National Defence Committee on Nov. 25th, 2010

[Bryon Wilfert, Liberal, Richmond Hill, ON]

That's an interesting point.

Mr. Dias.

[Jerome Dias]

The whole issue of IRBs is interesting, because here I have Canada's defence industry. The number one recommendation talks about the government leveraging IRBs. I listen to Minister Clement talking about the history of IRBs and the importance of IRBs. One can argue that a lot of our aerospace sector was developed on IRBs, so just because it's not structured into this program, that is not necessarily a bad thing. I don't buy the argument that it serves us well historically but now it's just not serving our purpose.

I've managed to work most of the questions I wanted to raise in some of the other questions that went around. There's no question. Depending on how you ask the questions to Industry Canada, you're going to get an appropriate response, based on your question.

I would suggest that if the taxpayer was offered $16 billion, clean, worth of government procurement or the opportunity to bid on $12 billion—the opportunity to bid—I think the Canadian taxpayer would take the $16 billion.

[Bryon Wilfert, Liberal, Richmond Hill, ON]

Are you concerned about a precedent here, because Treasury Board guidelines are very clear? I think section 7.4 or 7.5 is very clear about a clear, transparent, and competitive process. I think your point is well taken with regard to the benefits received, certainly from the guarantees of the past, and your comments about Industry Canada. Are you concerned that there may be a precedent here for future contracts?

[Jerome Dias]

I am not one who will sit here before you today, sir, and say that everything should be shopped to the lowest bidder. The reality is that as it affects Canadian jobs, I think Canadians have to come first. If it's a government procurement policy that we can build in Canada, then I don't care if the government sole-sources, to be perfectly honest with you, because the issue is about putting Canadians to work. I'm not hung up on that.

[Bryon Wilfert, Liberal, Richmond Hill, ON]

So you're not hung up on jobs that are guaranteed. The expectation that we may or may not get 16 versus...where did you get your figure again? You said—

[Jerome Dias]

I said nine plus seven: $9 billion worth of sales and $7 billion worth of in-service.

[Bryon Wilfert, Liberal, Richmond Hill, ON]

The same question to Mr. Chartrand. Do you have any concerns?

[David Chartrand]

My comments are pretty much the same as Jerry's.

We have policies within the union to buy union-made, to buy Canadian, to make sure we generate some return in the economy, and to make sure we keep people working here. When I buy printed documents, they've got to be from somebody who's unionized. When I buy clothing, in general I try to get something from a union shop.

Why do we do this? It's to keep people working. Yes, those jobs cost a little bit more sometimes, but it's not somebody who's working at $11 per hour who's generating a lot of movement in this economy. It's the middle class. It's jobs like these. It's $50,000 and $40,000 per year. That allows families to have a roof over their heads. It allows them to go on vacation. It allows them to spend some money in the economy and go to a restaurant. It allows them to do certain things that others can't do. That's how you generate movement in the economy. You don't generate movement in the economy by taking the taxpayers' money and giving somebody else work in another country.

[Bryon Wilfert, Liberal, Richmond Hill, ON]

I knew you'd agree with that, Mr. Chartrand.

Listen carefully--

[The Chair, Conservative, Maxime Bernier]

I'm listening carefully and I will give the floor to Mr. Payne.

[LaVar Payne, Conservative, Medicine Hat, AB]

Thank you, Mr. Chairman. My questions are through you to the gentlemen.

I have something I would like to refer to you gentlemen, in terms of the MOU. I know Mr. Dias said that Alan Williams was in disagreement with Dan Ross. I know Mr. Williams was not part of this process here. And Dan Ross and his other official, Mike Slack, as well as Colonel Burt, who have been working on this particular MOU for the last number of years, have agreed with everyone else in the MOU that they are not to include IRBs. That is the complete understanding of all the partners in the MOU.

Of course, the process is for global opportunities. And we've heard over and over again that the companies in the aerospace industry know they can compete. They're already competing very successfully around the world, and certainly there are a huge number of jobs in the aerospace industry. I could go on to quote a number of the companies that were here and what they've said.

I believe that you folks who work for them and the unions that work for them are obviously prepared to do the work they are awarded under the contracts. There will be no contracts in this process, particularly the technology piece of it, if we're not part of the MOU. We're not going to have the ability to have that technical information and use that for property rights and be able to expand, using that information, to other opportunities your organizations may have.

I'd just like to get your flavour on that piece of information, because I'm not sure your organizations fully understand that.

[David Chartrand]

We understand that.

What I'm wondering is, how come we don't have an MOU or a memorandum of agreement on development of the Boeing aircraft? How come we don't have one with the Europeans, who are also developing an aircraft?

Is Lockheed Martin the only company that can develop that technology? Is that the only--

[LaVar Payne, Conservative, Medicine Hat, AB]

Yes, it is actually.

[David Chartrand]

That's what I don't know. I'm not aware of that.

[LaVar Payne, Conservative, Medicine Hat, AB]

Lockheed Martin is the only fifth-generation aircraft that is available. We've had Boeing in here. And you know what? To be honest, Boeing could not answer one question. Even members of the opposition have come away from this saying that was a useless exercise. We've had other organizations as well in terms of this, and they have not been able to say they could compete.

We had Dassault Aviation. They had people who analyze this, and the JSF-35 won it. They had those organizations flying other aircraft. They didn't fly the JSF-35, but it still won on merit. Anyway--

[David Chartrand]

Sir, as I said, I'm not necessarily aware of the technology they're developing, but I've read reports--university reports, studies--and as I said, I'm not an aircraft expert, but some say it's not necessarily--

[LaVar Payne, Conservative, Medicine Hat, AB]

We've had the experts.

[David Chartrand]

Yes, that's it, you guys are the experts. But you know--

[LaVar Payne, Conservative, Medicine Hat, AB]

No, I'm saying we had the experts.

[David Chartrand]

Okay, you've had the experts. You've listened to the experts.

[LaVar Payne, Conservative, Medicine Hat, AB]

We had our military people. We also had the ADM of Materiel. These guys know the contracts. They've been through the whole process, so we have to take their word that this is the aircraft.

[David Chartrand]

We have to take their word for it.

[LaVar Payne, Conservative, Medicine Hat, AB]

You're suggesting that the people who have been working on this file for the last five, or a number of years, do not know?

[Jerome Dias]

Here's what we're saying, sir. Under the F-18, to use the same argument, we did the repair and overhaul, which means we had to have access to the intellectual property to do the in-service. We understand that--

[LaVar Payne, Conservative, Medicine Hat, AB]

And we have to have that under the MOU.