National Defence Committee on Nov. 28th, 2024

[Simon Page]

I don't have that date.

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

Would you be able to get that for us and send it back in writing?

[Simon Page]

Yes.

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

I'd appreciate that very much. That seems awfully low, especially when you look at anything else.

On the munitions supply program, we're hearing from industry that it's taking forever to get orders signed and get direction from the government to expand it. We see growth in munitions, especially in the 155-millimetre shells, happening under U.S. orders, but there's not necessarily much increase from the Canadian standpoint.

In meetings I've had with U.S. officials, including in Halifax, I've heard they want Canada to be a reliable supplier, especially of munitions, ammo and rockets. How do we make sure those are taken care of under the MSP?

[Simon Page]

The munitions supply program is an effective tool. It's a strategic program that allows us, to the question I had before, to do some planning ahead. I won't say it's perfect. We just conducted an evaluation of the program, and we're going to put some recommendations forward.

To give you an appreciation of it , within the MSP itself, in 2023, over $470 million was expended on various types of munitions, from small and medium to large calibres—nine millimetres, 25 millimetres and larger calibres.

I think ammunition at the moment is getting a bit of a sour assessment because of the 155-millimetre ammunition that we want to produce domestically. Again to my planning piece, this is not easy. We can tell industry that we need a 155-millimetre artillery round produced end to end in the country, but that does not happen in weeks. Infrastructure investment is required. Technical data packages need to be procured from the United States. All kinds of things need to be done from a resource point of view before we're in a position to do that.

[The Chair, Liberal, John McKay]

That's a very important response to that question. If there's something you wish to add to it, please write to the committee. This comes up all the time.

For the final five minutes, we're starting with Mr. Powlowski.

[Marcus Powlowski, Liberal, Thunder Bay—Rainy River, ON]

When the Canadian government purchases something, I think for the most part we would far prefer to spend our money in Canada. It's Canadian taxpayer money. I know that with other purchases, it's not always just about the cheapest product. There are also considerations for economic impact and environmental footprint.

Is that factored in when Defence procures something? Further to that, if it is, is that consistent with our international trade obligations or is it considered a hidden trade barrier? I would assume we fudge that somehow to get by, but we still factor those things in when we make a choice about procurement.

[Siobhan Harty]

In a very general sense, all of those factors are taken into consideration. That's part of the defence procurement strategy from 2014. Defence would consider those. ADM Page mentioned earlier that one step in the process is selecting the procurement strategy. All the factors you mentioned would go into that, taking into account what our industrial base is able to produce.

There are other considerations, like controlled goods, interoperability and other items the committee mentioned in posing questions to us. All of those things are put on the table, as is the question of timing.

[Marcus Powlowski, Liberal, Thunder Bay—Rainy River, ON]

There's also the question of whether that would be considered a hidden trade barrier in international trade.

[Siobhan Harty]

We have to respect our trade agreements, absolutely, but the committee has already asked questions about the national security exception. We have that, and there are obviously trade implications. Other countries face the same considerations.

[The Chair, Liberal, John McKay]

Just to tidy up, one of the problems with defence procurement is sticker shock. I don't think we do a very good job of disaggregating sticker shock because, first of all, it's an issue with respect to the initial thought of what it might cost. I appreciate your declining to answer Mr. Stewart's question, because there was a prematurity to it. The second part is that when the PBO and the AG start to weigh in, they get into life-cycle costs, and what starts out as a $20-billion acquisition ends up as $60 billion by the time you figure all of it in.

Has any thought been given to alleviating sticker shock and the heart attacks that collectively go across the nation when we announce a procurement?

[Simon Page]

There has been some thought and some discussion on that. To my earlier point about communicating differently and being transparent, there's some overlap there.

I think it would be smart and wise to look at this with a different lens. An early assessment could be described exactly as such. It's an early estimate that is derived using parametric variables according to what we know at the time. For a 25-year procurement, things will change and we'll manage them accordingly.

Where I think real accountability and precision should start surfacing in a different language—that is, no longer as an estimate—is when we sign contracts. As we approach our time to sign contracts and bring submissions to Treasury Board, numbers are well derived and there's a lot of accuracy. We can then be held accountable to our contract and be asked to get the best contract possible instead of doing guesswork 10 years ahead of delivering something.

[The Chair, Liberal, John McKay]

Thank you for that.

On behalf of the committee, I want to thank you for your two hours here. We appreciate it.

Colleagues, we're going to meet again on Tuesday. DND and VAC will be here to talk about contaminated sites.

With that, the meeting is adjourned.