National Defence Committee on Sept. 15th, 2010

[Peter MacKay, Conservative, Central Nova, NS]

That's exactly what it did.

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

That was about who would build the jet strike fighter, not about whether or not Canada would purchase it and which one would be--

[Peter MacKay, Conservative, Central Nova, NS]

The competition was exactly about what was the right aircraft for Canada.

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

Mr. Chairman, Minister Clement has told us that this is a very affordable purchase. So far we've seen the costs go from somewhere between $38 million and $48 million per unit--estimate--up to $138 million, and we have no notion of the full life-cycle cost. The estimates have gone around to the total cost of $16 billion. Minister Ambrose has refused to put a number on it because in fact--quite properly--she doesn't know.

So how can we say that this is affordable when we haven't had a competitive bidding process, we don't have any bids on the life-cycle cost, and this cost could go anywhere for a new plane that's not actually even in operation and we don't know what the costs are going to be? How can you say that's affordable?

[Peter MacKay, Conservative, Central Nova, NS]

We do in fact know what the costs are, Mr. Chair. I just stated not five minutes ago that it'll be roughly in the area of $250 million annually, and that price may come down. That's a result of being part of the global supply chain. It's the part of being in a competition that allowed us to make that decision. So any suggestion that being outside that process now would be to Canada's advantage is simply wrong. It's wrong-headed. It's factually incorrect.

We've been the beneficiaries of being part of a continuum that goes back to 1997. That was the initial decision, to go into the concept demonstration phase. Then in February of 2002, we entered into the system development and demonstration phase. In 2006 we entered the production and sustainment phase and follow-on development phase, and then of course we made a further investment. Then in 2008, there was a very clear public declaration in the Canada First defence strategy that we would be replacing the next generation of fighters.

All of this is on the public record. All of the evaluation is there, and there's been much public commentary. In fact, I would quote a member of this committee, Mr. LeBlanc, who's here with us. He said:

I have every confidence that Canadian companies would be well qualified to compete for defence contracts. Our expertise in many sectors of these industries is world leading....Our cooperation with the United States, for example on joint strike fighters has earned Canadian companies substantial industrial benefits.

This is from Hansard, dated October 23, 2003.

I completely agree with the defence critic for the Liberal Party, Mr. LeBlanc.

[The Vice-Chair, Liberal, Bryon Wilfert]

You have four minutes, Mr. Harris.

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

I'd like to quote a former deputy minister for military procurement, Alan Williams. In his recent commentary, he said the following:

The only way to know for certain which aircraft can best meet Canadian requirements and at what cost, is to put out an open, fair and transparent statement of requirements and request for proposal, and conduct a rigorous evaluation of the bidders' responses. The bid that meets the requirements of the Canadian military with the lowest life-cycle costs would be selected.

I want to ask Minister Ambrose whether or not that procedure was followed in this case. Obviously we haven't seen a statement of requirements other than the words the minister has spoken here today, but has there been such a statement of requirements prepared in the same fashion as we might see, as we have in the report on the operational requirements of fixed-wing aircraft? Has there been such a statement of requirements prepared, and have we in fact gone through that process in determining the life-cycle costs?

[Rona Ambrose, Conservative, Edmonton—Spruce Grove, AB]

Thank you, Mr. Chair.

Yes, Mr. Harris, there is a statement of requirements. As I indicated before, the procurement process does not drive the requirements, the requirements drive the procurement process.

The Canada First defence strategy, two years ago, very publicly committed us to purchasing the next-generation fighter. Since then, the defence department and Public Works have been doing research to confirm that there is only one next-generation fighter available for purchase by Canada.

To change the statement of requirements to hold a competition for the sake of holding a competition, when we know there is only one plane available that meets these requirements, would be, frankly, dishonest. It would be a waste of resources and time, and it would particularly be a waste of resources and time to companies that would be looking to compete.

[The Vice-Chair, Liberal, Bryon Wilfert]

Thank you, Minister.

Mr. Harris, you have about one minute and fifty seconds.

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

Your statement here that it would be dishonest to do that seems to contradict directly the Minister of Defence, who said that there will be—“will be”, future tense—an open, competitive, transparent process.

Now, it's all very well to say that the military has decided that the next-generation fighter that they want is this particular strike fighter, but I'm asking for a statement of requirements to meet our specific needs, something that could spell out the operational requirements based on military, strategic, and other studies that would demonstrate that this is what we need.

We've talked about patrolling the Arctic; we've talked about possibly interceptor aircraft. You don't need a stealth striker aircraft to patrol the Arctic or the offshore of the east coast. These are the kinds of operational requirements that need to be determined before you could even decide whether the F-35 is what we need or whether we could buy F-15s like the Saudi Arabians did.

[Rona Ambrose, Conservative, Edmonton—Spruce Grove, AB]

Mr. Harris, I find it interesting that everyone seems to be an expert on military operational requirements. I don't suggest that I am one of those, so I'll turn it over to General Deschamps to speak about operational requirements.

[Peter MacKay, Conservative, Central Nova, NS]

Thank you, Minister Ambrose.

I think we'll actually hear from real experts, such as General Deschamps and others, but what I can tell the member is that this is exactly the type of rigorous analysis that went on in the Department of Defence. This is exactly the type of expert input that we received before making the decision, after looking at the competition, after participating in a very rigorous examination of all of the aircraft that were on the market.

You know, Mr. Harris is talking about a fourth-generation aircraft as opposed to a fifth-generation. We need to project out into the future. With the vast airspace, coastal, and harsh conditions that these aircraft fly in--it's exactly that type of consideration that went into the weighing of the decision. All of the onboard features of this aircraft, and General Deschamps can describe in great detail the sensors and onboard equipment, were considered in the decision-making.

[The Vice-Chair, Liberal, Bryon Wilfert]

We'll hear from him in the next round.

We'll now go--

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

Mr. Chair, the minister referred to a statement of requirements. Can I ask that it be tabled to the committee?

[The Vice-Chair, Liberal, Bryon Wilfert]

Yes.

Minister?

[Peter MacKay, Conservative, Central Nova, NS]

Those are issued through the department, as part of the statement of requirement, in the proposal that was made to the company. So there is in fact some copyright consideration there, as an internal document.

But certainly we can have the general speak to what those statement of requirements were and explain them in detail, Mr. Chair.

[The Vice-Chair, Liberal, Bryon Wilfert]

I'm sure we'll follow up in the next round, then, thank you.

[Peter MacKay, Conservative, Central Nova, NS]

Absolutely.

[The Vice-Chair, Liberal, Bryon Wilfert]

I'll now go to Laurie Hawn of the Conservatives for ten minutes.

Mr. Hawn.

[Laurie Hawn, Conservative, Edmonton Centre, AB]

Thank you, Mr. Chair, and thank you to the witnesses for being here.

Mr. Chair, my friend Mr. Simms pointed out that the fixed-wing SAR program is still ongoing. I'll point out that the Sea King replacement is also still ongoing, 17 years and half a billion dollars later.

My first question, though, is to the Minister of National Defence. It was brought up that somehow our sovereignty would be compromised if we had support activity going on outside of Canada. I think that was a suggestion by Mr. LeBlanc. Maintenance of the CF-18, of course, has been done outside of Canada and in Canada. Maintenance of the C-17 is a cooperative effort. Maintenance of the C-130J is a cooperative effort.

We operate with allies when we're in those kinds of programs. Could you comment briefly, Minister, on the fact that there is no threat to sovereignty if we're operating with allies in supporting programs like the F-35?

[Peter MacKay, Conservative, Central Nova, NS]

That's exactly right, Mr. Hawn. In fact, your experience as an ex-fighter pilot itself speaks volumes on your understanding of that fact.

We've been involved in many international consortiums in the past. In the case of many of these aircraft you've mentioned--the C-130J, the new C-17 heavy-lift transport planes, the Chinook helicopters--Canada benefited from participating in these programs with, most notably, the United States but other allies as well.

What would threaten our sovereignty, quite frankly, at a practical level, would be not having aircraft capable to defend our airspace, not having aircraft able to go up and meet any airborne threat.

You know full well, having flown CF-18s, that we need to be there to meet and greet any airborne threat--or any maritime threat, for that matter. This type of aircraft, the F-35, gives us that ability. That, first and foremost, is the responsibility of the Canadian Forces: to protect Canada and North America and to participate interoperably with other allies be they NATO or NORAD allies. That interoperability, that cooperative approach in both procurement and the defence of Canada, North America, and participating and international operations, is exactly what protects and promotes our sovereignty both at home and abroad.

[Laurie Hawn, Conservative, Edmonton Centre, AB]

Thank you.

Mr. Chair, through you, I just want to finish the question that my colleague Mr. Simms had asked about the Tu-95 incursions into the Canadian air defence identification zone and the sovereignty threat. I think what he's getting at is why, if we can do that with the CF-18, we would need an F-35. Well, the CF-18 is 28 years old today. It's going to be 38 years old by the time we're finished flying it.

The people with other interests in our airspace are not going away, so the simple fact is we still need the capability to meet those aircraft and to exercise sovereignty. Sovereignty is being there to exercise that, regardless of whether it's a Tu-95 that was first built in 1956 but is a completely different airplane today from what it was then.

Can you comment on the continuing need for the type of things that the CF-18 has done but will in a few years be incapable of doing because of age?

[Peter MacKay, Conservative, Central Nova, NS]

That's exactly right, Mr. Hawn. You have flown sorties both in Europe and in Canada, and you know the capability of that aircraft. But it is reaching, if I can use the vernacular, the “best before” date. It will be 30-plus years old by the time we begin to receive the new F-35s.

We need to plan ahead. We need to plan ahead so we'll avoid operational gaps, which we're seeing now with the maritime helicopters because of the cancellation. We need to plan ahead because we don't know what those airborne threats may be. There's been a lot of talk about Russia and old planes coming in. We don't know what their future capability will be. We don't know what non-state actors may pose as a threat to North America. We don't know what other countries we'll have in the air in future generations. That's why we want to invest in the best plane: to ensure mission success today but also well into the future.

It's clear that we don't know what's aboard certain planes when they approach Canadian airspace, be they commercial or unidentified, or be they any aircraft that does not announce its approach and potential encroachment into Canadian airspace.

So it's having that capability that is available to us. That's why the investment now, so that we can get something in the future to replace the CF-18. These are not off-the-shelf variants; these are aircraft we need to invest in now--that's without getting into all the benefits on the industrial side. We need to plan ahead, the same as we're doing with the navy, the same reason we're investing in other capabilities for land combat vehicles. It's buy now and receive in the future.

[Laurie Hawn, Conservative, Edmonton Centre, AB]

Thank you, Minister.

Mr. Chair, this is through you to Minister Clement, en français.

What do you think of Mr. Bachand's comments that it would seem that companies in Quebec and everywhere else in Canada would not be able to keep their contracts with Lockheed Martin? I find that a bit odd as far as the capabilities of Canadian companies go.

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

You are right. It is important to state that there is an agreement between Lockheed Martin, Pratt & Whitney and GE Rolls-Royce Fighter Engine Team as far as access to contracts by Canadian businesses is concerned. Naturally, these benefits represent business opportunities for Quebec companies. Gilles Labbé, the president and chief executive officer of Héroux-Devtek, made the following comment:

This is the largest defence program we have ever seen! It is the biggest program of the next quarter century.

This is historic for Canada and excellent news for the Quebec aerospace cluster and the entire Canadian aerospace industry. As Mr. MacKay mentioned, Claude Lajeunesse, the president and CEO of the Aerospace Industry Association of Canada, made the following statement:The next generation fighter is the single largest military aircraft procurement program of the Government of Canada in the foreseeable future and will positively affect the Canadian aerospace industry for decades to come.

I agree.