Thank you. I'll try to speak quickly—and I apologize to the interpreters now—so that I can squeeze it all in.
Mr. Chair, thank you for this opportunity to appear before your committee as part of its study on procurement processes and their impact on the readiness of the Canadian Armed Forces.
I would like to acknowledge that this hearing is taking place on the traditional, unceded territory of the Algonquin Anishinabe people.
Joining me today are Andrew Hayes, my deputy auditor general; and Nick Swales, a principal who is really our expert on national defence matters and has done many audits on procurements.
There are a number of themes emerging from our audits linked to defence procurement that I would like to highlight for the committee.
First, I'll speak to delays and scope changes and the impact they have on the timely renewal of fleets. When fleet renewal is delayed, aging aircraft and ships remain in service beyond their planned useful lives or are retired before replacements are operational. Keeping aging aircraft and ships in service also means increased operating and maintenance costs.
In 2021, we audited the national shipbuilding strategy, which was launched in 2010. It calls for the building of different classes of at least 50 large science and defence vessels over some 30 years. Overall, we found that the delivery of many ships had been significantly delayed because of challenges in design and construction.
For example, welding problems were discovered in the offshore fisheries science vessels, problems that required time to investigate and repair. This delayed construction schedules for other vessels, increasing the risk of not having the vessels ready to do what we need when we need to do it.
Our recent audit of the surveillance of Canada's arctic waters, which this committee studied in December 2022, found that delays and their impacts persist. The audit also found risks of gaps in surveillance, patrol and presence capabilities because of aging satellites and patrol aircraft that may also reach the end of their useful lives before replacements are available.
The replacement of Canada's fighter force is another example of delays and their impacts on readiness. Canada bought its CF-18s in the early 1980s, expecting to replace them after about 20 years of service, but this did not happen. In 2016 the government directed National Defence to have enough fighter aircraft available every day to meet the highest NORAD alert level and Canada's NATO commitment at the same time. This meant that National Defence had to increase by 23% the number of fighter aircraft available for operations. To meet the demand, the government purchased used fighter jets from Australia that were about 30 years old and have the same operational limitations as Canada's fleet of CF-18s.
This brings me to the second theme I want to highlight: If you don’t have the people for the use and upkeep of the equipment, the readiness problem remains.
In the case of Canada’s fighter jets, National Defence expected to spend almost $3 billion to buy and operate the Australian aircraft and to extend the life of its fleet. However, it did not have a plan to deal with the shortage of experienced pilots and the CF-18’s declining combat capability. Purchasing additional aircraft was not enough to meet both the NORAD and NATO requirements.
In 2022, as part of our update on past audits, we found that National Defence had increased the number of aircraft and pilots available for operations but not technicians. As National Defence was still implementing its recruitment and retention strategies, some positions had yet to be staffed.
The final theme I want to bring to your attention today is inventory management. We have been raising issues in this area through our financial audit work for some 20 years. We further examined the military’s supply chain in a performance audit in 2020. We found that military units received materiel such as spare parts, uniforms, and rations late 50% of the time. High-priority items required to satisfy critical operational requirements were late even more often, at 60% of the time. These delays, often caused by stock shortages, affected National Defence’s capacity to perform its duties and manage its resources efficiently.
These audits underscore the importance of supplying Canada’s military and renewing fleets in a timely manner to avoid capability gaps that may jeopardize Canada’s ability to meet its domestic and international obligations for science and defence.
Mr. Chair, this concludes my opening remarks. We would be pleased to answer any questions the committee may have.
Thank you.
