Government Operations Committee on Oct. 24th, 2022

[Dr. Youri Cormier]

The only relationship is a sponsorship that exists between the two organizations, and their participation at some of the events we put on.

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

Mr. Cormier, on October 3, 2022, an expert institute contributor discussed the challenges of Canadian procurement, including the idea of giving the Department of National Defence full responsibility over procurement.

In your view, should Canada have a single organization responsible for procurement, and if so, which organization would that be?

[Dr. Youri Cormier]

There's no simple answer in the sense that it depends on what powers you give to that organization, and how much work you demand of it. It can take more time or less time. It really depends on the political oversight and the systems in place.

The other thing we need to keep in mind is that, if we're going to be using four or five organizations looking at this, we need to make sure they're all appropriately funded, so there's no bottleneck in one place while people are waiting in a backlog with other departments. I think that's the bigger question.

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

Again, it's along the same line of conversation in terms of centralization. Are the levels of fiscal authority delegated to the Department of National Defence and Canadian Coast Guard for procurement reasonable? If not, what should change?

[Dr. Youri Cormier]

I don't think I'm the right person to answer that one.

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

Okay. Thank you.

I'll go back to you, Mr. Pogue. Do you have knowledge of what challenges your industry members face in Canadian military procurement bids?

[Chris Pogue]

The challenges I think all industry, including Thales, faces are predictability and timeliness, and anything we can do to remove ambiguity. Industry makes decisions based on clarity, and they struggle with ambiguity. However, businesses can adapt to almost any situation. Those adaptations may not always be what we want to have happen, but they will adapt.

I think the keys for me would be predictability and timeliness.

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

Thank you.

Mr. Pogue, I'll go back to you. As executive director of Thales Canada, can you tell us about your role and how your company contributes to the Canadian aerospace industry and how your company deals with Canadian military procurement?

[Chris Pogue]

We deal with Canadian military procurement through the methods available to us today. We engage in procurement when they have workshops. We engage in open forums. We engage in responding to requests for information and to multiple versions of RFPs, requests for proposals.

We also engage in terms of our own investment in Canada. Maybe I'll just use an example of that an investment in the project we call Thales Synergy we have made using our AI@Centech initiative out of Montreal, which is an AI centre of excellence, to help reach out to small and medium-sized companies in Canada. This is somewhat reflective of the ITB concept, and it helps them bridge that gap between small and medium business and sometimes between medium and large business to help them reach a global export market through the 68 countries that Thales operates in.

We would engage on all levels, because I think to be part of the Canadian defence community, you need to engage on all levels.

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

Thank you.

[The Chair, Conservative, Kelly McCauley]

Thank you very much. That was six minutes on the dot.

Mrs. Vignola, go ahead for six minutes, please.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

Thank you, Mr. Chair.

Mr. Pogue, Mr. Cormier, thank you for being here with us today. Your testimony is important, because it will help us to better understand and improve the procurement process, especially in the area of air defence.

Mr. Pogue, Thales secured a contract in 2011 that was later cancelled in 2015. Last year, a new contract for the acquisition of three radar systems was signed with Thales Canada.

Can you tell us why the contract was cancelled in 2015?

[Chris Pogue]

Thank you for the question.

I wasn't at Thales during that time frame, so I can't offer you much insight as to the nature of the contract at that particular time. What I can tell you is that with the existing contract for the tactical control radar, we are working with a number of suppliers. We are working closely with the government to ensure that what we deliver will meet the Royal Canadian Air Force needs. It is a balancing act.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

I understand that you can't talk about it.

My next question is perhaps a touchy one, but it is not malicious.

Do you think the decision taken in 2015 to end the contract for the supply of two radar systems was more of a political decision rather than a decision based on facts and needs, especially now that you have signed a new contract for three radar systems?

[Chris Pogue]

Again, it's not a touchy question; it's a worthwhile question. I don't think I could answer it honestly as I don't have any awareness. It's difficult to take on a hypothetical without having been there at the time.

I will stress only that today we're moving forward with a program that I believe will deliver effective capabilities for the Royal Canadian Air Force.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

I guess you can't compare the contract signed in 2011 and the current contract, given that you weren't with the company.

Unless you could?

[Chris Pogue]

Can I compare the two contracts? Again, I would want to go back and take a look at them. I would want people to look at them. If it's important to the chair that we compare those two contracts, I would certainly undertake to provide a written response. Beyond that, it's virtually impossible for me to speak to a contract from 2014-15.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

If it is possible, I would ask you to send us a document outlining the comparison.

Your team submitted a bid based on the Rafale jet, then withdrew because it would have been difficult to meet the information exchange and interoperability specifications.

Looking at the contract for replacing the fighter jets, do you think that the fact that France is not a member of NORAD or a Five Eyes country went against Thales?

[Chris Pogue]

I can't speak specifically to the hypothetical of whether that was a disadvantage or not. The only thing I could say you would have to do is look at the requirements and the operational need of those requirements and then assess your decisions based on that.

As I mentioned, industry will adapt to requirements. They will adapt to what is the operational demand. Beyond that, I would be purely speculating, and I don't think it's worthwhile for this committee to have my speculation.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

Thank you.

Mr. Cormier, the federal government has gone back on decisions made previously concerning replacing the fighter jets and the radar systems in Canada's north, and has started the entire procurement process all over again.

What is the impact of this decision being felt right now in terms of national security?

[Dr. Youri Cormier]

You have to remember that Canada is never alone in the world. We always work hand in hand with our allies. I'm not going to say that China or Russia are worrying all of a sudden because Canada hasn't updated its infrastructure or its aircraft. Our allies have done it, so there are enough F‑35s in the sky. The Americans are at the ready. Canada, however, is giving its allies the impression that it is benefiting from the fact that they have made the investments, whereas Canada has not. We are counting on our allies' shield and power of deterrence, and I think that our behaviour is starting to have an impact.

If Canada wants a seat at the table, it has to be a bit more serious and invest more. AUKUS was set up and we only learned about it the next day, in the news. That is perhaps a sign that our allies are not including us in their conversations.

For me, it's a problem.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

Thank you.

[The Chair, Conservative, Kelly McCauley]

You have 14 seconds.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

Thank you.

There will be difficult questions after the break.

[The Chair, Conservative, Kelly McCauley]

Thanks.

Mr. Pogue, would you provide that in writing as Mrs. Vignola asked.

We have Mr. Johns for six minutes, please.