Government Operations Committee on June 3rd, 2022

[LGen Alain Pelletier]

I'm not the specialist with regard to the threshold. Jeannot Boucher may have more on that, but I understand that there is a five per cent threshold.

The challenge as it relates to architecture and infrastructure related to this generation of aircraft is the ability to find a contractor that is going to be able to deliver with the right level of technology, but I'll turn it over to Jeannot Boucher for any—

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

Just because time is running out, will the purchase of the F-35 aircraft require Canada to purchase specialized refuelling planes?

Can you help with that?

[LGen Alain Pelletier]

Nothing is specialized. It's about using one of the two systems that exist currently for refuelling: the probe-and-drogue system, or the boom system, and the F-35 uses the boom system.

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

Okay. Thanks very much.

Mr. Chair, do I have any time left?

[The Chair, Conservative, Robert Gordon Kitchen]

You have five seconds.

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

Thanks so much for your service, gentlemen.

[The Chair, Conservative, Robert Gordon Kitchen]

Thank you, Mr. Johns.

We'll now go to Mr. Lobb for four minutes.

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

Thanks very much.

Thank you for being at committee today.

My first question is for any of our panellists here about hypersonic missiles and hypersonic missile defence. Has there been a compilation of equipment and infrastructure required to be able to build out a hypersonic missile detection system that we would need?

[LGen Alain Pelletier]

From a NORAD perspective, we've highlighted that hypersonic systems are one of those systems that have evolved beyond the current detection capability of the command, where we will need to have additional systems to be able not only to detect, track, and identify, but also to maintain custody of those missiles throughout their flight pattern. That's just because of the nature of the manoeuverability of the capability, as much as the speed of the system itself. That, we're anticipating, could be a ground base, air base, or a space base system.

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

Is there currently technology and infrastructure today to purchase this equipment to do this monitoring or detection, or is this going to all be a brand new, blue sky development?

[LGen Alain Pelletier]

I'll let Jean Boucher expand on the capability that may exist out there.

I'm just going to say that I'm tracking here from a U.S. perspective that there's already research and development taking place in that area for the enhanced detection and tracking of such systems.

Jean Boucher.

[BGen Jeannot Boucher]

I would say the approach to this is obviously a system of systems approach. There's not a single system. It's multiple layers with systems interacting. The way we've looked at it and the advice we've provided is the all-domain awareness piece in terms of what General Pelletier talked about. Then obviously following that, there's our ability to command and control, to communicate and decide and then to take action on it. There are parts of the systems consisting of technology that already exists, and there are parts that are in development still. Thus, there's the need to start this work soon to be able to deliver the required technology in years to come.

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

Who at the end of the day decides this? Is this going to be the U.S. deciding this, or will we have a fifty-fifty say in this? Is that all in negotiations?

[BGen Jeannot Boucher]

I would pass this over to Mr. Quinn, I think.

[Jonathan Quinn]

This response isn't necessarily specific to the hypersonic threat, but in terms of modernization in NORAD writ large—I keep on referring to this—there was the joint statement on NORAD modernization. It laid out these four key areas of priorities for investments. That was negotiated—which is probably a strong word—with the U.S., or at least we worked very closely with the U.S. to lay out those four key areas.

Once we have a clear picture of the funding envelope that we're looking to operate within and then an announcement on the specific initiatives we will be pursuing, we'll work really closely with the U.S. to make sure that all of our investments are complementary. I wouldn't anticipate necessarily a fifty-fifty split or a formal negotiation on exactly what the cost-sharing arrangement would be. It would be more close collaboration on national investments that are complementary with each other.

Thank you.

[The Chair, Conservative, Robert Gordon Kitchen]

Thank you, Mr. Lobb.

We will now go to Mr. Jowhari, for four minutes.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Thank you, Mr. Chair.

I'd like to thank our witnesses for your testimony today.

Let me start by formally acknowledging the services that you two generals and the women and men of the Canadian Armed Forces are doing to ensure that Canada is kept safe and NORAD is kept strong. Thank you very much.

I'm going to limit my questions to the scope of the NORAD modernization. As I'm sure you followed the testimony, there are two schools of thought coming up. One is very defensive and the other one is defensive plus offensive. I call the defensive one, “upgrade and integrate”, and the offensive-plus-defensive one, “upgrade, enhance and integrate”.

Lieutenant-General, in your opening remarks you indicated that you are actively communicating—it's your requirement—with the leadership of both the U.S. and Canada. Can I start with you, sir, to ask whether the requirement that you're forwarding on behalf of the Canadian Armed Forces has an offensive nature as well as a defensive nature?

[LGen Alain Pelletier]

NORAD stands for North American Aerospace Defence Command, so we have a focus on the defence of the continent itself. The elements of offence are quite often accomplished more abroad in the U.S. in the context of their combatant commander system. In Canada it's executed by the Canadian Joint Operations Command. Our requirement is focused on the detection itself, the tracking, the ability to actually intercept using fighter aircraft and tanker aircraft as well as airborne early warning. That's the focus of the mission itself.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Thank you.

It's interesting that your comments you talked about detection and that deterrence starts abroad. I assumed that when you talked about the deterrence part starting abroad, and later on about our ability to maintain the custody of some of those hypersonic missiles.... I am thinking of a very defensive aspect to that scope, so it's very interesting that I hear that our requirement continues to be very defensive, rather than a combined defensive and offensive.

I would really like to hear your point of view and whether you think we should also be in a position to be able to go on the offensive if needed, at the source, while we are maintaining the custody of these hypersonic missiles that could potentially be coming.

[LGen Alain Pelletier]

Obviously we talk about integrated deterrence. That's the approach that we're using. We always say that integrated deterrence starts abroad, but it also includes more of a whole-of-government effort, because you don't only deter with that national instrument that is the military. You also deter through other avenues as well.

As it relates to the element of the offence in the defence scenario, again, it goes back to my previous answers. This is a policy decision as to whether or not the government wants to change its stance.

What am I going to say, though, is that right now we have an element of defence, which is active defence, because to counter a cruise missile, which is part of our mandate and mission, we have to actually shoot it down. We will engage and defend against a cruise missile, but it's just a different approach from what we have right now for elements like ballistic missile defence. Right now, NORAD has not been tasked to actually defend, i.e.. actively defend, against a hypersonic missile. Our role remains in the threat warning and attack assessment.

[The Chair, Conservative, Robert Gordon Kitchen]

Thank you.

Thank you, Mr. Jowhari and our witnesses. This ends our questioning time. I want to thank you all for bearing with us when we had the issue dealing with time constraints.

I would like to thank Mr. Quinn, General Boucher and General Pelletier for being our witnesses today.

If, by chance, you have any further evidence that you wish to submit that may add to your testimony today, by all means please provide that in writing to the clerk, and he will distribute all the materials to the committee.

With that said, I'm going to temporarily suspend the meeting until we get our second panel in here.

We are suspended.

I call the meeting back to order.

I would like to welcome Mr. Mueller from the Aerospace Industries Association of Canada. Thank you for being here and bearing with us and the time changes.

With that, Mr. Mueller, you have five minutes to make an opening statement.

[Mike Mueller, President and Chief Executive Offier, Aerospace Industries Association of Canada]

Thank you, Mr. Chair.

Good afternoon, everyone.

The delay was no problem. I actually enjoyed listening to the conversation.

I really appreciate the committee's time and its interest in this important topic. It's a real pleasure to be here on behalf of the Aerospace Industries Association of Canada.

Our members represent over 95% of aerospace activity in Canada, covering the civil, space and defence sectors. In 2020, Canada's aerospace industry contributed over $22 billion in GDP and over 200,000 jobs to the Canadian economy. That's quite significant.

Unfortunately, during the pandemic, we lost around 30,000 jobs due to the negative impacts on our sector. Despite the pandemic, the defence sector helped keep people employed throughout this very difficult time. We have a real opportunity now to help contribute to the economic recovery.

The intersection of aerospace and defence plays an important role in Canada's aerospace sector. The global aerospace and defence sector has been realigning dramatically to face new challenges and opportunities. Most recently, Russia's unprovoked invasion of Ukraine has forced an examination of defence and foreign policy with a focused attention on the need for Canada to have the means to play a bigger role in the North Atlantic Treaty Organization, or NATO, and continental defence within NORAD, which was just discussed here.

As many of you have heard me say before, aerospace is a unique and strategic industry for Canada. Its role in national security, its special defence trading relationships, the implications of the long product and investment timelines and the broad societal impacts and applications of its innovation have always required a close partnership between industry and government.

We applaud the Canadian government's commitment to prioritize NORAD modernization with our American ally. This represents an opportunity for government to plan and align policy with our own national security and industrial objectives to ensure that Canadian companies play a defining role in delivering capability.

Industry wants and needs to be part of that process. Early engagement is essential, so that industry can move quickly to ensure we are meeting the demands in a timely manner. We need to get this right. The rapidly changing geopolitical environment requires fast-paced government action. Threats to continental security are more complex and multi-faceted than they have ever been. A comprehensive approach is needed. Specifically, an aerospace strategy and national defence industrial strategy are needed and required.

As you've heard, we know that over the next eight to 10 years, the scale of investments will be significant. Right now, we see what is perhaps a piecemeal approach to procurement. With a strategy, industry can invest in the right places. We can plan ahead. We can move forward in alignment with government. With a road map as a guide, we can leverage our industrial strengths, so that the government—and more importantly, Canada's frontline troops—receive the equipment they need when they need it. Industry has been calling for such a national plan for years. Not only will it help with predictability and planning, it would play a significant role in reducing the delays in the current defence procurement process.

Make no mistake, we need to find efficiencies. Every year, government procurement lapses significant capital funds, which in turn deprives the military services of the equipment that is essential to their mission. It's a lost opportunity that also impedes our nation's economic growth.

We must take a long, hard look at how we can improve the current system to ensure more timely procurement. More timely procurement will mean government objectives are being met and that our nation is building its industrial capability and capacity. This is essential.

It's also time to re-examine government aerospace procurement and consider how procurement decisions can benefit Canadian firms, whether those firms are wholly domestic, the domestic subsidiary of a multinational company or an international supplier. Opportunities for Canadian companies to contribute their skills, technologies, services, systems and other components as part of a procurement strengthens the industry and contributes to the economy.

Finally, aerospace and defence programs must be modernized to spur investment here in Canada. By updating some of those programs, we can increase support for small businesses and the Canadian supply chain. The opportunities are staggering.

Let's leverage our strengths for Canadian jobs and national security. This can be done through a national aerospace strategy, as all of our competitor nations have done.

Thank you very much. I look forward to some of the questions.

[The Chair, Conservative, Robert Gordon Kitchen]

Thank you, Mr. Mueller.

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

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

Thank you, Mr. Chair.

Mr. Mueller, thank you for being with us today.

You were just talking about the federal procurement process. Indeed, since we began our study on the air force and the navy, our committee has seen two problems.

The first problem is related to government decisions and the administrative side of awarding and managing contracts. As for the second problem, it is on the industry level.

I was in Europe last week and had discussions with representatives from NATO countries. It seems that Canadian companies are raising prices and charging more than companies from abroad.

So both of these issues come down to shortcomings in government management and the fact that companies seem to be taking advantage of the fact that we favour them with our Canadian content policy.

In the aerospace industry, do you find it difficult to offer fair and equitable pricing compared to foreign competition?

[Mike Mueller]

Thank you for the question, Mr. Paul-Hus. I also want to acknowledge your service to our country. A lot of folks working in our industry are military, and ex-military, too, so I just wanted to acknowledge that.

There are definitely some challenges there. That's why we keep going back to the need for an overarching aerospace strategy and to having those discussions to make sure that industry can respond adequately to where the government is going.

I was listening with interest to the NORAD commander and the four different key priorities for NORAD. They're also looking for some of those details. That's what industry is looking toward, as well. There's a lot of opportunity to streamline the system. I talked a lot about capacity and capability, and that's what industry is looking to do.

There are a lot of extra hurdles that come along with a procurement process here in Canada. One of the companies, a while back, gave me an example of a procurement here in Canada. The amount of paperwork involved, compared with some of the requirements in other countries.... I think, for similar procurements, the Canadian procurement was around 80 pounds of paper and the other procurement was 20 to 40 pages.

There are some definite areas we could take a look at, domestically.