National Defence Committee on Feb. 20th, 2007

[Michael Fortier]

Once you've done a proper identification of your needs, once you know exactly what you want, then you go after the best value. It's not the other way around. You need to first figure out what you need and what you want. Once you've properly identified this, you negotiate to get the best price for that particular answer.

[Blaine Calkins, Conservative, Wetaskiwin, AB]

Of course, you would have the information and the specifications provided by National Defence officials. Is that correct? They're up front with the documentation on how you're going to evaluate or how they would like Public Works to proceed with the evaluation, so from a life-cycle perspective, when does Public Works get involved?

We've got an analysis of a problem, which is probably done by National Defence. At some point there are going to be draft requests for proposals that are going to go out. They're going to go to industry for some feedback, and then we're going to have final requests for proposals. At what point does Public Works staff get involved in that process? Does it need to change? Have there been any improvements or efficiencies so that the people who are responsible for project management for the procurement end of things are involved sooner or later or at the appropriate time in the process to make sure that we're creating efficiencies?

[Michael Fortier]

I'll let Terry answer that.

[The Chair, Conservative, Rick Casson]

We'll have to come back to that. We're out of time.

[Michael Fortier]

That's a great question.

[The Chair, Conservative, Rick Casson]

It's a great question. I think you will repeat it on your next turn.

[Michael Fortier]

It was a long question.

[The Chair, Conservative, Rick Casson]

Mr. Coderre, go ahead, please. You have five minutes.

[Denis Coderre, Liberal, Bourassa, QC]

We will go back to serious matters, Mr. Minister.

You were certainly informed that defence purchases, under the procurement process, could be made in three ways. There is procurement through a direct tie with the company.

They call that direct commercial sale.

Mention was made of foreign military sales or FMS. We'll talk about this later on with Mr. Williston. There is also the memorandum of understanding or MOU.

Were you briefed about ITAR?

[Michael Fortier]

Yes.

[Denis Coderre, Liberal, Bourassa, QC]

You were informed about what Gen. Daniel Ross said regarding defence purchases and ITAR? With respect to this issue, there was a document that talked about green light, yellow light and red light.

[Michael Fortier]

No.

[Denis Coderre, Liberal, Bourassa, QC]

You were poorly briefed then. Why was it said that the C-17 contract was ITAR-friendly, particularly with respect to dual citizenship? You know full well that ITAR applies to this contract, not only to employees that may come from other companies—and that's why I raised the matter of Bell Helicopter, even though I don't need you to answer regarding that—but also to defence employees. So for someone with dual citizenship, being Venezuelan or Chinese, the American government's security rules will apply: this person will not even be able to get near the plane.

I am not talking to you about the region, but about the way that you have awarded this contract. Why didn't you negotiate the application of ITAR before signing this contract? Why didn't you take a firmer stance in order to protect our Canadian citizens?

[Michael Fortier]

First of all, I would like to go back to what you said about the briefing. I do not think that this was your intention, but you let it be understood that I am poorly briefed. As you know, ITAR comes under the jurisdiction of the Department of Foreign Affairs. Mr. MacKay is responsible for this file. I would suggest that you invite him here, if you would like to discuss this matter with him.

I would also like to make the following correction. In the contract that Mr. Williston negotiated with Boeing, there are clauses providing that the procurement of planes will be done in such a manner that ITAR will not apply.

[Denis Coderre, Liberal, Bourassa, QC]

I'm going to stop you right there. Daniel Ross himself told the House that negotiations were now under way because ITAR was applying. We are talking about procurement contracts, not maintenance contracts. You therefore misled the Senate and the people when you said that this contract was ITAR-friendly. ITAR applies.

So why did you say that, Mr. Minister?

[Michael Fortier]

I will finish my answer. Provisions in the contract stipulate that procurement of the equipment excludes ITAR conditions. You are mixing a lot of things up. When we purchase a plane, it has already been manufactured, it already exists, Mr. Coderre. We take delivery of it. As far as the procurement of the plane is concerned, this is a contract that we signed. This procurement—

[Denis Coderre, Liberal, Bourassa, QC]

But as far as the handling—

It's my time, Mr. Chair. I have the right to do what I have to do. Thank you.

[The Chair, Conservative, Rick Casson]

No, no, no, we'll let him go on.

[Denis Coderre, Liberal, Bourassa, QC]

That's my time. Go on.

[The Chair, Conservative, Rick Casson]

No, but we'll address all the questions to the chair.

[Michael Fortier]

You are confusing all kinds of concepts. Earlier you talked about Bell Helicopter, but that has absolutely nothing to do with the C-17 contract, Mr. Coderre.

Where were you in 2002, when GM Canada had to lay off 14 employees because of ITAR? GM Canada paid the U.S. government $20 million in penalties because ITAR applied.

[Denis Coderre, Liberal, Bourassa, QC]

My problem, Mr. Minister, is not about what was done in the past; the problem, right now, is that you are the minister and you are the one who is responsible.

[Michael Fortier]

Yes, but I am not responsible for ITAR. That is not true.

[Denis Coderre, Liberal, Bourassa, QC]

And you said at the Senate that you are responsible for signing off on the contract. You said very clearly that the contract was ITAR-friendly.

[Michael Fortier]

Exactly, and that's what I'm telling you here again this morning.