National Defence Committee on Oct. 28th, 2010

[Laurie Hawn, Conservative, Edmonton Centre, AB]

Thank you for that.

Mr. Chairman, we talk about getting out and doing a competition and all that kind of stuff, with the very high probability that we would wind up with the F-35 in any event.

Could we get the same kind of deal and the same kind of capability in our F-35s if we acquired them through an outside competition?

[Col Dave Burt]

Thank you for the question.

As was described to this committee by Mr. Ross last week, it's understood that if we went to a competition and we chose to incorporate into that competition the need for industrial and regional benefits, the MOU explicitly tells us that we would not be able to do that through the MOU; therefore, we would have to leave the MOU.

We've done some analysis recently. While the details are at a highly classified level, I can say that owing to the nature of our participation in the program, participation has its privileges across a range of different things: industrial benefits, the cost of the capabilities that we are procuring, and operational capability. What has become clear to us is that if we were to buy this aircraft through any means other than the MOU, there is some chance--and it is quite a reasonable assumption--that the capability we would be procuring would not be as good as the capability we would procure through the MOU.

[Laurie Hawn, Conservative, Edmonton Centre, AB]

Obviously we've come to that conclusion in Canada. A whole range of other countries that have people with qualifications similar to yours, military and civilian, have all come to the same conclusion. Should we take that as a trend?

Obviously you're not a stupid person. These people aren't stupid people. Their countries want the best equipment for their men and women, just as we do. Is there a trend here? Is this maybe the answer?

[Col Dave Burt]

Mr. Chairman, among all nine partners in the JSF program there is absolute unanimity that the capability provided by fifth-generation F-35s is exactly what is needed for the future.

[Laurie Hawn, Conservative, Edmonton Centre, AB]

Thank you.

[The Chair, Conservative, Maxime Bernier]

Thank you very much.

I will give the floor to Mr. Wilfert.

[Bryon Wilfert, Liberal, Richmond Hill, ON]

Thank you, Mr. Chairman.

Welcome, General and Colonel.

General, I just want to acknowledge the great work the Canadian Air Force does both at home and abroad, and the personnel involved, and to thank you and members of your team for that.

Through you, Mr. Chairman, the Auditor General's report suggested there were huge gaps in oversight during the entire Chinook procurement process. What steps have been taken to ensure these gaps in oversight don't occur in the F-35 procurement process?

Before you answer that, Mr. Chairman, maybe I have a question for you. I would like to see the Department of National Defence undertake to provide regular updates to this committee, particularly with regard to the issue of the oversight of costs and the oversight mechanisms being used in the purchase so that we won't be in the same situation we were before.

My second question for General Deschamps is about the maintenance costs of the F-35, which we have heard will be about $7 billion. When we had Alan Williams here, he reminded us that we really don't know what those costs will be, as we really don't know that far in advance. Could you, General or Colonel, indicate what is the range of estimates for the in-service support costs? How confident are you that those in-service support costs won't exceed the upper end of the range? What would happen if in fact they do?

I have a couple of other questions if I get those answered.

[LGen J.P.A. Deschamps]

You first question, I believe, is a request to have the department provide regular updates. That's probably something the deputy minister or ADM Materiel would have to address, because it's not within my domain to provide that kind of information on procurement.

[Bryon Wilfert, Liberal, Richmond Hill, ON]

That kind of information, presumably, would be available and we could—

[LGen J.P.A. Deschamps]

Within the department, the different levels of review have that information. What is releasable would have to be determined by the department itself, given, again, that a lot of the information does dwell in the classified domain, depending on what parts of the program are being scrutinized.

As to the second part of your question, I believe it was about sustainment costs and predictability. I'll let Colonel Burt address that, because he's obviously given it some serious thought. But I think it's safe to assume, if you look just at past experience, that small fleets of single types of aircraft over time cost more money. That's a given. We've experienced that in all our small fleets.

Clearly, even though the actual numbers are still to be negotiated with our partners and industry to get the best deal, we're very confident that the deal we'll get will be better than any deal we would get for a small fleet of unique airplanes. Past experience dictates that would be the case.

That being said, I'll turn it over to Colonel Burt to give you the range of estimates we've looked at, and he can address how we've come to those conclusions.

[Col Dave Burt]

It is true that we are continuing to work with the other JSF partners to develop the sustainment process. There's been a series of sustainment war games ongoing through these months to that end, and it's anticipated that over these months we will get a clearer understanding of the nature of the collective sustainment process.

However, we do have initial estimates, and from those initial estimates it appears that the cost of sustainment of an F-35 for Canada would be approximately the same as what we're paying currently for our fighter capability.

[Bryon Wilfert, Liberal, Richmond Hill, ON]

The AG's report talked about poorly documented deviations from National Defence's project approval guide during the Chinook procurement process. Have there been any similar deviations so far with the F-35 procurement process?

[LGen J.P.A. Deschamps]

Again, I think Colonel Burt has mentioned the fact that we're now establishing the internal process to make sure that the F-35 procurement process does remain consistent with government accountability rules and departmental rules. But because it is somewhat of a different process, with an external body that we participate in and that also has jurisdiction, if you will, in some of that decision-making, we need to connect those two together so there's harmony between what is done in National Defence and what's taken down to the partnership in Washington.

[Bryon Wilfert, Liberal, Richmond Hill, ON]

I presume then that if there are deviations, they would be properly recorded, and obviously....

[LGen J.P.A. Deschamps]

The point being that there are no deviations yet, because we haven't established a process, which is what Colonel Burt is currently working on.

[Bryon Wilfert, Liberal, Richmond Hill, ON]

And you expect that to be seamless with our allies?

[LGen J.P.A. Deschamps]

That's correct, sir.

[Bryon Wilfert, Liberal, Richmond Hill, ON]

Again, Mr. Chair, I'll come back later to the issue of updates. Maybe when we have the deputy minister before us we could look at some regularized process.

Thank you.

[The Chair, Conservative, Maxime Bernier]

Great. Thank you.

We'll give the floor to Mr. Braid.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Thank you very much, Mr. Chair.

Thank you to both of our witnesses for being here this afternoon.

Perhaps I could start with a question for you, General Deschamps. You talked in your presentation about the requirements that have been identified, which dictate the fighter jet that we need. Are there any fourth-generation fighter jets that would meet our identified requirements?

[LGen J.P.A. Deschamps]

With regard to the analysis we looked at, again, I go back to the Canada First defence strategy, which basically lays out the three defence missions: the defence of Canada and North America, and of course our relevant contribution to international peace and security. As you break those down, what do we need practically and tactically? What types of missions will we be called upon to do, if that's the strategic national military mission? As you break those down, this is where we find those tactical risks that we need to identify. How do we address them?

Clearly, when we go abroad into unstable environments where there are multiple actors, either state or non-state, and a proliferation of technologies, which can be very threatening to air operations, (a) you need to be able to determine what those threats are, through intelligence, surveillance, or reconnaissance, and (b) if you're required to take action, you have to be effective in a very complex and dangerous environment.

An analysis of all those potential tasks brings out the high-level requirements and the mandatory requirements. As we looked at all those different tasks we have to do both at home and abroad, only the fifth-generation aircraft was able to meet the whole spectrum of requirements. There are lots of great airplanes. The problem is, as we look at that horizon of the next 30 to 40 years, the fifth-generation piece will play a significant role in ensuring that we remain relevant and able to do what government will want us to do. That's why I think our analysis has been done thoroughly and with our partners, who also don't spend money lightly. They see the fifth-generation aircraft as the long-term solution to being able to adapt to that future risk.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Thank you.

With respect to delivery, in your presentation you laid out in very clear terms that—and we've heard this from many experts who've appeared before us—the CF-18s take us to 2018, or 2020 at the very most. We need to start buying planes in 2016, and the procurement process, as you stated, needs to begin almost tomorrow. Hypothetically, if the process for acquiring our next fighter jet is either delayed or cancelled and we don't have fighter jets after 2020 for whatever period of time, what would that mean to our air force, to our air force capabilities, and to the defence of Canada?

[LGen J.P.A. Deschamps]

I think it's fair to say that the upgrades we've done to the CF-18 are tremendous, and the airplane, right now, is very relevant and capable of doing our business. The sad truth, though, is that the airplanes are aging. They're great airplanes, but they're going to reach the end of their service life. Airplanes are built around a maximum amount of time they can fly given the airframe and the structure fatigue, which will become an issue. We've replaced a lot of components on the airplane, but there are some very key components that will not be replaced without a huge reinvestment program, which would see us spend a lot of money to try to renew 40-year-old airplanes. So this is where there's a cost curve that we fall behind now if we decide to delay the program. We will lose capabilities as we approach the end of the decade and we have to start parking airplanes because they're no longer safe to fly. Then we're going to start having less capability for our mission internationally and, certainly at some point, at home.

That's the risk factor we have to keep in mind as we look at timeliness. There is a very firm definite ending to airplanes. That's the way airworthiness works. We have to be cognizant that it can't be stretched without massive reinvestment. I'm not even sure it's technically possible, in many respects, to extend the life of the older CF-18s once we've done what we've already done.

That's the risk we run if we delay the program too much. We will run into a capability gap towards the end of this decade.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

I have a final, important question.

In 10 or 15 years, if major powers in the world, both allies and non-allies of Canada, have a fifth-generation fighter and we don't, what will that mean?

[LGen J.P.A. Deschamps]

I think it will mean we will be limited in our usefulness in our coalition with our partners.

Again, as Colonel Burt has explained, those other platforms can operate seamlessly. We would be required to find the ways and means to try to integrate into these more advanced systems with a less capable system. Therefore, we would run greater risk...and potentially be a bit of a hindrance sometimes, depending on the scenarios. Or we would have to be used in a very limited fashion to avoid increasing risk to our partners.