National Defence Committee on March 20th, 2018

[Jody Thomas]

Yes.

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

—and to our SAR techs.

[Jody Thomas]

But it is for people who are serving in the field in those particular functions. If, after six months of rehabilitation, medical leave, or whatever is required for the member, they can't go back to the function—

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

But in the United States, the U.K., and Australia, they give 12 months.

[Jody Thomas]

It's certainly something we could look at, but every structure is different in every armed forces around the world, as I am sure you appreciate.

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

For my final question, Mr. Finn, I want to talk about the used Australian fighter jets again, the cost of refurbishment, plus the possibility that the Aussies aren't going to be turning them over to us as quickly as we originally had hoped because they still need them until they have all of their F-35s in place to replace them. Why don't we just expedite the entire process to speed up the competition so we can make a decision sooner rather than wait for used fighter jets?

[Patrick Finn]

On the one hand, we are working to expedite the acquisition of—

[The Chair, Liberal, Stephen Fuhr]

That's a big question to ask with very little time remaining.

I'm going to have to turn the floor over to MP Alleslev.

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

Thank you very much.

I'd like to continue on the procurement conversation, because when the minister was here, he made some comments about no issues with lapsed funding and stuff like that. The challenge is in our ability to execute on the programs, because we don't necessarily have, if I understand him correctly, the program and procurement staff within the department to be able to execute on these programs. Could you confirm if that's what he meant? If so, what performance metrics are we using to ensure that we put those teams in place as quickly as possible? What are the consequences to those program managers when they don't?

[Jody Thomas]

This is something that's near and dear to our hearts. In terms of the money that we're not bringing into SSC for capital this year, there are four aspects to that. Some of it is money that wasn't spent because the project was done more efficiently, completed more efficiently. Some of it was that the supplier wasn't ready and, therefore, there was a delay. Some of it is put aside particularly for one question of intellectual property with the surface combatant, and then some of it is our ability internally.

Restaffing and growing the procurement staff, the contract and policy staff, and the staff at PSPC is near and dear to our hearts and something that Mr. Finn and our HR civilian folks are working diligently on. We had positive growth in the procurement staff last year, and I'll ask Pat to give you the details on exactly what he's doing to grow his team.

[Patrick Finn]

As the deputy indicated, it really is procurement, I'd say, across the town, as you appreciate, in defence. For the army, navy, and air force, it's how they can advance things in the context of option analysis within the materiel group so that the project managers, the procurement specialists, and the technical specialists have been growing the last few years at about 10% a year on the civilian side. We hire about 500 people a year. About 70% of that is replacement for people who retire and do other things. The other part has been growth, and we are actively doing that. I would say right now there are none that are holding up any of the projects per se. As the deputy said, there are a number of areas that are really important where suppliers have not been able to deliver. Like we experienced in the—

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

That's fair enough, but you did mention that there were programs where it's our ability and where it's the supplier.... We have the ability to execute on that. We hold suppliers accountable for their performance, and we hold ourselves accountable for our performance to execute on highly important programs, or they wouldn't be in SSC. Could you please give us some indication of how we are measuring ourselves internally and what the consequences of not delivering are?

[Patrick Finn]

Not delivering internally or not delivering by suppliers.... On not delivering internally, within my span of control, we have very detailed performance measures that we bring to our program management board. I have over 300 projects and over 10,000 contracts under management. We have metrics that we use for the highest level. We have reports that we bring monthly to a panel of assistant deputy ministers. We bring them to central agencies. Again, on not performing, if it's based on the performance of an individual, we will take action there and move people around when it's clearly a lack of, I'll say, direction, leadership, or management by somebody who is key in that process.

[The Chair, Liberal, Stephen Fuhr]

MP Yurdiga.

[David Yurdiga, Conservative, Fort McMurray—Cold Lake, AB]

Thank you, Mr. Chair.

Mr. Finn, I'd like to give you the opportunity to answer the question my colleague MP Bezan asked, regarding the Australian fighter jets, on which there is no real delivery date at this point, and the practicality of actually speeding up the procurement process for a new fighter jet.

[Patrick Finn]

On future fighters, we have completed the source list, a bit of a pre-qualification. That's now done and in place. We reduced it to the five key suppliers, but we engaged with nations. These will come in different fashions. As early as next week, again with our colleagues at Public Service and Procurement Canada and ISED, we will be engaging with industry and those suppliers with the idea of trying to move out with all of their input and get a firm solicitation in the early part of next year. That is our target, to be able to move out on that smartly.

There is a reality in advancing any acquisition that we're subject to the order book of the suppliers. In any case, we're looking to be out next year and to be in contract no later than 2022. We're assuming a three-year delivery of the first aircraft as we talk generally to suppliers. That might advance or get retarded, depending on the order book of suppliers for the future fighter.

The reality is that no matter what we do we have to realize that we're one of many customers, hence the need to top up through the Australians. We are having very good and active consultation. We would see all the Australian aircraft delivered over the next three years, starting next summer or next fall with a small number of about three aircraft, and then six aircraft the following year and nine thereafter.

We are working with the Australians and closely with the U.S. government. This is subject to what's called a third party transfer under the international arms control agreement regime of the Americans. We don't see any stumbling blocks there, but we have to satisfy all the parties for it. We would see right now and have some positive indications from the Australians that by next summer the first aircraft would be here. We would be bringing them over and then have a pretty quick drum beat thereafter.

[David Yurdiga, Conservative, Fort McMurray—Cold Lake, AB]

The way I understand it, the timetable for the Australian F-18 is hinged on the ability of Australians to get the F-35. If there's a delay of a year or longer, that means there's a delay in our getting the F-18s.

[Patrick Finn]

There could be a delay, absolutely, if they want to hold on to all the aircraft. Like us, a certain portion of their fleet is always undergoing heavy maintenance. By virtue of aircraft that they are going to dispose of, they're going to cease doing that and be parking some aircraft, so those are potentially the ones that we could bring in, carry on the heavy maintenance here in Canada, and continue to do it. The F-35As are well into delivery, with multiple countries now having the F-35s. The indications appear to be that they will get those as indicated, which will free the aircraft up for us.

The potential is there. We would describe that aspect of it as certainly low risk.

[David Yurdiga, Conservative, Fort McMurray—Cold Lake, AB]

Mr. Finn, do we know the cost of the purchase of the Australian F-18s? Is there a fixed cost to this?

[Patrick Finn]

As the minister indicated, we don't have the final agreement with Australia. We have gone back and forth with an increased amount of certainty. When the U.S. government approves the third party transfer, that will enable us to finalize it all. We have a preliminary understanding of it. I think we've worked it up in previous testimony here. We've talked about having set aside $500 million for all the work we need to do. We're growing a fleet, so there is increased infrastructure and other things as well. We won't have the final cost developed until such time as we sign the final agreement with the Australians.

[The Chair, Liberal, Stephen Fuhr]

MP Yurdiga, that's your time.

I'm going to give the second-last question to MP Alleslev, and then we'll go to MP Garrison.

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

Those were all my questions.

[The Chair, Liberal, Stephen Fuhr]

Okay.

Mr. Garrison, the last one is from you.

[Randall Garrison, NDP, Esquimalt—Saanich—Sooke, BC]

Thank you very much, Mr. Chair.

I want to go back to the relocation question and give the deputy minister a chance to respond to the question I asked earlier about problems with the new system.

[Jody Thomas]

I have heard the same problems as you have, so thank you for raising it. On the credit card in particular, there are service charges that we are reimbursing, so that has been taken care of. When we've had individual problems with cards, we've gotten those rectified very quickly.

On the portal, the lack of face-to-face, we are encountering more difficulty with the transition to that way of service than we had anticipated. It is something that's being looked at now. I don't see it being changed in this posting season, but we'll do a full evaluation of how the posting season went and be able to report back.