National Defence Committee on Feb. 1st, 2018

[The Chair, Liberal, Stephen Fuhr]

The time is up.

Go ahead, Mr. Bezan.

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

Thank you, Mr. Chair; and thank you, witnesses, for being with us today.

Mr. Finn, just give me a little more detail about working with NATO through the NATO Support and Procurement Agency. What are the common capabilities that we're investing in for NATO military equipment and infrastructure?

[Patrick Finn]

Do you mean “we” as Canada, sir, or NATO writ large?

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

I mean as Canada, as a member of NATO. What's the common equipment?

[Patrick Finn]

I do have a bit of a list here, sir, if you'll bear with me.

There are a number of areas where we're looking at it in larger programs, but there are also a lot of things we're doing in smaller areas, investing in smart defence, smart procurement, and some things of that nature. It's almost more on the innovation end of things, where we're looking at different things.

In a number of areas that NATO is investing in, Canada is not always a participant, such as the allied ground surveillance and what they're doing with the Global Hawks. For us, one of the key areas is in the alliance future surveillance and control project. This is what comes after AWACS, which I believe has been extended until about 2035.

In looking at it now, we are asking what it is that we do. NATO is doing a very good job by not coming back to ask, “What's the airplane that replaces the airplane?” but “What is the approach, and how do we do it?”

We are looking at projects within “Strong, Secure, Engaged” for the replacement of the Auroras. NATO is working in some of those very areas. It is an area where our air force has looked at joining the like-minded nations. Again, it's not all 29 nations of NATO; a subset of those nations is looking at it. We can join in that area.

We're heavily involved in the communications, command, and control areas. There are a whole bunch of areas of smart defence that we're working on as well.

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

We're talking about things that are specifically NATO assets, but some of it is also owned by member states and used for NATO purposes.

You talked about adoption of best practices that we use here in Canada. You talk about being over budget and behind the schedule and falling short of requirements. Mr. O'Toole laid out some of the problems we have just in Canada. What best practices are we sharing if we are also falling behind schedule and over budget on a number of our own procurement projects?

[Patrick Finn]

Among those projects we talked about, such as ships and green yards and things we're doing, the shipbuilding strategy is something that we continue to work on feverishly. It is something we're into now. We are starting to see a lot of the economic benefits, but in terms of military capability, if you go to Halifax and see the first of the AOPS sitting on the land-level facility there, you'll see a very impressive capability. We're building on those things, building in a number of areas what I'll call development of people around complex project leadership. We've established a program here with Telfer at the university. It's not about the engineering and it's not about the time, cost, and scope of things that we do, but about how we can bring greater expertise to bear. That's what we're advocating, as an example, at NATO as well.

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

The European Union nations, many of them NATO members, have set up permanent structured co-operation on security and defence. One of the things that they're talking about is common procurement.

Do you see that augmenting what we do through NATO, or is this in competition? Does it help NATO member states in Europe get to the 2% GDP aspirational targets, or is it taking European member states in a different direction?

[Patrick Finn]

Thank you, sir, for the question.

I think the Permanent Structured Cooperation agreement in the EU is what you're talking about. It is something we've talked about a little bit at the Conference of National Armaments Directors.

Usually when we get together, for half of the day we invite the EU and others, and some of the partner countries, to come and join us so that we can discuss some of these things. I would compare it to NORAD in North America. It is a separate piece, and if you read through.... I had a chance to look through some of their things. They talk about commitments to the EU force and through the PESCO, but that does not preclude NATO and other things.

There's already a degree of common procurement going on among the EU countries, so this brings it together a bit more. I don't think it's in competition. I think it will help bring them forward to their 2% or otherwise.

I would say that through some of the discussions we've had about advancing projects and being careful about it, even in NATO there is often a struggle in some of the projects to bring real expertise and capacity together. It falls to the 29 to provide people, and not everybody who has domestic projects and a lot under way is going to provide a lot of people. There's usually a constant call there.

Certainly what I've expressed to my colleagues is a caution to make sure that the NATO projects aren't the ones that suffer. They have their domestic projects and they're putting people there, and now they have the EU projects and they're putting people there, so that's an area we're trying to be very careful about. A lot of it in the context of the EU—

[The Chair, Liberal, Stephen Fuhr]

I'm sorry. I'm going to have to stop you there. We're over time. I have to move on to the next question, and that goes to Mr. Gerretsen.

You have the floor.

[Mark Gerretsen, Liberal, Kingston and the Islands, ON]

Thank you very much, Mr. Chair.

When I was asking questions earlier about the changes in technology and NATO's positioning towards procurement in relation to that, Ms. Hubbard, I believe you were about to comment.

[Jennifer Hubbard]

Yes, I wanted to add that as part of CNAD, the Conference of National Armaments Directors, we've undertaken an initiative on innovation and recognizing the fast pace of technological change, and recently a framework was developed on innovation and the way forward on innovation.

Nations have come to the Conference of National Armaments Directors in the past year or so to present on what they are doing in innovation and how to mitigate those risks associated with the change in technology. There's a great deal of collaboration in those areas.

[Mark Gerretsen, Liberal, Kingston and the Islands, ON]

There is, and specifically as it relates to procurement.

[Jennifer Hubbard]

Absolutely, because the Conference of National Armaments Directors is a gathering of all the senior armaments acquisition people from the 29 NATO nations.

[Mark Gerretsen, Liberal, Kingston and the Islands, ON]

I can say, at least anecdotally—I don't think it would be fair to name names—that in my off-the-cuff conversations with members of CFB Kingston, it is something that is always coming up. The changes in technology are so rapid, yet procurement seems to take so long.

Mr. Finn, I want to go back to one of your answers to that, which was that it only seems to be a small percentage of the contracts that are taking a very long time to go through that procurement cycle. Is that correct?

[Patrick Finn]

Yes, sir. I'm really talking about the authorities.

At the end of the day, once we sign the contract, it's capacity and other things, but for projects under $5 million, we don't go to Treasury Board. We don't go to those areas to seek approvals. They exist elsewhere, so we're able to be more agile just because of how the procurement system is laid out.

[Mark Gerretsen, Liberal, Kingston and the Islands, ON]

From Canada's perspective, in terms of our role here, we're preparing a study on NATO, as you know. We will give recommendations as to what we think we should be doing in terms of advocacy in NATO to affect procurement in this particular instance.

Can you give us any recommendations? From Canada's perspective, what do you think NATO can be doing differently in terms of the framework it has for procurement?

[Patrick Finn]

Thank you for the question. I think that a lot of what NATO has done with the agencies, starting in about 2012, has been extremely useful. I think I'm going to flip this around to what Canada could do.

For us as a nation, having access to the agency, what they do, and what they do competitively, and being able to use their contracts and their approach, where appropriate, is of great value.

There are areas where I would like to use it even more. At times we run into a debate or discussion about what it is, about whether it's sole-sourcing and whether we're kind of taking it out of Canadian industry and things of that nature. I would say it's about ensuring that we don't have barriers that prevent us from using the agency and the things they do—where appropriate, where we don't have the capability, where we may not already be in contract, and where it's not an issue of national security. I would look at it through that lens. In terms of NATO, it's to sharpen up more....

The other thing I would say is on this issue we talked about, the group of experts. As always with NATO, as it went through, there was a lot of debate and discussion. There are nations that would want to have much more control at every step of every project on almost a continuous basis. From my experience, even for ourselves, if there is that continuous oversight, it will never advance.

[Mark Gerretsen, Liberal, Kingston and the Islands, ON]

Okay.

[Patrick Finn]

That would be a key piece: the right interventions at the right time, and the right time to step away and let the project teams advance.

[Mark Gerretsen, Liberal, Kingston and the Islands, ON]

If you have more on that, please submit it to us in written form. I have a little less than a minute left.

I want to ask about compliance to the framework in terms of Canada and other NATO nations. How would you rate the compliance of member nations?

[Patrick Finn]

I'm sorry, but compliance to which framework?

[Mark Gerretsen, Liberal, Kingston and the Islands, ON]

It's compliance to the specific guidelines and protocols that NATO has in regard to procurement.

[Patrick Finn]

The NATO protocols we were talking about were about NATO's procuring, not—

[Mark Gerretsen, Liberal, Kingston and the Islands, ON]

Right. It's not—