Evidence of meeting #43 for National Defence in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was ensure.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Jody Thomas  Senior Associate Deputy Minister, Department of National Defence

4:30 p.m.

NDP

Randall Garrison NDP Esquimalt—Saanich—Sooke, BC

Thanks very much, Mr. Chair.

Thank you for being with us today. Congratulations on your appointment. I'm always happy to see somebody who has spent a lot of time in my riding.

4:30 p.m.

Senior Associate Deputy Minister, Department of National Defence

Jody Thomas

I'm from Victoria.

4:30 p.m.

NDP

Randall Garrison NDP Esquimalt—Saanich—Sooke, BC

Exactly. Having somebody who has spent time at the graving dock and who understands the relationship among the shipyards, the graving dock, and the serving base, I think would be very useful. But I have some questions about what exactly your job is.

I believe you're well qualified for it. But when you look at the the org chart, you see that the deputy minister is served by one senior associate deputy minister, one associate deputy minister, five assistant deputy ministers who report directly, plus four additional assistant deputy ministers who report to both the vice-chief of the defence staff, which I believe is their reporting relationship, or the chief of the defence staff and to the deputy minister. That's a lot of cooks.

You've said that your responsibilities as a senior associate are implementation of major initiatives. Is that to provide overall supervision? It doesn't seem to have a line responsibility, if you like. A lot of other ADMs here seem to have very specific line responsibilities. Can you tell me a little more about what that means, to be responsible for implementation?

4:30 p.m.

Senior Associate Deputy Minister, Department of National Defence

Jody Thomas

Associate deputy ministers in most departments are two in a box. You shadow the deputy. You do whatever the deputy assigns to you. Defence is a massive department so the deputy minister and I have gone through ADMs, branches within the department, and particular files. The ADM materiel, for example, is going to report directly to me. I will have line authority, day-to-day authority, over certain ADMs in the department and then a broader implementation role for major initiatives within the department. I do that on behalf of the deputy minister.

4:30 p.m.

NDP

Randall Garrison NDP Esquimalt—Saanich—Sooke, BC

So who will report directly to you?

4:30 p.m.

Senior Associate Deputy Minister, Department of National Defence

Jody Thomas

I should have that piece of paper with me.

4:30 p.m.

NDP

Randall Garrison NDP Esquimalt—Saanich—Sooke, BC

I know you're new in the position but I think it's very important in terms of those initiatives....

4:30 p.m.

Senior Associate Deputy Minister, Department of National Defence

Jody Thomas

I have the ADM materiel. That includes procurement, science and technology, human resources, civilian human resources. I think that's it for the direct reports. Then I'll be working with the vice chief on a number of things where he has the role as the chief operating officer of the department essentially. I'll be working with him to help implement a number of initiatives.

4:30 p.m.

NDP

Randall Garrison NDP Esquimalt—Saanich—Sooke, BC

Okay.

When you said that one of the things is the judicious and strategic use of tax dollars, one of the biggest concerns I hear from the base in my own riding is that there is still the same pattern that's occurred for the last 10 years of being asked to do more and more with fewer real dollars. While there have been some modest increases in the budget they haven't kept up with what we might call “military inflation”, which is a bit higher. We saw the example of the chief of the defence staff saying that we're going to stop non-essential work. Although in Defence I often wonder what that is. I doubt we do much non-essential work. But how is the military going to keep up this increased pace of operations overseas with fewer real dollars to spend?

4:35 p.m.

Senior Associate Deputy Minister, Department of National Defence

Jody Thomas

The defence renewal, our policy renewal, of course will be an aspect of that when it's implemented, hopefully.

4:35 p.m.

NDP

Randall Garrison NDP Esquimalt—Saanich—Sooke, BC

But it usually adds rather than subtracts.

4:35 p.m.

Senior Associate Deputy Minister, Department of National Defence

Jody Thomas

Hopefully stable funding for the forces will come with that going into the future. In doing more with less and getting rid of lower priority initiatives, I think it's incumbent upon us, as stewards of the department, to constantly review what's being done. I think so much is done because we've always done something that way. We've always funded a certain initiative. We don't evaluate the effectiveness or the efficiency or the need for that initiative any longer. They've done a lot of work in the department of defence to look at just those things, but it can always be done. The private sector model can apply when you look at your bottom 20% every year of what you spend your funding on and ensure that it's still required and reallocate internally to higher priority items. I had to do it in Coast Guard and at Passport Canada. I think it's just part of stewardship of funds.

4:35 p.m.

NDP

Randall Garrison NDP Esquimalt—Saanich—Sooke, BC

I hear an increasing concern that sometimes this means deferring training and maintenance, putting things farther down the line, which eventually impairs our ability to do things. That's the concern I hear from people on the ground; that they're always being asked to put off this and put off that, and eventually they won't be able to do their jobs without it.

4:35 p.m.

Senior Associate Deputy Minister, Department of National Defence

Jody Thomas

That was certainly true in the Coast Guard. As the operating budget was reduced, we had to keep vessels at sea, and so training was reduced and maintenance became regulatory maintenance. There was no preventive maintenance within the fleet or in our shore-based infrastructure, which was massive. I don't have the details on Defence yet, but it is a trend across government. As operating dollars are reduced, you take away from some of those easier-to-defer expenditures in order to keep the front line going. That is part of what we're looking at.

4:35 p.m.

NDP

Randall Garrison NDP Esquimalt—Saanich—Sooke, BC

Eventually that does impair the front line.

4:35 p.m.

Senior Associate Deputy Minister, Department of National Defence

Jody Thomas

Yes, it does. It was starting to in the Coast Guard, with aging icebreakers, for example.

April 4th, 2017 / 4:35 p.m.

Liberal

The Chair Liberal Stephen Fuhr

Ms. Alleslev.

4:35 p.m.

Liberal

Leona Alleslev Liberal Aurora—Oak Ridges—Richmond Hill, ON

Thank you very much. I'm interested in what you see as the three big challenges for defence procurement, because that's going to be a lot of fun.

4:35 p.m.

Senior Associate Deputy Minister, Department of National Defence

Jody Thomas

It is. The big challenge is getting it right. I think that the Department of Defence, and Coast Guard as well, have made huge strides in trying to get it right.

I think that starts with understanding what your requirements truly are. What do you need that piece of equipment to do? Why do you need it to do that? How do you ensure that you're buying the right piece of equipment?

It then depends on having the industrial capability. In the shipbuilding context, that means having shipyards that are available, modern, and able to build ships.

You also need an understanding of the cost of what you're trying to procure—the budgeting, costing aspect of things is important. That's been a big problem for departments, and I think huge strides have been made there.

Then, I think, it's having the right oversight so that you don't have too much. You don't want to be overly burdened with red tape, but you want to know how the money is being spent and how the procurement is proceeding.

I think there are four challenges rather than three, but I think it's improving.

4:35 p.m.

Liberal

Leona Alleslev Liberal Aurora—Oak Ridges—Richmond Hill, ON

What kind of system of performance metrics are you using to evaluate the effectiveness, efficiency and, of course, improvement in the procurement system?

4:35 p.m.

Senior Associate Deputy Minister, Department of National Defence

Jody Thomas

I'm just getting into the details of what's being used with Defence. I can give you the Coast Guard example—it's very similar.

We use third-party metrics on the efficiency of shipyards. We have a significant amount of oversight. We ask, for example, what should the level of productivity be for every hour expended in the yard to ensure that we're going to get the ships on time and within budget?

We monitor the productivity. We meet as an oversight committee, on shipbuilding in particular, monthly, at the deputy minister level. As you're aware, there's a cabinet committee that looks at defence procurement.

So that's third-party oversight. There's internal management in the yards, watching what's going on. We have very close relationships with the shipyards, which didn't exist in the past. We're in the yard, managing, measuring what they're doing, and speaking to them, having a very open dialogue if things are not going well.

4:40 p.m.

Liberal

Leona Alleslev Liberal Aurora—Oak Ridges—Richmond Hill, ON

That speaks to the performance of, essentially, the contractor. It doesn't necessarily speak to the performance of the overall procurement process and output, of which the subcontractor or the execution arm is only one element.

Do you have a feel for the global performance metrics? How do we ensure at the end of the day that the military is achieving the capability it deserves and needs within the budget and timelines that have been specified? How do we ensure that we're achieving Canada's goals in the defence industry, technology transfer, and those other kinds of things? I'm talking about all the things wrapped up in procurement. What kind of procurement-modernization performance metrics are you envisioning on that front?

4:40 p.m.

Senior Associate Deputy Minister, Department of National Defence

Jody Thomas

Within the Department of Defence, I've had two briefings on what's being done to ensure value for money, performance of procurement, performance of the equipment that's in the system already to ensure that maintenance is continuing to be done, that the equipment is available and ready for the forces to use. They have quite sophisticated tools now to measure what's in refit, what's available, and what's not available for the commanders of the army, air force, and Royal Canadian Navy in order to ensure readiness.

I'm not yet ready to comment on the broader military procurement context, the industrial capability writ large, the technology transfer—as you talk about—and innovation. In six months, potentially I will be. It's a massive undertaking. ISED is very engaged. Industrial technical benefits are a huge element of any procurement. All large procurement has to ensure that there is a return to Canada of both knowledge and investment. That is a major driver of procurement, and it seems to be functioning very well. When we get briefed on what's going on with, for example, the construction of the offshore fisheries science vessel or the Arctic offshore patrol vessels that are being built in Halifax, we see the investment across Canada through subcontracts. You can see the financial benefit already. As for the technical benefit and the knowledge transfer, it's a nascent industry and it's going to grow.

4:40 p.m.

Liberal

Leona Alleslev Liberal Aurora—Oak Ridges—Richmond Hill, ON

Fantastic.

Can you share some information around in-service support and what kind of emphasis might be placed on that, and whether or not in the acquisition process you're also evaluating the design for life cycle as opposed to just the design for design and worrying about in-service support later?

4:40 p.m.

Senior Associate Deputy Minister, Department of National Defence

Jody Thomas

Defence has changed their approach, as I think you're aware. Both the costing and the design cycle have to include in-service support for all major procurements so that you don't end up with a situation where you're just doing regulatory and minimal maintenance so you can keep equipment operating.

Again, it's something that I have more to learn about, but I do know that there are three lines of maintenance done on armed forces ships, navy ships: first, second, and third. The first line is done by the crew, the second line within the bases themselves at the fleet maintenance facilities, and the third line by industry. It's an integrated approach ensuring that the vessels and any equipment can be kept operating and functional for as long as possible.