National Defence Committee on Nov. 21st, 2024

[The Chair, Liberal, John McKay]

You have about 15 seconds.

[Stefanie Beck]

It's for a very specific initiative that's based in Halifax. Actually, that's where we will be on the weekend. I think some of you are coming too. COVE is the name of the initiative. It's a joint project for research and development in the Halifax area.

[The Chair, Liberal, John McKay]

Thank you, Mrs. Gallant.

Just as a point of clarification, Mrs. Gallant, you said $27 billion in cuts. Did you mean $2.7 billion?

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

No, I said $2.7 billion.

[The Chair, Liberal, John McKay]

Okay. I'd heard $27 billion. I'm glad we clarified that point. Otherwise, we'd all be having heart attacks.

Ms. Lambropoulos, you have five minutes, please.

[Emmanuella Lambropoulos, Liberal, Saint-Laurent, QC]

Thank you, Chair.

Thank you to our witnesses for staying on to answer some questions of ours.

We've spoken a bit about cyber already. As we know and we've heard several times on this committee, our adversaries are using cyber-attacks more and more. The threat is very real. You spoke to that a little bit. I know that there's $49.1 million in these estimates. I'm wondering if you can speak a little bit to what improvements will be made in this area.

[Caroline Xavier]

Absolutely. The supplementary (B)s are providing us with $58.9 million, which is the first tranche of the budget 2024 announcements that were made by the government, and $49.1 million of that is directly for cyber-effects and cyber-power. It's to allow us to continue to do the work that we already have the workforce and the authorities to do.

That amount of money really is required, if voted on via the supplementary (B)s, to be able to allow us to continue to enhance the work we do to protect and defend Canada and Canadians against threats, continue to enhance our economic security, defend our democratic processes, advance Canada's interests on the world stage and support our allies and partners against these threats. It would not just allow us to continue to do what we do from a mandate perspective, but really to continue to be excellent partners in managing these threats.

[Emmanuella Lambropoulos, Liberal, Saint-Laurent, QC]

In a way, if a party were to vote against these, it would put us more at risk of not being able to deal with cyber-threats. Would you agree?

[Caroline Xavier]

It is clear to say that this investment is an important one for us at the CSE because it does allow us to continue to enhance the skills and the people we're bringing in to do this work. The more that we're able to have, in terms of the tool kits and the people to do the job, the more it continues to make our job easier—for sure.

[Emmanuella Lambropoulos, Liberal, Saint-Laurent, QC]

Thank you very much for that answer.

We did an entire study on procurement, and we heard from Canadian industry that they want to be part of Canada's plan and they want more collaboration between the government and industry. We have some very strong capabilities in Canada that could be used to our benefit. We recommended that there be stronger communication between industry and the government.

I know that there's also talk of a national aerospace strategy, among other things. I notice that there's $202.1 million going towards a national procurement program. I'm wondering if you could speak to whether any of these funds would go to supporting these initiatives to enhance that communication between the two and to make sure that our industry is being included in a plan?

[Nancy Tremblay]

There is constant engagement between Canadian industry and defence, as Canadian industry is super important to supporting the equipment that is being used by the Canadian Armed Forces.

The $202 million that we're asking for, as part of this supplementary estimate, is expected to go to the national procurement envelope, which is an envelope that is used to do maintenance on equipment, buy spare parts and do some engineering surveys and work. This is what this $202 million would go towards—applied to multiple of the numerous fleets that we're supporting.

[Emmanuella Lambropoulos, Liberal, Saint-Laurent, QC]

I'm hoping that, in the future, there is more funding that goes towards that collaboration and finding better ways to include industry. I know that they're already included, but I believe that there is a request on their part to get a little more feedback from the government.

Finally, I did notice that there were initiatives in these estimates to end or address gender-based violence within the forces. I'm wondering whether somebody could speak a little about that. I know it's $1.5 million. What initiatives would these include?

[Jonathan Moor, Assistant Deputy Minister and Chief Financial Officer, Finance, Department of National Defence]

I'm happy to answer that question.

It is $1.5 million in vote 1b, which is for personnel costs, with an additional $9.4 million for statutory payments, which are around the employee benefit plan. It's to cover two specific areas. One is for responsive legal opinions, to provide legal opinions for victims, and that is $1.1 million in this supplementary estimate. The other is to do prevention research, which is important, to identify training and tools to manage incidents as and when they occur. Those are the two elements that are being requested in these supplementary estimates (B).

[The Chair, Liberal, John McKay]

Thank you, Ms. Lambropoulos.

Ms. Normandin, you have two and a half minutes.

[Christine Normandin, Bloc, Saint-Jean, QC]

Thank you, Mr. Chair.

I'd like to pick up on Ms. Mathyssen's line of questioning.

You said it was important to be transparent with the public and show the real numbers, but that makes me wonder whether we shouldn't be transparent with ourselves. I'm talking about what Philippe Lagassé told the committee on November 7. He said the department tended to be too optimistic in its projections. He attributed it to a culture of always wanting to move forward and not wanting to give direct or honest answers, especially to the Department of Finance. DND always wants budget approval, so it underestimates project costs and the project ends up going over budget. Alternatively, the project is split into two, meaning only part of the work is completed in the hope that funding will become available to do the rest of the work later.

Is it time for a change in approach? Is it time for a frank discussion about that?

[Stefanie Beck]

I think everyone wants to answer that.

One of the big problems with cost estimates is that they have to be done years ahead of time. Inevitably, the numbers have changed by the time we're ready to carry out the project. For example, sometimes we have to figure out the cost of a project that will be completed five years down the road. We base the estimates on the numbers we have at the time, but the numbers tend to change afterwards.

It would be helpful if we could provide a much rougher estimate and indicate, for instance, that the project was going to cost somewhere between x and y dollars. Once it came time to actually carry out the project, we could provide a much more exact number. That would help not only DND, but also our colleagues at the finance department and Treasury Board.

[Christine Normandin, Bloc, Saint-Jean, QC]

Still, doesn't the department chronically underestimate the cost of projects? Just take the procurement of the 15 naval warships as an example. The cost went from $26 billion to $100 billion. We're not talking about a small change.

That happens just about every time. Do you systematically take an overly optimistic approach so you can get approval?

[Stefanie Beck]

It's not to get approval, because we know that, down the line, we'll have to explain the change in cost.

I'm going to ask Ms. Tremblay to jump in because she is in the midst of examining exactly that. We are in negotiations. We can't provide any details, but we can explain how it works in theory.

[The Chair, Liberal, John McKay]

Unfortunately, Ms. Normandin is out of time. Ms. Mathyssen might be interested.

Ms. Mathyssen, you have two and a half minutes.

[Lindsay Mathyssen, NDP, London—Fanshawe, ON]

Could CSE and DND answer?

Have you ever used, or are you currently using, Israeli surveillance technology, such as NSO Group's Pegasus or Cytrox's Predator, and could you provide a list to the committee of all procurements from Israeli-owned firms?

[Caroline Xavier]

CSE does not generally comment when it comes to procurement contract details because of reasons of national security. Therefore, I'll leave it at that for now.

[LGen Stephen Kelsey]

I say yes to the provision of any lists of what you provided.

There have, in the past, been partnerships with Israeli firms, but these are for medium-range radars that we currently have in service. They were built in Saint-Jean, and I'll misname the prime that they partnered with. There are examples. As with many international industrial companies, we use their technological intellectual property to build in Canada.

[Lindsay Mathyssen, NDP, London—Fanshawe, ON]

Considering the government said they will stop future uses of Israeli-built systems of that nature, in terms of the arms embargo, what changes are being made to deal with current equipment or future contracts?

[LGen Stephen Kelsey]

Chair, you deserve a specific answer to the question. I don't have one, but we will fulfill the obligation in the spirit of what the Government of Canada has directed. What I was just characterizing is a past procurement.

[Lindsay Mathyssen, NDP, London—Fanshawe, ON]

If there is any further information you can provide to this committee on this question, going forward, I would appreciate that.

How much time do I have left?