National Defence Committee on Aug. 25th, 2010

[The Chair, Conservative, Maxime Bernier]

Thank you.

This is the 23^rd meeting of the Standing Committee on National Defence. As I said earlier, the committee was convened at the request of some committee members.

I will give the floor to Mr. Bachand to present a motion to this committee.

Monsieur Bachand.

[Claude Bachand, Bloc, Saint-Jean, QC]

Mr. Chair, you read a little earlier the document that was sent to the clerk with the signatures of the members of the opposition. In my opinion, there is nothing wrong with what is being proposed. After all, the motion is broadly worded, leaving enough room for a discussion of contracts, the plane and a whole range of issues that I have also mentioned.

If we invite the Minister of Public Works and Government Services, we can discuss the signing of contracts. If we invite the Minister of National Defence, we can discuss the specifics of the contract. If we invite the Minister of Industry, we can find out whether it is possible to have the tools to calculate the economic spinoffs. I believe that everything we want to accomplish is in this motion.

In addition, Mr. Chair, knowing your open-mindedness, I am sure we will be able to discuss everything related to the F-18. We should not say that what we want to discuss has not been explicitly stated in the motion and that, therefore, we cannot talk about it. We are here to have discussions and I think the motion is perfectly reasonable, unless my colleagues think otherwise.

[The Chair, Conservative, Maxime Bernier]

Mr. Hawn, you have the floor.

[Laurie Hawn, Conservative, Edmonton Centre, AB]

Thank you very much, Mr. Chair. We support that motion wholeheartedly. This is a good-news story for Canadian industry, for the Canadian air force, for the country, for our international and domestic commitments. It is absolutely a good-news story. We welcome hearings. We'll offer ministers, the first meeting back in September, a panel of the three ministers. We have a list of potential witnesses, as I'm sure the opposition does as well.

I'll just put on the record my concern with regard to this particular meeting. It is, frankly, a waste of taxpayers' money to call a meeting in the middle of summer. We could pay a recruit in the Canadian Forces for a year for what it is costing just to stage this meeting when we could do this just as easily in September when Parliament comes back.

But as far as supporting the motion for the study is concerned, absolutely.

[The Chair, Conservative, Maxime Bernier]

Do I have members who want to speak on the motion?

I think we must add to the motion,

the following words: “that the committee conduct a study“

instead of

We, the undersigned members of the Standing Committee on National Defence, request that a meeting of our committee be convened, pursuant to Standing Order 106(4), in order to begin a study [...]

Instead of that, we would have:

[...] that the committee conduct a study on the next generation of fighter aircraft, the role and mission that would be assigned to this aircraft, the reason the government believes that a sole source contract is appropriate and the terms and conditions to be included in such a contract, such as a guarantee of regional economic benefits.

That's just to be sure. So that would be the motion.

(Motion agreed to)

I should say rather that it is passed unanimously.

Would the members like to tackle other topics? I think the goal of the meeting was achieved.

Go ahead, Mr. Bachand.

[Claude Bachand, Bloc, Saint-Jean, QC]

Is it too early to propose witnesses now?

Mr. Hawn seemed to suggest that the three ministers be invited. I am in favour of that.

Can we suggest the names of the witnesses now? Or would you rather have us refer them to the clerk?

[The Chair, Conservative, Maxime Bernier]

We can discuss the names of the witnesses, and also send them to the clerk. If you have a list of witnesses to suggest right away, then by all means go ahead since it could help the clerk who has to call them.

[Claude Bachand, Bloc, Saint-Jean, QC]

Mr. Chair, not only do I have a list of witnesses, but I also suggest that we group the witnesses together to save as much time as possible instead of spending a whole year on this process.

As to Mr. Hawn's suggestion, I would like the three ministers to appear. First, we should hear from the Minister of National Defence since it was the Department of National Defence that set out the specific terms of the contract. It would be important for the minister to explain to us why he chose those types of planes and to tell us whether that will change the missions of the Canadian Air Force. So I would call the Minister of National Defence.

The Minister of Public Works and Government Services will be responsible for signing contracts, or for proceeding by way of a memorandum of understanding, so we should hear from her.

Finally, I would also call the Minister of Industry since he usually deals with economic benefits. So it would be important for us to hear from these three ministers. If all three ministers are present, we will need a full two-hour meeting to be able to ask them all the appropriate questions.

However, as we saw in the announcement from July, the industry is also extremely interested in these contracts, which is normal since we are talking about anywhere from $12 billion to $16 billion in economic benefits. I have a list of four companies and I would like us to consult them. I suggest that the first group of witnesses consist of representatives from CAE and Pratt & Whitney, and that the second group consist of representatives from L-3 MAS and Héroux-Devtek.

The unions representing aerospace companies also seem very interested in the issue and have already contacted me. So I suggest a cross-section of representatives from these three unions. I believe these unions represent almost 90% of the aerospace sector. So I will be pleased to give you the names. In my opinion, someone like Claude Lajeunesse from the Aerospace Industries Association of Canada (AIAC) would also contribute to the debate. I will provide you with the names formally in writing, but, for the time being, I suggest these witnesses.

[The Chair, Conservative, Maxime Bernier]

That's great, thank you.

Mr. Dosanjh, you have the floor.

[Ujjal Dosanjh, Liberal, Vancouver South, BC]

I agree with Mr. Bachand that we should have the ministers, but I would suggest that we should have the four ministers rather than three. We should also have the Treasury Board minister, because it is those four ministers who actually make these decisions before the matter is presented to the cabinet.

I would also suggest that we not actually group all the ministers together, because each minister would bring, I am assuming, his or her officials. We should in fact have one minister per meeting so that we can thoroughly explore each minister's involvement and the officials' involvement in the process.

My further suggestion would be that we invite Mr. John Siebert and Kenneth Epps from Project Ploughshares; Alan Williams, the ex-ADM (Materiel); and if Minister MacKay comes, I'm assuming he will have Dan Ross, the current ADM.

I believe we should also invite representatives of Boeing, Lockheed Martin, and Eurofighter to come and tell us whether they had been approached—particularly Boeing and Eurofighter—whether they were allowed to bid, and why. I think Lockheed Martin should be invited to tell us, from their perspective, how they were able to obtain this particular contract.

Also I believe we should have some expert who could actually enlighten lay people such as myself as to the differences between the fourth- and fifth-generation fighters. I think that would be appropriate.

[The Chair, Conservative, Maxime Bernier]

Thank you very much.

Mr. Hawn, and then Mr. Harris.

[Laurie Hawn, Conservative, Edmonton Centre, AB]

We have no problem with any of those witnesses, because as I said, this is a good-news story. We can add other ones in throwing out names, but I think we should just give the list, because some of them will be the same.

I would like to hear how the airplane changes the missions and the mandate of the air force. It doesn't. It carries on the same missions and mandate: our responsibilities to NORAD, our responsibilities to NATO, our responsibilities domestically and abroad. What it does do is give us an airplane that for the next 40 years would be able to do that and meet potential threats.

We're glad the Leader of the Opposition agrees with our shipbuilding process, but we find it a little bit ironic on this side of the room that he is in British Columbia promising sole-sourced contracts to a shipyard in B.C. at the same time that his people are coming here saying we should shut down the fighter force. It just seems a bit incongruous.

But we will be very agreeable to any witness, because they will all have a story to tell that frankly will show this is the best deal for Canada in all respects. So bring it on.

[The Chair, Conservative, Maxime Bernier]

I just want to make sure, regarding the four ministers, that you don't have—

[Laurie Hawn, Conservative, Edmonton Centre, AB]

We don't have any objection to that. A lot of that is going to be, obviously, subject to ministerial availability, whether you get them one at a time or two at a time. We can sort out those details.

[The Chair, Conservative, Maxime Bernier]

Thank you.

Mr. Harris, and then Madam Gallant.

[Jack Harris, NDP, St. John's East, NL]

Thank you, Chair.

I think we need to go about this study very quickly. I don't think we need to wait until September rolls around. There are a lot of other issues on our plate.

This is a pretty important decision, or potential decision, in terms of the cost to Canadians. Also, Mr. Hawn just made reference to decisions about what our needs are for the next 40 years. So we're looking at a long-range strategy here, and doing that in military terms you really are crystal-balling the future.

What I've heard so far has been fairly flippant, such as that these jets are going to do what the F-18s do only better for the next 40 years. We do really need some sort of analysis of where this could fit into a potential strategy and what our needs are. We're very actively studying peacekeeping right now and what role Canada should be playing in that. We have a retired major-general from the Canadian Forces who was the former commandant of the national defence college in Kingston, Major-General (Retired) Leonard Johnson, who has been critical of the strategic need for an aircraft of this nature. I'd certainly like to hear from him.

If there's anybody else who has a perspective on that, we can add a couple of names to that part of the witness list. Other than the kind of comments we just heard from Mr. Hawn and we've heard from the minister, I haven't seen any serious military analysis demonstrate what exactly is the need for these new jets in the future, and not only that, but even if we do need to have a certain number of these aircraft in terms of our commitments to NORAD, etc., whether we actually need 65. Do we need 25 jets? Do we need 20? Do we need 35? All of this is just thrown in front of the Canadian people with a price tag of $16 billion and everybody is expected to swallow it whole.

I think we owe it to the Canadian public to investigate this more fully.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Thank you, Mr. Chairman.

My question or clarification arises from Mr. Dosanjh's comments.

It is my understanding that the decision to participate in the development of the joint strike fighter program predates this government. As a consequence of deciding to participate in this program, we already have more than 75 or 80 companies that have benefited through participation in this project.

Mr. Dosanjh asked how these decisions on who acquired what contract came into being. Some of these contracts may have come into force before this government even took office. Is he suggesting that we call as witnesses ministers who were in charge and would have that intimate knowledge from the previous administration?

[The Chair, Conservative, Maxime Bernier]

Thank you.

Mr. Hawn.

[Laurie Hawn, Conservative, Edmonton Centre, AB]

Perhaps you want to let Ujjal answer that.

[Ujjal Dosanjh, Liberal, Vancouver South, BC]

Far be it for me to enlighten Madam Gallant, but there was no commitment to purchase any aircraft whatsoever. It was a program to develop the fighter. I'm glad we got benefits, and my concern with respect to this particular contract is that there is no absolute guarantee of industrial and regional benefits to Canada in the amount of $16 billion.

If you have a competitive bid, usually benefits accrue, dollar for dollar, to Canada and Canadians. There is absolutely no guarantee. In fact, one of the ministers who made the announcement wasn't able to provide any guarantee that there'd be industrial and regional benefits in the amount of $16 billion.

Those are the kinds of questions we have. If you want to go back 10 years, fine.

[The Chair, Conservative, Maxime Bernier]

Mr. Hawn, the floor is yours.

[Laurie Hawn, Conservative, Edmonton Centre, AB]

I have just a couple of points on that. This wasn't laid on the Canadian public on July 16. The Canada First defence strategy has been out there since 2008. We've run elections on it. There was nothing secret about it. The joint strike fighter, the next-generation fighter aircraft, was in there as part of that, along with shipbuilding and everything else. So to suggest that this was somehow secretly foisted upon the Canadian public is just absolute nonsense and absolutely false.

The contract is $9 billion for the acquisition of 65 airplanes, for weapons, simulators, infrastructure, and training. I don't have the exact figure, but with the F-18 program, about 60% to 65% of the program cost was airplanes and the rest of the program cost was for the type of things I mentioned.

The other $7 billion that people like to throw in and call it $16 billion is for long-term support. I'll point out that the long-term support contract for the F-18 wasn't signed until about six years after we started flying the airplane. These support programs are done in collaboration with allies. We have nine partners in this program. It's going to be a collaborative process. It's going to be similar to the process we followed with the CF-18 support. It was very effective with the CF-18 and it will be very effective with the F-35, and in fact, to segue to that for a little bit, it opens up Canadian industry. It opens up opportunities for Canadian industry to participate not just with 65 airplanes, but with a worldwide fleet of up to 5,000 airplanes.

Canadian industry is very competitive. The rules and procedures around what used to be called industrial and regional benefits have changed. We are adapting to those changes and Canadian industry is very good. Avcorp, for example, as I mentioned, just signed a $500-million contract. We're buying a number of simulators. I suspect that CAE—and this isn't to be taken as anything other than a guess—is the biggest simulator builder in the world and I suspect they will do very well in simulators for the F-35. It goes on and on and on.

Canadian industry is very competitive. They will do very well, as they have already done well in contracts related to the F-35. Actually, 82 companies have benefited from contracts signed since I'm not sure when.

On the issue of the contract, people need to be clear, and that's why we need to bring in people from Public Works, and so on. The contract itself is not signed. The MOU has been activated. The contract itself is signed somewhere down the road. The lead time on all this is to allow us to get airplanes when we need them, around 2016, to allow us time to phase in the F-35 as we phase out the F-18. It is exactly the same process we followed with the CF-18 when we phased out the F-5, the F-101, and the F-104 and phased in the CF-18. This is nothing new; it's just the next stage in this process.

So we welcome all those people and more. If anybody else wants to come and share his or her expertise and opinions on this, we welcome that.

[The Chair, Conservative, Maxime Bernier]

Ms. Gallant.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Thank you, Mr. Chairman.

While I fully understand that the old government did not commit to this project, other than the development of the program, the result of which is that the longer it took us to commit to it the longer the delay in Canadian companies actually being able to compete for the contracts, I do agree that we should go back to the tendering process that was engaged in internationally by all the partners when they came together, how these contracts were tendered internationally in the program as a whole. So we may even need to invite witnesses who are outside Canada, through conference calls, as that would be more cost-effective.

[The Chair, Conservative, Maxime Bernier]

As I mentioned at the beginning, members will send a list of their witnesses to the clerk, maybe before the end of next week. After that, we will pick a date for the first meeting.

I will now give the floor to Monsieur Laframboise.