Government Operations Committee on Feb. 15th, 2022

[Parm Bains, Liberal, Steveston—Richmond East, BC]

What was the shape of our shipbuilding and ship procurement prior to the installation of the new shipbuilding strategy?

[Nicholas Swales]

The 2013 report talks about the fact that there had been a long period when no government ships were built, so the shipbuilding industry had lost that capacity. There had also been some failed procurements, when the government had sought to run competitions for ships and either didn't receive any bidders or compliant bidders, so there were clearly some challenges being able to get agreements and contracts in place to build ships.

[Parm Bains, Liberal, Steveston—Richmond East, BC]

Thank you for that.

How much time do I have? Do I have enough for one more question?

[The Chair, Conservative, Robert Gordon Kitchen]

You have 30 seconds for a question and answer.

[Parm Bains, Liberal, Steveston—Richmond East, BC]

What are some long-term lessons from this report that you feel can improve Canada's naval procurement process? Answer as quickly as you can.

[Andrew Hayes]

Identifying the risks to success and the delays that might be occasioned, as well as regular monitoring and follow-up, are the lessons that I would glean from this report.

[Parm Bains, Liberal, Steveston—Richmond East, BC]

Thank you.

[The Chair, Conservative, Robert Gordon Kitchen]

Thank you very much.

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

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

Thank you very much, Mr. Chair.

I'm also going to ask a question about the national shipbuilding strategy.

Mr. Hayes, what would be the consequences of not including a third shipyard as quickly as possible?

[Andrew Hayes]

The reason for operating a third yard is to increase the likelihood that vessels will be delivered in a timely manner. It is possible that delivery times will be pushed forward if we do not step up the pace of shipbuilding.

Mr. Swales, do you have anything to add?

[Nicholas Swales]

That's basically it. If the third yard is not put into operation, we would lack the capacity to produce ships before the old ones reach the end of their life.

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

Okay.

There are glaring staff shortages throughout the Canadian Armed Forces, including the Royal Canadian Navy and the Canadian Coast Guard. I have noticed that the national strategy focuses solely on construction and economic benefits, not on training and recruitment to ensure that we will have competent staff to operate the 40 or so ships.

What is the current status of the situation?

Is there enough staff to operate these vessels?

Is there a strategy to address these issues?

[Andrew Hayes]

I don't have the answer to that question.

Mr. Swales, can you elaborate on this matter?

[Nicholas Swales]

Staff training and recruitment are not part of the national shipbuilding strategy. The Royal Canadian Navy and the Canadian Coast Guard have a duty to transition to meet these needs.

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

In the event of a staffing shortage, what do you believe would be the most cost-effective and timely options for both the Royal Canadian Navy and the Canadian Coast Guard to address the shortage?

[Andrew Hayes]

Can you answer this question, Mr. Swales?

[Nicholas Swales]

I have no comment on this. We haven't done any analysis lately on how to recruit personnel for the Royal Canadian Navy and the Canadian Coast Guard.

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

All right.

[The Chair, Conservative, Robert Gordon Kitchen]

Thank you.

We'll now go to Mr. Johns for two and a half minutes.

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

Thank you.

Your audit found that delivery of ships was often delayed and delivery schedules were actually getting longer. It's also noted that the government's efforts to address the risk of unreliable schedules wasn't always actually effective.

Can you talk about what factors are due to what the contracting parties use to negotiate a delivery schedule? How could the federal government more accurately establish deliver schedules?

[Andrew Hayes]

I'd start by saying that—

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

Sorry to interrupt, Mr. Hayes.

I have a point of order, Mr. Chair.

I can no longer hear the interpretation.

[The Chair, Conservative, Robert Gordon Kitchen]

Sorry, we have a little translation problem.

It's been solved.

I had stopped the clock for you, Mr. Johns, so we'll start it at this point in time.

Thank you very much. Please proceed.

[Andrew Hayes]

Thank you.

We would start with a recognition that the government's forecasts for the schedule of delivery were not realistic. At the point in time when we were auditing in 2020, we had suggested that the government should use the lessons learned to increase the likelihood of delivery of ships on time.

In terms of the question about what the obstacles were, there could have been many. I do remember, as we were looking at a target state over the course of the two different audits, the challenges for the shipyards to meet targets states were many, whether it had to do with the personnel or the construction of the facilities for that.

Mr. Swales, would you like to add to that answer?

[Nicholas Swales]

I would add that we look at the detailed action plan that was provided by the departments in the audit to the public accounts committee in response to our recommendation on schedules. It committed them, in particular, to introduce a tool called “earned value management” into their review of schedules in a systematic and structured way.

If those actions were are followed through, that would go a long way to improving the situation.