National Defence Committee on Nov. 15th, 2022

[The Chair, Liberal, John McKay]

Thank you, sir.

With that, colleagues, I think to have any chance of staying in an order I'm going to cut back the six-minute round to five minutes. Then we'll see where we end up for the second round.

With that, you have five minutes, Mrs. Kramp-Neuman.

[Shelby Kramp-Neuman, Conservative, Hastings—Lennox and Addington, ON]

Thanks, Mr. Chair.

First of all, thank you both for being here, with Mr. Davis in the room and Mr. Klapatiuk.

My first question is posed to Mr. Klapatiuk.

From a defence perspective, I understand the infrastructure in the north is in dire condition. I certainly haven't been there, but I've been reading a tremendous amount. If we don't maintain our sovereignty, which is maintained by presence, then what do we do?

With regard to the cancellation of particular contracts, how does this undermine our national security? What's the issue? Is it ideology?

To be more specific, as you know, Canada has come to a point where critical NORAD infrastructure has to be upgraded. That's going to cost tens of billions and proceed over several decades. What kinds of opportunities do you envision for your company? What specific infrastructure projects can you see benefiting local communities, as well as National Defence?

There's a lot in that question.

[Les Klapatiuk]

Yes, there is.

Right now we have the Inuvik runways being extended. For the next five years, the new air-to-air refueller cannot land here. It's actually five to eight years. Even if it lands, the future means that there's no hangarage and there's insufficient fuel for this aircraft.

As for what I see happening, I made a proposal to NORAD directly on August 10 of last year. I indicated that they could make a lease with me or a contract, or buy me out completely so that my existing hangar would handle the CC-130 air-to-air refueller. I have sufficient property on the airport already, so we could build a hangar large enough to hold the A330 MRTT and the CC-177, just not at the same time.

We are completely adjacent to the boundary line of the Inuvik FOL. As I said, it is the busiest FOL in Canada. It's the busiest NORAD base. There are opportunities for civilian companies to partner with the Canadian Armed Forces to develop infrastructure.

As for leaving the infrastructure to the government to build, I'll use these examples. The Inuvik runway was first discussed by General St-Amand in 2007, and it's only starting now. The Nanisivik fuel depot for the naval ships was started in 2008 under the Harper government, and it may be ready next year. In Yellowknife, there's apparently a new building going in for the JTFN. It was first discussed in 2004. Now I understand the property's been purchased. I don't know if they've broken ground yet.

Twenty to 25 years hence does not make defence here and now, and that's what we have to be concerned with as well. Future construction is great, but we also have to look at what we are going to do here and now.

I hope I answered your question.

[Shelby Kramp-Neuman, Conservative, Hastings—Lennox and Addington, ON]

To complement that, I see your company as being a great example of shared infrastructure between National Defence and the civilian side.

What do you believe is the biggest challenge to make these historic investments in NORAD modernization when it comes to that critical infrastructure that is needed?

[Les Klapatiuk]

Reality.

[Shelby Kramp-Neuman, Conservative, Hastings—Lennox and Addington, ON]

Is “reality” political ideology?

[Les Klapatiuk]

I don't want to say political ideology. One of the problems that we face, though, is that people don't understand the length of time that it takes to build anything here.

Second, do the people in the local communities have the capability and capacity? Do they have the training?

One of the major items that we face is security clearances. People cannot get security clearances under the standard operating procedures. I believe my counterpart with Nunasi Corporation must run across that all the time.

There has to be a reality—

[Shelby Kramp-Neuman, Conservative, Hastings—Lennox and Addington, ON]

I'm sorry to interrupt you.

Would that concur similarly with gatekeepers? Is that the issue?

[Les Klapatiuk]

I'm not sure what you mean by gatekeepers.

People in the Arctic who want security clearances have to meet the same requirements as southern contractors for security clearances. Our crime rates in the Arctic—I'll only speak for the Inuvik region—are significantly higher with some—

[The Chair, Liberal, John McKay]

We're going to have to leave the answer there. Whether it's a gatekeeper or a reality check, I don't know.

Ms. Lambropoulos, you have five minutes.

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

Thank you, Mr. Chair.

Thank you to both of our witnesses for being here to answer some of our questions today.

In previous panels, we heard about the fact that we need to demonstrate sovereignty. As it was mentioned before, the best way to do that would be having a presence and making sure that the communities that are currently there are empowered as well.

As someone who believes that we definitely need to put reconciliation forward and do our best in those efforts, I see this defence spending in the Arctic as a major opportunity to be able to do that.

I know that there are certain Inuit-owned businesses that have received contracts. Can you tell us what the benefits have been in this area? How has this helped the north and northern communities?

Also, what policies and frameworks need to be put in place, and how can they be improved in order to see more of this going forward?

[Clint Davis]

Thank you for the question.

We just received the North Warning System contract recently. It was at the beginning of the year. The contract start date was in April. We've had to significantly ramp up staff, particularly at headquarters here in Ottawa, as well as ensure that we have training and development and the right support to ensure that we have a higher representation of Inuit workers and employees in those particular sites.

Some of that is happening during the transfer from the previous contract holder over to Nasittuq. That's one piece. We've held the contract for CFS Alert since 2012.

The benefits have been profound. Prior to us not winning the contract previously for the north warning system, a significant number of young Inuit business leaders started their careers working at Nasittuq and are working on different sites and so on. Some branched out to become entrepreneurs and things of that nature.

Not only is it training development and job opportunities, but two other areas specifically. In particular for procurement, right now, Inuit development corporations—of which there are only seven in the country—have investments in well over 100 businesses. Some of that is done through partnerships and so on. As other procurement opportunities come up, we are well positioned to take advantage of that.

When we do that, that net revenue flows back for the benefit of the community. It helps to achieve economic reconciliation. It has had a very positive impact on employment and, certainly, on procurement. Even with our revenue distribution to our development corporations, we use that in support of trying to develop other programs to support local communities.

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

Can either of you speak to some observations that you've had from various levels of government working with...in order to advance economic reconciliation?

Do you see that there needs to be better coordination of these efforts in order to advance the cause and make sure that they are benefiting the most from these investments?

[Clint Davis]

First of all, the North Warning System contract is one of the first federal contracts that was developed in compliance with the requirements under the Nunavut agreement with respect to federal procurement in the territory. The Inuit benefits piece had a significant amount of waiting when we went through the RFP process. That, we saw, was absolutely impactful for us to strategically position ourselves to secure that contract.

Are we seeing that in other departments? Not as much, unfortunately. Hopefully, we'll see this as a bit of learning for the other departments to be able to fully implement it as well.

[The Chair, Liberal, John McKay]

We'll have to leave it there, unfortunately.

Ms. Normandin will speak in French, so if you prepare yourselves for the translation, we'll suspend for a second while that happens.

Mr. Klapatiuk, have you adjusted to receive the question in translation?

[Les Klapatiuk]

Yes, I have, sir.

[The Chair, Liberal, John McKay]

Okay. That's good.

With that, Ms. Normandin, you have five minutes.

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

Thank you, Mr. Chair.

I'd like to thank both witnesses for being with us. We greatly appreciate it.

Mr. Davis, you talked about infrastructure, which is in a very critical state. If we were to prioritize infrastructure upgrades, what should the government's priority be for infrastructure in the Arctic?

[Clint Davis]

I'm sorry. I got the last part: “What priority would the government have in upgrading infrastructure within the region?”

There has been a commitment on the part of the Government of Canada in the most recent budget with respect to infrastructure as a part of the indigenous community infrastructure fund. I think there is a significant amount of capital that will be flowing to the Inuit political body, Nunavut Tunngavik Incorporated, specifically for Nunavut.

That's a good start, but when we talk about infrastructure investment, as I just highlighted, for the north, $500 million to a billion dollars is nowhere near what's required. I think my colleague here can talk more specifically about some of what's required across the Arctic.

I think we need to look at the Arctic as a fundamental part of the Canadian identity. In order to demonstrate that we want to substantiate that role of the Canadian Arctic in our national identity, we have to make the necessary investments. We're seeing these types of investments happening in other parts of the world.

Our Canadian Arctic makes up 25% of the land mass of the global Arctic, but when you look at that global economy, which is about $250 million U.S., we contribute 2% to that global economy, so I think infrastructure is absolutely critical.

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

Mr. Klapatiuk, I'll ask you the question slightly differently.

What should the priority be for infrastructure funding? Should it be communications infrastructure, roads or transport? What is essential right now?

[Les Klapatiuk]

In Inuvik we already have one fibre optic line, and there's a second one coming up the Dempster Highway, so in terms of communications, we're very fortunate.

As it pertains to land transport, roads are very difficult to build and will take a long time. One of the key transportation modes in the Arctic is air. One thing we have to look at, from a government perspective, is upgrading airports. Number one will be the critical airports, which are defence related. We also have to look at purchasing aircraft types, if we're talking from a defence perspective, that are going to operate off austere runways, which are gravel or ice, which is something that the new CC-295 search and rescue aircraft cannot do.

We also have a situation here in which infrastructure within communities will be built when major contracts start and we will have a secondary type of economy that will start, related to supplies or to the provision of transportation. There's a symbiotic relationship. It's not that the government has to come in and build the housing for people; it's more a matter of getting the economy rolling with defence-related infrastructure immediately and then other things starting to build.

One of the problems we do face in the Arctic, though, is that we have too many companies that come in on what we will call a drive-by or a storefront. They want to make a partnership in the Arctic so they can come in and do the business. That has negative ramifications, because companies in the Arctic sign on, and the first thing that happens once the project's gone is that there's no carry-on and there are no further economic benefits that accrue from the previous work. It's a feast-or-famine situation here. That's why we will need some of these long-term contracts for runways or for upgrading marine assets, from an immediate defence perspective.

[The Chair, Liberal, John McKay]

Thank you.

Ms. Mathyssen, go ahead for five minutes.

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

Thank you.

To both witnesses, what do your businesses now require due to some of the impacts of climate change? Are there any specific investments you need to make in response to harsher conditions or changing conditions?

Maybe Mr. Klapatiuk can go first.

[Les Klapatiuk]

Thank you for the question.

I'm an extremely fortunate individual. My hangar and property are situated on bedrock, which is approximately 25 feet below the surface, so I'm a very lucky individual. Some of the other areas are not that fortunate.

I think what we have to do is to look at things in the longer term or, pardon me, maybe even in the shorter term. The current situation in Europe precludes a long-term climate change type of view. My presentation here is more from the perspective of what we are going to do here and now. Canada has no capabilities in the Arctic right now, so what are we going to do over the next five years to make sure our NORAD base in Inuvik is properly supported? While it is good to talk about long-term construction and the impacts, our game right now should be looking at how we protect the country, because if we can't protect our own country, what country do we have?

[Clint Davis]

Just very quickly, we invest in a company called Nunavut Construction Corp. When it does planning, it has to take into account the impact of climate change. We're trying to make our houses much more energy-efficient so that we're not wasting any energy.

Something that I think is really interesting, though, is that of 53 Inuit communities, 52 are on diesel. A huge priority we see for this government, as well as for this country and the world, is to get off diesel to move towards net zero. Ironically enough, one of the biggest pieces of military infrastructure is the North Warning System, and all of their sites are run on diesel.

We think there's a great opportunity there because in Nunavut right now, we're not able to realize the renewable-energy piece at this point. I think there's a great opportunity to see what we can do to incorporate renewable energy into some of these sites, certainly, as a part of NORAD modernization. Any learnings from that could be extended to have a positive impact on communities as well.