Evidence of meeting #6 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 ships.
A recording is available from Parliament.
Liberal
Majid Jowhari Liberal Richmond Hill, ON
Did our commitment or the directive from the government mean that we had to go to a higher, elevated NORAD or higher level of support for NATO, and that's why it's such a big change?
Deputy Auditor General, Office of the Auditor General
I think the difference was that we hadn't, as a country, been approaching meeting NORAD'S highest level of alert and our NATO commitments at the same time. I think that's the answer to that question. That was a big change.
Liberal
Majid Jowhari Liberal Richmond Hill, ON
Thank you for clarifying that.
Also, there was a comment about $3 billion and there being no plan. I want to go back. When you did your analysis, did you look at general breakdown and categories that that $3 billion was being assigned to? Has that $3 billion been spent to date, and if not, do you know how much of it has and where it's been spent?
Deputy Auditor General, Office of the Auditor General
I haven't had the information since our 2018 report about how that money has been spent. We did identify that the plan we would have expected would have been to deal with the combat capability, of course, given that the aircraft would have been required for a longer period of time. There was also the element of purchasing the Australian jets, but we don't know exactly where that money has been spent at this point, because it is four years down the road now.
Liberal
Majid Jowhari Liberal Richmond Hill, ON
You don't know whether all of it has been spent. You just know this is how much was earmarked.
Deputy Auditor General, Office of the Auditor General
That's correct. That might be something we would follow up on.
Liberal
Majid Jowhari Liberal Richmond Hill, ON
Yes, that would be great. I actually want to point out paragraph 3.21 of your report as well, which says that “In 2017, National Defence approved a $628 million plan to increase the number of available aircraft. At the time of...audit, the plan was in the early stages of implementation, and it was too soon to assess whether it [worked or not].”
At least we know there was a clear earmark of $628 million. Four years forward, do you have any idea whether this money has been spent and has it yielded the result needed?
Deputy Auditor General, Office of the Auditor General
I don't have that information at this point. Again, that would be something that we would follow up on in future work.
Liberal
Majid Jowhari Liberal Richmond Hill, ON
Okay, thank you.
Quickly, I'll ask one last question. I do realize there were lots of conversations about replacement of the CF-18s, and the F-35 was one of the candidates in there. Back in 2010 there was heavy discussion on the procurement of those, but those were delayed. Do you have any insight into why and what the impact is?
February 15th, 2022 / 4:55 p.m.
Deputy Auditor General, Office of the Auditor General
I might turn to Mr. Swales to see if he has insights there. I don't have any ideas to share on that point.
Principal, Office of the Auditor General
I think we're talking about the fighter replacement project that was reset at the time, in the mid-2010s, and so we are now, as I understand it, at the point of assessing the last two competitors with a view to making a decision. It's been reported publicly, anyway, that the decision is due within a year or so.
Conservative
The Chair Conservative Robert Gordon Kitchen
We're now into our third round.
We'll go to Mr. Paul-Hus for five minutes.
Conservative
Pierre Paul-Hus Conservative Charlesbourg—Haute-Saint-Charles, QC
Thank you, Mr. Chair.
My question has to do with the National Defence departmental plan 2020‑21.
It states that the percentage of air fleets that should be serviceable to meet requirement and operational readiness criteria is 85%. The target for achieving this was March 31, 2021.
In 2018, it was 79%. In 2019‑20, it was at 60%, and currently, it's at 55%.
In 2018, we went around in circles. Canada wanted to buy 18 Super Hornets, but there were no pilots to fly them. It bought Australian planes knowing there were no pilots.
When you know there are no aircraft or pilots, and you buy the aircraft without pilots to fly them, there's a problem.
Mr. Hayes, is this a political issue or is it a Department of National Defence issue? Who makes the decisions?
Deputy Auditor General, Office of the Auditor General
Our mandate is to conduct departmental audits.
The analyses revealed that there were problems with the number of pilots and technicians.
We believe the department is accountable.
Conservative
Pierre Paul-Hus Conservative Charlesbourg—Haute-Saint-Charles, QC
Okay.
You say it's the responsibility of the department.
When the department decides to buy second‑hand Australian aircraft knowing that there are no pilots to fly them, shouldn't the government take the initiative to tell the department responsible for the purchase that there's a problem? Isn't it up to the government to say no?
Deputy Auditor General, Office of the Auditor General
Decisions are made at the political level. Our mandate is to examine what the department is doing. It's important that departments provide the necessary information to the people who make the decisions. That's what we're talking about.
Conservative
Pierre Paul-Hus Conservative Charlesbourg—Haute-Saint-Charles, QC
Are you telling me that the department kept the government in the dark, that it didn't have the necessary details to make a decision on a $3 billion purchase and that it was caught off guard?
Deputy Auditor General, Office of the Auditor General
I can't answer that question.
Mr. Swales, do you have any comments to make about this?
Conservative
Pierre Paul-Hus Conservative Charlesbourg—Haute-Saint-Charles, QC
Okay.
Let's talk about surface combatants. An Australian report noted that the Type 26 that Canada is preparing to build presents a capacity issue. It's too heavy and too slow for combat operations, and it consumes far too much fuel.
The Parliamentary Budget Officer has done an assessment of the different ship models that Canada could have. He even estimated that the costs were much higher for the Type 26 than originally planned.
Do you have any updated data? The Parliamentary Budget Officer hasn't received an update from the government on the amounts. In addition, there is a capacity issue, which the Australian government already knows about.
Doesn't that raise a red flag for the Auditor General? Can a change be made before it's too late?
Deputy Auditor General, Office of the Auditor General
Mr. Swales, do you have anything to add?
Principal, Office of the Auditor General
We have no additional information on what you're referring to. There are certainly some concerns about this project.
Conservative
Pierre Paul-Hus Conservative Charlesbourg—Haute-Saint-Charles, QC
Your office isn't aware of everything, but you're aware of an Australian report on ships being built at a cost of over $77 billion.
Should DND raise a red flag or sound the alarm to ask what to do with this information? Will the government hit a wall or is it not time to try to make changes?
Do you have any advice for parliamentarians on this?
Principal, Office of the Auditor General
I can say two things about this report.
First, in our National Shipbuilding Strategy report, we say that using experts to validate information in the development and procurement process is the right thing to do. That's what the Australians have done, and it's a model to follow.
Second, although the basic model, Type 26, is the same, there are ways to tailor the structure to the needs of each country. The way the Australians have done it has raised some concerns, but that doesn't necessarily mean that Canada will have to face the same challenges.