National Defence Committee on Oct. 27th, 2016

[The Chair, Liberal, Stephen Fuhr]

There are a couple of minutes.

[Sherry Romanado, Liberal, Longueuil—Charles-LeMoyne, QC]

Thank you. I did have one question about your operating budget. I'm sorry that I wasn't here for the first three weeks of this session, as I was travelling on another committee.

Is it possible for you to share with us your operating budget on an annual basis, and how much of that operating budget—it could be a percentage—is dedicated to R and D? I'm following up on Madam Gallant's question about innovative and new technologies. I'm curious about how much is dedicated toward R and D.

[VAdm Ron Lloyd]

The overall naval budget is approximately $2 billion, of which the operating and maintenance budget of the navy is approximately $500 million. About a quarter of our overall budget is governed by the navy, and the research and development that takes place, as it pertains to the navy, is delivered by ADM S and T under assistant deputy minister Marc Fortin.

What we do is have a governance process by which we are intimately working with ADM S and T and his team to address those R and D aspects. Commodore Donovan is our point man for our futures and for R and D.

Casper, would you be so kind as to highlight a couple of the initiatives and the resources allocated to us from ADM S and T?

[Cmdre C.P. Donovan]

We do work closely with ADM S and T, and the reason I'm—as the Admiral calls it—the point man is that much of what we want the R and D and the science and technology folks focused on is the future. They do some work for the here and now of today's navy, but mostly they're focused on the future.

As was mentioned when one of your colleagues asked the question earlier about autonomous and remote systems, we have scientists working across a number of themes. Depending on the nature of the work, it could be very specific, discrete, and almost like a very clear package, whereas other areas of effort are much more conceptual in just thinking through a challenge and scoping out what might be in the art of the possible. Then we look at that work to decide whether there's something discrete that we want to drill into and flesh out.

It spans a wide spectrum of activity with scientists from across Canada. That community leverages and will share R and D research across the Five Eyes as well as with our NATO partners, using a variety of mechanisms that the S and T community connects with.

[VAdm Ron Lloyd]

I can elaborate on the importance of innovation and experimentation. One of the things that we've recently stood up is X-Ship, an experimental ship. We've taken one of our frigates, HMCS Montréal, and in anticipation of receiving our future fleet, we are trying to discover where we can embrace innovation and experimentation in order to ensure that all facets of what we are doing at sea can be incorporated into the Royal Canadian Navy before we accept those new ships.

The first series of experiments will largely be personnel-driven. What's interesting from my perspective is that as other nations are embracing unmanned technologies right now, they are having problems manning their unmanned technologies. It's fascinating when you consider that, in terms of going forward.

The first set will be experimentation on the personnel initiatives, and in the second phase we'll lean more into the technological. We have to make sure that the legal framework is in place so that if some industry wants to conduct experimentation on board our ship, it is not penalized in terms of competing—for example, if we've proven that it's a revolutionary new capability that is going to change warfare forever, yet they can't compete because it might be problematic in terms of fair competition.

We have to make sure we get that right so that we don't disadvantage the navy in terms of being able to accept those capabilities, but it's equally important so we don't disadvantage industry that's coming forward.

[The Chair, Liberal, Stephen Fuhr]

Thank you for that.

We're going to move to five-minute questions. Mr. Fisher, you have the floor.

[Darren Fisher, Liberal, Dartmouth—Cole Harbour, NS]

Thank you, Mr. Chair.

Welcome, gentlemen. Thank you very much for being here.

I had the honour this morning of joining the ombudsman at the Liz Hoffman Memorial Commendation ceremony, where the ombudsman honoured four wonderful serving or retired members.

Vice-Admiral, you spoke about capability gaps. Almost everyone who has appeared before this committee has spoken to capability gaps. I'm always interested in the right mix of naval assets, and I'd like to ask you what I asked some academics previously.

Could you give me a grocery list of what we need short term, medium term, and long term as far as naval assets go? If you had the chequebook out and you had the ability to take care of either the forces at sea or the long-range air defence issues you spoke about, is that something you'd be able to give me?

[VAdm Ron Lloyd]

No.

[Darren Fisher, Liberal, Dartmouth—Cole Harbour, NS]

You don't have a prioritized list of what we need.

[VAdm Ron Lloyd]

Of course we do. We have that.

We've done a lot of work over the last several years to get our best understanding of what the government policy is and what the requirements are to deliver on that policy. There is analysis that substantiates the largest recapitalization of the Royal Canadian Navy in its peacetime history.

The question is not what we need in terms of the Royal Canadian Navy. The more accurate question is, how does the government anticipate it is going to use this navy in the future? An understanding of that adjusts the paradigm in terms of whether there will be a greater or a lesser appetite for the deployment of its navy in the future.

Many of the scholars are calling the 21st century a maritime century. As we look at that, what are the capabilities that are going to be required? The capabilities that will be required, to go back to the concept of team.... From our perspective, you'll need the capabilities to sustain the force and to operate on, below, and above the world's oceans, and then you'll need the complex networks and sensors to provide the intelligence and the sophisticated command and control required to enable forces to operate at sea.

From my perspective, what we are currently delivering will meet the government's requirements.

[Darren Fisher, Liberal, Dartmouth—Cole Harbour, NS]

Okay. If we agree that ships are the lifeblood of the global economy, how vulnerable do you feel we are right now with regard to our commerce globally?

[VAdm Ron Lloyd]

In terms of commerce, there are eight choke points around the world. The lifeblood of nations' economies flows through those choke points. The statistic that we use in Leadmark 2050 is that on any given day, Canadian Tire has a third of its inventory on the high seas.

Globally there's a recognition that this needs to be safeguarded and ensured. Although you're seeing a 48% increase in the budgets of the defences of the Indo-Asia-Pacific, you're seeing a 60% increase in their navies that is probably a direct correlation of the link between safety, security, and prosperity and the oceans in the future.

What I think is troubling is, for example, the attacks in the Strait of Bab-el-Mandeb against warships through one of those choke points. It's something people need to be monitoring. Is that a data point? Is that a one-off? What would that actually represent? I think there are a number of considerations that need to be addressed when you're taking a look at those types of questions.

[Darren Fisher, Liberal, Dartmouth—Cole Harbour, NS]

We retired two replenishment ships prematurely. We have a stopgap measure coming forward. You mentioned that soon steel would be cut for the next replenishment ship. Can you tell me a little bit about that? I wasn't aware that we were that close to cutting steel for that.

[VAdm Ron Lloyd]

I'll let Casper provide the dates in terms of the specifics of—

[Darren Fisher, Liberal, Dartmouth—Cole Harbour, NS]

I'd also be interested in your thoughts on that stopgap measure and when the replenishment ship from Davie is coming forward as well.

[VAdm Ron Lloyd]

Regarding the interim AOR, they're currently working on that. I was informed yesterday that we're about 10% ahead of schedule. Having said that, I'll probably jinx us.

The goal right now is to have that capability, and ideally it will be operational towards the end of next year. We've already made plans in terms of where we think the best operating base would be. Obviously that's flexible, depending on the future security environment and what the factors will be toward the end of next year. Then we look forward to integrating that ship into our naval operations.

[Darren Fisher, Liberal, Dartmouth—Cole Harbour, NS]

Do you mean the end of 2018?

[VAdm Ron Lloyd]

The end of 2017 is when we anticipate that interim AOR being available for operations with the navy. That's correct.

[Darren Fisher, Liberal, Dartmouth—Cole Harbour, NS]

Casper, they're cutting soon for the future replenishment ship?

[Cmdre C.P. Donovan]

For the Queenston class, the current plan sees cutting the steel in the 2018 time frame, with a view to delivering the first one to the navy in the 2021 timeframe. It's predicated, though, on the work that Vancouver Shipyards is currently doing on Coast Guard vessels, but that reflects the latest intent.

[Darren Fisher, Liberal, Dartmouth—Cole Harbour, NS]

Do I have—

[The Chair, Liberal, Stephen Fuhr]

You're out of time. Sorry.

We'll have time to circle back at the end.

I'm going to have to go to Mr. Paul-Hus.

[Darren Fisher, Liberal, Dartmouth—Cole Harbour, NS]

Thank you very much, guys.

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

Thank you, Mr. Chair.

My question is in the same vein as that of my colleague. We have a document here entitled “Leadmark 2050”, which I invite you to consult if you haven't already done so. This explanatory document, written in layperson's terms, is designed to help the public, and politicians like us, understand the situation, and the navy's needs. It's very important.

Offshore patrol ships are being built for use in the Arctic. The Cyclones will be ready for anti-submarine combat next year or in 2018. So some of the news is good.

That said, I'd like us to discuss the threat question. In your statement, you asked whether we were aware of the threat. There were questions on the subject. I can tell you that I want Canada to avoid experiencing a situation of the kind the United States experienced on September 11, 2001.

When we visited NORAD, we noticed that eyes were turned outside the country, not in. Two weeks ago, Cheryl and I visited the Marine Security Operations Centre in Halifax. I was able to observe maritime traffic on screens. I was very surprised at the number of ships circulating. It was like a highway.

What is the worst threat we can anticipate in the short term—that is, within five years—and is there sufficient capacity to face it? We can see what our fleet's operational readiness is. There will be new acquisitions, but it will take time. I'd like to know how we can counter the threat in question.

[VAdm Ron Lloyd]

The way you frame the question speaks to the threat. It's an understanding of what's taking place in our areas of responsibility.

To go back to that system of systems, it's not just about the Arctic: it's about understanding what's taking place above, on, and below the seas in terms of the vast maritime estates with which Canada has been blessed. We need to continue working very closely, as you indicated, through our maritime security operation centres to ensure those lines of dialogue are open. As opposed to a right to know, you've articulated the responsibility to share information and intelligence to ensure that we're completely interoperable with our allies, in particular the United States Navy, in terms of what that represents.

We have a very good tradition, as a navy, of being completely interoperable with the United States Navy. For example, there were occasions when we've deployed one of our frigates instead of one of their destroyers as recognition of that interoperability.

I was fortunate enough to be commanding officer of Charlottetown when we deployed as a member of a U.S. carrier strike group to the Middle East back in 2000. Immediately after we returned in July, there were the tragic events of 9/11, to which you just referred. When Canada wanted to demonstrate its commitment and leadership, we deployed a task group. Canada's navy had the furthest to go of all navies, and we were first on station in demonstrating that commitment and support to our closest ally.

In terms of what we need to do, we need to ensure that we're sharing information, that the lines of communication are open, and that we're completely interoperable in the case of that shock that you indicate could transpire, both looking in or out.

That's what we need to do to ensure we mitigate those threats.