Government Operations Committee on March 22nd, 2022

[Simon Page]

I can speak a little about this. Through the same process that I just described, which is our defence procurement strategy governance process, as we capture the requirement and as we capture where the procurement will take place and where the contract will be conducted, we can also collaboratively involve other agencies such as Indigenous Services Canada and organizations that will look at such variables and factors, so they are also involved very early in the process.

Then we also have specific directives released by Treasury Board to the effect that, if the work is going to take place on the three comprehensive land claims agreements, we have specific obligations and specific requirements to inject into the procurement processes. This was done for the program that you just mentioned, the North Warning System, and we were very proud to award this contract to an Inuit company, the Nasittuq Corporation, very recently. We look forward to moving forward with them in the maintenance and operation of the North Warning System.

Thank you.

[The Chair, Conservative, Robert Gordon Kitchen]

Thank you, Mr. Page.

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

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

I will ask a number of rapid-fire questions, as I want to understand properly.

We currently have two aircraft left on the list: the Gripen and the F‑35. Canada has adopted various policies, including the industrial and technological benefits policy, and I would like to be able to make a comparison, as I want to make sure that all of Canada is well favoured for those projects.

First, where will each of those aircraft, be it the Gripen or the F‑35, be maintained, repaired and potentially updated?

Second, how many hours of maintenance will each of those aircraft require, in theory, per hour of flight?

Some commentators are looking down on the Gripen because it is a fourth generation aircraft, but can it not be Canadianized?

Is Canadianization included in the purchase cost?

[Simon Page]

Thank you for the question.

The tendering process is very active. Unfortunately, we cannot discuss either of the two aircraft remaining in the competition, not even generally. We must protect the integrity of the process, especially because we are approaching a key moment.

What I can tell you is that the two remaining companies, as well as the governments associated with them, regardless of their score, have shown that they meet all the requirements in terms of the three families of criteria: capability, costs—which include maintenance and acquisition—and the value proposition.

Regardless of the final solution, those three criteria will have been fully met.

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

I just hope that we are not purchasing aircraft that will be flown by Canadians, but that will belong to the Americans.

Providing training and doing maintenance and updates on aircraft here, and not in the U.S., is a significant value added. Otherwise, those aircraft will be paid by Canadians, flown by Canadians, but will belong to the Americans. It would not make any sense.

[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.

In the department's 2022-23 plan, it reads:

Defence Intergovernmental Affairs is engaging Indigenous women’s organizations and Elders as partners in the work to strengthen domestic and continental defence and to modernize NORAD.

Can you talk about the important benefits of engaging indigenous women and elders for continental defence and NORAD's modernization? Can you also provide some examples of areas where indigenous women and elders have strengthened NORAD's operations and where we are right now in that area?

[Troy Crosby]

The engagement with various stakeholder groups, notably indigenous communities, through a gender-based analysis plus lens ensures that we are taking into consideration different perspectives and reflecting the opportunities at hand in our procurement processes.

For example, in the case of the future aircrew training process, there was extensive engagement across the country with these various community groups to ensure that we would put in place opportunities where various communities could benefit as outcomes of the process. Another example is opportunities for skills development and, ultimately, employment opportunities across the country that reflect the realities of the local communities where equipment will be operated. This practice will continue in future procurement.

When we're talking about NORAD modernization, there's clearly opportunity there. Again, referring back to the Nasittuq Corporation contract award for the North Warning System and service support contract, we can see the strength of indigenous and Inuit businesses in providing support for the Canadian Armed Forces.

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

Do you have targets for improving on where you are right now in that area?

[Troy Crosby]

Mr. Chair, government targets have been established. We are aiming to ensure that 5% of the value of defence procurement goes to indigenous business. We're not there yet, but we have great opportunities. As we continue our engagement with these communities, I think we'll recognize additional opportunities that we can build into the procurement processes, both for new acquisitions where we can leverage for skills development or for direct participation, as I mentioned earlier, as well as—

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

The 5% isn't close to the representation of the population there.

[The Chair, Conservative, Robert Gordon Kitchen]

Thank you, Mr. Crosby.

Now we'll go Mr. Lobb for five minutes.

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

Thanks very much.

The first question I have is in regard to the F-35 and in regard to industrial benefits and place in the production lines.

I'm just curious. In the last couple of years, how many dollars' worth of F-35 production have Canadian companies done?

[Troy Crosby]

Mr. Chair, I can provide some information about our participation in the production, sustainment and follow-on development phase memorandum of understanding for the F-35 program. Our last contribution payment was in the order of $70 million U.S. last year, almost one year ago. Over the period of time that Canada has been involved in the program, there has been a total of in the order of $2 billion U.S. of industrial benefit accrued to Canadian industry.

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

Thank you.

In regard to procurement, there's been a lot of talk recently in regard to the Ukraine conflict. I'm just going to fire off a couple of different items that are being used over there. I wonder if you could tell us if Canada owns any of them or if we're procuring any.

One is the Switchblade drone. Do we own any or have we sent any to Ukraine?

[Troy Crosby]

Mr. Chair, as a general answer, for reasons of sensitivity around our contributions, I'm not in a position to provide details about specific equipments or—

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

Do we own any Switchblade drones, though?

[Troy Crosby]

I'm not familiar with Switchblade drones, Mr. Chair.

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

Okay, what about the Stinger anti-aircraft? Do we own any of them?

[Troy Crosby]

Mr. Chair, we do not.

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

Okay.

What about the Javelin anti-tank? Do we own any of those?

[Troy Crosby]

Mr. Chair, we do not.

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

It's unfortunate to hear that.

You mentioned you have six Hornets from Australia in service. What does it cost per unit to put it into production?

[Troy Crosby]

Mr. Chair, the total value of the interim fighter capability project, to include the acquisition of the 18 aircraft plus two aircraft for spare parts, was $393 million. That also includes the investments to bring them into service, including phase one of the Hornet extension project, which addresses, as the gentleman mentioned, the interoperability and regulatory requirements.

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

Fair enough, but would you have a unit cost as to how much it's cost to date to get each one of the six into production? What is the average cost to get six of those into Canadian serviceability?