National Defence Committee on March 20th, 2018

[The Chair, Liberal, Stephen Fuhr]

Okay.

I'd like to thank the minister for your time and for coming today.

I'm going to suspend very briefly to let you depart, sir, and then we'll resume with departmental officials.

Thank you.

[The Chair, Liberal, Stephen Fuhr]

Welcome back, everybody.

Just before we start a round of questions with our guests, I'd like to give the floor over to MP Alleslev who has a motion she wants to table in accordance with our study of NATO and asking for funds for our trip to Petawawa.

MP Alleslev.

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

Thank you very much, Mr. Chair.

We discussed a while ago maybe having a site visit to Petawawa to take a look at how they're preparing for NATO involvement. I have a motion here that says that, in relation to the study of Canada's involvement in NATO, the committee would travel and the committee would be accompanied by necessary staff, and that a proposed budget of $4,000 for the committee's travel be adopted.

[The Chair, Liberal, Stephen Fuhr]

Is there a quick discussion? Although we haven't discussed this, it's more a formality so I can seek the funding. We've talked about this, so there's nothing to discuss.

(Motion agreed to)

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

I have a quick question. As it's such a short distance, can the entire committee travel as opposed to just however....

[The Chair, Liberal, Stephen Fuhr]

We'll circle back on that after. I'll undertake to have a discussion about that afterwards.

Given the time remaining, we're going to start at the top of the list. We're going to go for five, four, three minutes in terms of timing.

The first question will go to the Liberals with MP Fisher for five minutes, please.

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

Thank you, Mr. Chair.

I'm also a member of the Standing Committee on Environment and Sustainable Development, so I was pleased to see that DND is requesting $6.2 million for funding for remediating federally contaminated sites.

I wonder if you could give the committee a little more detail and depth on what the plan is for this remediation. How many sites might it cover? What might some of the sites be, and how many of the sites might be remaining?

[Jody Thomas]

I'll start and then I'll ask Elizabeth Van Allen, our ADM of infrastructure and environment, to get into a bit more detail.

In these estimates, we're asking for $6.2 million for four projects. These are the Esquimalt harbour remediation project, the TCE Valcartier project in Quebec, the Goose Bay remediation project, and the Alert curling club. Those are the four biggest priorities in terms of contaminated sites. We're going to continue to allocate money over four years, into 2020. It is $243 million in total for contaminated sites.

In Goose Bay, we're working at reducing or eliminating potential risks posed by contaminated areas at 5 Wing. That's estimated to be completed by 2020. The Esquimalt harbour remediation project is remediating several contaminated areas of Esquimalt harbour. It began in 2016, and will continue into 2017-18. Activities include dredging, sediment disposal, backfill added to the harbour to bring the seabed back up to the original grade, and containment monitoring.

With the Alert curling club complex assessment, we're looking to confirm levels of contamination from metals and petroleum hydrocarbons at CFS Alert. That has not been done in eight years.

The TCE Valcartier project will design, build, and operate a system that pumps and treats groundwater contaminated with TCE so that it's safe for the environment. Those are four very major projects.

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

Excellent. Thank you.

I see that a portion of the $435 million for “Strong, Secure, Engaged” is for a health and wellness strategy. Are you able to tell us a little more about that? What will it cover? Is this new? Is this additional money for an existing strategy? Please provide little bit more detail on that.

[Jody Thomas]

I'm very happy to.

The total health and wellness strategy funded through “Strong, Secure, Engaged” encompasses the entire department. It provides total health and wellness for serving CAF members and those transitioning to Veterans Affairs Canada, as well as a total health strategy, including mental health, for our civilian employees.

There is a strong focus on mental health, as you saw earlier in the year when we released, with Veterans Affairs Canada, the joint suicide prevention strategy. We're looking at a number of functions including fitness, family support, and integrated conflict and complaint management. It encompasses Operation Honour, a return to work program, and spiritual resiliency. It looks at the entire gamut of health for both civilian and military members of the Department of National Defence and the Canadian Armed Forces.

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

Excellent. Thank you.

I'm not sure where I am, Mr. Chair, but Mr. Gerretsen—

[The Chair, Liberal, Stephen Fuhr]

You have about another minute left in this block.

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

One thing that had been identified was $9 million for funding for a military personnel management capability transformation project. Can you expand a little bit on exactly what that is?

[Jody Thomas]

That's a software project in which the Canadian Armed Forces is upgrading PeopleSoft, which is the base system, in order to get it to the next iteration. It's part of a larger project that will eventually upgrade the military pay system. It's being done in very distinct steps. It's replacing a very old and fragile system. It's going to be user-friendly for Canadian Armed Forces members.

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

Are we learning from the example of the other pay system the federal government has been dealing with, to make sure that we don't go down the same road?

[Jody Thomas]

We are indeed. This one has been rigorously tested. It is being done in phases. In fact, it was part of the much larger project that we reduced. We're upgrading PeopleSoft. Then we're going to improve business rules, and then we'll work on the pay system.

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

Thank you.

[The Chair, Liberal, Stephen Fuhr]

MP Gallant.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Profiteering was a significant problem during the First World War. I'm hearing concerns that Irving Shipbuilding Inc. is poised to make extraordinary profits under the monopoly it has in shipbuilding, and it will make profit on top of profit under the program. This is a concern to all taxpayers, especially when we're talking about a $100-billion program. By the end of this week, can you table with the clerk the allowable profit that Irving is eligible to make on the AOPS and the CSC projects? I do not mean the specific contract amount but the range that it's eligible to make.

[Jody Thomas]

I'll ask Pat to speak to this in more detail. The AOPS project is negotiated, and we're working on whether we'll deliver five or six ships with Irving Shipbuilding now, the Canadian Navy and PSPC.

In terms of the surface combatant project, we're still in an RFP process. I'm not sure that it would be appropriate at this time to talk about the contract, the structure, or the profit for Irving, as we're determining who will actually get that contract.

I will ask Pat.

[Patrick Finn]

I would just add that certainly the profit levels on CSC have not been established. “Profit on profit” is something we watch very carefully for. I think it's important to separate, though, profit on profit from payments that are made to manage subcontractors, which is fairly typical in the industry with contracts of this nature. Irving Shipbuilding doesn't have a monopoly, per se. There are ships being built across the country and others that will be competed.

The Arctic offshore patrol ship contract was negotiated per the Government of Canada contracting policy. We can get you some information on that. The other parts of it would be subject to third party, but we can take that away. Certainly the profit policy per the Government of Canada that was used is something that is available.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

I'm wondering if you can table with the clerk by the end of this week the specific policy that prohibits Irving from profiteering and making a profit on top of profit, first by using its own companies as the subs, then as part of the cost-plus contract it has with Canada. One hopes there is a policy that prohibits this.

[Jody Thomas]

I would suggest that the question would be best raised with Public Services and Procurement Canada.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Okay. Well, this cost-plus contract that Irving has allows it to be rewarded for being late and overpriced. The higher the project costs, the more profit it makes. The later the project, the more it hurts our military.

Can you table with the clerk by the end of this week any reports or emails you have in the department related to audits of Irving and measures taken to ensure competition and lowest prices to taxpayers under the national shipbuilding strategy?

[Jody Thomas]

We can table any documents we have to that effect, yes.