across this country in order to provide everything that was needed to keep Canadians safe.

When we think of where we've come, we see that when COVID-19 descended upon us, we didn't even have an approved vaccine. Now we are in a...position. We entered into agreements with seven vaccine suppliers, and to this day we have a sufficient supply of vaccines for every Canadian to get their full complement of what they are eligible for. I thank my predecessor; I can't take credit for this. We know that vaccination is the best way to protect Canadians during COVID.

That's one piece I would say.

The second part is we have to thank businesses. We know that local businesses pivoted and tried to respond to the needs that were there. They retooled and invested and took risks in order to do that. We wanted to invest in as much domestic supply and capacity as we possibly could. We spent 42% of the money on domestic supply. There were times when we had to reach out because we needed to get the life-saving PPE here, and we weren't going to risk the health and safety of Canadians, so we did that.

When I look at where we're at now, we have contracts with Medicom, for example, which responded to Canada's call to action early to produce 20 million N95 respirators and 24 million surgical masks per year for the next 10 years. They are up and running in Montreal.

We look at the announcement the Prime Minister made today with respect to working with Moderna, which is looking here to provide a vaccine supply.

I will give credit. It was a whole-of-government approach. I think everyone realized that we needed to come together and put the health and safety of Canadians first, and I think we did that.

[Joanne Thompson, Liberal, St. John's East, NL]

Thank you. Leading a community health centre in those early days, I can certainly attest to the work that the PSPC did to really respond in a very timely manner.

I'll go back to the sixth wave. We're now seeing the BA.2 variant, and this certainly is a concern for many. Some provinces have opened up an eligibility for a fourth vaccine shot.

Would you mind speaking to the use of therapeutics in medical circles to relieve COVID symptoms? Does Canada have the use of therapeutics, and when did they come into Canada? If you have time to answer this part, do we have future contracts for therapeutics?

[Filomena Tassi, Liberal, Hamilton West—Ancaster—Dundas, ON]

Thanks for that important question.

I think we've all heard medical experts talking about this as another really important tool, and it is an important tool. These treatments are important to have in Canada, particularly for high-risk groups and the immunocompromised. The therapeutics are targeted for different groups, but for that group in particular.

In anticipation of the approval of Pfizer's antiviral treatment Paxlovid, we secured one million courses of the treatment in December. We also secured 500,000 treatment courses of Merck's antiviral pill. We announced the shipment of more than 30,000 Paxlovid treatments the day it received regulatory approval, and that was just working in advance, hoping the approval was going to come in, working with the suppliers and trying to ensure that the time lag was minimal. In fact, on this, it was the same day. We have another 120,000 on their way for the end of this quarter.

I would say that as of March this year, we've secured more than 1.7 million treatment courses from nine different therapeutics.

[The Chair, Conservative, Robert Gordon Kitchen]

Thank you, Minister.

We'll go to Ms. Vignola for two and a half minutes.