National Defence Committee on Feb. 7th, 2017

[David Perry]

I would just start off by saying that I don't know anybody who is involved in the file who thinks we are going to get 15 of any of the proposed designs for a project budget of $26.2 billion, regardless of what we do. So either that number changes or the allocation changes or we build something different, because I don't know anyone who thinks that's going to happen. When I say that we're going to end up with something different in the future in terms of a fleet composition and size, irrespective of what you do, that's part one. We're not going to have 15 surface vessels unless that project budget changes somehow. There is currently not money to either extend or replace the submarines, so that's another component.

With regard to the shipbuilding strategy, we're so far down this path already—even though we're not yet all the way over the hurdle—that it makes the most sense to continue with what we're doing. Michael raises a good point about trying to seek the right balance between taking an existing design and modifying it. It's not really clear to me exactly how much emphasis the government has put on the different components that they have to balance between cost, the project budget, getting the requirement for the navy as well as delivering on domestic industrial capability, both in terms of shipbuilding as well as the systems that go into it. Ultimately it's going to be a question of deciding what it is the government wants and then going ahead on that basis. It's not really clear to me that the decision has been made, but I think Michael is raising good points about the types of trade-offs.

The whole idea about off-the-shelf or developmental is a false dichotomy, I think. Those things don't exist in reality. As far as I'm aware, other than boots and socks, the only thing we've bought off the shelf, in terms of a big project, has been the C-17. Everything else is a kind of degree of developmental, degree of modification, so it's about doing it wisely, being conscious about what trade-offs you're making, because it won't go as fast and will introduce more risk, but the other side would be that you could get either/or a requirement more closely aligned to what the navy needs as well as more Canadian defence industrial involvement. The government needs to pick and decide what it wants.

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

I'm really interested in the whole discussion around the 2% of GDP, and whether that's the most efficient way to spend money or allocate money. You said we are at around 0.99%. I have heard as high at 1.2%. The U.S. includes their coast guard. We don't include our Coast Guard budget. If we combined the two, where would we be?

[David Perry]

Still nowhere close.

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

Would it be 1.01%, or...? Is it significant, our Coast Guard budget, or is it minuscule?

[David Perry]

I don't know off the top of my head what the Coast Guard's budget is.

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

Do you see any rationale for including our Coast Guard budget within our commitments, like the U.S. does?

[David Perry]

Not if we're aiming to actually increase capability. You can fudge the accounting any number of different ways. I don't personally see that there is much benefit in that. I think we should spend more if we want the armed forces to do the same types of things.

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

Okay.

Dr. Byers, you were reluctant to speak about submarines, even though you kind of did speak about submarines. It's clear that you're not a fan of submarines. Is it the current ones we have, or do you not believe we should be investing in submarines in the future? Every piece of testimony that I remember getting during our study seemed to be in favour of submarines, with the exception of you.

[Dr. Michael Byers]

Yes, and to some degree I'm playing the devil's advocate, because I think the question needs to be asked: should we have a submarine program? I think we either have a modern, highly capable submarine program or we stop this charade we have right now of pouring money into a hole and getting vessels that are not 21st century. This is the thing; we are just stringing out old vessels, pretending to have a submarine capability.

This new government spent another $900 million on Babcock International to keep refitting and repairing these old submarines. For the same amount of money that has been spent over the course of the last decade, we could have three or four brand new German-made submarines with under-ice capability. We missed that opportunity by stringing along these old Victoria class vessels. That's my point.

I'm trying to challenge the groupthink that exists in the Royal Canadian Navy. Okay, you want submarines? So make a justification for having new submarines. Don't pretend.

I'm not an expert on the future of maritime warfare or the geopolitics of Asia. There are others who are better able to speak to the issue as to why we need new submarines, but we clearly don't need old submarines.

I have one last thing, very quickly, on the issue of icebreakers. If we put a deck gun on the front of our Coast Guard vessels, then we could justify calling them part of defence procurement, and we would take a serious burden off the Royal Canadian Navy with respect to the Arctic and coastal defence. We just bought a whole bunch of new Hero class midshore patrol vessels for the Coast Guard. They're fast, but they're not armed. The previous government considered very seriously putting guns on them. You get into issues as to what kind of personnel you need on board a Coast Guard vessel to actually operate the gun. But if you want to do that, yes; you solve a lot of problems. You don't need to envelop the Coast Guard within the Royal Canadian Navy, but you can change the operations a little bit and immediately boost our capacity.

In regard to a deck gun on the front deck of each of our icebreakers, again, what are you going to do if you get into a situation where there are smugglers who are armed—call out the Royal Canadian Navy, and they have an AOPS that's five days' sailing away?

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

Mr. Chair, do I have time for a short snapper?

[The Chair, Liberal, Stephen Fuhr]

You have 40 seconds.

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

Okay.

Mr. Boutilier, you mentioned “middle-power navy”. Notwithstanding the number of ships we get from the NSS, after we complete the whole process and build all the ships that we're going to build, will we then be a middle-power navy or will we still be short?

[Dr. James Boutilier]

Yes, we will be, but currently we're certainly not.

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

Thank you.

Thanks, Mr. Chair.

[The Chair, Liberal, Stephen Fuhr]

We'll go to five-minute questions.

Mr. Spengemann.

[Sven Spengemann, Liberal, Mississauga—Lakeshore, ON]

Thank you very much, Mr. Chair.

Gentlemen, thank you for being with us and for sharing your expertise. I wanted to put three propositions to you—they're very simplified—in terms of the sequence of how we should think about this, putting aside political constraints for the moment. The questions are these: what do we know, what do we need, and how do we get it?

I won't in five minutes get all the way down the chain of even these three questions, but I wanted to start with what we know in terms of our strategic setting. I want to ask you about unknown unknowns. The world is changing very quickly, and you made reference to China. There are all sorts of currents of instability, not the least of which are forced migration and climate change and humanitarian work that may or may not need to be done. What do you have in mind in terms of the things that we do not know that we have to be speculative on? How could they change our strategic setting?

My second question is to ask you about domain awareness and RADARSAT and the related questions, just being aware of what our setting is before we proceed in terms of what we need.

I'm afraid this will gobble up a good chunk of time, but I would ask you to briefly comment on that, whoever is interested.

[Dr. Michael Byers]

I'll take it first, very briefly.

We have the longest coastline in the world. Coastal defence is therefore quite important. The new AOPS will have a top speed of only 17 knots. They're not particularly suited for the Atlantic Ocean in winter. We need to think about how we beef up our offshore patrol capacity with purpose-built offshore patrol vessels. Then, as I said, we need to make use of the Coast Guard in a much fuller sense, because we do have Coast Guard vessels, including new fast ones for midshore patrol.

The other thing, in terms of what you mentioned in terms of unpredictability, is that we do need new surface combatants. Let's make sure they're good, well-equipped, high-technology surface combatants that can participate in combat situations in 20 or 30 years. Don't compromise on these vessels.

[Sven Spengemann, Liberal, Mississauga—Lakeshore, ON]

Is that with respect to overseas work and international missions and also the defence of Canada's coastline?

[Dr. Michael Byers]

Absolutely, which is why I'm worried, if this procurement drags on, that compromises will be made and we'll end up with subpar vessels. That would be the worst.

The final thing to say about surveillance is that RADARSAT is phenomenal technology. We built it for Canada's maritime zones and Arctic zones. It's fabulous technology. RADARSAT Constellation will serve this country for the next 15 to 20 years. But we need more than three in that constellation. The proposal was for six, and you should fund six.

The other thing to look at in this context, and I urge especially the government members to think about this, is the polar weather and communications satellite project. It has been scaled back significantly in the last year and it requires re-examination. It was one cross-government project that combined Environment Canada, civilian communication, and military needs in the Arctic. It was a good thing. Your government has pulled back funding for the civilian and weather components of that, and I urge you to reconsider.

[Sven Spengemann, Liberal, Mississauga—Lakeshore, ON]

Okay.

Perhaps I can just sharpen the focus a bit. The likelihood of navy-on-navy conflict in which the Canadian Forces would be involved, now and maybe 10 or 15 years out: how do you gauge that likelihood? Be speculative, if you feel so bold.

[Dr. James Boutilier]

One of the points made by my colleague Dr. Sokolsky was that in the Pacific region we already have major navies—Japanese, Australian, Indian, and so forth. As I suggest in my brief set of notes, what's beginning to emerge is a containment strategy, although all the players will put their hands to their heart and deny that's what's happening. Canada's capacity to contribute to that containment strategy I think is critical. It plays out at a number of different levels. It is not just hard hulls in the water in Asia as distinct from somewhere else in the world, but in terms of our larger diplomatic posture, what is it that we hope to achieve in different parts of the world? I know that the navy leadership is dedicated to putting more ships into the region as an illustration of naval and national resolve, so it plays out at a number of different levels. Clearly, what role we would play in the event of hostilities would be a decision that government would have to make.

I think one of the red herrings, to a degree, is that, yes, we have fewer ships, but they're more sophisticated. I had a long, muscular discussion with Secretary of Defense Rumsfeld about this very issue, because you can't have a cruiser in two different locations at the same time. There is a certain bare minimum that we have to have. With two huge oceans, not to mention a third ocean, what are we going to do in terms of allocation of hulls in order to make some contribution?

[Dr. Joel Sokolsky]

I don't think you're going to see navy-to-navy on the high seas. The U.S. focus is on undoing or meeting what it calls Chinese “anti-access” capabilities. They have come up with a new capability, called “anti anti-access”. This means getting access to the very waters that China is concerned about, the waters near China. It will be in the forward areas and it may not be just ship-on-ship. The Chinese have a tremendous land-based anti-naval, anti-access capability.

[The Chair, Liberal, Stephen Fuhr]

You'll have to hold it there, Mr. Sokolsky. Perhaps we can circle back on that.

Mr. Paul-Hus has the floor.

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

Thank you, Mr. Chair.

Welcome, gentlemen. Thank you for taking part in our hearing.

I feel like I am reliving a bad episode from my days as an infantry officer. When we received new equipment, we wondered why we were being sent this type of totally obsolete, useless and ineffectual equipment. As a politician now, I hope to be able to affect certain things and bring about some changes.

Before the holidays, I was at a conference in Istanbul. The Secretary General of NATO said that budgets indeed have to be increased, but that the most important thing was to spend more wisely. His message was addressed to all of the countries present. Just spending more and more money is not necessarily the best way to proceed. We have to spend it better.

A document was also produced. I don't know if you consulted it, but I would imagine you did. It was produced by the navy and is entitled “Leadmark 2050”. It is a 75-page document presenting the overall vision of the Royal Canadian Navy up to 2050.

In a context where we know that we have to spend smarter, navy people are in the best position to know what the navy needs, because they have the information and they know how things work.

I want to understand what the procurement-process-related issues are. We are aware of the needs currently. We have a naval strategy that allows us to conduct good negotiations with shipyards, and in principle to avoid having politics involved in the choice of shipyard. Then there are the last elements, such as funding and the final decision to do or not do something. We know that the navy knows how things work. The shipyards have said to us that the strategy only concerns acquisition, and not the strategic side of things necessarily.

In your opinion, where is the basic problem? Is it a political one, or something else?

[Dr. Michael Byers]

I touched on this, but let me make it explicit. Defence procurement is the single largest discretionary item in the federal budget. Generations of politicians have seen opportunity in this. Defence spending is not governed by international trade agreements or international foreign investment agreements. You actually have an enormous amount of leeway. This can be used for regional development, for the promotion of high-technology industry, and also for political purposes: for rewarding or encouraging certain regions to vote in certain ways. I'm being very frank here.

In normal circumstances, all of those additional considerations could coexist with the need to build new ships for the navy. In fact, those kinds of considerations were present when we built the Halifax class frigates, for instance, fabulous ships built more or less on time. The problem is that, because of successive delays, we're now in a crisis situation with regard to the joint support ships and with regard to the Canadian surface combatants, particularly those surface combatants that will provide area air defence, the replacements for the destroyers. We don't have any destroyers right now. We need that capability.

We need to pull the plug out here and get moving. The additional considerations that we used to be able to play with—the politics, the industrial development, and all of that—need to be pushed back a little bit further than would normally be the case.

Again, I hate to say this, because you would want to have a comprehensive vision of how to do industrial development and regional development as part of defence procurement, but I don't think you have the luxury to do all of that right now. The decision to buy an off-the-shelf design for the Canadian surface combatants makes sense if you want to expedite this procurement. If that was the purpose—and I think it's a good purpose—then don't allow the local industrial lobbies to slow you down as they fight for more and more Canadianization. It's harsh to say that, but buy these ships as they were more or less intended, as proven vessels, and get them in the water. Then we can move on.