National Defence Committee on May 22nd, 2013

[The Chair, Conservative, James Bezan]

Good afternoon, everyone.

Sorry for the delay because of the votes. We'll be heading into another set of bells in the very near future, so let's quickly continue with our agenda.

Appearing today on the main estimates, votes 1, 5, 10, 15, 20, 25, and 30 under National Defence, referred to committee by the House of Commons on February 25, are the Honourable Peter MacKay, Minister of National Defence, and the Honourable Kerry-Lynne Findlay, Associate Minister of National Defence.

They are joined by members from the Department of National Defence: Bruce Donaldson, Vice Chief of the Defence Staff; Michael Martin, senior associate deputy minister; Kevin Lindsey, assistant deputy minister and chief financial officer for finance and corporate services; and Patrick Finn, chief of staff in the materiel group.

I want to welcome all of you to committee.

Mr. MacKay, if you could make your opening comments, we would appreciate that.

[Peter MacKay, Conservative, Minister of National Defence]

Yes, Mr. Chair, and I will endeavour to be brief.

Mr. Chair and colleagues, I am pleased to be here, along with Associate Minister Findlay and members of the defence team, to discuss the main estimates for the year 2013-14.

This is my 34th appearance before committee since being appointed minister, the fourteenth before this committee.

Over the past fiscal year, the Canadian armed forces have continued to deliver excellence at home, defend North America in partnership with our closest ally, the United States, and project Canadian leadership abroad.

In fact, one does not have to look hard to see the strategic effect that the Canadian armed forces are having here at home and around the world.

For instance, the Canadian armed forces just completed operation Nunalivut, demonstrating our ability to project forces into the High Arctic to defend national interests and assert Canada's Arctic sovereignty.

And further afield, Canada has maintained its role in Afghanistan as the second largest contributor—behind only the United States—to the NATO training mission there.

The Afghan National Security Forces are increasingly able to plan and execute operations independently and to conduct their own training. They are now taking the lead for the security of about 90% of the Afghan population. These results are putting NATO on track to leave a self-sufficient Afghan force by the end of 2014.

Mr. Chair, colleagues, these are just two examples of how the Canadian Armed Forces, supported by the work of the Department of National Defence, are delivering real results for Canadians.

This level of operational excellence requires significant investments, which is why since 2006 our government has worked to modernize core equipment fleets, upgrade infrastructure, improve care for our ill and injured military personnel, and ensure readiness.

For example, this past January we welcomed the first upgraded light armoured vehicle from General Dynamics Land Systems-Canada. These vehicles, the LAV III, have proven their mettle time and time again. This investment is just one of many coming to a head across the army, navy, and air force.

On the infrastructure front, since 2008 the government has announced approximately $3 billion in new and upgraded defence infrastructure across the country, including upgrades in places like CFB Petawawa, as we prepare for the arrival of the new Chinook helicopter fleet. In terms of care for our ill and injured military personnel, I'm particularly pleased to report that the government is investing an additional $11.4 million annually, dedicated directly to the subject of mental health.

More recently, Mr. Chair, the government has taken some important steps in the area of search and rescue. A short while ago I introduced several new measures to improve Canada's national search and rescue system, which includes initiatives in the area of readiness such as the seasonal optimization of search and rescue posture readiness, as well as the launch of the first comprehensive quadrennial search and rescue review.

This review will bring together search and rescue partners to assess our search and rescue system in a comprehensive and systematic way. It will also ensure that Canada's search and rescue system remains up to date and relevant to the changing needs of Canadians who find themselves in distress. As we prepare the Canadian Armed Forces for the future, the Canada first defence strategy, CFDS, will continue to provide a road map on the way ahead. With this in mind, I want to take just a few moments to conclude with an overview of the priorities and requirements that have shaped the estimates before the committee today.

In broad terms, in 2013-14, the main estimates for National Defence are $17.9 billion. Mr. Chair, you will note that the 2013-14 main estimates reflect a decrease from last fiscal year's main estimates. There are a number of factors behind that decrease. Chief among them is the fact that the National Defence department has the largest operational budget in the federal government and is doing its part to support the government's plan to return to a balanced budget in the medium term. More specifically, through spending review initiatives under budget 2012, National Defence is finding ways to improve efficiency and effectiveness in the organization.

In addition, the reduction in operational tempo stemming from the conclusion of the combat operations in Afghanistan and the completion of the Libya mission has also presented National Defence with the opportunity to realign resources. That means focusing on the right things, such as readiness.

Going forward, the funding outlined in the main estimates will allow National Defence to pursue important organizational priorities.

First, we will continue to deliver sustainable operational excellence at home and abroad, as conducting operations in the defence of Canada and Canadians remains the very raison d'être of the Canadian armed forces.

Second, the Canadian armed forces will be ready to meet the challenges of tomorrow, wherever they may arise. Indeed, as reflected in the estimates, National Defence remains committed to making sure that a sufficient number of personnel are trained to the required levels, and that the necessary equipment is available—for training and for operations—so that the forces can take on both current and future challenges.

Third, we'll continue to be strong stewards of the public purse. This will include maintaining an affordable sustainable investment plan that delivers on the commitments outlined in the Canada first defence strategy while accounting for fiscal realities as well as addressing requirements for new or expanded capabilities.

As the Canadian Armed Forces return to a more normal operational tempo, National Defence will take advantage of this time to develop ways to conduct the defence business better and smarter and find opportunities to reinvest resources in the front-line operational capabilities and readiness of the Canadian Armed Forces.

Finally, in all of this I want to emphasize to this committee that our fourth organizational priority is that of strengthening the defence team that shapes all that we do. I think we can all agree that our men and women in uniform, our personnel, are our greatest asset. In fact, our ability to deliver successfully on the multiple objectives that I've just highlighted depends on the highly skilled, motivated civilian military members.

To this end, National Defence will continue to maintain a strong and vibrant workforce that contributes to operational excellence.

Thank you, Chair.

I look forward to the questions of this committee.

[The Chair, Conservative, James Bezan]

Thank you, Minister. I appreciate those opening comments.

In line with our routine proceedings and motions, when a minister's here, the first round is 10 minutes per party.

Mr. Harris, you have the floor.

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

Thank you, Chair.

Thank you, Minister, for joining us today.

I'm going to get right down to brass tacks—no pun intended—since we have our military people here.

In your budget presentation, in particular in the planning and priorities document, there's a claim that on the procurement projects with respect to the Canada first defence strategy we're 90% on schedule. How does that ring true when we're talking about fixed-wing SAR aircraft being delayed, as well as maritime helicopter coast guard search and rescue helicopters, the Cyclones, the CCVs, the CF-18 replacements, SMP trucks, joint supply ships, AOPS? All of these procurements, in fact, are significantly delayed, so how did you come up with 90%? That's obviously not true, or some measurement is being used that means nothing to the public.

[Peter MacKay, Conservative, Central Nova, NS]

Mr. Chair, Mr. Harris, thank you.

What we're referring to there, of course, is the Chinook helicopters, the new C-17 heavy lift, the new fleet of Hercules aircraft, the M777s, the fleet of Leopard 2 tanks, new equipment that was utilized in Afghanistan.

As you know, there are more procurements that are in the pipeline, particularly with respect to the national shipbuilding procurement strategy. Fixed-wing SAR aircraft, of course, is an ongoing procurement. We have also replaced, as I mentioned in my remarks, the LAV III, which has become very much the backbone of the Canadian armoured division.

We have, in addition to equipment procurements, a number of very important investments that are playing out across the country, some $3 billion, I believe, at last estimate, in terms of investment to the bases. That is where members of the Canadian Armed Forces and their families live, train, and prepare for our operational requirements.

With respect to some of the procurements that are ongoing, though, I will defer to Associate Minister Findlay to respond.

[Kerry-Lynne Findlay, Conservative, Associate Minister of National Defence]

Thank you.

The fact is that the department has a long and successful history of handling complex and difficult procurement files. In 2011-12 alone we generated over 10,000 defence contracts.

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

May I interrupt, as we only have 10 minutes here.

The projects are not on schedule. That's the point. Your documents say that 90% of the projects are on schedule. I've listed almost 10 of them, well-known projects, that are way behind schedule, so how can you claim a 90% rate of success? That doesn't make any sense.

[Kerry-Lynne Findlay, Conservative, Delta—Richmond East, BC]

As I just said, we've generated over 10,000 defence contracts through Public Works.

There are many examples of successful large capability procurements, including: the arrival of Canada's 17th and final CC-130J Hercules aircraft, which was on budget and ahead of schedule; major investments in the LAV III upgrade project, including on-schedule delivery; the successful maiden test flight of Canada's first Chinook F-model helicopter, scheduled to be delivered in June 2013; and the ongoing modernization of our frigates, which is a highly complex program to equip over 12 Halifax-class frigates.

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

Minister, we are aware there are ongoing projects, but you haven't answered the question. If I may, I'd like to move to something else, given the time I have.

One question that's been arising since 2007 is the pension for reservists. Some 21,000 reservists are entitled to a pension, according to the 2007 legislation brought in under this government's watch. As of two years ago, there were over 9,000 individuals backlogged, and only 4% of them had been dealt with.

Minister, can you tell me whether that backlog has been cleared? If not, how many are left of the 9,000 who haven't been backlogged? When are reservists going to see the pensions they're entitled to?

[Peter MacKay, Conservative, Central Nova, NS]

I'd be pleased to give you the specifics of that, Mr. Harris. You would be the first to acknowledge that it was this government that made pensions available to reservists, whereas they previously were not. There was some catching up to do. There was a fair bit of work administratively to put in place a pension plan that will in fact compensate reservists fairly and provide the pensions they deserve.

I'm told by our military personnel that the work is ongoing. We'd be pleased to provide you with a comprehensive briefing if you desire.

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

That would certainly be desired. Perhaps we can arrange a briefing to the committee at the first opportunity. I'd certainly appreciate that.

Mr. Minister, you mentioned SAR as an area you're concerned about. We have, of course, the Auditor General's report saying that your government doesn't have a plan—in fact, there's been no plan put in place since 1986, a strategic plan—that there are not enough aircraft, not enough crews, not enough training, essentially suggesting the sustainability of the system is in question.

Is your government prepared to put a greater amount of money, a greater percentage of your budget, into search and rescue?

[Peter MacKay, Conservative, Central Nova, NS]

Well, in fact it's what we're doing, Mr. Chair.

Mr. Harris, you would know that the announcement that was made this spring, just a few weeks ago, focused specifically on ensuring that we continue to make necessary—I'd be the first to acknowledge—investments in equipment and in terms of the readiness, the procurements you've already mentioned that are ongoing. Much of this is going to require a greater coordination, hence the quadrennial review, which is meant to bring all of the participants and stakeholders of SAR around the table. This process has now commenced. It will run over the next number of months. It will allow us to have a deep dive into what the necessary investments are to reach that important sustainability which the Auditor General spoke of.

He did, you will know, say that search and rescue is working, and we have, in fact, one of the best search and rescue systems in the world, given the size of our country, our coastline. Twenty thousand people access our search and rescue system just at the federal level, and there is, of course, responsibility for provincial ground search and rescue.

It's bringing everybody together, making more investments in modern technology, including the use of satellites, where we have announced investments, more beacons. A lot can be done on the prevention side, so a public education component will be part of this quadrennial review, in addition, as you mentioned, to investments in both personnel and equipment, the enablers for search and rescue.

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

Minister, I don't see new investments in this budget line, but I do see a decrease, for example, in the contribution to the search and rescue new initiatives fund over the last two years of $1.7 million. Although we do see support for the Civil Air Search and Rescue Association, CASARA, I note that the ground search and rescue crew, representing 10,000 active volunteers across the country, are complaining that they can't get support from your government as part of the important role they play in search and rescue. Although it's ground search and rescue, you are the national coordinator for search and rescue in Canada, and we don't see any support for that in this budget or from your government.

[Peter MacKay, Conservative, Central Nova, NS]

You must be missing something, then, Mr. Harris, because we just announced—in fact I just announced in your province—almost $1 million in support of ground search and rescue. There is a national program that is specifically designed to support the provincial responsibility of ground search and rescue, but it is for stakeholders, volunteers, those organizations that do perform the ground search and rescue task. So there has been money, I believe $4 million, very recently announced nationally to address that exact scenario you've described.

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

But that $4 million is from the existing search and rescue new initiatives fund, which has been around for a long time and is not new money at all.

[Peter MacKay, Conservative, Central Nova, NS]

Is it new money this year for ground search and rescue? Yes.

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

Mr. Chair, there are a couple of documents that would be quite useful to this committee that would give us information on the plans of the department. One is the National Defence investment plan, referred to on page 14 of the report on plans and priorities, and the other is the national procurement budget, which is referred to on page 19 of the report on plans and priorities.

Would you be prepared to table both of those documents with this committee?

[Peter MacKay, Conservative, Central Nova, NS]

Possibly.

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

Possibly. What's your problem with that? These are documents that are required, in the one case, by Treasury Board policy on investment planning, and it's referred to in your document as your government's plan. We do have a situation where our parliamentary system has been criticized strongly for having a lack of ability to hold the government to account because we don't have the kind of transparency that's required to allow parliamentarians, and this committee in particular, to monitor and hold the government to account on these plans.

You're hesitant for some reason. Can you tell us why that's the case?

[Peter MacKay, Conservative, Central Nova, NS]

Mr. Chair, I will endeavour to give this committee whatever is legally permissible. Keeping in mind national security interests, I'd be pleased to provide information requested by this committee.

[The Chair, Conservative, James Bezan]

Thank you, your time has just expired.

Mr. Strahl, you have the next 10 minutes.

[Mark Strahl, Conservative, Chilliwack—Fraser Canyon, BC]

Thank you very much, and I'll be sharing my time with Mr. Opitz.

I do want to take a brief moment, Mr. Chair, to extend our best wishes to our colleague Mr. Brahmi as he recovers in hospital. I'm sure he'll be reading these transcripts and listening in, so we want to wish him a full and complete recovery as soon as possible.

I also certainly want to welcome a fellow British Columbian, the honourable Minister Findlay, to the table here. I wanted to ask more about the LAV III procurement. As the minister said, it's become the army's workhorse. Certainly, it played a key role in allowing our forces to operate in Afghanistan with a higher degree of safety than some of the smaller vehicles that initially accompanied our troops when they went to Afghanistan. Unfortunately, we also know that a lot of Canadians died in accidents involving these vehicles. We know the modern battlefield has an ever-growing threat of IEDs and other threats.

Regarding the LAV III upgrade project, the main estimates show that National Defence has requested $299.6 million for this project. Could you explain where we are in the procurement process, as well as what this project will provide for our army?

[Kerry-Lynne Findlay, Conservative, Delta—Richmond East, BC]

Thank you for your question.

You're quite correct that the modern battlefield is continually evolving and tragically has become a more dangerous place. Canada has embarked on an overall fleet renewal for the army and upgrading the LAV IIIs is certainly a key part of that renewal. We are taking lessons learned in Afghanistan and elsewhere, embracing new technologies, upgrading the fleet. The upgraded fleet will offer much more protection to the troops, and provide them with additional firepower to successfully complete their missions.

On October 20, 2011, an implementation contract was awarded to General Dynamics Land Systems-Canada to upgrade these vehicles. We accepted delivery of the first upgraded vehicle on January 24 of this year. Initial operational capability is scheduled for later this year. The next steps will be to conduct a comprehensive test and evaluation program to ensure their performance and put in place the necessary logistic support to allow fielding to operational units this fall.

We expect that all 550 LAV IIIs will be upgraded by 2018. The last upgrade project is capitalizing on existing and evolving technology to improve the vehicle's mobility system and the weapons system, in addition to installing more armour.

I'm told that early indications are showing, and we have heard this, that the upgrades are proving more effective than first imagined, and that's certainly a very positive development. To date, the project is on budget and on schedule. Canada's light armoured vehicle III, LAV III, fleet, has served the Canadian Armed Forces in Afghanistan and other areas of operation well. With the upgrades, they will be state-of-the-art combat vehicles that will be used to transport infantry on the battlefield, while providing defence and protection and firepower.

Ultimately, we are using proven Canadian technology and workers to provide a better, safer workhorse—I think you used that phrase—for our army. The total projected cost to deliver the 550 upgraded LAV IIIs is $1.32 billion.

[The Chair, Conservative, James Bezan]

Thank you.

I want to point out that the bells are ringing. Standing Order 115(5) stipulates that I should suspend the meeting unless there is unanimous consent to extend the sitting. I'd suggest that we extend to allow this round of questioning to finish for Mr. Strahl, Mr. Opitz, and Mr. McKay. We would extend for roughly 16 minutes. Is it agreed?

[Some hon. members]

Agreed.