National Defence Committee on Feb. 8th, 2007

[Dan Ross]

I have been to Afghanistan and I've talked to many of those soldiers face to face and spent many sleepless nights over the past year making sure we had the right stuff there for our troops there.

We review those things every two weeks from top to bottom; it gets the top priority from my army engineering equipment staff. We have to be careful because sometimes soldiers take their own kit and they may get injured because they don't have the flash protection gloves we've already issued them. Soldiers may not be happy with load-carrying vests and they'll buy their own because they want them configurable, but they can't find any that are configurable on the civilian market. So we work very, very hard on finding really, really good kits. I think our personal kit is among the best in the world, but the soldiers have to use it.

[The Chair, Conservative, Rick Casson]

I appreciate that comment.

We'll start with the third round, and we have a little over five minutes. Mr. Coderre, and then Mr. Blaney.

[Denis Coderre, Liberal, Bourassa, QC]

Thank you very much.

First of all, who is Col Burt's boss?

[Dan Ross]

The Chief of the Air Staff.

[Denis Coderre, Liberal, Bourassa, QC]

Through Access to Information, Mike Blanchfield and Alec Castonguay were able to publish a number of articles relating to a series of documents on the topic of air resource requirements. I must admit I am concerned.

If I talked about the capability going from 43,000 pounds to 86,000 pounds, it's because it is clear in my own mind that, if the idea was to let a single source contract and the political powers that be wanted to ensure that single source would be Boeing, all they had to do was amend the requirements with respect to the delivery date and the payload capacity. These articles quote Col Burt as saying that an official call for tenders was required. In any case, from the very beginning, it was clear that it was between Airbus and Boeing—in other words, between the A400M and the C-17. As you know, the A400M is a smaller aircraft than C-17, but it was still suggested.

There were discussions with the Prime Minister's Office, particularly with respect to the delivery date. The Prime Minister's Office wanted to handle this file on its own. According to the article by Alec Castonguay, Col Burt said that, if the government wanted to give special preference to one particular aircraft, it could do so by changing the delivery date criterion. In his own words, “As discussed, the delivery schedules would probably be the real key in terms of discrimination.” Alec Castonguay went on to say this:

Indeed, on May 31, in a document intended to beef up the presentation to be made to Cabinet by Minister Gordon O'Connor, the payload capacity requirement had not changed, and remained at 43,000 pounds. Thus both types of aircraft could still qualify.

However, on June 29, when the announcement was made, that requirement was completely different. The payload capacity requirement under the contract had effectively doubled, from 43,000 pounds to 85,890 pounds.

Mr. Chairman, as I said earlier, it depends on what generation you're from. I haven't yet adjusted to kilograms. So, I was talking in terms of pounds.

The Department of National Defence has always wanted that type of competition to exist. The real question is whether the criteria were amended to make sure that only Boeing would be able to secure the contract. Can you tell me what happened between May 31 and June 29 for the process to change from one of competition between the suppliers of two different aircraft to the current situation? I think we could have held on to our bargaining power and used it to see what the other one was prepared to offer, particularly since, in the case of the C-17, this is the first time in the history of the Department of National Defence that on-site support service depends on a foreign company. We don't even have intellectual property rights. So, what happened in the course of that month for the requirements to change? Mr. O'Connor was prepared to go to Cabinet with the basic criteria. There is a note that says: “Office of the Prime Minister”. Did the Prime Minister's Office ask you to amend the criteria?

[Dan Ross]

I wasn't aware that the Prime Minister's Office was involved in any way.

I was never aware of any conflict of interest.

[Denis Coderre, Liberal, Bourassa, QC]

These are e-mails from Col Burt.

[Dan Ross]

Perhaps, but I think as we discussed earlier, there was that challenge function going on prior to the SOR being finalized. I think Colonel Burt's e-mail is referring not to Airbus A400M but to Airbus A319, our passenger Airbus that we tried to use for strategic airlift in the past. But I think that's part of the normal challenge function of whether we have the requirement right. What is a strategic airlifter? Is a strategic airlifter carrying one thing over the Atlantic, or is it a—

[Denis Coderre, Liberal, Bourassa, QC]

Mr. Ross, you are responsible for Materiel. Your job is to act as a link between the public, the other departments and the requirements of the people working at National Defence, is it not? You should be aware, because, in a sense, you are our watchdog. You talk to all your people. What happened in the course of that month? Why would you not be aware of this? These are professional journalists and they have quoted people. They get their information through Access to Information. We're talking about an exchange of e-mails. We're not talking about things that occurred in the years prior to that. There is only a few days' difference. Can Gen Ward or someone else answer my question?

[Dan Ross]

General Ward wasn't in the job at that time. I was aware of some of the requirements discussions that had taken place, but I have to say, sir, it was part of the normal debate on whether we had our requirements right.

I don't recall any discussion about whether they were Airbus A400s or Boeing C-17s.

[Denis Coderre, Liberal, Bourassa, QC]

I'm just interested in bids. I don't care about the companies.

[Dan Ross]

It was about, “Do you really need to carry what type of equipment across the Atlantic Ocean, refuel once, and go into Africa or Afghanistan?”

[The Chair, Conservative, Rick Casson]

Just a short comment, please. I know it's difficult, but we're out of time.

[MGen J.D.A. Hincke]

My only comment is not about these circumstances, but in the force development, force planning, how do you get what you think you need? There's a tension that goes back and forth.

As you are developing requirements and looking at the best ways to answer those, what's the new idea cut-off date in your definition of the requirement? You need to get on with the business of going out, doing procurement, and working the process, but you also don't want to be tied too much to that. When a new idea, deficiency, or something is identified, your process needs to be flexible enough to accommodate what might be new learned things.

We're doing that right now with IEDs and the standards we are looking at around army vehicles. We're learning new things about what the enemy is doing to us, and we have to be flexible enough to adapt. So that may require us to go back to look at SORs, or whatever. We're professionals and we look at these things all the time.

I'm not talking about this in particular because I don't know the circumstances, but philosophically, that sort of stuff goes on all the time.

[The Chair, Conservative, Rick Casson]

Very good. Thank you.

Mr. Blaney.

[Steven Blaney, Conservative, Lévis—Bellechasse, QC]

Yes, certainly.

So, whether it's in pounds or kilos, Mr. Chairman, it is quite clear that means half as many trips across the Atlantic, and therefore, half as many greenhouse gas emissions.

We have talked a lot about aircraft this morning, but we haven't talked about what the shipbuilding industry needs. We do know, however, that the Joint Support Ship Project is currently underway.

We have seen that there are procurement cycles. There were no acquisitions for 13 years. This obviously disrupts the industry, which suffers structural problems, and particularly the shipbuilding industry, where there are medium- and long-term projects.

Can you tell me whether, as part of your strategy, you are considering spreading your procurements over time? You made it clear that the need for equipment trumps regional spinoffs. In the case of the shipbuilding industry, there is obviously a certain amount of flexibility.

Do you expect to spread your requirements over time, so as to spread out production and avoid peak periods, which ultimately result in a lack of production?

I would be interested in hearing your comments on that.

[Dan Ross]

There is a long-standing shipbuilding policy in the country, where major navy, coast guard, and fisheries vessels are built in Canadian ports. You're absolutely right that the feast or famine thing has been extremely difficult for the maritime industries. That is a concern for Industry Canada, and they have discussed it with us.

We would be delighted to have a long-term continuous build for our ships, but you need to have guaranteed long-term funding to continuously build major ships in a reasonable manner. That has always been the challenge. Can you afford it?

You also have to admit that at the 20-year point you will sell your frigates and won't rebuild them or upgrade them, which we have always done. The Germans, the Dutch, and the Americans do not rebuild or upgrade their frigates, for example. They keep them for 20 years, sell them, and build new ships. We have never done that in this country. It's expensive, high-risk, and often doesn't give you the length of service you really need.

[Steven Blaney, Conservative, Lévis—Bellechasse, QC]

You say retrofits are not always operationally effective. Is that right?

[Dan Ross]

They are complex. The question of technology and integration—

[Steven Blaney, Conservative, Lévis—Bellechasse, QC]

But you do agree that in terms of both the Canadian Forces and industry, it would be advisable for a committee such as our own to be able to recommend to government that there be medium- and long-term planning of maritime requirements, and that a policy be adopted along those lines.

[Dan Ross]

We would have to discuss that with the other departments—for example, Fisheries and Oceans.

[Steven Blaney, Conservative, Lévis—Bellechasse, QC]

And particularly with Industry, right?

[Dan Ross]

Yes.

[Steven Blaney, Conservative, Lévis—Bellechasse, QC]

Thank you very much.

[The Chair, Conservative, Rick Casson]

Thank you.

We need some time to deal with some committee business, Mr. Coderre. I apologize for that.

Gentlemen, is there anything you'd like to add? If I had to cut you off and you feel you need to elaborate more on something, please supply it to the committee in written form.

Are there any final comments?